EXECUTION COPY
AMENDMENT AGREEMENT TO CREDIT AGREEMENT
Amendment Agreement to Credit Agreement, dated as of March 17, 1999 (this
"Amendment Agreement"), among XXXXX XXXXX, a New York general partnership (the
"Borrower"), XXXXX XXXXX INC., a Delaware corporation ("Holdings"), DRI I INC.,
a Delaware corporation ("DRI I" and, together with Holdings, collectively, the
"Parent Guarantors"), the Lenders parties hereto, DLJ CAPITAL FUNDING, INC., as
syndication agent (in such capacity, the "Syndication Agent") for the Lenders,
FLEET NATIONAL BANK, as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders, and CREDIT LYONNAIS NEW YORK BRANCH, as
the documentation agent (in such capacity, the "Documentation Agent") for the
Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent Guarantors, various financial
institutions (the "Lenders"), the Agents and the Documentation Agent have
heretofore entered into the Amended and Restated Credit Agreement, dated as of
September 11, 1998 (as amended prior to the date hereof, the "Existing Credit
Agreement"); and
WHEREAS, the Borrower and Parent Guarantors have requested, and the
Lenders have agreed, subject to the terms and conditions hereinafter set forth,
to amend and restate the Existing Credit Agreement (together with all schedules
and exhibits thereto) in its entirety in the form of the Second Amended and
Restated Credit Agreement (as defined below);
NOW, THEREFORE, in consideration of the agreements herein contained, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings (such
meanings to be equally applicable to the singular and plural form thereof):
"Amendment Agreement" is defined in the preamble.
"Amendment Effective Date" is defined in Section 3.1.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"DRI I" is defined in the preamble.
"Existing Credit Agreement" is defined in the first recital.
"Holdings" is defined in the preamble.
"Parent Guarantors" is defined in the preamble.
"Second Amended and Restated Credit Agreement" is defined in Section 2.1.
SECTION 1.2. Other Definitions. Terms for which meanings are provided in
the Second Amended and Restated Credit Agreement are, unless otherwise defined
herein or the context otherwise requires, used in this Amendment Agreement with
such meanings.
ARTICLE II
AMENDMENT AND RESTATEMENT
OF EXISTING CREDIT AGREEMENT
SECTION 2.1. Amendment and Restatement of Existing Credit Agreement. On
the Amendment Effective Date, the Existing Credit Agreement (including all
schedules and exhibits thereto) shall be and is hereby amended and restated to
read in its entirety as set forth in Annex I hereto (as set forth in such Annex
I, the "Second Amended and Restated Credit Agreement"), and as so amended and
restated is hereby ratified, approved and confirmed in each and every respect;
provided, however, that except for purposes of calculating the Total Exposure
Amount as used in Section 3.1.12, each of (a) the definition of "Revolving Loan
Commitment Amount" set forth in Section 1.1 of the Second Amended and Restated
Credit Agreement and (b) the Percentages set forth under the column entitled
"Revolving Loan Commitment" in Schedule II thereto will not be deemed to be
amended until all outstanding Existing Revolving Loans have been paid in full
using the proceeds of the Additional Term C Loans. The rights and obligations of
the parties to the Existing Credit Agreement with respect to the period prior to
the Amendment Effective Date shall not be affected by such amendment and
restatement.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
SECTION 3.1. Amendment Effective Date; Conditions Precedent to Borrowing
of Additional Term C Loans. This Amendment Agreement (and the amendments and
modifications contained herein) shall become effective on the date (the
"Amendment Effective Date") when each of the conditions set forth in this
Article III shall have been fulfilled to the reasonable satisfaction of the
Agents on or before March 17, 1999. The obligation of each Lender having an
Additional Term C Loan Commitment to make an Additional Term C Loan shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Article in addition to those set forth in Section
5.2 of the Second Amended and Restated Credit Agreement.
SECTION 3.1.1. Execution of Counterparts. The Agents shall have received
executed counterparts of this Amendment Agreement, duly executed and delivered
on behalf of each of the Borrower, the Parent Guarantors and the Required
Lenders (which shall include (a) those Lenders holding greater than 50% of the
aggregate amount of the Loans outstanding under each Tranche and (b) each Lender
that has an Additional Term C Loan Commitment).
SECTION 3.1.2. Resolutions, etc. The Agents shall have received, with a
copy for each Lender, from each Obligor a certificate, dated the Amendment
Effective Date, of its Secretary, Assistant Secretary or general partners, as
applicable, as to (i) resolutions of its Board of Directors or all partnership
action, as applicable, then in full force and effect authorizing the execution,
delivery and performance of this Amendment Agreement, the Second Amended and
Restated Credit Agreement and each other Loan Document to be executed by it,
(ii) the incumbency and signatures of those of its officers or general partners,
as applicable, authorized to act with respect to this Amendment Agreement, the
Second Amended and Restated Credit Agreement and each such other Loan Document
executed by it and (iii) the full force and validity of its Organic Documents
and true and complete copies of all amendments thereto since September 11, 1998,
upon which certificate each Agent, the Documentation Agent, the Issuer and each
Lender may conclusively rely until, in the case of clause (ii) above, it shall
have received a further certificate of the Secretary, Assistant Secretary or
general partners, as applicable, of such Obligor canceling or amending such
prior certificate.
