Exhibit 10.2
$1,300,000,000
TERM LOAN AGREEMENT
dated as of
October 25, 1999
among
Rite Aid Corporation,
The Banks from time to time
parties hereto
and
Xxxxxx Guaranty Trust Company of New York,
as Administrative Agent
------------------------------------
XX Xxxxxx Securities Inc.,
Lead Arranger and Book Runner
TABLE OF CONTENTS1
---------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.......................................1
SECTION 1.02. Accounting Terms and Determinations..............16
SECTION 1.03. Other Definitional Provisions....................16
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend..............................17
SECTION 2.02. Notice of Borrowing..............................17
SECTION 2.03. Notice to Banks; Funding of Loans................18
SECTION 2.04. Notes............................................19
SECTION 2.05. Maturity of Loans................................19
SECTION 2.06. Interest Rates...................................19
SECTION 2.07. Method of Electing Interest Rates................21
SECTION 2.08. Fees.............................................22
SECTION 2.09. Reduction Events; Mandatory Prepayments and
Commitment Reductions..........................23
SECTION 2.10. Optional Prepayments.............................25
SECTION 2.11. General Provisions as to Payments................25
SECTION 2.12. Funding Losses...................................26
SECTION 2.13. Computation of Interest..........................26
SECTION 2.14. Regulation D Compensation........................26
ARTICLE 3
CONDITIONS
SECTION 3.01. Closing Date.....................................27
SECTION 3.02. Subsequent Borrowings............................28
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power....................29
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention..................................29
SECTION 4.03. Binding Effect...................................29
SECTION 4.04. Financial Information............................29
SECTION 4.05. Full Disclosure..................................30
SECTION 4.06. Litigation.......................................30
SECTION 4.07. Compliance with ERISA............................30
SECTION 4.08. Taxes............................................31
SECTION 4.09. Subsidiaries.....................................31
SECTION 4.10. Environmental Matters............................31
SECTION 4.11. Year 2000 Compliance.............................32
SECTION 4.12. Pledge Agreement.................................32
ARTICLE 5
COVENANTS
SECTION 5.01. Information......................................32
SECTION 5.02. Payment of Obligations...........................35
SECTION 5.03. Maintenance of Property; Insurance...............35
SECTION 5.04. Conduct of Business and Maintenance of Existence.35
SECTION 5.05. Compliance with Laws.............................36
SECTION 5.06. Inspection of Property, Books and Records........36
SECTION 5.07. Restriction on Other Agreements..................36
SECTION 5.08. Restriction on Debt of Subsidiaries..............36
SECTION 5.09. Restriction on Sales with Leases Back............37
SECTION 5.10. Restriction on Liens.............................37
SECTION 5.11. Capital Expenditures.............................39
SECTION 5.12. Capitalization Leverage Ratio....................39
SECTION 5.13. Cash Flow Leverage Ratio.........................39
SECTION 5.14. Fixed Charge Coverage............................39
SECTION 5.15. Limitation on Investments and Acquisitions.......40
SECTION 5.16. Consolidations, Mergers and Sales of Assets......40
SECTION 5.17. Use of Proceeds..................................41
SECTION 5.18. Restricted Payments..............................41
SECTION 5.19. Synthetic Leases.................................41
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default................................42
SECTION 6.02. Notice of Default................................44
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization....................44
SECTION 7.02. Administrative Agent and Affiliates..............44
SECTION 7.03. Action by Administrative Agent...................45
SECTION 7.04. Consultation with Experts........................45
SECTION 7.05. Liability of Administrative Agent................45
SECTION 7.06. Indemnification..................................45
SECTION 7.07. Credit Decision..................................46
SECTION 7.08. Successor Administrative Agent...................46
SECTION 7.09. Administrative Agent's Fees......................46
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair........................................46
SECTION 8.02. Illegality.......................................47
SECTION 8.03. Increased Cost and Reduced Return................48
SECTION 8.04. Taxes............................................49
SECTION 8.05. Base Rate Loans Substituted for Affected
Euro-Dollar Loans...............................51
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices..........................................52
SECTION 9.02. No Waivers.......................................52
SECTION 9.03. Expenses; Indemnification........................52
SECTION 9.04. Sharing of Set-Offs..............................53
SECTION 9.05. Amendments and Waivers...........................53
SECTION 9.06. Successors and Assigns...........................54
SECTION 9.07. Collateral.......................................56
SECTION 9.08. Governing Law; Submission to Jurisdiction........56
SECTION 9.09. Counterparts.....................................56
SECTION 9.10. WAIVER OF JURY TRIAL.............................56
Commitment Schedule
Pricing Schedule
Exhibit A - Note
Exhibit B - 1 Opinion of Special Counsel for the Borrower
Exhibit B-2 - Opinion of General Counsel for the Borrower
Exhibit C - Opinion of Xxxxx Xxxx & Xxxxxxxx, Special Counsel for
the Administrative Agent
Exhibit D - Assignment and Assumption Agreement
Exhibit E - Pledge Agreement
TERM LOAN AGREEMENT
AGREEMENT dated as of October 25, 1999 among RITE AID CORPORATION,
the BANKS from time to time parties hereto and XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used
herein, have the following meanings:
"ADMINISTRATIVE AGENT" means Xxxxxx Guaranty Trust Company of New
York in its capacity as agent for the Banks under the Loan Documents, and
its successors in such capacity.
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative
Agent and submitted to the Administrative Agent (with a copy to the
Borrower) duly completed by such Bank.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in
the case of its Base Rate Loans, its Domestic Lending Office and (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"ASSET SALE" means any sale, lease or other disposition (including
any such transaction effected by way of merger or consolidation) by the
Borrower or any of its Subsidiaries of any asset, but excluding (i) any
sale, lease or other disposition by PCS or any of its Subsidiaries, (ii)
the sale or other disposition of capital stock of PCS (or of any non-cash
proceeds thereof), (iii) dispositions of inventory, cash, cash equivalents
and other cash management investments and obsolete, unused or unnecessary
equipment, in each case in the ordinary course of business, (iv)
dispositions to the Borrower or a Wholly-Owned Consolidated Subsidiary, (v)
any Sale and Leaseback Transaction and (vi) sales of accounts receivable
pursuant to the Rite Aid Funding LLC receivables securitization facility in
existence on the date hereof, or any successor receivables securitization
facility, if and to the extent that the amount of financing available
thereunder is not increased above that available on the date hereof.
"ASSIGNEE" has the meaning set forth in Section 9.06(c).
"ATTRIBUTABLE DEBT" means, as to any particular Sale and Leaseback
Transaction under which the Borrower or any Subsidiary is at the time
liable, at any date as of which the amount thereof is to be determined (i)
in the case of any such transaction involving a Capital Lease, the amount
on such date of the Capital Lease Obligation thereunder, or (ii) in the
case of any other Sale and Leaseback Transaction, the then present value of
the minimum rental obligations under such Sale and Leaseback Transaction
during the remaining term thereof (after giving effect to any extensions at
the option of the lessor) computed by discounting the respective rental
payments at the actual interest factor included in such payments or, if
such interest factor cannot be readily determined, at the rate of 14% per
annum. The amount of any rental payment required to be made under any such
Sale and Leaseback Transaction not involving a Capital Lease may exclude
amounts required to be paid by the lessee on account of maintenance and
repairs, insurance, taxes, assessments, utilities, operating and labor
costs and similar charges.
"AVAILABILITY PERIOD" means the period from and including the Closing
Date to and including November 15, 1999 (or such earlier date on which the
unused amount of the Commitments is reduced to zero).
"BANK" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their
respective successors.
"BASE RATE" means, for any day, a rate per annum equal to the higher
of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"BASE RATE LOAN" means a Loan that bears interest at a rate per
annum, based on the Base Rate pursuant to the Notice of Borrowing, a Notice
of Interest Rate Election, the last sentence of Section 2.07(a) or Article
8.
"BASE RATE MARGIN" has the meaning specified in the Pricing
Schedule.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by
any member of the ERISA Group.
"BORROWER" means Rite Aid Corporation, a Delaware corporation, and its
successors.
"BORROWER'S 1999 FORM 10-K" means the Borrower's annual report on
Form 10-K for the fiscal year ended February 27, 1999, as filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended.
"BORROWING" means the aggregation of Loans to be made to the Borrower
by the Banks pursuant to Article 2 on a single date and for a single
Interest Period. A Borrowing is a "BASE RATE BORROWING" if such Loans are
Base Rate Loans or a "EURO-DOLLAR BORROWING" if such Loans are Euro-Dollar
Loans.
"BUSINESS ACQUISITION" means (i) an Investment by the Borrower or any
of its Subsidiaries in any other Person (including an Investment by way of
acquisition of securities of any other Person) pursuant to which such
Person shall become a Subsidiary or shall be merged into or consolidated
with the Borrower or any of its Subsidiaries or (ii) an acquisition by the
Borrower or any of its Subsidiaries of the property and assets of any
Person (other than the Borrower or any of its Subsidiaries) that constitute
substantially all the assets of such Person or any division or other
business unit of such Person.
"CAPITAL LEASE" means any lease of property which, in accordance with
generally accepted accounting principles, should be capitalized on the
lessee's balance sheet; and "CAPITAL LEASE OBLIGATION" means the amount of
the liability so capitalized in respect of a Capital Lease.
"CAPITAL MARKETS TRANSACTION" means the receipt by the Borrower or a
Subsidiary of proceeds of (a) an issuance in the public or private capital
markets of long-term debt securities, of equity securities or of
equity-linked (e.g., trust preferred) securities (other than the LPG
Transaction), (b) a Sale and Leaseback Transaction (other than a Sale and
Leaseback Transaction (i) between the Borrower and a Wholly-Owned
Consolidated Subsidiary or between Wholly-Owned Consolidated Subsidiaries
or (ii) entered into in respect of property acquired by the Borrower or a
Subsidiary if such Sale and Leaseback Transaction is entered into within 24
months from the date of such acquisition) or (c) bank borrowings under
facilities entered into after the Closing Date, to the extent the aggregate
incremental financing available thereunder exceeds $200,000,000.
"CLOSING DATE" means the date designated by the Borrower pursuant to
Section 2.02 as the date of the first borrowing hereunder.
"CLOSING PRICE" on any day, with respect to publicly traded
securities, means (a) if such securities are listed or admitted for trading
on a national securities exchange, the reported last sales price regular
way or, if no such reported sale occurs on such day, the average of the
closing bid and asked prices regular way on such day, in each case on the
principal national securities exchange on which such securities are listed
or admitted to trading, or (b) if such securities are not listed or
admitted to trading on any national securities exchange, the average of the
closing bid and asked prices in the over-the-counter market on such day as
reported by NASDAQ or any comparable system or, if not so reported, as
reported by any New York Stock Exchange member firm selected by the
Administration Agent for such purpose.
"COLLATERAL" means collateral subject to the Collateral
Documents.
The "COLLATERAL TEST" will be deemed to have been met for purposes of
Section 2.09 if either (i) there shall have been no sale or other
disposition by the Borrower of the capital stock of PCS and the Required
Banks shall not have notified the Borrower of their determination that
there has been a material decline in the value of the capital stock of PCS
or (ii) the capital stock of PCS shall have been sold for consideration
consisting in whole or in part of publicly traded securities held as
Collateral under the Loan Documents, and the aggregate Closing Price at the
date of determination of such Collateral is at least 200% of the aggregate
amount of the Credit Exposures at such date.
"COLLATERAL DOCUMENTS" means the Pledge Agreement, any additional
pledge agreements required to be delivered pursuant to the Loan Documents
and any other instruments or agreements executed pursuant to the
foregoing.
"COMMITMENT" means (i) with respect to each Bank listed in the
Commitment Schedule, the amount set forth opposite the name of such Bank in
the Commitment Schedule as its Commitment and (ii) with respect to each
Assignee which becomes a Bank pursuant to Section 9.06(c), the amount of
the Commitment thereby assumed by it, in each case as such amount may be
changed from time to time pursuant to Sections 2.09 and 9.06(c).
"COMMITMENT SCHEDULE" means the Schedule attached hereto
identified as such.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate amount of expenditures by the Borrower and its Consolidated
Subsidiaries for plant, property and equipment during such period
(including any such expenditure by way of acquisition of a Person or by way
of assumption of indebtedness or other obligations of a Person, to the
extent reflected as plant, property and equipment), but excluding any such
expenditures made (i) for the replacement or restoration of assets to the
extent financed by condemnation awards or proceeds of insurance received
with respect to the loss or taking of or damage to the asset or assets
being replaced or restored and (ii) for assets acquired to the extent
financed by a Sale and Leaseback Transaction permitted by Section 5.09.
"CONSOLIDATED DEBT" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such
date.
"CONSOLIDATED EBITDA" for any period, Consolidated Net Income for such
period plus, to the extent deducted in determining Consolidated Net Income
for such period, the aggregate amount of (i) Consolidated Interest Charges,
(ii) provision for income taxes, (iii) depreciation and amortization and
(iv) charges incurred in connection with store closings not in excess of
$48,000,000 and $20,000,000 during the fiscal years ending on or closest to
February 28, 2000 and February 28, 2001, respectively; provided that if
there shall have been an acquisition or disposition of operations during
such period, Consolidated EBITDA shall be calculated on a pro forma basis
giving effect thereto as if such acquisition or disposition had occurred on
the first day of such period.
"CONSOLIDATED INTEREST CHARGES" means, for any period, the aggregate
amount of interest charges, whether expensed or capitalized, incurred or
accrued by the Borrower and its Consolidated Subsidiaries during such
period.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of the Borrower and its Consolidated Subsidiaries (exclusive of (a)
any non-cash loss on account of a sale of any drugstore and (b)
extraordinary items of gain or loss and other non-recurring items of gain
or loss, but only to the extent that such non-recurring items of loss do
not (i) involve any cash expenditure by the Borrower during such period or
any future period or (ii) exceed $50,000,000 in any fiscal year),
determined on a consolidated basis for such period.
"CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of assets
(less applicable reserves and other properly deductible items) which under
generally accepted accounting principles would be included on a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries after deducting therefrom (i) all liabilities and liability
items, including amounts in respect of obligations or guarantees of
obligations under leases, which under generally accepted accounting
principles would be included on such balance sheet, except Funded Debt,
capital stock and surplus, surplus reserves and provisions for deferred
income taxes, and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, which in
each case under generally accepted accounting principles would be included
on such consolidated balance sheet.
"CONSOLIDATED NET WORTH" means at any date the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries
determined as of such date.
"CONSOLIDATED RENT" means, for any period, the consolidated rental
expense of the Borrower and its Consolidated Subsidiaries for such period.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the
Borrower in its consolidated financial statements if such statements were
prepared as of such date.
"CREDIT EXPOSURE" means, with respect to any Bank, the amount of such
Bank's Commitment, if still in existence, or the aggregate outstanding
principal amount of such Bank's Loans, if its Commitment is not in
existence.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee which are
capitalized in accordance with generally accepted accounting principles,
(v) all non-contingent obligations (and, for purposes of Section 5.10 and
the definitions of Material Debt and Material Financial Obligations, all
contingent obligations) of such Person to reimburse any bank or other
Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Lien on any asset of such Person,
whether or not such Debt is otherwise an obligation of such Person, and
(vii) all Debt of others Guaranteed by such Person.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including
any option with respect to any of the foregoing transactions) or any
combination of the foregoing transactions.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law
to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located
at its address set forth in its Administrative Questionnaire (or identified
in its Administrative Questionnaire as its Domestic Lending Office) or such
other office as such Bank may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Administrative Agent.
"XXXXXXXXX.XXX" means xxxxxxxxx.xxx, inc., a Delaware
corporation, and its successors.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to
emissions, discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes
or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or
any Subsidiary, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings
in dollar deposits) in London.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office
by notice to the Borrower and the Administrative Agent.
"EURO-DOLLAR LOAN" means a Loan that bears interest at a Euro-Dollar
Rate pursuant to the Notice of Borrowing or a Notice of Interest
Rate Election.
"EURO-DOLLAR MARGIN" has the meaning specified in the Pricing
Schedule.
"EURO-DOLLAR RATE" means a rate of interest determined pursuant to
Section 2.06(b) on the basis of a London Interbank Offered Rate.
"EURO-DOLLAR RESERVE PERCENTAGE" has the meaning set forth in Section
2.14.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXISTING CREDIT AGREEMENT" means the Credit Agreement dated as of
January 21, 1999 among the Borrower, the banks party thereto and Xxxxxx
Guaranty Trust Company of New York, as administrative agent.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if such day is not
a Domestic Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Domestic Business Day as so
published on the next succeeding Domestic Business Day, and (ii) if no such
rate is so published on such next succeeding Domestic Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to Xxxxxx
Guaranty Trust Company of New York on such day on such transactions as
determined by the Administrative Agent.
"FIXED CHARGE COVERAGE RATIO" means at any date, the ratio of (i)
Consolidated EBITDA plus Consolidated Rent to (ii) Consolidated Interest
Charges plus Consolidated Rent, in each case for the period of four
consecutive fiscal quarters most recently ended on or prior to such date.
"FUNDED DEBT" means any Debt maturing more than one year after the
date of determination thereof and any Debt, regardless of its term,
renewable pursuant to the terms thereof or of a revolving credit or similar
agreement effective for more than one year after the date of the creation
of such Debt, which would, in accordance with generally accepted accounting
practice, be classified as funded debt but shall not include:
(a) any Debt for the payment, redemption or satisfaction of which
money (or evidences of indebtedness, if permitted under the instrument
creating such indebtedness) in the necessary amount shall have been
deposited in trust with a trustee or proper depository either at or
before maturity or redemption date thereof; or
(b) guarantees arising in connection with the sale, discount,
guarantee or pledge of notes, chattel mortgages, leases, accounts
receivable, trade acceptances and other paper arising, in the ordinary
course of business, out of installment or conditional sales to or by,
or transactions involving title retention with, distributors, dealers
or other customers of merchandise, equipment or services or guarantees
other than guarantees of indebtedness for borrowed money.
