EXHIBIT 10.13
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CREDIT AND SECURITY AGREEMENT
DATED AS OF MAY 20, 2002
BETWEEN
FRANK'S NURSERY & CRAFTS, INC.
AS BORROWER
AND
KIMCO CAPITAL CORP.
AS LENDER
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INTRODUCTORY STATEMENT...........................................................................................1
1. THE LOANS...............................................................................................1
SECTION 1.1 Term Loan.........................................................................1
SECTION 1.2 Revolving Credit Loans............................................................1
SECTION 1.3 Disbursement of Funds and Notice of Borrowing.....................................1
SECTION 1.4 Repayment; Extension of Initial Maturity Date; Evidence of Debt;
Administration....................................................................2
SECTION 1.5 Interest..........................................................................3
SECTION 1.6 Loan Fee..........................................................................3
SECTION 1.7 Termination and/or Reduction of the Revolving Credit .............................3
SECTION 1.8 Voluntary Prepayments.............................................................3
SECTION 1.9 Mandatory Prepayments; Warrant Agreement..........................................4
SECTION 1.10 Default Interest..................................................................5
SECTION 1.11 INTENTIONALLY OMITTED.............................................................5
SECTION 1.12 Interest Adjustments..............................................................5
SECTION 1.13 Manner of Payments................................................................6
SECTION 1.14 Use of Proceeds...................................................................6
2. REPRESENTATIONS AND WARRANTIES .........................................................................6
SECTION 2.1 Existence and Power...............................................................6
SECTION 2.2 Authority and No Violation........................................................6
SECTION 2.3 Governmental Approval.............................................................7
SECTION 2.4 Binding Agreements................................................................7
SECTION 2.5 Title to Properties...............................................................7
SECTION 2.6 Litigation; Judgments.............................................................8
SECTION 2.7 Taxes.............................................................................8
SECTION 2.8 Compliance with ERISA.............................................................9
SECTION 2.9 Agreements........................................................................9
SECTION 2.10 Security Documents...............................................................10
SECTION 2.11 Disclosure.......................................................................10
SECTION 2.12 Environmental Matters............................................................10
SECTION 2.13 Compliance with Laws.............................................................11
SECTION 2.14 Real Property....................................................................11
SECTION 2.15 No Default.......................................................................12
SECTION 2.16 No Tenants in Possession.........................................................12
SECTION 2.17 Subsidiaries. ...................................................................12
3. CONDITIONS TO THE EFFECTIVENESS OF THIS CREDIT AGREEMENT
AND THE MAKING OF THE LOANS............................................................................12
SECTION 3.1 Conditions Precedent to the Effectiveness of This Credit Agreement and
the Making of the Loans..........................................................12
SECTION 3.2 Conditions Precedent to Each Revolving Credit Loan...............................15
4. AFFIRMATIVE COVENANTS..................................................................................16
SECTION 4.1 Financial Statements and Reports.................................................16
SECTION 4.2 Compliance with Laws.............................................................16
SECTION 4.3 Maintenance of Properties........................................................17
SECTION 4.4 Notice of Material Events........................................................17
SECTION 4.5 Insurance........................................................................18
SECTION 4.6 Books and Records................................................................18
SECTION 4.7 Observance of Agreements.........................................................19
SECTION 4.8 Taxes and Charges................................................................19
SECTION 4.9 Liens............................................................................20
SECTION 4.10 Further Assurances; Security Interests...........................................20
SECTION 4.11 Environmental Laws...............................................................20
SECTION 4.12 Lease Agreements.................................................................22
SECTION 4.13 Use of Proceeds of Loans.........................................................22
SECTION 4.14 ERISA Plan Compliance and Reports................................................22
SECTION 4.15 Kimco Collateral Account.........................................................22
5. NEGATIVE COVENANTS.....................................................................................23
SECTION 5.1 Limitations on Indebtedness and Preferred Stock..................................23
SECTION 5.2 Limitations on Liens.............................................................24
SECTION 5.3 Merger, Sale of Assets, Purchases, etc...........................................25
SECTION 5.4 Places of Business; Change of Name...............................................25