SECTION 3.1.3. Delivery of Amendment Effective Date Certificate. The
Agents shall have received executed counterparts of the Amendment Effective Date
Certificate, dated the Amendment Effective Date and duly executed and delivered
by the chief executive, financial or accounting (or equivalent thereof)
Authorized Officer of Holdings, in which certificate Holdings shall agree and
acknowledge that the statements made therein shall be deemed to be true and
correct representations and warranties of Holdings made as of such date under
this Amendment Agreement, and, at the time such certificate is delivered, such
statements shall in fact be true and correct in all
material respects.
SECTION 3.1.4. Delivery of Notes. The Agents shall have received, for the
account of each Lender that shall have requested a replacement Note not less
than two Business Days prior to the Amendment Effective Date, a replacement Note
in respect of each applicable Tranche duly executed and delivered by an
Authorized Officer of the Borrower (and each such replacement Note shall
represent an amendment and restatement of, and shall be issued in substitution
and exchange for, and not in satisfaction or payment of, the original Note (as
defined in, and issued pursuant to, the Existing Credit Agreement, an "Original
Note") of such Lender and the indebtedness (together with the obligation to pay
accrued interest thereon) originally evidenced by such Lender's Original Notes
which are now to be evidenced by such Lender's new replacement Notes delivered
pursuant to this Amendment Agreement shall be (and the Borrower hereby
acknowledges and agrees that such indebtedness is) a continuing indebtedness,
and nothing herein contained shall be construed to deem any such Original Notes
paid, or to release or terminate any Lien or security interest given to secure
such Original Notes, which Liens and security interests shall continue to secure
such indebtedness as evidenced by such Lender's new Notes).
SECTION 3.1.5. Borrowing Request. The Administrative Agent shall have
received a Borrowing Request duly executed and delivered by the Borrower
pursuant to which Additional Term C Loans are made to the Borrower for the
purposes set forth in the Section 7.1.9 of the Second Amended and Restated
Credit Agreement.
SECTION 3.1.6. Financial Information, etc. The Agents shall have received,
with counterparts for each Lender, (a) (i) audited consolidated financial
statements of (A) Holdings and its Subsidiaries and Daboco and its Subsidiaries
for the Fiscal Years ended on December 30, 1995, December 28, 1996 and December
27, 1997 and (B) Rock Bottom and its Subsidiaries for the Fiscal Years ended on
January 31, 1996, January 31, 1997 and January 31, 1998, (ii) unaudited
consolidated financial statements of (A) Holdings and its Subsidiaries and
Daboco and its Subsidiaries for the Fiscal Quarters ended on March 28, 1998,
June 27, 1998, September 26, 1998 and December 26, 1998 and (B) Rock Bottom and
its Subsidiaries for the Fiscal Quarters ended on April 30, 1998 and (iii)
unaudited consolidated financial statements of Holdings and its Subsidiaries and
Borrower and its Subsidiaries for the fiscal month ended on January 23, 1999;
and (b) a pro forma consolidated balance sheets of Holdings and its Subsidiaries
and the Borrower and its Subsidiaries, as at December 26, 1998 (the "Pro Forma
Balance Sheets"), certified by the chief financial or accounting Authorized
Officers of Holdings and the Borrower, respectively, giving effect to the
consummation of the New Transaction.
SECTION 3.1.7. Solvency The Agents shall have received executed
counterparts of the Solvency Certificates, dated as of the Amendment Effective
Date, duly executed and delivered by the chief financial or accounting
Authorized Officer of each of Holdings and the Borrower.
SECTION 3.1.8. Litigation. There shall exist no pending or threatened
material litigation, proceedings or investigations which (x) contests the
consummation of the New Transaction or the legality or validity of the Second
Amended and Restated Credit Agreement, any other Loan Document or any Material
Document or (y) could reasonably be expected to have a Material Adverse Effect.
SECTION 3.1.9. Material Adverse Change. Except as set forth in Item 6.6
("Material Adverse Change") of the Disclosure Schedule, there shall have
occurred no material adverse change in the business, assets, debt service
capacity, tax position, environmental liability, financial condition,
operations, properties or prospects of the Borrower and its Subsidiaries, taken
as a whole, or Holdings and its Subsidiaries, taken as a whole, in each case
since December 27, 1997.
SECTION 3.1.10. Approvals. All necessary governmental, shareholders' and
third-party approvals in connection with the New Transaction, the financing
contemplated hereby, the continued operations of any Parent Guarantor, the
Borrower and each of their respective Subsidiaries and the execution, delivery
and performance of this Amendment Agreement, the Second Amended and Restated
Credit Agreement and the other Loan Documents shall have been duly obtained and
all applicable waiting periods shall have expired without, in all such cases,
any action being taken or threatened by any competent authority that would
restrain, prevent or otherwise imposes adverse conditions on the New
Transaction, the financing contemplated hereby or the continued operations of
any Parent Guarantor, the Borrower or any of their respective Subsidiaries.
SECTION 3.1.11. Opinions of Counsel. The Agents shall have received an
opinion, dated the Amendment Effective Date and addressed to the Agents, the
Documentation Agent and all of the Lenders from Xxxxxx & Xxxxxxx, special New
York counsel to each of the Obligors, substantially in the form of Exhibit K to
the Second Amended and Restated Credit Agreement.