"GROUP OF LOANS" means, at any time, a group of Loans consisting of
(i) all Loans which are Base Rate Loans at such time and (ii) all
Euro-Dollar Loans having the same Interest Period at such time; provided
that, if a Loan of any particular Bank is converted to or made as a Base
Rate Loan pursuant to Article 8, such Loan shall be included in the same
Group or Groups of Loans from time to time as it would have been in if it
had not been so converted or made.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of
any other Person; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
The term "GUARANTEE" used as a verb has a corresponding meaning.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INDENTURES" means (i) the Indenture dated as of December 21, 1998
between the Borrower and Xxxxxx Trust and Savings Bank, as trustee, (ii)
the Indenture dated as of September 22, 1998 between the Borrower and
Xxxxxx Trust and Savings Bank, as trustee and (iii) the Indenture dated as
of August 1, 1993, between the Borrower and First Trust of New York,
National Association, as successor trustee.
"INFORMATION" means, collectively, (i) the information provided to
the Banks in connection with the waiver dated as of September 29, 1999 to
the Existing Credit Agreement and (ii) the information presented to the
Banks at meetings in New York City on October 4, 1999 and October 18, 1999
among the Borrower and certain financial institutions.
"INTEREST PERIOD" means, with respect to each Euro-Dollar Loan, the
period commencing on the date of borrowing specified in the applicable
Notice of Borrowing or on the date specified in an applicable Notice of
Interest Rate Election and ending one, two, three or six months thereafter,
as the Borrower may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) no Interest Period may end after the Maturity Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"INVESTMENT" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise. Any
repurchase by the Borrower of its own capital stock shall not constitute an
Investment for purposes of this Agreement. The amount of any Investment
shall be the original principal or capital amount thereof less all returns
of principal or equity thereon (and without adjustment by reason of the
financial condition of such other Person) and shall, if made by the
transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal, to the fair market
value of such property at the time of such transfer or exchange.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset. For the purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional
sale agreement, Capital Lease or other title retention agreement relating
to such asset.
"LOAN" means a Base Rate Loan or a Euro-Dollar Loan and "LOANS" means
Base Rate Loans or Euro-Dollar Loans or any combination of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Notes and the Collateral
Documents.
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.06(b).
"LPG COMMITMENT" means the Commitment with Respect to Investment in
Rite Aid Corporation dated October 18, 1999 between the Borrower and Green
Equity Investors III.
"LPG TRANSACTION" means the purchase and sale of 3,000,000 shares of
8% Convertible Pay-In-Kind Preferred Stock of the Borrower for a purchase
price of $100.00 per share pursuant to the LPG Commitment.
"MATERIAL FINANCIAL OBLIGATIONS" means (i) a principal or face amount
of Debt (except Debt outstanding hereunder) and/or (ii) payment or
collateralization obligations in respect of Derivatives Obligations and/or
(iii) payment or collateralization obligations in respect of leases (other
than Capital Leases, which are Debt) of the Borrower and/or one or more of
its Subsidiaries, arising in one or more related or unrelated transactions,
exceeding in the aggregate $25,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000.
"MATURITY DATE" means November 1, 2000.
"XXXXXX PRO RATA EXPOSURE" means the $300,000,000 Demand Promissory
Note dated June 15, 1999 issued by the Borrower to the order of X.X. Xxxxxx
Ventures Corporation.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.
"NET CASH PROCEEDS" means, with respect to any Reduction Event, an
amount equal to the cash proceeds received by the Borrower or any of its
Subsidiaries from or in respect of such Reduction Event (including, when
received, any cash proceeds received as income or other proceeds of any
noncash proceeds of any Asset Sale), less (x) any investment banking and
underwriting fees and any other expenses reasonably incurred by such Person
in respect of such Reduction Event, (y) if such Reduction Event is an Asset
Sale, (I) the amount of any Debt secured by a Lien on any asset disposed of
in such Asset Sale and discharged from the proceeds thereof and (II) any
taxes actually paid or to be payable by such Person (as estimated in good
faith by the senior financial or accounting officer of the Borrower, giving
effect to the overall tax position of the Borrower) in respect of such
Asset Sale and (z) if such Reduction Event is an Asset Sale, the portion
(which may be all) of such Net Cash Proceeds required by the terms of the
Pro Rata Facilities to be applied to the prepayment of loans and/or
reduction of commitments thereunder.
"1996 LOAN DOCUMENTS" means the "Loan Documents" as defined in the Pro
Rata Credit Agreement.
"NOTES" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to
repay the Loans, and "NOTE" means any one of such promissory notes issued
hereunder.
"NOTICE OF BORROWING" means a Notice of Borrowing (as defined in
Section 2.02).
"OCTOBER SPECIAL CHARGES" means the special charges in the aggregate
pre-tax amount of $660,000,000 reflected in the Information.
"PARENT" means, with respect to any Bank, any Person controlling such
Bank.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PCS" means PCS Holding Corporation, a Delaware corporation, and its
successors.
"PCS EVENT" means (i) the sale or other disposition of capital stock
of PCS (or of any non-cash proceeds thereof) or (ii) any sale, lease or
other disposition by PCS or any of its Subsidiaries of any asset which
would constitute an Asset Sale but for clause (i) of the definition of such
term.
"PERSON" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"PLAN" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed
to, by any Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the ERISA Group.
"PLEDGE AGREEMENT" means the PCS Pledge Agreement dated as of the
date hereof between the Borrower and Xxxxxx Guaranty Trust Company of New
York, as agent thereunder, in substantially the form of Exhibit E.
"PRICING SCHEDULE" means the Schedule attached hereto
identified as such.
"PRIME RATE" means the rate of interest publicly announced by Xxxxxx
Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.
"PRO RATA CREDIT AGREEMENT" means the $1,000,000,000 Amended and
Restated Credit Agreement dated as of July 19, 1996 and amended and
restated as of October 25, 1999 among the Borrower, the banks listed
therein and Xxxxxx Guaranty Trust Company of New York, as administrative
agent thereunder.
"PRO RATA FACILITIES" means, collectively, the Pro Rata Credit
Agreement, the Prudential Pro Rata Exposure and the Xxxxxx Pro Rata
Exposure.
"PRUDENTIAL PRO RATA EXPOSURE" means the 7.30% Senior Secured Notes
due February 28, 2002 issued by Xxxxx, Inc. and guaranteed by the Borrower.
"QUARTERLY DATE" means the last day of each Quarterly Period.
"QUARTERLY PERIOD" means a three-month period consisting of (i)
February, March and April, (ii) May, June and July, (iii) August, September
and October or (iv) November, December and January.
"REDUCTION EVENT" means the receipt on or after October 15, 1999 by
the Borrower or a Subsidiary of proceeds of (i) a PCS Event, (ii) a Capital
Markets Transaction or (iii) an Asset Sale.
"REFERENCE BANKS" means the principal London offices of Citibank,
N.A., Bank of America, N. A. and Xxxxxx Guaranty Trust Company of New York.
"REGULATION T, U OR X" means Regulation T, U or X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"REQUIRED BANKS" means at any time Banks having more than 50% of the
aggregate amount of the Credit Exposures.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on
any shares of the Borrower's capital stock (except dividends payable solely
in shares of its capital stock) or (ii) any payment on account of the
purchase, redemption, retirement or acquisition of (a) any shares of the
Borrower's capital stock or (b) any option, warrant or other right to
acquire shares of the Borrower's capital stock (other than such payments in
connection with employee benefit plans in the ordinary course of business).
"SALE AND LEASEBACK TRANSACTION" has the meaning set forth in Section
5.09.
"SEC" means the Securities and Exchange Commission, or any Person
succeeding to its functions under the Securities Exchange Act of 1934, as
amended.
"SECURED DEBT" means Debt which is secured by a Lien on property of
the Borrower or any Subsidiary, but shall not include guarantees arising in
connection with the sale, discount, guarantee or pledge of notes, chattel
mortgages, leases, accounts receivable, trade acceptances and other papers
arising, in the ordinary course of business, out of installment or
conditional sales to or by, or transactions involving title retention with,
distributors, dealers or other customers, of merchandise, equipment or
services.
"SIGNIFICANT SUBSIDIARY" means at any time any Subsidiary or any
group of Subsidiaries having consolidated assets, individually or in the
aggregate, equal to or greater than 8% of the consolidated assets of the
Borrower and its Consolidated Subsidiaries at such time.
"SUBSIDIARY" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the
Borrower.
"SUPER MAJORITY BANKS" means at any time Banks having at least 90% of
the aggregate amount of the Credit Exposures.
"SYNTHETIC LEASE" means a lease which is treated as an operating
lease under generally accepted accounting principles but as ownership of
the leased asset by the lessee for purposes of the Internal Revenue Code.
"TEMPORARY CASH INVESTMENT" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial
paper rated at least A-1 by S&P (as defined in the Pricing Schedule) and
P-1 by Xxxxx'x (as defined in the Pricing Schedule), (iii) time deposits
with, including certificates of deposit issued by, any office located in
the United States of any bank or trust company which is organized or
licensed under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000,
(iv) repurchase agreements with respect to securities described in clause
(i) above entered into with an office of a bank or trust company meeting
the criteria specified in clause (iii) above, provided in each case that
such Investment matures within one year from the date of acquisition
thereof by the Borrower or a Subsidiary or (v) money market mutual funds at
least 90% the assets of which are held in Investments referred to in
clauses (i) through (iv) above (except that the maturities of certain
Investments held by any such money market funds may exceed one year so long
as the dollar-weighted average life of the Investments of such money market
mutual fund is less than one year).
"TOTAL CAPITAL" means, at any date, the sum of Consolidated Debt and
Consolidated Net Worth, each determined as of such date.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii)
the fair market value of all Plan assets allocable to such liabilities
under Title IV of ERISA (excluding any accrued but unpaid contributions),
all determined as of the then most recent valuation date for such Plan, but
only to the extent that such excess represents a potential liability of a
member of the ERISA Group to the PBGC or any other Person under Title IV of
ERISA.
"UNITED STATES" means the United States of America, including the
States and the District of Columbia, but excluding its territories and
possessions.
"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests
of which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. (a) Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared
in accordance with generally accepted accounting principles as in effect
from time to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the
most recent audited consolidated financial statements of the Borrower and
its Consolidated Subsidiaries delivered to the Banks; provided that, if the
Borrower notifies the Administrative Agent that the Borrower wishes to
amend any covenant in Article 5 to eliminate the effect of any change in
generally accepted accounting principles on the operation of such covenant
(or if the Administrative Agent notifies the Borrower that the Required
Banks wish to amend Article 5 for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of generally
accepted accounting principles in effect immediately before the relevant
change in generally accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
(b) All financial determinations hereunder shall be adjusted to
eliminate the effect of the October Special Charge for all fiscal periods
ended prior to the date hereof.
SECTION 1.03. Other Definitional Provisions. References in this
Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.01
may, unless the context otherwise requires, be used in the singular or
plural depending on the reference. "Include" or "includes" and "including"
shall be deemed to be followed by "without limitation" whether or not they
are in fact followed by such words or words of like import. "Writing",
"written" and comparable terms refer to printing, typing and other means of
reproducing words in a visible form. References to any agreement or
contract are to such agreement or contract as amended, modified or
supplemented from time to time in accordance with the terms hereof and
thereof; provided that amendments, modifications or supplements to the 1996
Loan Documents or the Pro Rata Facilities shall be effective for purposes
of references thereto in the Loan Documents only if such amendments are
consented to in writing for such purpose by the Super-Majority Banks.
References to any Person include the successors and assigns of such Person.
References "from" or "through" any date mean, unless otherwise specified,
"from and including" or "through and including", respectively.
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Availability Period
each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make loans to the Borrower from time to time in amounts
requested by the Borrower in accordance with the terms of this Agreement,
provided that the aggregate principal amount of Loans made by such Bank
shall not exceed the amount of its Commitment. Each Borrowing under this
Section shall be in an aggregate principal amount of $10,000,000 or any
larger multiple of $1,000,000 (except that any such Borrowing may be in the
aggregate amount of the unused Commitments) and shall be made from the
several Banks ratably in proportion to their respective Commitments. The
Commitments are not revolving in nature, and amounts repaid or prepaid may
not be reborrowed. The Commitments shall terminate at the close of business
on the last day of the Availability Period (or at the close of business on
October 29, 1999, if the Closing Date shall not have occurred on or prior
to such date).
SECTION 2.02. Notice of Borrowing. The Borrower shall give the
Administrative Agent notice (a "NOTICE OF BORROWING") not later than 10:30
A.M. (New York City time) on (x) the date of each Base Rate Borrowing and
(y) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be Base Rate
Loans or Euro-Dollar Loans, and
(d) in the case of a Euro-Dollar Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
SECTION 2.03. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Administrative Agent
shall promptly notify each Bank of the contents thereof, and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City time) on the date of each
Borrowing, each Bank shall (except as provided in subsection (c) of this
Section) make available its share of such Borrowing, in Federal or other
funds immediately available in New York City, to the Administrative Agent
at its address referred to in Section 9.01. Unless the Administrative Agent
determines that any applicable condition specified in Article 3 has not
been satisfied, the Administrative Agent will make the funds so received
from the Banks available to the Borrower at the Administrative Agent's
aforesaid address.
(c) Each Bank shall apply a portion of the Loan(s) to be made by it on
the Closing Date equal to the outstanding principal amount of its loans
under the Existing Credit Agreement as an extension and renewal of such
outstanding loans, and only an amount equal to the excess, if any, of its
share of the Borrowing on the Closing Date over the amount of its
outstanding loans under the Existing Credit Agreement shall be made
available by such Bank to the Administrative Agent as provided in
subsection (b).
(d) Unless the Administrative Agent shall have received notice from a
Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's share of such Borrowing,
the Administrative Agent may assume that such Bank has made such share
available to the Administrative Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.03 and the
Administrative Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the extent
that such Bank shall not have so made such share available to the
Administrative Agent, such Bank and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, a rate per annum
equal to the higher of the Federal Funds Rate and the interest rate
applicable thereto pursuant to Section 2.06 and (ii) in the case of such
Bank, the Federal Funds Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for purposes of this
Agreement.
SECTION 2.04. Notes. (a) The Loans of each Bank shall be evidenced by
a single Note payable to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Administrative
Agent, request that its Loans of a particular type be evidenced by a
separate Note in an amount equal to the aggregate unpaid principal amount
of such Loans. Each such Note shall be in substantially the form of Exhibit
A hereto with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant type. Each reference in this
Agreement to the "NOTE" of such Bank shall be deemed to refer to and
include any or all of such Notes, as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(d), the
Administrative Agent shall forward such Note to such Bank. Each Bank shall
record the date, amount and type of each Loan made by it and the date and
amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with any transfer or
enforcement of its Note, endorse on the schedule forming a part thereof
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding; provided that the failure of any Bank to
make any such recordation or endorsement shall not affect the obligations
of the Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its Note and to attach
to and make a part of its Note a continuation of any such schedule as and
when required.
SECTION 2.05. Maturity of Loans. Each Loan shall mature, and the
principal amount thereof shall be due and payable, on the Maturity Date.
SECTION 2.06. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due, at a rate per annum equal to
the sum of the Base Rate Margin plus the Base Rate for such day. Such
interest shall be payable monthly in arrears on the last day of each
calendar month and on the Maturity Date and, with respect to the principal
amount of any Base Rate Loan that is prepaid or converted to a Euro-Dollar
Loan, on the date of such prepayment or conversion. Any overdue principal
of or interest on any Base Rate Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the sum of 2%
plus the rate otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar
Margin for such day plus the applicable London Interbank Offered Rate for
such Interest Period. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than
three months, at intervals of three months after the first day thereof.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before
the first day of such Interest Period in an amount approximately equal to
the principal amount of the Euro-Dollar Loan of such Reference Bank to
which such Interest Period is to apply and for a period of time comparable
to such Interest Period.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day from and including the date
payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin for such day plus the London Interbank Offered Rate
applicable to such Loan and (ii) the Euro-Dollar Margin for such day plus
the quotient obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (x) the average (rounded upward, if necessary, to
the next higher 1/16 of 1%) of the respective rates per annum at which one
day (or, if such amount due remains unpaid more than three Euro-Dollar
Business Days, then for such other period of time not longer than six
months as the Administrative Agent may select) deposits in dollars in an
amount approximately equal to such overdue payment due to each of the
Reference Banks are offered to such Reference Bank in the London interbank
market for the applicable period determined as provided above by (y) 1.00
minus the Euro-Dollar Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per
annum equal to the sum of 2% plus the rate applicable to Base Rate Loans
for such day).
(d) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the Banks of each rate of interest so
determined, and its determination thereof shall be conclusive in the
absence of manifest error.
(e) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If
any Reference Bank does not furnish a timely quotation, the Administrative
Agent shall determine the relevant interest rate on the basis of the
quotation or quotations furnished by the remaining Reference Bank or Banks
or, if none of such quotations is available on a timely basis, the
provisions of Section 8.01 shall apply.