SECTION 5.5 Sale and Leaseback...............................................................26
SECTION 5.6 Changes to Material Agreements...................................................26
SECTION 5.7 ERISA Compliance.................................................................26
SECTION 5.8 Hazardous Materials..............................................................26
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SECTION 5.9 Transactions with Subsidiaries...................................................26
6. EVENTS OF DEFAULT......................................................................................27
7. MISCELLANEOUS..........................................................................................30
SECTION 7.1 Notices..........................................................................30
SECTION 7.2 Survival of Agreement, Representations and Warranties, etc.......................31
SECTION 7.3 Successors and Assigns; Syndications; Loan Sales; Participations.................31
SECTION 7.4 Expenses; Documentary Taxes......................................................32
SECTION 7.5 Indemnity........................................................................33
SECTION 7.6 CHOICE OF LAW....................................................................34
SECTION 7.7 WAIVER OF JURY TRIAL.............................................................34
SECTION 7.8 WAIVER WITH RESPECT TO DAMAGES...................................................34
SECTION 7.9 No Waiver........................................................................35
SECTION 7.10 Extension of Payment Date........................................................35
SECTION 7.11 Amendments, etc..................................................................35
SECTION 7.12 Severability.....................................................................35
SECTION 7.13 SERVICE OF PROCESS...............................................................35
SECTION 7.14 Headings.........................................................................36
SECTION 7.15 Execution in Counterparts........................................................36
SECTION 7.16 Confidentiality..................................................................36
SECTION 7.17 Entire Agreement.................................................................37
SECTION 7.18 Enforcement of Rights; No Obligation to Xxxxxxxx Assets..........................37
SECTION 7.19 Reproduction of Documents........................................................37
SECTION 7.20 Right of Set-Off.................................................................37
8. GRANT OF SECURITY INTEREST; REMEDIES...................................................................38
SECTION 8.1 Security Interests...............................................................38
SECTION 8.2 Use of Collateral................................................................38
SECTION 8.3 Borrower to Hold in Trust........................................................38
SECTION 8.4 Application of Proceeds on Default...............................................39
SECTION 8.5 Power of Attorney................................................................39
SECTION 8.6 Financing Statements, Direct Payments............................................40
SECTION 8.7 Further Assurances...............................................................40
SECTION 8.8 Termination and Release..........................................................40
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SECTION 8.9 Remedies Not Exclusive...........................................................40
SECTION 8.10 Continuation and Reinstatement...................................................41
9. DEFINITIONS............................................................................................41
SCHEDULES
2.1(a) List of jurisdictions where Borrower is qualified/not in good
standing
2.5(a) Matters Affecting Title to Property
2.5(b) Defaults under Leases
2.5(c) Condemnation Proceedings
2.5(d) Contractual Obligations With Respect to Collateral
2.7 Taxes
2.9(b) Agreements
2.10 Filing Offices for the Mortgages and Fixture Filings
2.12 Environmental Matters
2.14(a) Fee Properties
2.14(b) Leased Properties
2.14(b)(1) SNDA Agreements
2.14(b)(2) Other Agreements and Documents
2.14(b)(3) Estoppel Certificates
2.14(b)(4) Lease Modifications
2.16 Tenants in Possession
2.17 Subsidiaries
3.1(c) Opinion of Willkie, Xxxx & Xxxxxxxxx
5.1(b) Existing Indebtedness
5.1(c) Existing Liens
EXHIBITS
A Form of Borrowing Certificate
B Form of Mortgage
C Form of Closing Certificate
D Form of Warrant Agreement
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CREDIT AND SECURITY AGREEMENT, dated as of May 20, 2002 (as this agreement may
be further amended, amended and restated, supplemented or otherwise modified,
renewed or replaced from time to time, the "Credit Agreement"), between FRANK'S
NURSERY & CRAFTS, INC., a Delaware corporation ("Borrower") and KIMCO CAPITAL
CORP., as Lender (in such capacity, "Lender").
INTRODUCTORY STATEMENT
Subject to and upon the terms and conditions set forth herein,
Lender is willing to make available to Borrower: (a) Revolving Credit Loans (as
defined herein) in the amount of $10,000,000, and (b) a Term Loan (as defined
herein) in the amount of $20,000,000.
To provide assurance for the repayment of the Loans (as
defined herein) hereunder and the other Obligations (as defined herein) of
Borrower hereunder, Borrower will, among other things, provide or cause to be
provided to Lender, Mortgages and other Security Documents (each as defined
herein) with respect to the Collateral (as defined herein).
Accordingly, the parties hereto hereby agree as follows:
1. THE LOANS
SECTION 1.1 Term Loan. The Lender agrees, upon the terms and
subject to the conditions hereinafter set forth to make a term loan (the "Term
Loan") to Borrower on the Closing Date in a single draw in a principal amount up
to the Term Loan Commitment. Once repaid, the Term Loan may not be re-borrowed.