SECTION 3.1.12. Amendment Fee. The Administrative Agent shall have
received, for the account of each Lender signatory hereto prior to or on the
Amendment Effective Date, an amendment fee equal to .125% of each such Lender's
Percentage of the Total Exposure Amount.
SECTION 3.1.13. Fees, Expenses, etc. The Administrative Agent shall have
received for its own account or for the account of each other Agent or each
Lender, as the case may be, all fees, costs and expenses due and payable
pursuant to Sections 3.3 and 11.3 of the Second Amended and Restated Credit
Agreement to the extent then invoiced.
SECTION 3.1.14. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be satisfactory in form and substance
to the Agents and their counsel. The Agents and their counsel shall have
received all information, approvals, opinions, documents or instruments as the
Agents or their counsel may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties. In order to induce the
Lenders to execute and deliver this Amendment Agreement, each of the Borrower
and each Parent Guarantor hereby represents and warrants as set forth below:
(a) The execution, delivery and performance by each of the Borrower,
each Parent Guarantor and each of their respective Subsidiaries of this
Amendment Agreement, the Second Amended and Restated Credit Agreement, the
Notes and each other Loan Document executed or to be executed by it are
within the Borrower's and each such Obligor's corporate or partnership
powers, have been duly authorized by all necessary corporate or
partnership action, and do not (i) contravene the Borrower's or any such
Obligor's Organic Documents, (ii) contravene any contractual restriction,
law or governmental regulation or court decree or order binding on or
affecting the Borrower or any such Obligor, or (iii) result in, or require
the creation or imposition of, any Lien on any of the Borrower's or any
other Obligor's properties, except pursuant to the terms of a Loan
Document.
(b) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or other
Person, is required for the due execution, delivery or performance by any
of the Borrower, any Parent Guarantor or any of their respective
Subsidiaries of this Amendment Agreement, the Second Amended and Restated
Credit Agreement, the Notes, any other Loan Document to which it is a
party, except as have been duly obtained or made and are in full force and
effect.
(c) This Amendment Agreement and the Second Amended and Restated
Credit Agreement constitute, and the Notes and each other Loan Document
executed, or to be executed, by any of the Borrower, any Parent Guarantor
or any of their respective Subsidiaries, as the case may be, constitutes,
or will on the due execution and delivery thereof constitute, the legal,
valid and binding obligations of the Borrower and such other Obligor
enforceable in accordance with their respective terms.
(d) Each Obligor reaffirms as of the Amendment Effective Date such
Person's respective covenants and agreements contained in each Security
Agreement and each Pledge Agreement to which such Person is a party,
including, in each case, as such covenants and agreements may be modified
by the Amendment Agreement and the Second Amended and Restated Credit
Agreement. Each such Obligor further confirms that each such Loan Document
to which such Person is a party is and shall continue to be in full force
and effect and the same are hereby ratified, approved and confirmed in all
respects, except that upon the occurrence of the Amendment Effective Date,
all references in such Loan Documents to the "Credit Agreement", "Loan
Documents", "thereunder", "thereof", "therein" or words of like or similar
import shall mean and be a reference to the Second Amended and Restated
Credit Agreement and the Loan Documents (as such term is defined in the
Second Amended and Restated Credit Agreement).
(e) After giving effect to this Amendment Agreement, neither the
amendment and restatement of the Existing Credit Agreement effected
pursuant to this Amendment Agreement nor the execution, delivery,
performance or effectiveness of this Amendment Agreement, the Second
Amended and Restated Credit Agreement or any Loan Document impairs the
validity, effectiveness or priority of the Liens granted pursuant to each
Pledge Agreement and each Security Agreement (as such terms are defined in
the Existing Credit Agreement, collectively, the "Security Documents"),
and such Liens continue unimpaired with the same priority to secure
repayment of all Obligations (including any Obligations arising in
connection with the making of the Additional Term C Loan Commitments or
the Additional Term C Loans), whether heretofore or hereafter incurred.
Neither the amendment and restatement of the Existing Credit Agreement
effected pursuant to this Amendment Agreement nor the execution, delivery,
performance or effectiveness of this Amendment Agreement or the Second
Amended and Restated Credit Agreement requires that any new filings be
made or other action taken to perfect or to maintain the perfection of
such Liens. Under the foregoing circumstances, the position of the Lenders
with respect to such Liens, the Collateral (as defined in the Security
Documents) in which a security interest was granted pursuant to the
Security Documents, and the ability of the Administrative Agent to realize
upon such Liens pursuant to the terms of the Security Documents have not
been adversely affected in any material respect by the amendment and
restatement of the Existing Credit Agreement effected pursuant to this
Amendment Agreement or by the execution, delivery, performance or
effectiveness of this Amendment Agreement or the Second Amended and
Restated Credit Agreement.
(f) Both before and immediately after giving effect to this
Amendment Agreement, no Default has (or will have) occurred and is (or
will be) continuing, and all of the statements set forth in Section 5.2.1
of the Second Amended and Restated Credit Agreement are true and correct.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Cross-References. References in this Amendment Agreement to
any Article or Section are, unless otherwise specified or otherwise required by
the context, to such Article or Section of this Amendment Agreement.
SECTION 5.2. Loan Document Pursuant to Credit Agreement. This Amendment
Agreement is a Loan Document executed pursuant to the Second Amended and
Restated Credit Agreement and shall be construed, administered and applied in
accordance with all of the terms and provisions of the Second Amended and
Restated Credit Agreement.