SECTION 2.07. Method of Electing Interest Rates. (a) The Loans
included in each Group of Loans shall bear interest initially at the type
of rate specified by the Borrower in the Notice of Borrowing. Thereafter,
the Borrower may from time to time elect to change or continue the type of
interest rate borne by each Group of Loans (subject to Section 2.07(d) and
the provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to Euro-Dollar Loans as of any
Euro-Dollar Business Day; and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans as of any Domestic
Business Day or may elect to continue such Loans as Euro-Dollar
Loans, as of the end of any Interest Period applicable thereto,
for an additional Interest Period, subject to Section 2.12 if any
such conversion is effective on any day other than the last day
of an Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Administrative Agent not later than 10:30
A.M. (New York City time) on the third Euro-Dollar Business Day before the
conversion or continuation selected in such notice is to be effective. A
Notice of Interest Rate Election may, if it so specifies, apply to only a
portion of the aggregate principal amount of the relevant Group of Loans;
provided that (i) such portion is allocated ratably among the Loans
comprising such Group and (ii) the portion to which such Notice applies,
and the remaining portion to which it does not apply, are each at least
$100,000,000 (unless such portion is comprised of Base Rate Loans). If no
such notice is timely received before the end of an Interest Period for any
Group of Euro-Dollar Loans, the Borrower shall be deemed to have elected
that such Group of Loans be converted to Base Rate Loans at the end of such
Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the applicable
clause of Section 2.07(a);
(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if the Loans resulting from such conversion are
to be Euro-Dollar Loans, the duration of the next succeeding Interest
Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for
an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from
the Borrower pursuant to Section 2.07(a), the Administrative Agent shall
notify each Bank of the contents thereof and such notice shall not
thereafter be revocable by the Borrower.
(d) The Borrower shall not be entitled to elect to convert any Loans
to, or continue any Loans for an additional Interest Period as, Euro-Dollar
Loans if (i) the aggregate principal amount of any Group of Euro-Dollar
Loans created or continued as a result of such election would be less than
$100,000,000 or (ii) a Default shall have occurred and be continuing when
the Borrower delivers notice of such election to the Administrative Agent.
(e) If any Loan is converted to a different type of Loan, the Borrower
shall pay, on the date of such conversion, the interest accrued to such
date on the principal amount being converted.
SECTION 2.08. Fees. (a) Participation Fees. On the Closing Date, the
Borrower shall pay to the Administrative Agent for the account of each Bank
a participation fee in an amount equal to the sum of (i) 0.50% of the
amount of such Bank's Commitment plus (ii) 0.25% of the excess, if any, of
the amount (if any) that such Bank committed to provide to the Borrower
during the syndication of this Agreement (whether or not accepted by the
Borrower) over the amount of the commitment of such Bank under the Existing
Credit Agreement.
(b) Commitment Fees. The Borrower shall pay to the Agent for the
account of the Banks ratably a commitment fee accruing at the rate of 0.50%
per annum on the daily unused amount of the Commitments. Accrued commitment
fees shall be payable upon the date of termination of the Commitments in
their entirety.
SECTION 2.09. Reduction Events; Mandatory Prepayments and Commitment
Reductions. (a) In the event that the Borrower or any of its Subsidiaries
shall at any time, or from time to time, receive any Net Cash Proceeds of
any Reduction Event, (x) the Borrower shall, not later than the Domestic
Business Day following the date of receipt of such Net Cash Proceeds,
notify the Administrative Agent of such fact and of the amount of such Net
Cash Proceeds, (y) the Borrower shall, not later than the Domestic Business
Day following the date of receipt of such Net Cash Proceeds, cause the same
to be transferred to the Administrative Agent to be held in an escrow
account pending application in accordance with the provisions of this
Agreement and (z) the Borrower shall apply an amount equal to the largest
multiple of $1,000,000 which does not exceed the amount of such Net Cash
Proceeds to the ratable reduction of the Credit Exposures; provided that
(i) if the amount of the Net Cash Proceeds in respect of any
Reduction Event is less than $5,000,000, then, unless the Required
Banks otherwise elect, the application thereof shall be deferred until
receipt of proceeds such that, together with all other such amounts
received and not previously applied, the amount of such Net Cash
Proceeds is equal to at least $5,000,000;
(ii) so long as the Collateral Test would be met after giving
effect to any such election, each Bank shall have the right,
exercisable by notice to such effect to the Administrative Agent not
less than two Euro-Dollar Business Days prior to the date of any
prepayment required pursuant to this Section by reason of a Capital
Markets Transaction, to decline to accept the portion of such
prepayment otherwise allocable to the Loans of such Bank, in which
case the Loans of such Bank shall not be prepaid and the portion of
the Net Cash Proceeds of such Capital Markets Transaction which would
otherwise have been applied to the prepayment of the Loans of such
Bank shall instead be available for application in accordance with the
Pro Rata Facilities or, if the Pro Rata Facilities shall have been
prepaid in full and the commitments thereunder shall have been
terminated, such portion shall be returned to the Borrower. Any such
election shall be made by each Bank individually and in its sole
discretion, and no such election with respect to any particular
prepayment required hereunder shall be applicable to any subsequent
prepayment. The absence of a timely notice as contemplated by this
paragraph shall constitute an election to receive the prepayment in
question. In the event a Bank elects to decline one or more
prepayments of its Loans, the aggregate principal amount of its Loans
which would otherwise have been so prepaid shall bear additional
interest, payable quarterly in arrears on each Quarterly Date, at the
rate of 0.25% per annum;
(iii) Net Cash Proceeds applied to the Credit Exposures pursuant
to this Section shall be applied, FIRST, to reduce ratably the unused
amount of the Commitments and, SECOND, if the Commitments shall have
terminated or been fully utilized, to the ratable prepayment of the
Loans;
(iv) any reduction of the Commitments hereunder shall be
effective on the Domestic Business Day following the date of receipt
of the related Net Cash Proceeds, and any required prepayment of the
Loans shall be made on the third Euro-Dollar Business Day following
the date of receipt of such Net Cash Proceeds; and
(v) the ratable allocation among the Banks contemplated by this
Section 2.09 shall be done on a basis which disregards the effect of
any election by a Bank to decline to accept a prepayment of its Loans
pursuant to Section 2.09(a)(ii) above.
(b) Upon receipt from the Borrower of a notice pursuant to Section
2.09(a)(y), the Administrative Agent will promptly notify each Bank of the
contents thereof, and of the date of the related reduction required
hereunder. Any required prepayment shall be made together with accrued
interest on the amount prepaid, and shall be applied first to the Group of
Base Rate Loans and then to such Group or Groups of outstanding Euro-Dollar
Loans as the Borrower may elect in such notice, or failing such election as
the Administrative Agent may determine in its discretion.
(c) Amounts held by the Administrative Agent in escrow pending
application as contemplated by this Section 2.09 shall be invested upon the
instruction of the Borrower in Temporary Cash Investments for the account
of the Borrower.
(d) It is expressly understood and agreed that the provisions of this
Section 2.09 are not intended to, and do not, create a Lien in any Net Cash
Proceeds (except to the extent the same represent proceeds of Collateral).
(e) Net Cash Proceeds of a Reduction Event received by the Borrower or
a Subsidiary prior to the Closing Date shall be deemed for purposes of this
Section to have been received on the Closing Date.
SECTION 2.10. Optional Prepayments. (a) Subject in the case of any
Euro-Dollar Loans to Section 2.12 and so long as no loans are outstanding
under the Pro Rata Credit Agreement and the commitments thereunder have
been terminated, the Borrower may (i) upon at least one Domestic Business
Day's notice to the Administrative Agent, prepay any Base Rate Borrowing or
(ii) upon at least three Euro-Business Days' notice to the Administrative
Agent, prepay any Euro-Dollar Borrowing, in each case in whole at any time,
or from time to time in part in amounts aggregating $10,000,000 or any
larger multiple of $1,000,000, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the Loans of the
several Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this Section,
the Administrative Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment and such notice
shall not thereafter be revocable by the Borrower.
SECTION 2.11. General Provisions as to Payments. (a) The Borrower
shall make each payment of principal of, and interest on, the Loans and of
fees hereunder, not later than 12:00 Noon (New York City time) on the date
when due, in Federal or other funds immediately available in New York City,
to the Administrative Agent at its address referred to in Section 9.01. The
Administrative Agent will promptly distribute to each Bank its ratable
share of each such payment received by the Administrative Agent for the
account of the Banks. Whenever any payment of principal of, or interest on,
the Base Rate Loans or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to
the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a day
which is not a Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the
date for payment thereof shall be the next preceding Euro-Dollar Business
Day. If the date for any payment of principal is extended by operation of
law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in
full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each Bank
on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Borrower shall not have so made such payment, each
Bank shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date
such Bank repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.12. Funding Losses. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan (pursuant to Article 2, 6 or
8 or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the end of an applicable period fixed pursuant to
Section 2.06(c), or if the Borrower fails to borrow, prepay, continue or
convert any Euro-Dollar Loans after notice has been given to any Bank in
accordance with Section 2.03(a), 2.07(c), 2.09(b) or 2.10(b), the Borrower
shall reimburse each Bank within 15 days after demand for any resulting
loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after any such payment
or failure to borrow, prepay, continue or convert, provided that such Bank
shall have delivered to the Borrower a certificate as to the amount of such
loss or expense, which certificate shall be conclusive in the absence of
clearly demonstrable error.
SECTION 2.13. Computation of Interest. Interest based on the Prime
Rate hereunder shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All other interest
and fees shall be computed on the basis of a year of 360 days and paid for
the actual number of days elapsed (including the first day but excluding
the last day).
SECTION 2.14. Regulation D Compensation. Each Bank may require the
Borrower to pay, contemporaneously with each payment of interest on the
Euro-Dollar Loans, additional interest on the related Euro-Dollar Loan of
such Bank at a rate per annum determined by such Bank up to but not
exceeding the excess of (i) (A) the applicable London Interbank Offered
Rate divided by (B) one minus the Euro-Dollar Reserve Percentage over (ii)
the applicable London Interbank Offered Rate. Any Bank wishing to require
payment of such additional interest (x) shall so notify the Borrower and
the Administrative Agent, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank at the place
indicated in such notice with respect to each Interest Period commencing at
least three Euro-Dollar Business Days after the giving of such notice, and
(y) shall notify the Borrower at least five Euro-Dollar Business Days prior
to each date on which interest is payable on the Euro-Dollar Loans of the
amount then due it under this Section.
"EURO-DOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits exceeding five
billion dollars in respect of "Eurocurrency liabilities" (or in respect of
any other category of liabilities which includes deposits by reference to
which the interest rate on Euro-Dollar Loans is determined or any category
of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents).
ARTICLE 3
CONDITIONS
SECTION 3.01. Closing Date. The obligation of any Bank to make a Loan
on the Closing Date is subject to the satisfaction of the following
conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.02;
(b) the fact that, immediately after such Borrowing, no Default shall
have occurred and be continuing;
(c) the fact that the representations and warranties of the Borrower
contained in this Agreement shall be true in all material respects on and
as of the date of such Borrowing;
(d) receipt by the Administrative Agent for the account of each Bank
of a duly executed Note dated on or before the Closing Date complying with
the provisions of Section 2.04;
(e) receipt by the Administrative Agent of duly executed counterparts
of the Pledge Agreement;
(f) receipt by the Administrative Agent of opinions of (i) Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel for the Borrower,
substantially in the form of Exhibit B-1 hereto, and (ii) Xxxxxx X. Xxxxxx,
General Counsel of the Borrower, substantially in the form of Exhibit B-2
hereto, and covering in each case such additional matters relating to the
transactions contemplated hereby as the Required Banks may be reasonably
request;
(g) receipt by the Administrative Agent of an opinion of Xxxxx Xxxx &
Xxxxxxxx, special counsel for the Administrative Agent, substantially in
the form of Exhibit C hereto and covering such additional matters relating
to the transactions contemplated hereby as the Required Banks may
reasonably request;
(h) receipt by the Administrative Agent of all documents it may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement, the Pledge Agreement and
the Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent;
(i) receipt by the Administrative Agent of evidence satisfactory to it
that the Borrower shall have paid all participation fees payable pursuant
to Section 2.08;
(j) receipt by the Administrative Agent of evidence satisfactory to it
that all loans outstanding under the Existing Credit Agreement shall have
been renewed and extended hereunder and that all interest and fees accrued
under the Existing Credit Agreement to but excluding the Closing Date and
all other amounts (if any) then due and payable by the Borrower thereunder
shall have been paid in full;
(k) receipt by the Administrative Agent of evidence satisfactory to it
that the LPG Transaction shall have been consummated in accordance with the
LPG Commitment, and the Borrower shall have received $300,000,000 gross
cash proceeds pursuant thereto; and
(l) receipt by the Administrative Agent of evidence satisfactory to it
that the Pro Rata Credit Agreement shall have become effective in
accordance with its terms without waiver of any material condition
specified therein.
On the Closing Date, the commitments under the Existing Credit Agreement
shall terminate automatically, without any further action by any party to
the Existing Credit Agreement. Upon receipt of its Note, each Bank which is
a party to the Existing Credit Agreement shall xxxx the note issued to it
pursuant to the Existing Credit Agreement "renewed".
SECTION 3.02. Subsequent Borrowings. The obligation of any Bank to
make a Loan on the occasion of any Borrowing subsequent to the Closing Date
is subject to the satisfaction of the conditions specified in clauses (a),
(b) and (c) of Section 3.01. Each Borrowing hereunder shall be deemed to be
a representation and warranty by the Borrower on the date of such Borrowing
as to the facts specified in clauses (b) and (c) of Section 3.01.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of
the Loan Documents are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any agreement or instrument evidencing or
governing Debt of the Borrower or any Subsidiary or any other material
agreement, instrument, judgment, injunction, order or decree binding upon
the Borrower or any Subsidiary or result in the creation or imposition of
any Lien on any asset of the Borrower or any Subsidiary pursuant to any
such agreement, instrument, judgment, injunction, order or decree (other
than the Liens created by the Pledge Agreement).
SECTION 4.03. Binding Effect. This Agreement and the Pledge Agreement
each constitutes a valid and binding agreement of the Borrower and each
Note, when executed and delivered in accordance with this Agreement, will
constitute a valid and binding obligation of the Borrower, in each case
enforceable in accordance with its terms.
SECTION 4.04. Financial Information. Except as disclosed in the
Information:
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of February 27, 1999 and the related
consolidated statements of income and cash flows for the fiscal year then
ended, reported on by KPMG Peat Marwick LLP and set forth in the Borrower's
1999 Form 10-K, a copy of which has been delivered to each of the Banks,
fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of May 29, 1999 and the related consolidated
statements of income and cash flows for the fiscal period then ended, set
forth in the Borrower's quarterly report on Form 10-Q for the fiscal
quarter then ended, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial statements
referred to in subsection (a), the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal period,
subject to normal year-end adjustments.
(c) Since May 29, 1999, there has been no material adverse change in
the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Full Disclosure. All financial statements and other
documents furnished by the Borrower to the Banks in connection with this
Agreement, including the Information, do not and will not contain any
untrue statement of material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading.
The Borrower has disclosed to the Banks in writing any and all facts which
materially and adversely affect the business, operations or condition,
financial or otherwise, of the Borrower and its Subsidiaries or the
Borrower's ability to perform its obligations under this Agreement.
SECTION 4.06. Litigation. Except as disclosed in the Borrower's 1999
Form 10-K, there is no action, suit or proceeding pending against, or to
the knowledge of the Borrower threatened against or affecting, the Borrower
or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect
the business, consolidated financial position or consolidated results of
operations of the Borrower and its Consolidated Subsidiaries or which in
any manner draws into question the validity or enforceability of any Loan
Document.
SECTION 4.07. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA
and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable
provisions of ERISA and the Internal Revenue Code with respect to each
Plan. No member of the ERISA Group has (i) sought a waiver of the minimum
funding standard under Section 412 of the Internal Revenue Code in respect
of any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security under ERISA or the Internal Revenue Code or (iii) incurred any
liability under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
SECTION 4.08. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns, and the Borrower and its
Significant Subsidiaries have filed all other material tax returns, which
are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Significant Subsidiary except where the payment of any such taxes is being
contested in good faith by appropriate proceedings. The charges, accruals
and reserves on the books of the Borrower and its Consolidated Subsidiaries
in respect of taxes or other governmental charges are, in the opinion of
the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the Borrower's corporate
Significant Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
SECTION 4.10. Environmental Matters. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the
Borrower and its Subsidiaries, in the course of which it identifies and
evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license,
permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction
in the level of or change in the nature of operations conducted thereat,
any costs or liabilities in connection with off-site disposal of wastes or
hazardous substances, and any actual or potential liabilities to third
parties, including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.11. Year 2000 Compliance. The Borrower has (i) initiated a
review and assessment of all areas within the business and operations of
the Borrower and each of its Subsidiaries (including those areas affected
by suppliers and vendors) that could be adversely affected by the "YEAR
2000 PROBLEM") (that is, the risk that computer applications used by it or
any of its Subsidiaries (or their respective supplier and vendors) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a
timely basis and (iii) to date, implemented such plan in accordance with
such timetable. The Borrower reasonably believes that all computer
applications that are material to the business or operations of the
Borrower or any of its Subsidiaries will on a timely basis be able to
perform properly date-sensitive functions for all dates before and from and
after January 1, 2000, except to the extent that a failure to do so could
not reasonably be expected to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.12. Pledge Agreement. The representations and warranties of
the Borrower set forth in the Pledge Agreement are true and correct.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days (or within
such longer period of time, not greater than 120 days, to which the SEC may
extend the filing deadline for the Borrower's Annual Report on Form 10-K)
after the end of each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income and cash
flows for such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, all reported on without material
qualification by KPMG Peat Marwick LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days (or (x) in
the case of the fiscal quarter most recently ended prior to the date
hereof, within 65 days or (y) in the case of any subsequent fiscal quarter,
within such longer period of time, not greater than 60 days, to which the
SEC may extend the filing deadline for the Borrower's Quarterly Report on
Form 10-Q) after the end of each of the first three quarters of each fiscal
year of the Borrower, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the related
consolidated statements of income and cash flows for such quarter and for
the portion of the Borrower's fiscal year ended at the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the chief
accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections
5.08 to 5.15, inclusive, on the date of such financial statements and (ii)
stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
whether anything has come to their attention to cause them to believe that
any Default existed on the date of such statements and (ii) confirming the
calculations set forth in the officer's certificate delivered
simultaneously therewith pursuant to clause (c) above;
(e) within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate
of the chief financial officer or the chief accounting officer of the
Borrower setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Borrower shall have filed with the SEC;
(h) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer, any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice
and other information filed with the PBGC; (vi) gives notice of withdrawal
from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could
result in the imposition of a Lien or the posting of a bond or other
security, a certificate of the chief financial officer or the chief
accounting officer of the Borrower setting forth details as to such
occurrence and action, if any, which the Borrower or applicable member of
the ERISA Group is required or proposes to take; and
(i) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Administrative Agent, at the request of any Bank, may reasonably request.