SECTION 1.2 Revolving Credit Loans. (a) The Lender agrees,
upon the terms and subject to the conditions hereinafter set forth, to make
loans equal to the Revolving Credit Commitment (each a "Revolving Credit Loan"
and collectively, the "Revolving Credit Loans") to Borrower on any Business Day
and from time to time from the Closing Date to but excluding the Revolving
Credit Commitment Termination Date; provided, that such Revolving Credit Loans
when added to the aggregate principal amount of all Revolving Credit Loans then
outstanding, do not exceed the Revolving Credit Commitment (after giving effect
to all Revolving Credit Loans repaid concurrently with the making of any
Revolving Credit Loans); provided, further that Borrower shall not request more
than four (4) Borrowings during any one Accounting Period.
(b) Subject to the terms and conditions of this Credit
Agreement, at any time prior to the Revolving Credit Commitment Termination
Date, Borrower may borrow, repay and re-borrow amounts constituting the
Revolving Credit Loans.
SECTION 1.3 Disbursement of Funds and Notice of Borrowing. (a)
The Borrower shall give Lender prior written or facsimile notice of each
Borrowing hereunder; such notice shall be irrevocable and to be effective, must
be received by Lender not later than 12:00 noon (Eastern time), no less than
three (3) Business Days prior to the date on which such Loan is to be made. Each
such written notice shall be given in substantially the form of the Borrowing
Certificate appropriately completed to specify (A) the amount of the proposed
Borrowing and (B) the date thereof (which shall be a Business Day).
(b) The aggregate amount of any Borrowing of a Revolving
Credit Loan shall be in a minimum aggregate principal amount of $100,000 or such
greater amount which is an integral multiple thereof (or such lesser amount as
shall equal the available but unused portion of the Revolving Credit Commitment
then in effect).
(c) The Lender shall disburse the proceeds of Loans by
depositing them on the date of the Borrowing in an account of Borrower as
Borrower may specify to Lender in writing.
SECTION 1.4 Repayment; Extension of Initial Maturity Date;
Evidence of Debt; Administration. (a) The Loans shall be subject to voluntary
prepayment as provided in Section 1.8 hereto, to mandatory prepayment as
provided in Section 1.9 hereof, and to acceleration as provided in Article 6
hereof.
(b) The outstanding principal balance of the Revolving Credit
Loans shall be payable in full on the Revolving Credit Commitment Termination
Date, and the outstanding principal balance of the Term Loans shall be payable
in full on the Term Loan Maturity Date.
(c) The Initial Maturity Date shall be extended for a period
of up to two years (any such period, an "Extension Period") with respect to all
or a portion of the principal amount of Loans outstanding, at Borrower's option,
provided, however, that (i) at the time of the commencement of any such
Extension Period, no Default or Event of Default shall have occurred and be
continuing, (ii) at least thirty (30) days prior to the Initial Maturity Date,
Borrower shall provide to Lender written notice of such extension, the length of
the Extension Period and the Loans to which such extension shall apply and (iii)
concurrently with the giving of notice as set forth in clause (ii) of this
subsection, Borrower shall pay to Lender a fee (the "Extension Fee") in an
amount equal to one percent (1%) of the principal amount of Loans with respect
to which the Initial Maturity Date is being extended, pro-rated to the extent
that the Extension Period is less than two years.
(d) The Lender shall maintain an account or accounts
evidencing the indebtedness of Borrower to Lender resulting from each Loan made
by Lender, including the amounts of principal and interest payable and paid to
Lender from time to time hereunder.
(e) The entries made in the account(s) maintained pursuant to
sub-paragraph (d) of this Section shall be prima facie evidence of the existence
and amounts of the Obligations recorded therein; provided, however, that the
failure of Lender to maintain such account(s) or any error therein shall not in
any manner affect the obligation of Borrower to repay the Loans and other
Obligations in accordance with the terms of this Credit Agreement.
(f) The Lender may request that Loans made by it be evidenced
by a promissory note. In such event, Borrower shall promptly prepare, execute
and deliver to Lender a promissory note payable to the order of Lender (or, if
requested by Lender, to Lender and its registered assigns), in a form furnished
by Lender and reasonably acceptable to Borrower. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 7.3 hereof) be represented by one or more
promissory notes in such form payable to the order of the payee named therein.
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SECTION 1.5 Interest. (a) Interest shall be payable at a rate
per annum (computed on the basis of the actual number of days elapsed over a
year of 360 days) equal to ten and one quarter percent (10.25%); provided that
in the event that Borrower shall elect to extend the Initial Maturity Date in
accordance with Section 1.4(c), interest shall be payable during the Extension
Period at a rate per annum (computed on the basis of the actual number of days
elapsed over a year of 360 days) equal to ten and three quarters percent
(10.75%). Interest shall be payable in arrears on the last Business Day of each
March, June, September and December, on the Term Loan Maturity Date and on the
Revolving Credit Commitment Termination Date.