SECTION 5.3. Successors and Assigns. This Amendment Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 5.4. Counterparts. This Amendment Agreement may be executed by the
parties hereto in several counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SECTION 5.5. Governing Law. THIS AMENDMENT AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SECTION 5.6. Asset Sales. The Lenders hereby acknowledge and agree that
the Borrower and its Subsidiaries may sell the assets listed on Schedule I
hereto in accordance with the terms of Section 7.2.9 of the Second Amended and
Restated Credit Agreement; provided that up to $8,000,000 of Net Disposition
Proceeds received from such assets shall not constitute Net Disposition Proceeds
for purposes of clause (d)(ii) of such Section.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the signatories hereto have caused this Amendment
Agreement to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
BORROWER:
XXXXX XXXXX
By Xxxxx Xxxxx Inc., a general partner
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Title: Senior Vice President
and Chief Financial Officer
By DRI I Inc., a general partner
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Title: Senior Vice President
and Chief Financial Officer
PARENT GUARANTORS:
XXXXX XXXXX INC.
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Title: Senior Vice President
and Chief Financial Officer
DRI I INC.
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Title: Senior Vice President
and Chief Financial Officer
DLJ CAPITAL FUNDING, INC., as the
Syndication Agent and as a Lender
By /s/ Authorized Signatory
-------------------------------------
Title:
FLEET NATIONAL BANK, as the
Administrative Agent and as a Lender
By /s/ Authorized Signatory
-------------------------------------
Title:
CREDIT LYONNAIS NEW YORK BRANCH, as
the Documentation Agent and as a Lender
By /s/ Authorized Signatory
-------------------------------------
Title:
LENDERS:
SUMMIT BANK
By /s/ Authorized Signatory
-------------------------------------
Title:
BHF-BANK AKTIENGESELLSCHAFT
By /s/ Authorized Signatory
-------------------------------------
Title:
By /s/ Authorized Signatory
-------------------------------------
Title:
BALANCED HIGH-YIELD FUND II LTD.,
By: BHF-Bank Aktiengesellschaft, acting
through its New York Branch, as
attorney-in-fact, as Assignee
By /s/ Authorized Signatory
-------------------------------------
Title:
By /s/ Authorized Signatory
-------------------------------------
Title:
XXXXXX FINANCIAL, INC.
By /s/ Authorized Signatory
-------------------------------------
Title:
ORIX USA CORPORATION
By /s/ Authorized Signatory
-------------------------------------
Title:
OSPREY INVESTMENTS PORTFOLIO
By Citibank, N.A., as Manager
By /s/ Authorized Signatory
-------------------------------------
Title:
GCB INVESTMENT PORTFOLIO,
By: Citibank, N.A.
By /s/ Authorized Signatory
-------------------------------------
Title:
XXXXXX XXXXXXX XXXX XXXXXX PRIME
INCOME TRUST
By /s/ Authorized Signatory
-------------------------------------
Title:
XXX XXXXXX CLO I, LIMITED
By Xxx Xxxxxx Management, Inc.,
as Collateral Manager
By /s/ Authorized Signatory
-------------------------------------
Title:
XXX XXXXXX SENIOR FLOATING RATE
FUND
By /s/ Authorized Signatory
-------------------------------------
Title:
Xxxxxxx Xxxxx Global Investment Series:
INCOME STRATEGIES PORTFOLIO
By Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By /s/ Authorized Signatory
-------------------------------------
Title:
XXXXXXX XXXXX DEBT STRATEGIES
PORTFOLIO
By Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By /s/ Authorized Signatory
-------------------------------------
Title:
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By Xxxxxxx Xxxxx Asset Management, L.P.
as Investment Advisor
By /s/ Authorized Signatory
-------------------------------------
Title:
DEBT STRATEGIES FUND, INC.
By /s/ Authorized Signatory
-------------------------------------
Title:
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC.
By /s/ Authorized Signatory
-------------------------------------
Title:
SENIOR HIGH INCOME PORTFOLIO
By /s/ Authorized Signatory
-------------------------------------
Title:
DEEPROCK & CO.
By: Xxxxx Xxxxx Management, as Investment
Advisor
By /s/ Authorized Signatory
-------------------------------------
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research, as
Investment Advisor
By /s/ Authorized Signatory
-------------------------------------
Title:
OXFORD STRATEGIC INCOME FUND
By: Xxxxx Xxxxx Management, as Investment
Advisor
By /s/ Authorized Signatory
-------------------------------------
Title:
XXX CAPITAL FUNDING LP
By: Highland Capital Management, L.P., as
Collateral Manager
By /s/ Authorized Signatory
-------------------------------------
Title:
KZH PAMCO
By /s/ Authorized Signatory
-------------------------------------
Title:
NORSE CBO, LTD.