Information required to be delivered pursuant to Section 5.01(a),
5.01(b), 5.01(f) or 5.01(g) above shall be deemed to have been delivered on
the date on which the Borrower provides notice to the Banks that such
information has been posted on the Borrower's website on the Internet at
the website address listed on the signature pages hereof, at
xxx.xxx/xxxxx/xxxxxxxx.xxx or at another website identified in such notice
and accessible by the Banks without charge; provided that (i) such notice
may be included in a certificate delivered pursuant to Section 5.01(c) and
(ii) the Borrower shall deliver paper copies of the information referred to
in Section 5.01(a), 5.01(b), 5.01(f) or 5.01(g) to any Bank which requests
such delivery.
SECTION 5.02. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay and discharge, as the same shall
become due and payable, (i) all material claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons prior
to the time such claims or demands give rise to a Lien upon any of its
property or assets, and (ii) all material taxes, assessments and
governmental charges or levies upon it or its property or assets, except
where any of the items in clause (i) or (ii) above may be contested in good
faith by appropriate proceedings, and the Borrower or such Subsidiary, as
the case may be, shall have set aside on its books, in accordance with
generally accepted accounting principles, appropriate reserves, if any, for
the accrual of any such items.
SECTION 5.03. Maintenance of Property; Insurance. (a) The Borrower
will keep, and will cause each Subsidiary to keep, all property useful and
necessary in its business in good working order and condition, ordinary
wear and tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Borrower or in such Subsidiary's own
name) with financially sound and responsible insurance companies, insurance
on all their respective properties in at least such amounts and against at
least such risks (and with such risk retention) as are usually insured
against in the same general area by companies of established repute engaged
in the same or a similar business; and will furnish to the Banks, upon
request from the Administrative Agent, information presented in reasonable
detail as to the insurance so carried.
SECTION 5.04. Conduct of Business and Maintenance of Existence.
Except as otherwise permitted in this Agreement, the Borrower will
continue, and will cause each Significant Subsidiary to continue, to engage
in business of the same general type as now conducted by the Borrower and
its Significant Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each Significant Subsidiary (except where
such Significant Subsidiary merges into the Borrower or any other
Subsidiary) to preserve, renew and keep in full force and effect their
respective legal existences and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws
and ERISA and the rules and regulations thereunder) except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to comply would not have a material
adverse effect on the business, financial position or results of operations
of the Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 5.06. Inspection of Property, Books and Records. The Borrower
will keep, and will cause each Subsidiary to keep, proper books of record
and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and
will permit, and will cause each Subsidiary to permit, representatives of
any Bank at such Bank's expense to visit and inspect any of their
respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs,
finances and accounts with their respective officers, employees and
independent public accountants, all at such reasonable times and as often
as may reasonably be desired.
SECTION 5.07. Restriction on Other Agreements. The Borrower will not,
and will not permit any Subsidiary to, enter into any agreement (other than
the Loan Documents and the 1996 Loan Documents) which imposes a limitation
on incurrence by the Borrower and its Subsidiaries of Liens that is more
restrictive than the limitation on Liens set forth in the Indentures (other
than agreements with respect to Debt secured by Liens permitted by Section
5.10(a) containing restrictions on the ability to transfer or grant Liens
on the assets securing such Debt and other than customary restrictions
contained in purchase and sale agreements limiting the transfer of the
subject assets pending closing and customary non-assignment provisions in
leases and other contracts entered into in the ordinary course of business)
or which imposes other covenants more restrictive than those set forth in
this Agreement.
SECTION 5.08. Restriction on Debt of Subsidiaries. The Borrower will
not permit any Subsidiary to create, issue, incur, assume, or in any other
way become liable for any unsecured Debt unless immediately prior thereto
the Borrower would be entitled under Section 5.10(e) to create Secured Debt
not specifically permitted under Section 5.10 but for subsection (e)
thereof in an amount equal to such Debt; provided that the foregoing
restriction shall not prevent (i) any Subsidiary from becoming liable to
the Borrower or to a Wholly-Owned Consolidated Subsidiary for Debt or (ii)
the extension, renewal or refunding of any Debt of any Subsidiary so long
as Consolidated Debt is not thereby increased.
SECTION 5.09. Restriction on Sales with Leases Back. Except for a
sale or transfer by a Subsidiary to the Borrower or a Wholly-Owned
Consolidated Subsidiary, the Borrower will not, and will not permit any
Subsidiary to, sell or transfer any manufacturing plant, warehouse, retail
store or equipment now or hereafter owned and operated by the Borrower or a
Subsidiary, with the intention that the Borrower or any Subsidiary take
back a lease thereof, except a lease for a period, including renewals, not
exceeding 24 months, by the end of which period it is intended that the use
of such property or equipment by the lessee will be discontinued (any such
transaction being herein referred to as a "SALE AND LEASEBACK
TRANSACTION"); provided that, notwithstanding the foregoing, the Borrower
or any Subsidiary may enter into a Sale and Leaseback Transaction if the
Borrower or a Subsidiary would be entitled under Section 5.10(e) to create
Secured Debt not specifically permitted under Section 5.10 but for Section
5.10(e) in an amount equal to the Attributable Debt respecting such Sale
and Leaseback Transaction; provided further that, notwithstanding the
foregoing, the Borrower or any Subsidiary may enter into a Sale and
Leaseback Transaction if entered into in respect of property acquired by
the Borrower or a Subsidiary if such Sale and Leaseback Transaction is
entered into within 24 months from the date of such acquisition; and
provided still further that, notwithstanding the foregoing, the Borrower or
any Subsidiary may enter into a Sale and Leaseback Transaction so long as
the Net Cash Proceeds thereof are applied as contemplated by Section 2.09
hereof.
SECTION 5.10. Restriction on Liens. The Borrower will not, and will
not permit any Subsidiary to, create, issue, incur, assume or guarantee any
Secured Debt; provided that the foregoing covenant shall not apply to the
following:
(a) (i) Any Lien on any property acquired or constructed by the
Borrower or a Subsidiary and created contemporaneously with, or within 24
months after, such acquisition or the completion of such construction and
commencement of full operation of such property, whichever is later, to
secure or provide for the payment of any part of the purchase or
construction price of such property, or (ii) the acquisition by the
Borrower or a Subsidiary of property subject to any Lien upon such property
existing at the time of acquisition thereof, whether or not assumed by the
Borrower or such Subsidiary, or (iii) any conditional sales agreement or
other title retention agreement with respect to any property hereafter
acquired; provided that the Lien does not spread to other property except
unimproved real property previously owned upon which any new construction
has taken place and subsequent additions to such acquired or constructed
property;
(b) Any Lien created for the sole purpose of extending, renewing or
refunding, in whole or part, any Lien permitted by this Section 5.10 or any
Lien securing the Debt of the Borrower or of any Subsidiary on the date of
this Agreement or of a corporation at the time such corporation becomes a
Subsidiary, or any extensions, renewals or refundings of any such Lien;
provided that the principal amount of Debt secured thereby shall not exceed
the principal amount of Debt so secured at the time of such extension,
renewal or refunding and that such extension, renewal or refunding Lien
shall be limited to all or that part of the same property which secured the
Debt so extended, renewed or refunded;
(c) Any Secured Debt of a Subsidiary owing to the Borrower or a
Wholly-Owned Consolidated Subsidiary;
(d) Any Lien created by the Loan Documents or the 1996 Loan Documents;
and
(e) Secured Debt of the Borrower and its Subsidiaries which would
otherwise be prohibited by the foregoing restrictions (not including
Secured Debt permitted to be secured under subsections (a) through (d)
above) so long as the sum of any such Secured Debt hereafter incurred and
outstanding at the time plus Attributable Debt of the Borrower and any
Subsidiaries in respect of Sale and Leaseback Transactions hereafter
entered into and outstanding at the time (excluding Attributable Debt
incurred in respect of any Sale and Leaseback Transaction (i) entered into
in respect of property acquired by the Borrower or a Subsidiary not more
than 24 months prior to the date such Sale and Leaseback Transaction is
entered into or (ii) if the Borrower, within 120 days before or after such
Sale and Leaseback Transaction is entered into applies an amount equal to
the greater of (A) the net proceeds of the sale of the property so sold and
leased back or (B) the fair market value of such property at the date such
arrangement is entered into to the retirement of Secured Debt (other than
at maturity or pursuant to any mandatory payment provision) or to reduction
of the Commitments) plus unsecured Debt of any Subsidiary hereafter
incurred and outstanding at the time (excluding unsecured Debt incurred
through the extension, renewal or refunding of Debt of such Subsidiary
where Consolidated Debt was not thereby increased and excluding any Debt
owed to the Borrower or a Wholly-Owned Consolidated Subsidiary) does not at
the time exceed 5% of Consolidated Net Tangible Assets.
SECTION 5.11. Capital Expenditures. The aggregate amount of
Consolidated Capital Expenditures for any period set forth below shall not
exceed the amount set forth below opposite such period:
FISCAL YEAR ENDING ON AMOUNT
OR CLOSEST TO
February 29, 2000 $620,000,000
February 28, 2001 $295,000,000
SECTION 5.12. Capitalization Leverage Ratio. At no time during any
period set forth below shall the ratio of (i) Consolidated Debt at such
time to (ii) Total Capital at such time, exceed the ratio set forth below
opposite such period:
FISCAL QUARTER ENDING RATIO
ON OR CLOSEST TO
November 30, 1999 0.635
February 29, 2000 0.635
May 31, 2000 and 0.620
thereafter
SECTION 5.13. Cash Flow Leverage Ratio. At no time during any period
set forth below shall the ratio of (i) Consolidated Debt at such time to
(ii) Consolidated EBITDA for the four consecutive fiscal quarters then most
recently ended at or prior to such time, exceed the ratio set forth below
opposite such period:
FISCAL QUARTER ENDING RATIO
ON OR CLOSEST TO
November 30, 1999 6.30
February 29, 2000 6.00
May 31, 2000 5.75
August 31, 2000 4.75
SECTION 5.14. Fixed Charge Coverage. At no time during any period set
forth below shall the Fixed Charge Coverage Ratio be less than the ratio
set forth below opposite such period:
FISCAL QUARTER ENDING RATIO
ON OR CLOSEST TO
November 30, 1999 1.35
February 29, 2000 1.35
May 31, 2000 1.35
August 31, 2000 1.45
SECTION 5.15. Limitation on Investments and Acquisitions. (a) Neither
the Borrower nor any Consolidated Subsidiary will make or acquire any
Investment in any Person other than:
(i) Investments in Consolidated Subsidiaries; provided, that
Investments (exclusive of inter-company payables owing to the Borrower
or a Subsidiary arising from cash management transactions in the
ordinary course of business) in PCS, whether existing on the date
hereof or hereafter made, may be made only by the Borrower and only in
the form of a contribution to the capital of PCS and without issuance
of additional shares of capital stock therefor, and provided further
that no such Investment may be made in any Subsidiary of PCS except by
PCS or another Subsidiary of PCS;
(ii) Temporary Cash Investments;
(iii) Investments received as consideration for sale or other
disposition of the capital stock of PCS or xxxxxxxxx.xxx permitted by
Section 5.16;
(iv) Investments in xxxxxxxxx.xxx existing on the date hereof;
and
(v) Any Investment not otherwise permitted by the foregoing
clauses of this Section if, immediately after such Investment is made
or acquired, the aggregate net book value of all Investments permitted
by this clause (c) does not exceed 10% of Consolidated Net Worth.
(b) The Borrower will not, and will not permit any Subsidiary to,
consummate any Business Acquisition to the extent that the aggregate
consideration paid or payable by the Borrower or any Subsidiary in
connection with all such Business Acquisitions on or after the Closing Date
would exceed $15,000,000.
SECTION 5.16. Consolidations, Mergers and Sales of Assets. The
Borrower will not (i) consolidate or merge with or into any other Person,
(ii) sell, lease or otherwise transfer, directly or indirectly, all or any
substantial part of the assets of the Borrower and its Subsidiaries, taken
as a whole, to any other Person or (iii) sell, lease or otherwise transfer
any Collateral to any other Person; provided that (x) the Borrower may
merge with another Person if (A) the Borrower is the corporation surviving
such merger and (B) immediately after giving effect to such merger, no
Default shall have occurred and be continuing and (y) the Borrower may sell
or otherwise dispose of the capital stock of PCS or xxxxxxxxx.xxx, in whole
but not in part, so long as the consideration therefor is not less than the
fair market value of such capital stock and shall consist solely of a
combination of cash and publicly traded securities payable and deliverable
at the closing of such sale.
SECTION 5.17. Use of Proceeds. The proceeds of the Loans made under
this Agreement will be used by the Borrower solely to repay commercial
paper maturing on or prior to the date of the related Borrowing hereunder
or to extend and renew loans outstanding under the Existing Credit
Agreement, the proceeds of which loans were used solely to repay commercial
paper (or to refund other borrowings the proceeds of which were used solely
to repay commercial paper), which commercial paper provided funds for the
payment of the purchase price of the capital stock of PCS. No such use of
proceeds will be, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "MARGIN STOCK"
within the meaning of Regulation U, other than publicly traded securities
issued to the Borrower in connection with the sale of the capital stock of
PCS. The Borrower will ensure that no such use of proceeds violates
Regulation T, U or X.
SECTION 5.18. Restricted Payments. After the date hereof, neither the
Borrower nor any Subsidiary will declare or make any Restricted Payment.
SECTION 5.19. Synthetic Leases. Neither the Borrower nor any
Subsidiary will enter into any Synthetic Lease if, after giving effect
thereto, the aggregate amount financed under all Synthetic Leases entered
into in any period of twelve consecutive calendar months commencing after
the date hereof would exceed $35,000,000.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
events ("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan,
or shall fail to pay within five days of the due date thereof any interest,
fees or other amount payable hereunder;
(b) the Borrower shall fail to observe or perform (i) any covenant
contained in Sections 5.08 to 5.19, inclusive or (ii) any covenant
contained in Section 3(b) or 5(b) of the Pledge Agreement;
(c) the Borrower shall fail to observe or perform any covenant or
agreement contained in the Loan Documents (other than those covered by
clause (a) or (b) above) for 30 days after written notice thereof has been
given to the Borrower by the Administrative Agent at the request of any
Bank;
(d) any material representation, warranty, certification or statement
made (or deemed made) by the Borrower in any Loan Document or in any
certificate, financial statement or other document delivered pursuant to
any Loan Document shall prove to have been incorrect in any material
respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any payment in
respect of any Material Financial Obligations when due or within any
applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Financial Obligations or
enables (or, if such event or condition does not otherwise give rise to a
Default hereunder, which with the giving of notice or lapse of time or both
would enable) the holder of such Material Financial Obligations or any
Person acting on such holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against
the Borrower or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be entered
against the Borrower or any Significant Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an amount
or amounts aggregating in excess of $5,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate,
to impose liability (other than for premiums under Section 4007 of ERISA)
in respect of, or to cause a trustee to be appointed to administer, any
Material Plan; or a condition shall exist by reason of which the PBGC would
be entitled to obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal from, or
a default, within the meaning of Section 4219(c)(5) of ERISA, with respect
to, one or more Multiemployer Plans which could cause one or more members
of the ERISA Group to incur a current payment obligation in excess of
$25,000,000;
(j) a judgment or order for the payment of money in excess of
$25,000,000 shall be rendered against the Borrower or any Subsidiary and
such judgment or order shall continue unsatisfied and unstayed for a period
of 30 days;
(k) any Lien created by the Pledge Agreement shall at any time fail to
constitute a valid and (to the extent required by the Pledge Agreement)
perfected Lien on all of the Collateral purported to be subject thereto,
securing the obligations purported to be secured thereby, with the priority
required by the Loan Documents, or the Borrower shall so assert in writing;
or
(l) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the SEC under said Act) of 20% or more of the outstanding shares of
common stock of the Borrower; or, during any period of 12 consecutive
calendar months, individuals who were directors of the Borrower on the
first day of such period shall cease to constitute a majority of the board
of directors of the Borrower;
then, and in every such event, the Administrative Agent shall (i) if
requested by the Required Banks, by notice to the Borrower terminate the
Commitments (if still in existence) and they shall thereupon terminate, and
(ii) if requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the Borrower declare
the Notes (together with accrued interest thereon) to be, and the Notes
(together with accrued interest thereon) shall thereupon become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower;
provided that in the case of any of the Events of Default specified in
clause (g) or (h) above with respect to the Borrower, without any notice to
the Borrower or any other act by the Administrative Agent or the Banks, the
Commitments (if still in existence) shall thereupon terminate and the Notes
(together with accrued interest thereon) shall become immediately due and
payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Administrative Agent shall give
notice to the Borrower under Section 6.01(c) promptly upon being requested
to do so by any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Administrative Agent to take such action as
Administrative Agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with all such powers as are reasonably incidental
thereto.