By: Xxxxxxxx Capital Management, LLC, as its
Investment Advisor
By: Xxxxxxxx Capital Advisors, LLC, its
Manager and pursuant to delegated
authority
By /s/ Authorized Signatory
-------------------------------------
Title:
CAPTIVA III FINANCE LTD., as advised by
Pacific Investment Management Company
By /s/ Authorized Signatory
-------------------------------------
Title:
CHASE MANHATTAN BANK
By /s/ Authorized Signatory
-------------------------------------
Title:
ATHENA CDO, Limited
By: Pacific Investment Management Company,
as its Investment Advisor
By: PIMCO Management Inc., a general partner
By /s/ Authorized Signatory
-------------------------------------
Title:
SCHEDULE I
Assets to be Sold Pursuant to Section 7.2.9
All rights and interests of the Borrower under the leases with respect to the
following real property:
000 X. Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxx
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxx
0000-X Xxxx Xxxx Xxxxxx
Xxxxx Xxxxxxx, Xxx Xxxx
000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxx Xxxx
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxx Xxxx
All of the Borrower's prescription files owned and used by the Borrower in
connection with the operation of its stores located at 000 X. Xxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxx Xxxx and 0000-X Xxxx Xxxx Xxxxxx, Xxxxx Xxxxxxx, Xxx Xxxx (the
"Drug Stores").
All of the Borrower's pharmaceutical inventory located at the Drug Stores.
All of the Borrower's licenses and permits, to the extent transferable, used in
connection with the operation of the Drug Stores.
[EXECUTION COPY]
SOLVENCY CERTIFICATE
XXXXX XXXXX INC.
I, the undersigned, the chief financial officer of Xxxxx Xxxxx Inc.
(formerly known as Xxxxx Xxxxx Holding Corp.), a company incorporated and
existing under the laws of the State of Delaware ("Holdings"), do hereby
certify, on behalf of Holdings, that:
1. This Certificate is furnished to the Lenders pursuant to Section
3.1.7 of the Amendment Agreement defined in the Second Amended and Restated
Credit Agreement, dated as of March 17, 1999, amending and restating in its
entirety that certain Credit Agreement, dated as of September 11, 1998 (as
amended prior to the Amendment Effective Date) (as so amended and restated, and
together with all amendments, supplements, restatements and other modifications,
if any, from time to time thereafter made thereto, the "Credit Agreement"),
among Xxxxx Xxxxx, a New York general partnership (the "Borrower"), Holdings and
the other Parent Guarantor named therein, the several financial institutions
from time to time party thereto (collectively, the "Lenders", and, individually,
a "Lender"), DLJ Capital Funding, Inc., as Syndication Agent for the Lenders,
Fleet National Bank, as Administrative Agent for the Lenders and Credit Lyonnais
New York Branch, as Documentation Agent. Unless otherwise defined herein,
capitalized terms used in this Certificate shall have the meanings set forth in
the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following meanings:
(a) "Fair Market Value"
The amount at which the assets, in their entirety, of Holdings and
its Subsidiaries (including the Borrower) taken as a whole would
change hands between a willing buyer and a willing seller, within a
commercially reasonable period of time, each having reasonable
knowledge of the relevant facts, with neither being under any
compulsion to act, with equity to both.
(b) "Present Fair Salable Value"
The amount that may be realized by an independent willing seller
from an independent willing buyer if the assets of Holdings and its
Subsidiaries (including the Borrower) taken as whole are sold with
reasonable promptness in an arm's-length transaction under present
conditions for the sale of the assets of Holdings and its
Subsidiaries (including the Borrower) taken as a whole.
(c) "Stated Liabilities"
The recorded liabilities (including contingent liabilities that
would be recorded in accordance with GAAP) of Holdings and its
Subsidiaries (including the Borrower) on a consolidated basis
pursuant to its unaudited balance sheet as of July 25, 1998, after
giving effect to the consummation of the New Transaction
contemplated pursuant to and in connection with the Credit
Agreement, determined in accordance with GAAP consistently applied.
(d) "Identified Contingent Liabilities"
The maximum reasonably estimated amount of liabilities that may
result from pending litigation, asserted claims and assessments,
guaranties, environmental conditions, uninsured risks and other
contingent liabilities of Holdings and its Subsidiaries (including
the Borrower) taken as a whole, as identified and explained in terms
of their nature and estimated magnitude by Authorized Officers of
Holdings and/or any of its Subsidiaries (including the Borrower).
(e) "Pay their respective Stated Liabilities and Identified Contingent
Liabilities as they mature"
Holdings and its Subsidiaries (including the Borrower) taken as a
whole will have sufficient assets and cash flow to pay their
respective Stated Liabilities and Identified Contingent Liabilities
as those liabilities mature or otherwise become payable.
(f) "Does not have Unreasonably Small Capital"
Holdings and its Subsidiaries (including the Borrower) taken as a
whole, after giving effect to the New Transaction contemplated
pursuant to and in connection with the Credit Agreement, is a going
concern and has sufficient capital to ensure that it will continue
to be a going concern for such period and to remain a going concern
and does not lack sufficient capital for its needs and anticipated
needs, including without limitation, Identified Contingent
Liabilities, without substantial unplanned disposition of assets
outside the ordinary course of business, restructuring of debt,
externally forced revisions of its operations or other similar
actions.
3. For purposes of this Certificate, I, or officers of Holdings
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below.
(a) I have reviewed the financial statements referred to in Section 6.5
of the Credit
-2-
Agreement.
(b) I have made inquiries of certain officials of Holdings and its
Subsidiaries (including the Borrower) who have responsibility for
financial and accounting matters regarding the existence and amount
of Identified Contingent Liabilities associated with the business of
Holdings and its Subsidiaries (including the Borrower).
(c) I have knowledge of and have reviewed to my satisfaction the Loan
Documents, and the other documents relating thereto, and the
respective schedules and exhibits thereto.