SECTION 7.02. Administrative Agent and Affiliates. Xxxxxx Guaranty
Trust Company of New York shall have the same rights and powers under the
Loan Documents as any other Bank and may exercise or refrain from
exercising the same as though it were not the Administrative Agent, and
Xxxxxx Guaranty Trust Company of New York and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business
with the Borrower or any Subsidiary or affiliate of the Borrower as if it
were not the Administrative Agent.
SECTION 7.03. Action by Administrative Agent. The obligations of the
Administrative Agent under the Loan Documents are only those expressly set
forth therein. Without limiting the generality of the foregoing, the
Administrative Agent shall not be required to take any action with respect
to any Default, except as expressly provided in Article 6 and in the Pledge
Agreement.
SECTION 7.04. Consultation with Experts. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Administrative Agent. Neither the
Administrative Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action
taken or not taken by it or any of them in connection herewith (i) with the
consent or at the request of the Required Banks (or such other number or
percentage of Banks as may be specified in the Loan Documents for
particular purposes) or (ii) in the absence of its or their own gross
negligence or willful misconduct. Neither the Administrative Agent nor any
of its affiliates nor any of their respective directors, officers, agents
or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made
in connection with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Article 3,
except receipt of items required to be delivered to the Administrative
Agent; or (iv) the validity, effectiveness or genuineness of this
Agreement, the Notes or any other instrument or writing furnished in
connection herewith. The Administrative Agent shall not incur any liability
by acting in reliance upon any notice, consent, certificate, statement, or
other writing (which may be a bank wire, telex or similar writing) believed
by it to be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Credit Exposure, indemnify the Administrative Agent, its
affiliates and their respective directors, officers, agents and employees
(to the extent not reimbursed by the Borrower) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct) that such indemnitees may suffer or incur in connection
with this Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any
action under this Agreement.
SECTION 7.08. Successor Administrative Agent. The Administrative Agent
may resign at any time by giving notice thereof to the Banks and the
Borrower. Upon any such resignation, the Required Banks shall have the
right, with (so long as no Default shall have occurred and be continuing)
the consent of the Borrower, to appoint a successor Administrative Agent.
If no successor Administrative Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent gives notice of resignation, then
the retiring Administrative Agent may, on behalf of the Banks, appoint a
successor Administrative Agent, which shall be a commercial bank organized
or licensed under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $50,000,000.
Upon the acceptance of its appointment as Administrative Agent by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of
the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent.
SECTION 7.09. Administrative Agent's Fees. The Borrower shall pay to
the Administrative Agent for its own account fees in the amounts and at the
times previously agreed upon between the Borrower and the Administrative
Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Euro-Dollar Loan:
(a) the Administrative Agent is advised by the Reference Banks
that deposits in dollars (in the applicable amounts) are not being
offered to the Reference Banks in the London interbank market for such
Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the
Credit Exposures advise the Administrative Agent that the London
Interbank Offered Rate as determined by the Administrative Agent will
not adequately and fairly reflect the cost to such Banks of funding
their Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Administrative Agent notifies
the Borrower that the circumstances giving rise to such suspension no
longer exist, the obligations of the Banks to make Euro-Dollar Loans, or to
continue or convert outstanding Loans as or into Euro-Dollar Loans, shall
be suspended, and each outstanding Euro-Dollar Loan shall be converted into
a Base Rate Loan on the last day of the then current Interest Period
applicable thereto. Unless the Borrower notifies the Agent at least two
Domestic Business Days before the date of any Euro-Dollar Borrowing for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing.
SECTION 8.02. Illegality. (a) If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency
shall make it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Administrative
Agent that the circumstances giving rise to such suspension no longer
exist, the obligation of such Bank to make Euro-Dollar Loans, or to convert
outstanding Loans into Euro-Dollar Loans or continue outstanding Loans as
Euro-Dollar Loans, shall be suspended. Before giving any notice to the
Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank.
(b) If such notice is given, each Euro-Dollar Loan of such Bank then
outstanding shall be converted to a Base Rate Loan either (a) on the last
day of the then current Interest Period applicable to such Euro-Dollar Loan
if such Bank may lawfully continue to maintain and fund such Loan as a
Euro-Dollar Loan to such day or (b) immediately if such Bank shall
determine that it may not lawfully continue to maintain and fund such Loan
as a Euro-Dollar Loan to such day. Interest and principal on any such Base
Rate Loan shall be payable on the same dates as, and on a pro rata basis
with, the interest and principal payable on the related Euro-Dollar Loans
of the other Banks.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after
the date hereof, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency
shall impose, modify or deem applicable any reserve (including, without
limitation, any such requirement imposed by the Board of Governors of the
Federal Reserve System, but excluding any such requirement with respect to
which such Bank is entitled to compensation for the relevant Interest
Period under Section 2.14), special deposit, insurance assessment or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Bank (or its Applicable Lending Office) or shall
impose on any Bank (or its Applicable Lending Office) or on the London
interbank market any other condition affecting its Euro-Dollar Loans, its
Note or its obligation to make Euro-Dollar Loans and the result of any of
the foregoing is to increase the cost to such Bank (or its Applicable
Lending Office) of making or maintaining any Euro-Dollar Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with
respect thereto, by an amount deemed by such Bank to be material, then,
within 15 days after demand by such Bank (with a copy to the Administrative
Agent), the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level
below that which such Bank (or its Parent) could have achieved but for such
adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Bank
to be material, then from time to time, within 15 days after demand by such
Bank (with a copy to the Administrative Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will compensate such Bank
(or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Bank to compensation pursuant to this
Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
clearly demonstrable error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods.
SECTION 8.04. Taxes. (a) Any and all payments by the Borrower to or
for the account of any Bank or the Administrative Agent hereunder or under
any Note shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Bank and the Administrative Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Bank or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each
Bank, taxes imposed on its income, and franchise or similar taxes imposed
on it, by the jurisdiction of such Bank's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "TAXES"). If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or
under any Note to any Bank or the Administrative Agent, (i) the sum payable
shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and
(iv) the Borrower shall furnish to the Administrative Agent, at its address
referred to in Section 9.01, the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or
charges or similar levies which arise from any payment made hereunder or
under any Note or from the execution or delivery of, or otherwise with
respect to, any Loan Document (hereinafter referred to as "OTHER TAXES").
(c) The Borrower agrees to indemnify each Bank and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 8.04) paid by such Bank
or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 15 days from the
date such Bank or the Administrative Agent (as the case may be) makes
demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages
hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Bank remains lawfully
able to do so), shall provide the Borrower with Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Bank is entitled to benefits
under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying
that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States. If
the form provided by a Bank at the time such Bank first becomes a party to
this Agreement indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded
from "TAXES" as defined in Section 8.04(a).
(e) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form pursuant to Section 8.04(d) (unless
such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which a form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
8.04(a) with respect to Taxes imposed by the United States; provided,
however, that should a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such
steps as such Bank shall reasonably request to assist such Bank to recover
such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Bank pursuant to this Section 8.04, then such Bank will
change the jurisdiction of its Applicable Lending Office so as to eliminate
or reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Bank, is not otherwise disadvantageous to
such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Euro-Dollar
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03 or 8.04 with respect to its Euro-Dollar
Loans and the Borrower shall, by at least five Euro-Dollar Business Days'
prior notice to such Bank through the Administrative Agent, have elected
that the provisions of this Section shall apply to such Bank, then, unless
and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as (or
continued as or converted into) Euro-Dollar Loans shall be made
instead as Base Rate Loans (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans of the
other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such
Euro-Dollar Loans shall be applied to repay its Base Rate Loans
instead.
If such Bank notifies the Borrower that the circumstances giving rise to
such suspension or demand for compensation no longer exist, the principal
amount of each such Base Rate Loan shall be converted into a Euro-Dollar
Loan on the first day of the next succeeding Interest Period applicable to
the related Euro-Dollar Loans of the other Banks.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, telex,
facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Borrower or the Administrative Agent, at its
address or telex number set forth on the signature pages hereof, (y) in the
case of any Bank, at its address or telex number set forth in its
Administrative Questionnaire or (z) in the case of any party, such other
address or telex number as such party may hereafter specify for the purpose
by notice to the Administrative Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if given by telex,
when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by mail,
72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when delivered at the address specified in this Section;
provided that notices to the Administrative Agent under Article 2 or
Article 8 shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by the Administrative
Agent or any Bank in exercising any right, power or privilege under any
Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and
remedies provided in the Loan Documents shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Borrower shall pay
(i) all reasonable out-of-pocket expenses of the Administrative Agent,
including fees and disbursements of special counsel for the Administrative
Agent, in connection with the preparation and administration of the Loan
Documents, any waiver or consent thereunder or any amendment thereof or any
Default or alleged Default hereunder and (ii) if an Event of Default
occurs, all out-of-pocket expenses incurred by the Administrative Agent and
each Bank, including fees and disbursements of counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Administrative Agent and each
Bank, their respective affiliates and the respective directors, officers,
agents and employees of the foregoing (each an "INDEMNITEE") and hold each
Indemnitee harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without limitation, the
reasonable fees and disbursements of counsel, which may be incurred by such
Indemnitee in connection with any administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto)
brought or threatened relating to or arising out of this Agreement or any
actual or proposed use of proceeds of Loans hereunder; provided that no
Indemnitee shall have the right to be indemnified hereunder for such
Indemnitee's own gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest
due with respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the aggregate amount of
principal and interest due with respect to any Note held by such other
Bank, the Bank receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other Banks, and such
other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the
Banks shall be shared by the Banks pro rata; provided that nothing in this
Section shall impair the right of any Bank to exercise any right of set-off
or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Borrower agrees, to the fullest extent it
may effectively do so under applicable law, that any holder of a
participation in a Note acquired pursuant to the foregoing arrangements may
exercise rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a
direct creditor of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. (a) Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Banks (and, if the rights or duties of the Administrative Agent
are affected thereby, by the Administrative Agent); provided that no such
amendment or waiver shall, unless signed by all the Banks, (i) increase or
decrease the Commitment of any Bank (except for a ratable decrease in the
Commitments of all Banks) or subject any Bank to any additional obligation,
(ii) reduce the principal of or rate of interest on any Loan or any fees
hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for termination of any
Commitment (iv) change Section 9.04 or (v) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, or
the number of Banks, which shall be required for the Banks or any of them
to take any action under this Section or any other provision of this
Agreement; and provided further that no such amendment or waiver may modify
Section 2.09 (or the defined terms used therein) in a manner which (i)
increases the amount of Net Cash Proceeds available for application under
the Pro Rata Facilities or (ii) permits application of cash proceeds of
Collateral to a use other than payment of the Loans, in either case without
the written consent of all Banks.
(b) Any provision of any Collateral Document may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by
the Borrower and the Administrative Agent with the consent of the Required
Banks; provided that no such amendment or waiver shall, unless signed by
all the Banks, (i) alter in a manner adverse to the Banks the priorities
specified in Section 13 of the Pledge Agreement or (ii) effect or permit a
release of any of the Collateral under the Plege Agreement. Notwithstanding
the foregoing, Collateral shall be released from the Lien of the Pledge
Agreement from time to time as necessary to effect any sale of Collateral
permitted by the Loan Documents, and the Administrative Agent shall execute
and deliver all release documents reasonably requested to evidence such
release; provided that arrangements satisfactory to the Administrative
Agent shall have been made for application of the cash proceeds thereof in
accordance with Section 2.09 hereof and for the pledge of any non-cash
proceeds thereof pursuant to the Collateral Documents.
SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the
Borrower may not assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon
notice to the Borrower and the Administrative Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the
Borrower and the Administrative Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement;
provided that such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii) or (iii) of Section 9.05 without the consent
of the Participant. The Borrower agrees that each Participant shall, to the
extent provided in its participation agreement, be entitled to the benefits
of Article 8 with respect to its participating interest. An assignment or
other transfer which is not permitted by subsection (c) or (d) below shall
be given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "ASSIGNEE") all, or a proportionate part of all, of
its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the form of Exhibit D
hereto executed by such Assignee and such transferor Bank, with (and
subject to) notice to, and the subscribed consent of, the Borrower, so long
as no Default shall have occurred and be continuing, and the Administrative
Agent (such consent of the Borrower and the Administrative Agent not to be
unreasonably withheld); provided that (i) if an Assignee is an affiliate of
such transferor Bank or is a Bank prior to giving effect to such
assignment, such notice shall be given but no such consent shall be
required. Upon execution and delivery of such instrument and payment by
such Assignee to such transferor Bank of an amount equal to the purchase
price agreed between such transferor Bank and such Assignee, such Assignee
shall be a Bank party to this Agreement and shall have all the rights and
obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by
any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Administrative
Agent and the Borrower shall make appropriate arrangements so that, if
required, a new Note is issued to the Assignee. In connection with any such
assignment, the transferor Bank shall pay to the Administrative Agent an
administrative fee for processing such assignment in the amount of $2,500.
If the Assignee is not incorporated under the laws of the United States of
America or a state thereof, it shall, prior to the first date on which
interest or fees are payable hereunder for its account, deliver to the
Borrower and the Administrative Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in
accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations
hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 than
such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.02, 8.03 or 8.04
requiring such Bank to designate a different Applicable Lending Office
under certain circumstances or at a time when the circumstances giving rise
to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is
not relying upon any "MARGIN STOCK" (as defined in Regulation U) as
collateral in the extension of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to Jurisdiction. This
Agreement and each Note shall be governed by and construed in accordance
with the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in
New York City for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 9.09. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
RITE AID CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President - Finance
Address: 00 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Website: xxx.xxxxxxx.xxx
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Xxxxxx Xxxxxx-Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx-Xxxxxx
Title: Vice President
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
CITIBANK, N.A.
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
BANK ONE, NA
(Main Office - Chicago)
By: /s/ Eve Drinis
----------------------------------
Name: Eve Drinis
Title: Assistant Vice President
ABN AMRO BANK N.V.
By: /s/ Xxxxx X. XxXxxxxx Xx.
----------------------------------
Name: Xxxxx X. XxXxxxxx Xx.
Title: Vice President
By: /s/ Xxx Janorsky
----------------------------------
Name: Xxx Janorsky
Title: Group Vice President
FIRST UNION NATIONAL BANK
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Assistant Vice President
WACHOVIA BANK, N.A.
By: /s/ Xxxxx XxXxxxxx
---------------------------------------------
Name: Xxxxx XxXxxxxx
Title: Senior Vice President/Group Executive
BANK OF MONTREAL
By: /s/ Xxxxxxx XxXxxxxxx
--------------------------------
Name: Xxxxxxx XxXxxxxxx
Title: Director
THE BANK OF NOVA SCOTIA
By: /s/ J. Xxxx Xxxxxxx
--------------------------------
Name: J. Xxxx Xxxxxxx
Title: Authorized Signatory
COMMERZBANK AG, NEW YORK BRANCH
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Daniel Lolly
--------------------------------
Name: Daniel Lolly
Title: Assistant Vice President
MELLON BANK, N.A.
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
HSBC BANK USA
By: /s/ Xxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
AMSOUTH BANK
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
ARAB BANK, PLC GRAND CAYMAN
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------
Name: Emanuel Cravanos
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxxx Xxxxxx Xx.
------------------------------
Name: Xxxxxx Xxxxxx Xx.
Title: Vice President
ALLFIRST BANK, N.A.
By: /s/ Xxxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
HIBERNIA NATIONAL BANK
By: /s/ Xxxxxxxxxxx Xxxxx
------------------------------
Name: Xxxxxxxxxxx Xxxxx
Title: Vice President
THE HUNTINGTON NATIONAL BANK
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
NATIONAL CITY BANK OF PENNSYLVANIA
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
NORDDEUTSCHE LANDESBANK
GIROZENTRALE
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
THE NORTHERN TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
THE SUMITOMO BANK, LIMITED
By: /s/ C. Xxxxxxx Xxxxxxx
----------------------------
Name: C. Xxxxxxx Xxxxxxx
Title: Senior Vice President
SUNTRUST BANK, ATLANTA
By: /s/ Xxxxx Xxxxxx
----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
By:
---------------------------
Name:
Title:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By: /s/ X. X. Xxxxxx
---------------------------
Name: X. X. Xxxxxx
Title: Vice President
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ Xxx Xxxxxx
---------------------------
Name: Xxx Xxxxxx
Title: Vice President
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Administrative Agent
By: /s/ Xxxxxx Xxxxxx-Xxxxxx
---------------------------
Name: Xxxxxx Xxxxxx-Xxxxxx
Title: Vice President
Address: 00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000-0000
Attention: Loan Department
Telex number: 177615
COMMITMENT SCHEDULE
BANK COMMITMENT
---- ----------
Xxxxxx Guaranty Trust Company of New York $ 73,000,000.00
Bank of America, N.A. 73,000,000.00
Citibank, N.A. 73,000,000.00
Bank One, NA (Main Office - Chicago) 73,000,000.00
ABN AMRO Bank N.V. 61,000,000.00
First Union National Bank 61,000,000.00
PNC Bank, National Association 61,000,000.00
Wachovia Bank, N.A. 61,000,000.00
Bank of Montreal 52,000,000.00
The Bank of Nova Scotia 52,000,000.00
Commerzbank AG, New York Branch 52,000,000.00
Fleet National Bank 52,000,000.00
KeyBank National Association 52,000,000.00
Mellon Bank, N.A. 52,000,000.00
U.S. Bank National Association 52,000,000.00
Union Bank of California, N.A. 49,000,000.00
Xxxxxx Commercial Paper Inc. 44,000,000.00
HSBC Bank USA 44,000,000.00
AmSouth Bank 22,000,000.00
Arab Bank, PLC Grand Cayman 22,000,000.00
The Bank of New York 22,000,000.00
Allfirst Bank, N.A. 22,000,000.00
Hibernia National Bank 22,000,000.00
The Huntington National Bank 22,000,000.00
National City Bank of Pennsylvania 22,000,000.00
Norddeutsche Landesbank Girozentrale 22,000,000.00
The Northern Trust Company 22,000,000.00
The Sumitomo Bank, Limited 22,000,000.00
SunTrust Bank, Atlanta 22,000,000.00
Bank of Tokyo-Mitsubishi Trust Company 12,000,000.00
First Tennessee Bank National Association 9,000,000.00
--------------
TOTAL COMMITMENTS $ 1,300,000,000.00
PRICING SCHEDULE
The "BASE RATE MARGIN" and "EURO-DOLLAR MARGIN" for any day are the
respective percentages set forth below in the applicable row under the
column corresponding to the Status that exists on such day.