(d) With respect to Identified Contingent Liabilities, I:
(i) inquired of certain officials of Holdings and its Subsidiaries
(including the Borrower) who have responsibility for legal,
financial and accounting matters as to the existence and
estimated liability with respect to all contingent liabilities
associated with the business of Holdings and its Subsidiaries
(including the Borrower); and
(ii) confirmed with officers of Holdings and its Subsidiaries
(including the Borrower) that, to the best of such officers'
knowledge, (A) all appropriate items were included in Stated
Liabilities or Identified Contingent Liabilities and that (B)
the amounts relating thereto were the maximum estimated amount
of liabilities reasonably likely to result therefrom as of the
date hereof.
(e) I have made inquiries of certain officers of Holdings and its
Subsidiaries (including the Borrower) who have responsibility for
financial reporting and accounting matters regarding whether they
were aware of any events or conditions that, as of the date hereof,
would cause Holdings and its Subsidiaries (including the Borrower)
taken as a whole after giving effect to the consummation of the New
Transaction contemplated pursuant to and in connection with the
Credit Agreement (including the making of Loans and the issuance of
Letters of Credit under the Credit Agreement), to (i) have assets
with a Fair Market Value that are less than Stated Liabilities and
Identified Contingent Liabilities; (ii) have assets with a Present
Fair Salable Value that are less than Stated Liabilities and
Identified Contingent Liabilities; (iii) have Unreasonably Small
Capital; or (iv) not be able to pay their respective Stated
Liabilities and Identified Contingent Liabilities as they mature or
otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify on behalf
of Holdings that, after giving effect to the consummation of the New Transaction
contemplated pursuant to and in connection with the Credit Agreement and the
related financing transactions
-3-
(including the making of Loans and the issuance of Letters of Credit under the
Credit Agreement), it is my opinion that (i) the Fair Market Value of the assets
of Holdings and its Subsidiaries (including the Borrower) taken as a whole
exceed the Stated Liabilities and Identified Contingent Liabilities; (ii) the
Present Fair Salable Value of the assets of Holdings and its Subsidiaries
(including the Borrower) taken as a whole exceed the Stated Liabilities and
Identified Contingent Liabilities; (iii) Holdings and its Subsidiaries
(including the Borrower) taken as a whole will not have Unreasonably Small
Capital; and (iv) Holdings and its Subsidiaries (including the Borrower) taken
as a whole will be able to pay their respective Stated Liabilities and
Identified Contingent Liabilities as they mature or otherwise become payable.
IN WITNESS WHEREOF, I have hereto set my hand this 17th day of
March, 1999.
XXXXX XXXXX INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
-4-
[EXECUTION COPY]
SOLVENCY CERTIFICATE
XXXXX XXXXX
I, the undersigned, the chief financial officer of Xxxxx Xxxxx, a
general partnership organized and existing under the laws of the State of New
York (the "Borrower"), do hereby certify on behalf of the Borrower, that:
1. This Certificate is furnished to the Lenders pursuant to Section
3.1.7 of the Amendment Agreement defined in the Second Amended and Restated
Credit Agreement, dated as of March 17, 1999, amending and restating in its
entirety that certain Amended and Restated Credit Agreement, dated as of
September 11, 1998 (as amended prior to the Amendment Effective Date) (as so
amended and restated, and together with all amendments, supplements,
restatements and other modifications, if any, from time to time thereafter made
thereto, the "Credit Agreement"), among the Borrower, each of the Parent
Guarantors named therein, the several financial institutions from time to time
party thereto (collectively, the "Lenders", and, individually, a "Lender"), DLJ
Capital Funding, Inc., as Syndication Agent for the Lenders, Fleet National
Bank, as Administrative Agent for the Lenders and Credit Lyonnais New York
Branch, as Documentation Agent. Unless otherwise defined herein, capitalized
terms used in this Certificate shall have the meanings set forth in the Credit
Agreement.
2. For purposes of this Certificate, the terms below shall have the
following meanings:
(a) "Fair Market Value"
The amount at which the assets, in their entirety, of the Borrower
and its Subsidiaries taken as a whole would change hands between a
willing buyer and a willing seller, within a commercially reasonable
period of time, each having reasonable knowledge of the relevant
facts, with neither being under any compulsion to act, with equity
to both.
(b) "Present Fair Salable Value"
The amount that may be realized by an independent willing seller
from an independent willing buyer if the assets of the Borrower and
its Subsidiaries taken as whole are sold with reasonable promptness
in an arm's-length transaction under present conditions for the sale
of the assets of the Borrower and its Subsidiaries taken as a whole.
(c) "Stated Liabilities"
The recorded liabilities (including contingent liabilities that
would be recorded in accordance with GAAP) of the Borrower and its
Subsidiaries on a consolidated basis pursuant to its unaudited
balance sheet as of July 25, 1998, after giving effect to the
consummation of the New Transaction contemplated pursuant to and in
connection with the Credit Agreement, determined in accordance with
GAAP consistently applied.
(d) "Identified Contingent Liabilities"
The maximum reasonably estimated amount of liabilities that may
result from pending litigation, asserted claims and assessments,
guaranties, environmental conditions, uninsured risks and other
contingent liabilities of the Borrower and its Subsidiaries taken as
a whole, as identified and explained in terms of their nature and
estimated magnitude by Authorized Officers of the Borrower and/or
any of its Subsidiaries.
(e) "Pay their respective Stated Liabilities and Identified Contingent
Liabilities as they mature"
The Borrower and its Subsidiaries taken as a whole will have
sufficient assets and cash flow to pay their respective Stated
Liabilities and Identified Contingent Liabilities as those
liabilities mature or otherwise become payable.
(f) "Does not have Unreasonably Small Capital"
The Borrower and its Subsidiaries taken as a whole, after giving
effect to the New Transaction contemplated pursuant to and in
connection with the Credit Agreement, is a going concern and has
sufficient capital to ensure that it will continue to be a going
concern for such period and to remain a going concern and does not
lack sufficient capital for its needs and anticipated needs,
including without limitation, Identified Contingent Liabilities,
without substantial unplanned disposition of assets outside the
ordinary course of business, restructuring of debt, externally
forced revisions of its operations or other similar actions.
3. For purposes of this Certificate, I, or officers of the Borrower
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below.
(a) I have reviewed the financial statements referred to in Section 6.5
of the Credit Agreement.
-2-
(b) I have made inquiries of certain officials of the Borrower and its
Subsidiaries who have responsibility for financial and accounting
matters regarding the existence and amount of Identified Contingent
Liabilities associated with the business of the Borrower and its
Subsidiaries.
(c) I have knowledge of and have reviewed to my satisfaction the Loan
Documents, and the other documents relating thereto, and the
respective schedules and exhibits thereto.
(d) With respect to Identified Contingent Liabilities, I:
(i) inquired of certain officials of the Borrower and its
Subsidiaries who have responsibility for legal, financial and
accounting matters as to the existence and estimated liability
with respect to all contingent liabilities associated with the
business of the Borrower and its Subsidiaries; and
(ii) confirmed with officers of the Borrower and its Subsidiaries
that, to the best of such officers' knowledge, (A) all
appropriate items were included in Stated Liabilities or
Identified Contingent Liabilities and that (B) the amounts
relating thereto were the maximum estimated amount of
liabilities reasonably likely to result therefrom as of the
date hereof.
(e) I have made inquiries of certain officers of the Borrower and its
Subsidiaries who have responsibility for financial reporting and
accounting matters regarding whether they were aware of any events
or conditions that, as of the date hereof, would cause the Borrower
and its Subsidiaries taken as a whole after giving effect to the
consummation of the New Transaction contemplated pursuant to and in
connection with the Credit Agreement (including the making of Loans
and the issuance of Letters of Credit under the Credit Agreement),
to (i) have assets with a Fair Market Value that are less than
Stated Liabilities and Identified Contingent Liabilities; (ii) have
assets with a Present Fair Salable Value that are less than Stated
Liabilities and Identified Contingent Liabilities; (iii) have
Unreasonably Small Capital; or (iv) not be able to pay their
respective Stated Liabilities and Identified Contingent Liabilities
as they mature or otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify on behalf
of the Borrower that, after giving effect to the consummation of the New
Transaction contemplated pursuant to and in connection with the Credit Agreement
and the related financing transactions (including the making of Loans and the
issuance of Letters of Credit under the Credit Agreement), it is my opinion that
(i) the Fair Market Value of the assets of the Borrower and its Subsidiaries
taken as a whole exceed the Stated Liabilities and Identified Contingent
-3-
Liabilities; (ii) the Present Fair Salable Value of the assets of the Borrower
and its Subsidiaries taken as a whole exceed the Stated Liabilities and
Identified Contingent Liabilities; (iii) the Borrower and its Subsidiaries taken
as a whole will not have Unreasonably Small Capital; and (iv) the Borrower and
its Subsidiaries taken as a whole will be able to pay their respective Stated
Liabilities and Identified Contingent Liabilities as they mature or otherwise
become payable.
IN WITNESS WHEREOF, I have hereto set my hand this 17th day of
March, 1999.
XXXXX XXXXX
By Xxxxx Xxxxx Inc., a general partner
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
-4-
[EXECUTION COPY]
SOLVENCY CERTIFICATE
XXXXX XXXXX
I, the undersigned, the chief financial officer of Xxxxx Xxxxx, a
general partnership organized and existing under the laws of the State of New
York (the "Borrower"), do hereby certify on behalf of the Borrower, that:
1. This Certificate is furnished to the Lenders pursuant to Section
3.1.7 of the Amendment Agreement defined in the Second Amended and Restated
Credit Agreement, dated as of March 17, 1999, amending and restating in its
entirety that certain Amended and Restated Credit Agreement, dated as of
September 11, 1998 (as amended prior to the Amendment Effective Date) (as so
amended and restated, and together with all amendments, supplements,
restatements and other modifications, if any, from time to time thereafter made
thereto, the "Credit Agreement"), among the Borrower, each of the Parent
Guarantors named therein, the several financial institutions from time to time
party thereto (collectively, the "Lenders", and, individually, a "Lender"), DLJ
Capital Funding, Inc., as Syndication Agent for the Lenders, Fleet National
Bank, as Administrative Agent for the Lenders and Credit Lyonnais New York
Branch, as Documentation Agent. Unless otherwise defined herein, capitalized
terms used in this Certificate shall have the meanings set forth in the Credit
Agreement.