Status Level I Level II Level III
-----------------------------------------------------------------------------
Base Rate Margin 1.00% 1.50% 2.00%
-----------------------------------------------------------------------------
Euro-Dollar Margin 2.00% 2.50% 3.00%
For purposes of this Schedule, the following terms have the following
meanings:
"LEVEL I STATUS" exists at any date if (i) such date is on or after
May 1, 2000 and (ii) at such date, the Borrower's long-term debt is rated
BBB- or higher by S&P and Baa3 or higher by Moody's.
"LEVEL II STATUS" exists at any date if, at such date, (a) the
Borrower's long-term debt is rated BB+ or higher by S&P and Ba1 or higher
by Moody's and (b) Level I Status does not exist.
"LEVEL III STATUS" exists at any date if, at such date, no other
Status exists.
"MOODY'S" means Xxxxx'x Investors Service, Inc., or any successor to
its business of rating debt securities.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to its business of rating
debt securities.
"STATUS" refers to the determination of which of Level I Status,
Level II Status or Level III Status exists at any date.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the senior unsecured long-term debt securities of the
Borrower without third-party credit enhancement, and any rating assigned to
any other debt security of the Borrower shall be disregarded. The rating in
effect at any date is that in effect at the close of business on such date.
If Asset Sales generating Net Cash Proceeds of at least $500.0 million
(excluding the sale by the Borrower of certain of its assets to Longs Drug
Stores Corp. publicly announced prior to the date of this Agreement, but
including solely for purposes of this sentence a sale or other disposition
of capital stock of PCS) are not consummated by February 15, 2000, the
Euro-Dollar Margin and Base Rate Margin applicable for any day thereafter
shall be the Euro-Dollar Margin and Base Rate Margin, respectively, set
forth above for such day, plus, in each case, 0.50%.
EXHIBIT A
NOTE
New York, New York
October __, 1999
For value received, RITE AID CORPORATION, a Delaware corporation (the
"BORROWER"), promises to pay to the order of ________________________________
(the "BANK"), for the account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the Borrower pursuant to
the Loan Agreement referred to below on November 1, 2000. The Borrower
promises to pay interest on the unpaid principal amount of each such Loan
on the dates and at the rate or rates provided for in the Loan Agreement.
All such payments of principal and interest shall be made in lawful money
of the United States in Federal or other immediately available funds at the
office of Xxxxxx Guaranty Trust Company of New York, 00 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx.
All Loans made by the Bank, the respective types thereof and all
repayments of the principal thereof shall be recorded by the Bank and, if
the Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to
each such Loan then outstanding may be endorsed by the Bank on the schedule
attached hereto, or on a continuation of such schedule attached to and made
a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Loan Agreement.
This note is one of the Notes referred to in the $1,300,000,000 Term
Loan Agreement dated as of October 25, 1999 among the Borrower, the Banks
from time to time parties thereto and Xxxxxx Guaranty Trust Company of New
York, as Administrative Agent (as the same may be amended from time to
time, the "LOAN AGREEMENT"). Terms defined in the Loan Agreement are used
herein with the same meanings. Reference is made to the Loan Agreement for
provisions for the prepayment hereof and the acceleration of the maturity
hereof.
Payment of principal and interest on this Note is secured by security
interests in certain collateral pursuant to the Collateral
Documents.
RITE AID CORPORATION
By ___________________________________
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
------------------------------------------------------------------------------
Amount of
Amount of Type of Principal Notation
Date Loan Loan Repaid Made By
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
EXHIBIT B-1
October __, 1999
To the Banks and the Administrative Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company of New York,
as Administrative Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Rite Aid Corporation
Ladies and Gentlemen:
We have acted as special counsel to Rite Aid Corporation, a
Delaware corporation (the "BORROWER"), in connection with the preparation,
execution and delivery of the $1,300,000,000 Term Loan Agreement dated as
of October 25, 1999 (the "LOAN AGREEMENT") among the Borrower, the Banks
from time to time parties thereto and Xxxxxx Guaranty Trust Company of New
York, as Administrative Agent (the "ADMINISTRATIVE AGENT"). Terms defined
in the Loan Agreement are used herein as therein defined. This opinion is
being delivered pursuant to Section 3.01(f)(i) of the Loan Agreement.
In our examination we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such copies. As to any
facts material to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of the Borrower
and its officers and other representatives and of public officials,
including the facts set forth in the Borrower's Certificate described
below.
In rendering the opinions set forth herein, we have examined
and relied on originals or copies of the following:
(1) the Loan Agreement;
(2) the Notes issued pursuant thereto;
(3) the Pledge Agreement dated as of October __, 1999 (the
"PLEDGE AGREEMENT") between the Borrower and the Administrative Agent;
(iv) each of the other Applicable Agreements (as defined below);
(v) the certificate of the Borrower dated the date hereof, a
copy of which is attached as Exhibit A hereto (the "BORROWER'S
Certificate"); and
(vi) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
Members of our firm are admitted to the Bar in the State of New
York, and we do not express any opinion as to the laws of any other
jurisdiction other than the Delaware General Corporation Law, the Uniform
Commercial Code as in effect on the date hereof in the State of Delaware
(the "DELAWARE UCC") and the laws of the United States of America to the
extent specifically referred to herein.
Unless otherwise indicated, references to the "UCC" shall mean
(i) with respect to the validity of the security interest, the Uniform
Commercial Code as in effect on the date hereof in the State of New York,
and (ii) with respect to the perfection and the effect of perfection or
non-perfection of the security interest, the Delaware UCC.
Xxxxx X. Xxxxxxxxx, a member of this firm, is a director and
shareholder of the Borrower.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Each Loan Document (other than the Notes) constitutes the
valid and binding agreement of the Borrower and each Note constitutes a
valid and binding obligation of the Borrower, in each case, enforceable
against the Borrower in accordance with its terms, except as the same may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity
or at law).
In connection with our opinion set forth in this paragraph 1, we call to
your attention our opinion set forth in paragraph 2 below.
2. The execution and delivery by the Borrower of each Loan
Document, and the performance by the Borrower of its obligations under each
Loan Document in accordance with its terms, do not conflict with the
Certificate of Incorporation or By-laws of the Borrower.
3. Neither the execution, delivery or performance by the
Borrower of any Loan Document nor the compliance by the Borrower with the
terms and provisions thereof will contravene any provision of any of the
Applicable Agreements (as hereinafter defined). "APPLICABLE AGREEMENTS"
shall mean the agreements set forth in Schedule B hereto, together with the
instruments issued by the Borrower in connection therewith, in each case as
in effect as of the date hereof.
In rendering the opinions set forth in this paragraph 3, we
have considered and relied upon the fact that (i) the shares of capital
stock represented by the share certificate identified on Schedule A hereto
(the "PLEDGED SECURITIES") were acquired by the Borrower within 24 months
of the date hereof with the proceeds of commercial paper issued thereby and
(ii) the proceeds of the Loans are being used exclusively to repay
commercial paper maturing on or prior to the date of the related Borrowing
under the Loan Agreement or to repay or prepay the loans outstanding under
the Existing Credit Agreement, the proceeds of which loans were used solely
to repay commercial paper (or to refund other borrowings the proceeds of
which were used solely to repay commercial paper).
4. The provisions of the Pledge Agreement are effective to
create, in favor of the Administrative Agent for the benefit of the Banks
to secure all amounts payable by the Borrower under the Pledge Agreement,
the Loan Agreement and the Notes (all such amounts, the "OBLIGATIONS"), a
valid security interest in the Pledged Securities (as defined in each
Pledge Agreement).
5. Upon delivery of the Pledged Securities to the
Administrative Agent for the benefit of the Banks in the State of Delaware,
the security interest of the Agent for the benefit of the Banks in the
Pledged Securities
will be perfected.
6. Neither the execution, delivery or performance by the
Borrower of any Loan Document nor the compliance by the Borrower with the
terms and provisions thereof will contravene any provision of any
Applicable Law (as hereinafter defined). "APPLICABLE LAWS" shall mean those
laws, rules and regulations of the State of New York and of the United
States of America (including, without limitation, Regulations U and X of
the Board of Governors of Federal Reserve System) or pursuant to the
Delaware General Corporation Law which, in our experience, are normally
applicable to transactions of the type contemplated by the Loan Documents.
7. No Governmental Approval (as hereinafter defined), which has
not been obtained or taken and is not in full force and effect, is required
to authorize or is required in connection with the execution, delivery or
performance of any of the Loan Documents by the Borrower. "GOVERNMENTAL
APPROVAL" means any consent, approval, license, authorization or validation
of, or filing, recording or registration with, any Governmental Authority
(as hereinafter defined) pursuant to Applicable Laws. "GOVERNMENTAL
AUTHORITY" means any New York or federal legislative, judicial,
administrative or regulatory body.
8. Neither the execution, delivery or performance by the
Borrower of its obligations under the Loan Documents nor compliance by the
Borrower with the terms thereof will contravene any Applicable Order (as
hereinafter defined) against the Borrower. "APPLICABLE ORDERS" means those
orders, judgments or decrees of Governmental Authorities identified in
paragraph 2 of the Borrower's Certificate.
In rendering the foregoing opinions, we have assumed, with your
consent, that:
(i) each Loan Document has been duly executed and
delivered by the Borrower;
(ii) the execution, delivery and performance of any of
the Borrower's obligations under the Loan Documents does not and will
not conflict with, contravene, violate or constitute a default under
(i) any lease, indenture, instrument or other agreement to which the
Borrower or its property is subject (other than Applicable Agreements
as to which we express our opinion in paragraph 3 herein), (ii) any
rule, law or regulation to which the Borrower is subject (other than
Applicable Laws as to which we express our opinion in paragraph 6
herein) or (iii) any judicial or administrative order or decree of
any governmental authority (other than Applicable Orders as to which
we express our opinion in paragraph 8 herein); and
(iii) no authorization, consent or other approval of,
notice to or filing with any court, governmental authority or
regulatory body (other than Governmental Approvals as to which we
express our opinion in paragraph 7 herein) is required to authorize
or is required in connection with the execution, delivery or
performance by the Borrower of the Loan Documents or the transactions
contemplated thereby.
We understand that you are separately receiving an
opinion, dated as of the date hereof, with respect to certain of the
foregoing from Xxxxxx X. Xxxxxx, Esq. (the "GENERAL COUNSEL OPINION") and
we are advised that such opinion contains qualifications. Our opinions
herein stated are based on the assumptions specified above and we express
no opinion as to the effect on the opinions herein stated of the
qualifications contained in the General Counsel Opinion.
Our opinions are also subject to the following assumptions and
qualifications:
(a) we have assumed that each of the Loan Documents constitutes
the legal, valid and binding obligation of each party thereto (other
than the Borrower) enforceable against such party (other than the
Borrower) in accordance with its terms; and
(b) we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of any party
(other than the Borrower) to the any Loan Document with any state,
federal or other laws or regulations applicable to it or (ii) the
legal or regulatory status or the nature of the business of any party
(other than the Borrower) to any Loan Document.
(c) we express no opinion as to the enforceability of any rights
to contribution or indemnification provided for in the Loan Documents
which are violative of the public policy underlying any law, rule or
regulation (including any federal or state securities law, rule or
regulation);
(d) certain of the remedial provisions, including waivers, with
respect to the exercise of remedies against the Pledged Securities
contained in the Pledge Agreement may be unenforceable in whole or in
part, but the inclusion of such provisions does not affect the
validity of the Pledge Agreement, taken as a whole, and the Pledge
Agreement, taken as a whole, together with applicable law, contains
adequate provisions for the practical realization of the benefits of
the security interest created thereby;
(e) we express no opinion as to the effect on the opinions
expressed herein of (1) the compliance or non-compliance of the
Administrative Agent for the benefit of the Banks or any party (other
than the Borrower) to the Loan Documents with any state, federal or
other laws or regulations applicable to them or (2) the legal or
regulatory status or the nature of the business of the Agent for the
benefit of the Banks; and
In addition to the foregoing, our opinions with respect to the
security interest of the Administrative Agent for the benefit of the Banks
in the Pledged Securities are subject to the following qualifications:
(a) we have assumed that the Borrower owns, or with respect to
after-acquired property will own, the Pledged Securities, and we
express no opinion as to the nature or extent of the Borrower's rights
in, or title to, any of the Pledged Securities and we note that with
respect to any after-acquired property, the security interest will not
attach until the Borrower acquires ownership thereof;
(b) our opinions with respect to the interest of the
Administrative Agent for the benefit of the Banks are limited to
Article 8 and Article 9 of the UCC, and such opinions do not address
(i) laws of jurisdictions other than New York and Delaware, and of New
York and Delaware except for Article 8 and Article 9 of the UCC, (ii)
collateral of a type not subject to Article 8 and Article 9 of the
UCC, and (iii) what law governs perfection or priority of the security
interests granted in the Pledged Securities covered by this opinion;
(c) we call to your attention that under the UCC, events
occurring subsequent to the date hereof may affect any security
interest subject to the UCC including, but not limited to, factors of
the type identified in Section 9-306 with respect to proceeds; Section
9-402 with respect to changes in name, structure and corporate
identity; Section 9-103 with respect to changes in the location of the
Pledged Securities and the location of a debtor; Section 9-316 with
respect to subordination agreements; Section 9-403 with respect to
continuation statements; and Sections 9-307, 9-308 and 9-309 with
respect to subsequent purchasers of the Pledged Securities. In
addition, actions taken by a secured party (e.g., releasing or
assigning the security interest, delivering possession of the Pledged
Securities to a debtor or another person and voluntarily subordinating
a security interest) may affect any security interest subject to the
UCC;
(d) we have assumed that the Pledged Securities are the
Subsidiary Shares as defined in the Pledge Agreement; and
(e) we express no opinion with respect to the priority of the
security interest of the Administrative Agent for the benefit of the
Banks in any of the Pledged Securities.
This opinion is being furnished only to you and is solely for
your benefit and is not to be relied upon by anyone else or for any
other purpose without our prior written consent.
Very truly yours,
Schedule A
Certificate Type of Number of
Issuer Number Stock Shares
------ ----------- ------- ---------
PCS Holdings Corporation A-2 Class A, 565 Shares
par value $1.00
per share
Schedule B
1. Note Agreement dated as of September 30, 1996 among XXXXX,
INC, The Prudential Insurance Company of America and PRUCO Life Insurance
Company ($79,560,908.91 7.30% Senior Secured Notes due February 28, 2002).
2. Master Tax Ownership Operating Lease dated as of March 19,
1998 by and among Rite Aid Realty Corp. as Lessee, Rite Aid Corporation, as
Guarantor, RAC Leasing LLC, as Lessor, Sumitomo Bank, Limited, New York
Branch, as Liquidity Agent and Collateral Agent, and RA Funding II
Corporation as Lease Receivables Purchaser.
3. Senior Loan Agreement dated as of March 11, 1998 between RAC
Leasing LLC and The Lenders Parties hereto, as Lenders and Sumitomo Bank
Leasing and Finance, Inc. as Agent.
4. Master Tax Ownership Operating Lease dated as of May 30,
1997 by and among Rite Aid Realty Corp., as Lessee, Rite Aid Corporation,
as Guarantor, Sumitomo Bank Leasing and Finance, Inc., as Lessor, Sumitomo
Bank, Limited, New York Branch as Liquidity Agent and Collateral Agent, RA
Funding Corporation, as Lease Receivables Purchaser, and Madison Funding
Corporation, as Conduit.
5. Receivables Purchase Agreement dated as of November 26, 1997
among Rite Aid Funding LLC as the Seller, and Corporate Asset Funding
Company, Inc. and Corporate Receivables Corporation as the Investors, and
Citibank, N.A. and Citicorp North America, Inc. as the Agent and Rite Aid
Corporation as Collection Agent.
6. Indenture, dated as of December 21, 1998, between the Borrower
and Xxxxxx Trust and Savings Bank, as Trustee.
7. Indenture, dated as of September 22, 1998, by and among the
Borrower and Xxxxxx Trust and Savings Bank, as Trustee.
8. Indenture dated August 1, 1993, between the Borrower and
First Trust of New York, National Association, as successor Trustee.
EXHIBIT B-2
OPINION OF
GENERAL COUNSEL FOR THE BORROWER
--------------------------------
To the Banks and the Administrative Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Administrative Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
I am General Counsel of Rite Aid Corporation (the "Borrower"), and I
have advised the Borrower in connection with the $1,300,000,000 Term Loan
Agreement (the "LOAN AGREEMENT") dated as of October __, 1999 among the
Borrower, the Banks from time to time parties thereto and Xxxxxx Guaranty
Trust Company of New York, as Administrative Agent. Terms defined in the
Loan Agreement are used herein as therein defined. This opinion is being
rendered to you at the request of our client pursuant to Section
3.01(f)(ii) of the Loan Agreement.