2. For purposes of this Certificate, the terms below shall have the
following meanings:
(a) "Fair Market Value"
The amount at which the assets, in their entirety, of the Borrower
and its Subsidiaries taken as a whole would change hands between a
willing buyer and a willing seller, within a commercially reasonable
period of time, each having reasonable knowledge of the relevant
facts, with neither being under any compulsion to act, with equity
to both.
(b) "Present Fair Salable Value"
The amount that may be realized by an independent willing seller
from an independent willing buyer if the assets of the Borrower and
its Subsidiaries taken as whole are sold with reasonable promptness
in an arm's-length transaction under present conditions for the sale
of the assets of the Borrower and its Subsidiaries taken as a whole.
(c) "Stated Liabilities"
The recorded liabilities (including contingent liabilities that
would be recorded in accordance with GAAP) of the Borrower and its
Subsidiaries on a consolidated basis pursuant to its unaudited
balance sheet as of July 25, 1998, after giving effect to the
consummation of the New Transaction contemplated pursuant to and in
connection with the Credit Agreement, determined in accordance with
GAAP consistently applied.
(d) "Identified Contingent Liabilities"
The maximum reasonably estimated amount of liabilities that may
result from pending litigation, asserted claims and assessments,
guaranties, environmental conditions, uninsured risks and other
contingent liabilities of the Borrower and its Subsidiaries taken as
a whole, as identified and explained in terms of their nature and
estimated magnitude by Authorized Officers of the Borrower and/or
any of its Subsidiaries.
(e) "Pay their respective Stated Liabilities and Identified Contingent
Liabilities as they mature"
The Borrower and its Subsidiaries taken as a whole will have
sufficient assets and cash flow to pay their respective Stated
Liabilities and Identified Contingent Liabilities as those
liabilities mature or otherwise become payable.
(f) "Does not have Unreasonably Small Capital"
The Borrower and its Subsidiaries taken as a whole, after giving
effect to the New Transaction contemplated pursuant to and in
connection with the Credit Agreement, is a going concern and has
sufficient capital to ensure that it will continue to be a going
concern for such period and to remain a going concern and does not
lack sufficient capital for its needs and anticipated needs,
including without limitation, Identified Contingent Liabilities,
without substantial unplanned disposition of assets outside the
ordinary course of business, restructuring of debt, externally
forced revisions of its operations or other similar actions.
3. For purposes of this Certificate, I, or officers of the Borrower
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below.
(a) I have reviewed the financial statements referred to in Section 6.5
of the Credit Agreement.
-2-
(b) I have made inquiries of certain officials of the Borrower and its
Subsidiaries who have responsibility for financial and accounting
matters regarding the existence and amount of Identified Contingent
Liabilities associated with the business of the Borrower and its
Subsidiaries.
(c) I have knowledge of and have reviewed to my satisfaction the Loan
Documents, and the other documents relating thereto, and the
respective schedules and exhibits thereto.
(d) With respect to Identified Contingent Liabilities, I:
(i) inquired of certain officials of the Borrower and its
Subsidiaries who have responsibility for legal, financial and
accounting matters as to the existence and estimated liability
with respect to all contingent liabilities associated with the
business of the Borrower and its Subsidiaries; and
(ii) confirmed with officers of the Borrower and its Subsidiaries
that, to the best of such officers' knowledge, (A) all
appropriate items were included in Stated Liabilities or
Identified Contingent Liabilities and that (B) the amounts
relating thereto were the maximum estimated amount of
liabilities reasonably likely to result therefrom as of the
date hereof.
(e) I have made inquiries of certain officers of the Borrower and its
Subsidiaries who have responsibility for financial reporting and
accounting matters regarding whether they were aware of any events
or conditions that, as of the date hereof, would cause the Borrower
and its Subsidiaries taken as a whole after giving effect to the
consummation of the New Transaction contemplated pursuant to and in
connection with the Credit Agreement (including the making of Loans
and the issuance of Letters of Credit under the Credit Agreement),
to (i) have assets with a Fair Market Value that are less than
Stated Liabilities and Identified Contingent Liabilities; (ii) have
assets with a Present Fair Salable Value that are less than Stated
Liabilities and Identified Contingent Liabilities; (iii) have
Unreasonably Small Capital; or (iv) not be able to pay their
respective Stated Liabilities and Identified Contingent Liabilities
as they mature or otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify on behalf
of the Borrower that, after giving effect to the consummation of the New
Transaction contemplated pursuant to and in connection with the Credit Agreement
and the related financing transactions (including the making of Loans and the
issuance of Letters of Credit under the Credit Agreement), it is my opinion that
(i) the Fair Market Value of the assets of the Borrower and its Subsidiaries
taken as a whole exceed the Stated Liabilities and Identified Contingent
-3-
Liabilities; (ii) the Present Fair Salable Value of the assets of the Borrower
and its Subsidiaries taken as a whole exceed the Stated Liabilities and
Identified Contingent Liabilities; (iii) the Borrower and its Subsidiaries taken
as a whole will not have Unreasonably Small Capital; and (iv) the Borrower and
its Subsidiaries taken as a whole will be able to pay their respective Stated
Liabilities and Identified Contingent Liabilities as they mature or otherwise
become payable.
IN WITNESS WHEREOF, I have hereto set my hand this 17th day of
March, 1999.
XXXXX XXXXX
By Xxxxx Xxxxx Inc., a general partner
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
-4-