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of the Loan Agreement, the Notes issued
pursuant thereto, the Pledge Agreement and such other documents, corporate
records, certificates of public officials and other instruments and have
conducted such other investigations of fact and law as I have deemed
necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
2. The execution, delivery and performance by the Borrower of the Loan
Documents are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of (i) any agreement or instrument evidencing or
governing Debt of the Borrower or any Subsidiary, (ii) any agreement
material to the business, financial condition, results of operations or
prospects of the Borrower, or (iii) any other material instrument,
judgment, injunction, order or decree binding upon the Borrower or any
Subsidiary or result in the creation or imposition of any Lien on any asset
of the Borrower or any Subsidiary pursuant to any such agreement,
instrument, judgment, injunction, order or decree.
3. Each Loan Document (other than the Notes) constitutes a valid and
binding agreement of the Borrower and each Note constitutes a valid and
binding obligation of the Borrower, in each case enforceable in accordance
with its terms except as the same may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and by general
principles of equity.
4. Except as described in the Borrower's Annual Report on Form 10-K
for the fiscal year ended February 27, 1999, there is no action, suit or
proceeding pending against, or to the best of my knowledge threatened
against or affecting, the Borrower or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official, in which
there is a reasonable possibility of an adverse decision which could
materially adversely affect the business, consolidated financial position
or consolidated results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole or which in any manner draws into
question the validity or enforceability of the Loan Documents.
5. Each of the Borrower's corporate Significant Subsidiaries is a
corporation validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
In giving the foregoing opinion, I express no opinion as to the
effect (if any) of any law of any jurisdiction (except the State of New
York and the State of Pennsylvania) in which any Bank is located which
limits the rate of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without my prior written consent.
Very truly yours,
EXHIBIT C
OPINION OF
XXXXX XXXX & XXXXXXXX, SPECIAL COUNSEL
FOR THE ADMINISTRATIVE AGENT
To the Banks and the Administrative Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Administrative Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
We have participated in the preparation of the $1,300,000,000 Term
Loan Agreement (the "LOAN AGREEMENT") dated as of October 25, 1999 among
Rite Aid Corporation, a Delaware corporation (the "BORROWER"), the Banks
from time to time parties thereto and Xxxxxx Guaranty Trust Company of New
York, as Administrative Agent, and have acted as special counsel for the
Administrative Agent for the purpose of rendering this opinion pursuant to
Section 3.01(g) of the Loan Agreement. Terms defined in the Loan Agreement
are used herein as therein defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Loan Agreement, the Notes issued
pursuant thereto, the Pledge Agreement and such other documents, corporate
records, certificates of public officials and other instruments and have
conducted such other investigations of fact and law as we have deemed
necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the
Loan Documents are within the Borrower's corporate powers and have been
duly
authorized by all necessary corporate action.
2. Each Loan Document (other than the Notes) constitutes a valid and
binding agreement of the Borrower and each Note constitutes a valid and
binding obligation of the Borrower, in each case enforceable in accordance
with its terms except as the same may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and by general
principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws
of the United States of America and the General Corporation Law of the
State of Delaware. In giving the foregoing opinion, we express no opinion
as to the effect (if any) of any law of any jurisdiction (except the State
of New York) in which any Bank is located which limits the rate of interest
that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent.
Very truly yours,
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of __________, 19__ among [ASSIGNOR] (the
"ASSIGNOR"), [ASSIGNEE] (the "ASSIGNEE"), [RITE AID CORPORATION (the
"BORROWER")] and XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as
Administrative Agent (the "ADMINISTRATIVE AGENT").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement (the "AGREEMENT")
relates to the $1,300,000,000 Term Loan Agreement dated as of October __,
1999 among [Rite Aid Corporation (the "BORROWER")] [the Borrower], the
Assignor and the other Banks parties thereto, as Banks, and the
Administrative Agent (as amended from time to time, the "LOAN AGREEMENT");
[WHEREAS, as provided under the Loan Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount
not to exceed $_________;]
[WHEREAS, Loans made to the Borrower by the Assignor under the Loan
Agreement in the aggregate principal amount of $_______ are outstanding at
the date hereof;] and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Loan Agreement in respect of a portion of
its [Commitment][Loans] thereunder in an amount equal to $___________ (the
"ASSIGNED AMOUNT"), [together with a corresponding portion of its
outstanding Loans,] and the Assignee proposes to accept assignment of such
rights and assume the corresponding obligations from the Assignor on such
terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Loan Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Loan Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the
Assignor under the Loan Agreement to the extent of the Assigned Amount,
including the purchase from the Assignor of the corresponding portion of
the principal amount of the Loans made by the Assignor outstanding at the
date hereof. Upon the execution and delivery hereof by the Assignor, the
Assignee, the Borrower and the Administrative Agent and the payment of the
amounts specified in Section 3 required to be paid on the date hereof [(i)]
the Assignee shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Bank under the Loan Agreement
with [a Commitment][outstanding Loans] in an amount equal to the Assigned
Amount, and (ii) [the Commitment of the Assignor shall, as of the date
hereof, be reduced by a like amount and] the Assignor released from its
obligations under the Loan Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds an amount equal to $_______.1 [It is
understood that commitment fees accrued to the date hereof are for the
account of the Assignor and such fees accruing from and including the date
hereof in respect of the Assigned Amount are for the account of the
Assignee.] Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Loan Agreement which is for the account of
the other party hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
SECTION 4. Consent of [the Borrower and] the Administrative Agent.
This Agreement is conditioned upon the consent of [the Borrower and] the
Administrative Agent pursuant to Section 9.06(c) of the Loan Agreement. The
execution of this Agreement by [the Borrower and] the Administrative Agent
is evidence of this consent. Pursuant to Section 9.06(c) the Borrower
agrees to execute and deliver a Note payable to the order of the Assignee
to evidence the assignment and assumption provided for herein.
SECTION 5. Non-reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition, or
statements of the Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Loan Agreement or any Note.
The Assignee acknowledges that it has, independently and without reliance
on the Assignor, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of
the Borrower. -------- 1 Amount should combine principal together with
accrued interest and breakage compensation, if any, to be paid by the
Assignee, net of any portion of any upfront fee to be paid by the Assignor
to the Assignee. It may be preferable in an appropriate case to specify
these amounts generically or by formula rather than as a fixed sum.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date
first above written.
[ASSIGNOR]
By ____________________________________
Title:
[ASSIGNEE]
By ____________________________________
Title:
[RITE AID CORPORATION
By______________________________________
Title:]
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative Agent
By _____________________________________
Title:
EXHIBIT E
PCS PLEDGE AGREEMENT
AGREEMENT dated as of October 25, 1999 between RITE AID CORPORATION
(with its successors, the "BORROWER") and XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK ("XXXXXX"), as agent hereunder (the "AGENT").
W I T N E S S E T H :
WHEREAS, the Borrower, certain banks and Xxxxxx, as agent for such
banks are parties to a Credit Agreement dated as of January 21, 1999 (as
heretofore amended, the "ORIGINAL 1999 CREDIT AGREEMENT"); and
WHEREAS, the Borrower and Xxxxxx, as agent, have entered into the
Pledge Agreement dated as of September 29, 1999 (the "FIRST PLEDGE
AGREEMENT"), pursuant to which the Borrower has pledged the Collateral (as
hereinafter defined) to secure its obligations under the Original 1999
Credit Agreement and the Notes issued pursuant thereto; and
WHEREAS, the Borrower, certain banks and Xxxxxx, as agent for such
banks are parties to a Credit Agreement dated as of July 19, 1996 (as
heretofore amended, the "ORIGINAL 1996 CREDIT AGREEMENT"); and
WHEREAS, the Borrower and Xxxxxx, as agent, are parties to a PCS
Junior Pledge Agreement dated as of October 19, 1999 (the "SECOND PLEDGE
AGREEMENT"), pursuant to which the Borrower has granted a junior security
interest in the Collateral to secure certain of its obligations under the
Original 1996 Credit Agreement; and
WHEREAS, the Borrower proposes to enter into a Term Loan Agreement of
even date herewith with the parties to the Original 1999 Credit Agreement
(as the same may be amended from time to time, the "1999 FACILITY"), term
loans under which (the "1999 LOANS") are to refinance loans outstanding
under the Original 1999 Credit Agreement; and
WHEREAS, the Borrower proposes to enter into an Amended and Restated
Credit Agreement of even date amending and restating the Original 1996
Credit Agreement (as the same may be amended from time to time, the "PRO
RATA CREDIT AGREEMENT"); and
WHEREAS, the Borrower has agreed to grant a continuing security
interest in and to the Collateral (i) on a first priority basis, to secure
its obligations under the 1999 Facility, (ii) on a second priority basis,
to secure certain of its obligations under the Pro Rata Credit Agreement,
(iii) on a third priority basis, to secure certain other obligations under
the Pro Rata Credit Agreement as well as the Prudential Pro Rata Exposure
(as defined below), the Xxxxxx Pro Rata Exposure (as defined below) and the
Letter of Credit Exposure (as defined below) and (iv) on a fourth priority
basis, to secure the Synthetic Lease Obligations (as defined below); and
WHEREAS, this Agreement is intended to continue the security
interests created and perfected under the First Pledge Agreement and the
Second Pledge Agreement, but its terms shall supersede the terms thereof;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. (a) Terms defined in the heading and recitals
hereto have the respective meanings provided for therein.
(b) The following terms have the meanings provided for in the Pro Rata
Credit Agreement:
xxxxxxxxx.xxx Pledge Agreement
Xxxxxx Pro Rata Exposure
Prudential Pro Rata Exposure
Tranche A Loans
Tranche B Loans
(c) The following additional terms, as used herein, have the
following respective meanings:
"BASE RATE" has the meaning set forth in the Credit Agreements.
"COLLATERAL" has the meaning assigned to such term in Section 2(c)(a).
"CREDIT AGREEMENT" means the 1999 Facility or the Pro Rata Credit
Agreement.
"DEFAULT" means a "Default" as defined in either of the Credit
Agreements.
"EVENT OF DEFAULT" means an "Event of Default" as defined in either
the Credit Agreements.
"FIRST PRIORITY SECURED OBLIGATIONS" means (i) all principal of and
interest (including, without limitation, any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any 1999 Loan,
(ii) all other amounts payable by the Borrower under the 1999 Facility and
(iii) any renewals or extensions of any of the foregoing.
"FOURTH PRIORITY SECURED OBLIGATIONS" means (i) the obligations of
the Borrower in respect of the Synthetic Lease Obligations and (ii) any
renewals or extensions of the foregoing.
"INSTRUCTING BANKS" means (i) until all First Priority Secured
Obligations shall have been paid in full, the "Required Banks" as defined
in the 1999 Facility and (ii) thereafter, the "Required Banks" as defined
in the Pro Rata Credit Agreement.
"ISSUER" means PCS Holdings Corporation, and its successors.
"LETTER OF CREDIT EXPOSURE" means the reimbursement obligations of
the Borrower in respect of standby letters of credit issued for the account
of the Borrower set forth in Schedule A hereto, and any replacements
thereof; provided that the issuer of such letter of credit shall have
entered into an agreement with the Borrower and the Agent satisfactory to
the Agent pursuant to which such issuer has agreed to accept the benefits
of and be bound by the terms of this Agreement; provided further that the
Letter of Credit Exposure may not for purposes of this Agreement exceed
$32,750,000; and provided further that the outstanding principal amount of
any such letters of credit which are undrawn shall be deemed to be the face
amount thereof for purposes of this Agreement, subject to the last sentence
of Section 13.
"LIEN" means a "Lien" as defined in either of the Credit Agreements.
"LOAN DOCUMENTS" means the "Loan Documents" as defined in either
Credit Agreement.
"MAXIMUM PRINCIPAL AMOUNT" shall mean that portion of the outstanding
principal amounts of the Partially Secured Obligations secured both
hereunder and under the xxxxxxxxx.xxx Pledge Agreement, which principal
amount shall not exceed $399,000,000, it being understood that this
Agreement and the xxxxxxxxx.xxx Pledge Agreement each individually, but
also collectively, secure the Partially Secured Obligations to the extent
of such Maximum Principal Amount, and that therefore the Maximum Principal
Amount for purposes of this Agreement shall be reduced by the amount of any
proceeds of Collateral applied to principal of the Partially Secured
Obligations pursuant to Section 13 of the xxxxxxxxx.xxx Pledge Agreement.
"PARTIALLY SECURED OBLIGATIONS" means the Tranche B Loans, the
Prudential Pro Rata Exposure, the Xxxxxx Pro Rata Exposure and the Letter
of Credit Exposure.
"PLEDGED STOCK" means (i) the Subsidiary Shares and (ii) any other
capital stock required to be pledged to the Agent pursuant to Section
2(c)(b).
"SECOND PRIORITY SECURED OBLIGATIONS" means (i) all principal of and
interest (including, without limitation, any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any Tranche A
Loan, (ii) all other amounts payable by the Borrower hereunder or under the
1996 Loan Documents, to the extent properly allocable to the Tranche A
Loans, and (iii) any renewals or extensions of any of the foregoing.
"SECURED OBLIGATIONS" means the First Priority Secured Obligations,
the Second Priority Secured Obligations, the Third Priority Secured
Obligations, the Fourth Priority Secured Obligations and any amount payable
by the Borrower under this Agreement.
"SECURED PARTIES" means the Agent and the holders from time to time of
the Secured Obligations.
"SECURITY INTERESTS" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"SUBSIDIARY SHARES" means 565 shares of Class A Stock, par value
$1.00 per share, of the Issuer.
"SYNTHETIC LEASE OBLIGATIONS" means, collectively, (i) the Guaranty
dated as of March 19, 1998 from Rite Aid Corporation to RAC Leasing LLC, as
the same may be amended from time to time, and (ii) the Guaranty dated as
of May 30, 1997 from Rite Aid Corporation to Sumitomo Bank Leasing and
Finance, Inc., as the same may be amended from time to time.
"THIRD PRIORITY SECURED OBLIGATIONS" means (i) all outstanding
principal amounts of Partially Secured Obligations, provided that the
principal amount secured pursuant to this clause (i) shall not exceed the
Maximum Principal Amount; (ii) all interest (including, without limitation,
any interest which accrues after the commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency or reorganization of
the Borrower, whether or not allowed or allowable as a claim in any such
proceeding) on the principal amounts secured pursuant to clause (i) of this
definition, (iii) any Yield-Maintenance Amount payable in respect of the
portion of the Prudential Pro Rata Exposure secured pursuant to clauses (i)
and (ii) of this definition; (iv) any renewals or extensions of any of the
foregoing and (v) to the extent the same may be secured hereunder and under
the xxxxxxxxx.xxx Pledge Agreement without contravention of the Indentures,
any and all other amounts payable by the Borrower in respect of the
Partially Secured Obligations. The amounts specified in clauses (i) and
(iv) shall be allocated among the Partially Secured Obligations ratably
based on the unpaid principal amount thereof at the time of determination.
Unless otherwise defined herein, or unless the context otherwise
requires, all terms used herein which are defined in the New York Uniform
Commercial Code as in effect on the date hereof shall have the meanings
therein stated.
SECTION 2. Representations and Warranties. The Borrower represents and
warrants as follows:
(a) Title to Pledged Stock. The Borrower owns all of the Pledged
Stock, free and clear of any Liens other than the Security Interests.
The Pledged Stock includes all of the issued and outstanding capital
stock of the Issuer. All of the Pledged Stock has been duly authorized
and validly issued, and is fully paid and non-assessable, and is
subject to no options to purchase or similar rights of any Person. The
Borrower is not and will not become a party to or otherwise bound by
any agreement, other than this Agreement, which restricts in any
manner the rights of any present or future holder of any of the
Pledged Stock with respect thereto.
(b) Validity, Perfection and Priority of Security Interests. The
Agent has valid and perfected security interests in the Collateral
subject to no prior Lien. No registration, recordation or filing with
any governmental body, agency or official is required in connection
with the execution or delivery of this Agreement or necessary for the
validity or enforceability hereof or for the perfection or enforcement
of the Security Interests. Neither the Borrower nor any of its
Subsidiaries has performed or will perform any acts which might
prevent the Agent from enforcing any of the terms and conditions of
this Agreement or which would limit the Agent in any such enforcement.
(c) UCC Filing Locations. The chief executive office of the Borrower
is located at its address set forth on the signature pages of the
Credit Agreement.
SECTION 3. The Security Interests. In order to secure the full and
punctual payment of the Secured Obligations in accordance with the terms
thereof, and to secure the performance of all the obligations of the
Borrower hereunder:
(a) The Borrower hereby assigns and pledges to and with the Agent
for the benefit of the Secured Parties and grants to the Agent for the
benefit of the Secured Parties security interests in the Pledged
Stock, and all of its rights and privileges with respect to the
Pledged Stock, and all income and profits thereon, and all dividends
and other payments and distributions with respect thereto, and all
proceeds of the foregoing (the "COLLATERAL"). Prior to the execution
and delivery hereof, the Borrower has delivered the certificate
representing the Subsidiary Shares in pledge hereunder.
(b) In the event that the Issuer at any time issues any
additional or substitute shares of capital stock of any class, the
Borrower will immediately pledge and deposit with the Agent
certificates representing all such shares as additional security for
the Secured Obligations. All such shares constitute Pledged Stock and
are subject to all provisions of this Agreement.
(c) The Security Interests are granted as security only and shall
not subject the Agent or any Secured Party to, or transfer or in any
way affect or modify, any obligation or liability of the Borrower with
respect to any of the Collateral or any transaction in connection
therewith.
SECTION 4. Delivery of Pledged Stock. All certificates representing
Pledged Stock delivered to the Agent by the Borrower pursuant hereto shall
be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, with
signatures appropriately guaranteed, and accompanied by any required
transfer tax stamps, all in form and substance satisfactory to the Agent.
SECTION 5. Further Assurances. (a) The Borrower agrees that it will,
at its expense and in such manner and form as the Agent may require,
execute, deliver, file and record any financing statement, specific
assignment or other paper and take any other action that may be necessary
or desirable, or that the Agent may request, in order to create, preserve,
perfect or validate any Security Interest or to enable the Agent to
exercise and enforce its rights hereunder with respect to any of the
Collateral. To the extent permitted by applicable law, the Borrower hereby
authorizes the Agent to execute and file, in the name of the Borrower or
otherwise, Uniform Commercial Code financing statements (which may be
carbon, photographic, photostatic or other reproductions of this Agreement
or of a financing statement relating to this Agreement) which the Agent in
its sole discretion may deem necessary or appropriate to further perfect
the Security Interests.
(b) The Borrower agrees that it will not change (i) its name, identity
or corporate structure in any manner, (ii) the location of its chief
executive office or (iii) jurisdiction of incorporation unless it shall
have given the Agent not less than 30 days' prior notice thereof.
SECTION 6. Record Ownership of Pledged Stock. The Agent may at any
time or from time to time, in its sole discretion, cause any or all of the
Pledged Stock to be transferred of record into the name of the Agent or its
nominee. The Borrower will promptly give to the Agent copies of any notices
or other communications received by it with respect to Pledged Stock
registered in the name of the Borrower and the Agent will promptly give to
the Borrower copies of any notices and communications received by the Agent
with respect to Pledged Stock registered in the name of the Agent or its
nominee.
SECTION 7. Right to Receive Distributions on Collateral. During the
continuance of any Default the Agent shall have the right to receive and to
retain as Collateral hereunder all dividends and other payments and
distributions made upon or with respect to the Collateral and the Borrower
shall take all such action as the Agent may deem necessary or appropriate
to give effect to such right. All such dividends and other payments and
distributions which are received by the Borrower shall be received in trust
for the benefit of the Agent and the Secured Parties and, if the Agent so
directs during the continuance of a Default, shall be segregated from other
funds of the Borrower and shall, forthwith upon demand by the Agent during
the continuance of a Default, be paid over to the Agent as Collateral in
the same form as received (with any necessary endorsement). After all
Defaults have been cured, the Agent's right to retain dividends and other
payments and distributions under this Section 7 shall cease and the Agent
shall pay over to the Borrower any such Collateral retained by it during
the continuance of a Default.
SECTION 8. Right to Vote Pledged Stock. Unless a Default shall have
occurred and be continuing, the Borrower shall have the right, from time to
time, to vote and to give consents, ratifications and waivers with respect
to the Pledged Stock, and the Agent shall, upon receiving a written request
from the Borrower accompanied by a certificate signed by its principal
financial officer stating that no Default has occurred and is continuing,
deliver to the Borrower or as specified in such request such proxies,
powers of attorney, consents, ratifications and waivers in respect of any
of the Pledged Stock which is registered in the name of the Agent or its
nominee as shall be specified in such request and be in form and substance
satisfactory to the Agent.
If a Default shall have occurred and be continuing, the Agent shall
have the right to the extent permitted by law, and the Borrower shall take
all such action as may be necessary or appropriate to give effect to such
right, to vote and to give consents, ratifications and waivers, and take
any other action with respect to any or all of the Pledged Stock with the
same force and effect as if the Agent were the absolute and sole owner
thereof.
SECTION 9. General Authority. The Borrower hereby irrevocably
appoints the Agent its true and lawful attorney, with full power of
substitution, in the name of the Borrower, the Agent, the Secured Parties
or otherwise, for the sole use and benefit of the Agent and Secured
Parties, but at the expense of the Borrower, to the extent permitted by law
to exercise, at any time and from time to time while an Event of Default
has occurred and is continuing, all or any of the following powers with
respect to all or any of the Collateral:
(a) to demand, xxx for, collect, receive and give acquittance for
any and all monies due or to become due upon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and effectually as if
the Agent were the absolute owner thereof, and
(d) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference thereto;
provided that the Agent shall give the Borrower not less than ten days'
prior notice of the time and place of any sale or other intended
disposition of any of the Collateral except any Collateral which is
perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market. The Agent and the Borrower agree
that such notice constitutes "reasonable notification" within the meaning
of Section 9-504(3) of the Uniform Commercial Code.
SECTION 10. Remedies upon Event of Default. If any Event of Default
shall have occurred and be continuing, the Agent may exercise on behalf of
the Secured Parties all the rights of a secured party under the Uniform
Commercial Code (whether or not in effect in the jurisdiction where such
rights are exercised) and, in addition, the Agent may, without being
required to give any notice, except as herein provided or as may be
required by mandatory provisions of law, (i) apply the cash, if any, then
held by it as Collateral as specified in Section 12 and (ii) if there shall
be no such cash or if such cash shall be insufficient to pay all the
Secured Obligations in full, sell the Collateral or any part thereof at
public or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery, and at such price
or prices as the Agent may deem satisfactory. Any Secured Party may be the
purchaser of any or all of the Collateral so sold at any public sale (or,
if the Collateral is of a type customarily sold in a recognized market or
is of a type which is the subject of widely distributed standard price
quotations, at any private sale). The Agent is authorized, in connection
with any such sale, if it deems it advisable so to do, (A) to restrict the
prospective bidders on or purchasers of any of the Pledged Stock to a
limited number of sophisticated investors who will represent and agree that
they are purchasing for their own account for investment and not with a
view to the distribution or sale of any of such Pledged Stock, (B) to cause
to be placed on certificates for any or all of the Pledged Stock or on any
other securities pledged hereunder a legend to the effect that such
security has not been registered under the Securities Act of 1933 and may
not be disposed of in violation of the provision of said Act, and (C) to
impose such other limitations or conditions in connection with any such
sale as the Agent deems necessary or advisable in order to comply with said
Act or any other law. The Borrower will execute and deliver such documents
and take such other action as the Agent deems necessary or advisable in
order that any such sale may be made in compliance with law. Upon any such
sale the Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. Each purchaser at any such sale
shall hold the Collateral so sold absolutely and free from any claim or
right of whatsoever kind, including any equity or right of redemption of
the Borrower which may be waived, and the Borrower, to the extent permitted
by law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or hereafter
adopted. The notice (if any) of such sale required by Section 9 shall (1)
in the case of a public sale, state the time and place fixed for such sale,
(2) in the case of a sale at a broker's board or on a securities exchange,
state the board or exchange at which such sale is to be made and the day on
which the Collateral, or the portion thereof so being sold, will first be
offered for sale at such board or exchange, and (3) in the case of a
private sale, state the day after which such sale may be consummated. Any
such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Agent may fix in the
notice of such sale. At any such sale the Collateral may be sold in one lot
as an entirety or in separate parcels, as the Agent may determine. The
Agent shall not be obligated to make any such sale pursuant to any such
notice. The Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the same may be so adjourned. In the
case of any sale of all or any part of the Collateral on credit or for
future delivery, the Collateral so sold may be retained by the Agent until
the selling price is paid by the purchaser thereof, but the Agent shall not
incur any liability in the case of the failure of such purchaser to take up
and pay for the Collateral so sold and, in the case of any such failure,
such Collateral may again be sold upon like notice. The
Agent, instead of exercising the power of sale herein conferred upon it,
may proceed by a suit or suits at law or in equity to foreclose the
Security Interests and sell the Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.
SECTION 11. Expenses. The Borrower agrees that it will forthwith upon
demand pay to the Agent:
(a) the amount of any taxes which the Agent may have been
required to pay by reason of the Security Interests or to free any of
the Collateral from any Lien thereon, and
(b) the amount of any and all out-of-pocket expenses, including
the fees and disbursements of counsel, which the Agent may incur in
connection with (i) the administration or enforcement of this
Agreement, including such expenses as are incurred to preserve the
value of the Collateral and the validity, perfection, rank and value
of any Security Interest, (ii) the collection, sale or other
disposition of any of the Collateral, (iii) the exercise by the Agent
of any of the rights conferred upon it hereunder or (iv) any Default.
Any such amount not paid on demand shall bear interest at a rate per annum
equal to Base Rate plus 4.50% and shall be an additional Secured Obligation
hereunder.
SECTION 12. Limitation on Duty of Agent in Respect of Collateral.
Beyond the exercise of reasonable care in the custody thereof, the Agent
shall have no duty as to any Collateral in its possession or control or in
the possession or control of any agent or bailee or any income thereon or
as to the preservation of rights against prior parties or any other rights
pertaining thereto. The Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any
loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any agent or bailee selected
by the Agent in good faith.
SECTION 13. Application of Proceeds. Upon the occurrence and during
the continuance of an Event of Default, the proceeds of any sale of, or
other realization upon, all or any part of the Collateral and any cash held
shall be applied by the Agent in the following order of priorities:
FIRST, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Agent, and all expenses, liabilities and advances incurred or
made by the Agent in connection therewith, and any other unreimbursed
expenses for which the Agent is to be reimbursed pursuant to Section
10 hereof;
SECOND, to the ratable payment of unpaid principal of the First
Priority Secured Obligations;
THIRD, to the ratable payment of accrued but unpaid interest on
the First Priority Secured Obligations in accordance with the terms
thereof;
FOURTH, to the ratable payment of all other First Priority
Secured Obligations, until all First Priority Secured Obligations
shall have been paid in full;
FIFTH, to the ratable payment of unpaid principal of the Second
Priority Secured Obligations,
SIXTH, to the ratable payment of accrued but unpaid interest on
the Second Priority Secured Obligations in accordance with the terms
thereof;
SEVENTH, to the ratable payment of all other Second Priority
Secured Obligations, until all Second Priority Secured Obligations
shall have been paid in full;
EIGHTH, to the ratable payment of unpaid principal of the Third
Priority Secured Obligations;
NINTH, to the ratable payment of accrued but unpaid interest on
Third Priority Secured Obligations in accordance with the terms
thereof;
TENTH, to the ratable payment of all other Third Priority Secured
Obligations, until all Third Priority Secured Obligations shall have
been paid in full;
ELEVENTH, to the ratable payment of all Fourth Priority Secured
Obligations, until all Fourth Priority Secured Obligations have been
paid in full;
FINALLY, to payment to the Borrower or its successors or assigns,
or as a court of competent jurisdiction may direct, of any surplus
then remaining from such proceeds.
The Agent may make distributions hereunder in cash or in kind or, on a
ratable basis, in any combination thereof. Any amount distributable
pursuant to this Section 13 in respect of any Letter of Credit Exposure
consisting of undrawn letters of credit shall be retained by the Agent for
payment to the Secured Parties that are issuers thereof at such time as
such letters of credit are drawn and then only to the extent of any such
draw. To the extent that any such letter of credit expires undrawn, any
amount then held by the Agent pursuant to the preceding sentence in respect
thereof shall be distributed in accordance with the priorities established
by this Section 13, it being understood that any reimbursement obligations
in respect of such expired letter of credit shall not be included in
Secured Obligations for purposes of such distribution.
SECTION 14. Concerning the Agent. The provisions of Article 7 of each
Credit Agreement shall inure to the benefit of the Agent in respect of this
Agreement and shall be binding upon the Secured Parties in such respect. In
furtherance and not in derogation of the rights, privileges and immunities
of the Agent therein set forth:
(a) The Agent is authorized to take all such action as is
provided to be taken by it as Agent hereunder and all other action
reasonably incidental thereto. As to any matters not expressly
provided for herein (including, without limitation, the timing and
methods of realization upon the Collateral) the Agent shall act or
refrain from acting in accordance with written instructions from the
Instructing Banks or, in the absence of such instructions, in
accordance with its discretion.
(b) The Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the Security Interests in
any of the Collateral, whether impaired by operation of law or by
reason of any action or omission to act on its part hereunder. The
Agent shall have no duty to ascertain or inquire as to the performance
or observance of any of the terms of this Agreement by the Borrower.
SECTION 15. Appointment of Co-agents. At any time or times, in order
to comply with any legal requirement in any jurisdiction, the Agent may
appoint another bank or trust company or one or more other persons, either
to act as co-agent or co-agents, jointly with the Agent, or to act as
separate agent or agents on behalf of the Secured Parties with such power
and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment
(which may, in the discretion of the Agent, include provisions for the
protection of such co-agent or separate agent similar to the provisions of
Section 14).
SECTION 16. Termination of Security Interests; Release of Collateral.
Upon the repayment in full of all Secured Obligations and the termination
of the Commitments under the Credit Agreements, the Security Interests
shall terminate and all rights to the Collateral shall revert to the
Borrower. At any time and from time to time prior to such termination of
the Security Interests, the Agent may release any of the Collateral in
accordance with the applicable provisions of the Credit Agreements. Upon
any such termination of the Security Interests or release of Collateral,
the Agent will, at the expense of the Borrower, execute and deliver to the
Borrower such documents as the Borrower shall reasonably request to
evidence the termination of the Security Interests or the release of such
Collateral, as the case may be.
SECTION 17. Notices. All notices hereunder shall be given in
accordance with Section 9.01 of the Credit Agreements.
SECTION 18. Waivers, Non-Exclusive Remedies. No failure on the part
of the Agent to exercise, and no delay in exercising and no course of
dealing with respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Agent or
any Secured Party of any right under any Loan Document or any other
document relating to the Secured Obligations owing to such Secured Party
preclude any other or further exercise thereof or the exercise of any other
right. The rights under the Loan Documents and such other documents are
cumulative and are not exclusive of any other remedies provided by law.
SECTION 19. Successors and Assigns. This Agreement is for the benefit
of the Secured Parties and their successors and assigns, and in the event
of an assignment of all or any of the Secured Obligations, the rights
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Agreement shall be binding on the
Borrower and its successors and assigns.
SECTION 20. Changes in Writing. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally,
but only in writing signed by the Borrower and the Agent with the consent
of the Required Banks under each Credit Agreement. No such amendment shall
by its terms materially adversely affect the rights of holders of any of
the Prudential Pro Rata Exposure, the Xxxxxx Pro Rata Exposure, the Letter
of Credit Exposure or the Fourth Priority Secured Obligations in a manner
different from its effect on the rights of holders of any other Secured
Obligations, except with the written consent of such affected holder (or of
the requisite majority of the affected holders specified in the documents
governing such affected holders' Secured Obligations).
SECTION 21. New York Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, except
as otherwise required by mandatory provisions of law and except to the
extent that remedies provided by the laws of any jurisdiction other than
New York are governed by the laws of such jurisdiction.
SECTION 22. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect
in such jurisdiction and shall be liberally construed in favor of the Agent
and the Secured Parties in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not
affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 23. Acceptance of Appointment. Xxxxxx hereby accepts its
appointment as agent for each of the Secured Parties; provided that neither
such appointment or such acceptance shall impose on Xxxxxx any duties other
than the express duties of the Agent hereunder and subject in any case to
the provisions of Section 7 hereof and Article 7 of the Credit Agreement,
which shall be binding on all Secured Parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
RITE AID CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President - Finance
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as
Agent
By: /s/ Xxxxxx Xxxxxx-Xxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxx-Xxxxxx
Title: Vice President
SCHEDULE A
Letters of Credit
-----------------
L/C Ref # Beneficiary Amount Date Issued Expiry Date
--------- ----------- ------ ----------- -----------
ISSUED BY MELLON
BANK, N.A.:
0000000 National Union Fire $ 20,861,000.00 20-Feb-98 31-Dec-99
Insurance
8554730 Insurance Co. of North 1,186,255.00 00-Xxx-00 00-Xxx-00
Xxxxxxx
0000000 Commonwealth of PA 75,000.00 11-Jul-97 11-Jul-00
8531390 Xxxxxx Xxxxxx, Xx. 250,000.00 25-Jun-97 25-Jun-00
8159320 Continental Casualty Company 1,027,000.00 00-Xxx-00 00-Xxx-00
0000000 Xxxxxx Xxxxxx Fidelity and 1,250,000.00 15-May-98 31-Dec-99
Trust
8578810 Travelers Indemnity Co. (TPI) 225,000.00 16-Apr-98 31-Dec-99
8578580 LA Dept. of Labor 350,000.00 15-Apr-98 31-Dec-99
8586190 Reliance Insurance Co. 300,000.00 20-May-98 31-Dec-99
8614310 City of Grand Junction, CO 117,680.00 28-Dec-98 21-Apr-00
8642610 Capital Blue Cross 749.458.87 08-Jul-99 31-Dec-99
8464810 Baltimore County, MD 38,973.00 08-May-96 08-Nov-99
--------------
26,430,366.87
ISSUED BY
CITIBANK,
N.A.:
13863/00000000 MLTC Funding 5,800,000.00 12-Dec-96 22-Oct-00
ISSUED BY AMSOUTH
BANK OF ALABAMA:
S309510 AmSouth Bank of Alabama 477,320.73 05-Sep-95 01-Jan-00
----------------
Total standby letters 32,707,687.60
of credit outstanding
----------------
CROSS-REFERENCE TARGET LIST
NOTE: DUE TO THE NUMBER OF TARGETS SOME TARGET NAMES MAY NOT APPEAR IN THE
TARGET PULL-DOWN LIST.
(This list is for the use of the wordprocessor only, is not a part of this
document and may be discarded.)
ARTICLE/SECTIONTARGET NAME ARTICLE/SECTIONTARGET NAME ARTICLE/SECTIONTARGET NAMEARTICLE/SECTIONTARGET NAME
1....................................def
2................................rep.war
2(c).............................xxx.xxx
4.............................del.pl.sec
5..............................fur.assur
6.........................rec.own.pl.stk
5.19........................synth.leases
7........................rt.rec.dist.col
7................................xx.xxxx
9..............................gen.autho
9.04.......................shrg.set.offs
9(d).......................rem.event.def
10..............................expenses
11(b)(iv)...................lim.duty.agt
12..............................xxxx.xxx
14..............................conc.agt
14(b)........................appt.co.agt
15..........................xxxx.xxx.xxx
9.01, 16.........................notices
17...............................waivers
18...........................succ.assign
19.............................chg.write
20................................xx.xxx
22...................................sev