(b) Interest in respect of any Loan hereunder shall accrue
from and including the date of such Loan to but excluding the date on which such
Loan is paid.
(c) Anything in this Credit Agreement or in any note
evidencing any Loan hereunder to the contrary notwithstanding, the interest rate
on the Loans shall in no event be in excess of the maximum rate permitted by
Applicable Law.
SECTION 1.6 Loan Fee. The Borrower agrees to pay to Lender a
loan fee in the amount of $300,000, payable as follows: (a) $75,000 on the
Closing Date; (b) $75,000 on the date that is 90 days after the Closing Date;
(c) $75,000 on the date that is 180 days after the Closing Date; and (d) $75,000
on the date that is 270 days after the Closing Date; provided that upon the
occurrence of an Event of Default or the Revolving Credit Commitment Termination
Date, the entire remaining balance of the loan fee shall become immediately due
and payable.
SECTION 1.7 Termination and/or Reduction of the Revolving
Credit Commitment and the Term Loan Commitment. (a) Upon at least three (3)
Business Days' prior written notice to Lender, Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Revolving Credit Commitment. In the case of a partial reduction, each such
reduction shall be in a minimum aggregate principal amount of $1,000,000 or an
integral multiple thereof; provided, however, that the Revolving Credit
Commitment may not be reduced to an amount less than the aggregate principal
amount of all Revolving Credit Loans then outstanding.
(b) The Revolving Credit Commitment shall automatically and
permanently reduce on the date of any mandatory prepayment or repayment of
Revolving Credit Loans, pursuant to Sections 1.9(b) or (c), in an amount equal
to such mandatory prepayment or repayment of Revolving Credit Loans.
SECTION 1.8 Voluntary Prepayments. The Borrower shall have the
right at its option at any time and from time to time to prepay any Loan, in
whole or in part, upon two (2) Business Days' prior written notice to Lender
received not later than 11:30 a.m. (Eastern time) on such day, in the principal
amount of $100,000 or such greater amount which is an integral multiple of
$100,000 if prepaid in part. Each notice of prepayment shall specify the
prepayment date, each Loan to be prepaid and the principal amount thereof, shall
be irrevocable and shall commit Borrower to prepay each such Loan in the amount
and on the date stated therein.
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SECTION 1.9 Mandatory Prepayments; Warrant Agreement. (a) If
at any time the sum of the aggregate principal amount of all Revolving Credit
Loans outstanding, shall exceed the Revolving Credit Commitment, Borrower will
immediately prepay such Revolving Credit Loans to the extent necessary to
eliminate such excess.
(b) Within two (2) Business Days of the receipt of any Net
Cash Proceeds by Borrower, Borrower shall prepay the Loans in an amount equal to
100% of the Net Cash Proceeds received, provided, however, that prior to such
prepayment such Net Cash Proceeds (i) shall be deemed at all times to be held by
Borrower in trust for the benefit of Lender, (ii) shall be deposited and held in
the Kimco Collateral Account and (iii) shall at no time be deposited or held in
either the Concentration Account (as defined in the Working Capital Facility) or
any deposit account whose balances are transferred to such Concentration Account
under the Working Capital Facility.
(c) Subject to the terms of any lease on any Leased Property
as in effect on the Closing Date, within two (2) Business Days following the
receipt by Borrower (or, if applicable, by Lender as loss payee) of any payment
of proceeds of (x) any insurance (other than business interruption insurance)
required to be maintained pursuant to this Credit Agreement or any other
Fundamental Document on account of each separate loss, damage or injury in
excess of $500,000 to any property constituting Collateral, or (y) the
condemnation (whether in whole or in any part) of any property constituting
Collateral, Borrower shall prepay or, to the extent Lender is loss payee under
any insurance policy, irrevocably direct Lender to apply as a prepayment of the
Loans, an amount equal to 100% of such insurance or condemnation proceeds (or
such lesser percentage which represents that portion of such proceeds not
expended or committed pursuant to the first proviso of this Section), provided,
however, that solely with respect to insurance proceeds and so long as no
Default or Event of Default shall have occurred and then be continuing, such
insurance proceeds (or any portion thereof) may be expended or irrevocably
committed by Borrower to repair or replace such property (or, with respect to
fixtures, to purchase new fixtures used or useful in Borrower's business;
provided, further, that Borrower shall execute all documents and take all other
actions necessary to grant Lender a first priority security interest in any such
fixtures) within 270 days of such loss, damage or injury and Borrower shall
furnish to Lender evidence reasonably satisfactory to Lender of such expenditure
or commitment and shall have certified to Lender that such proceeds (or such
proceeds together with other funds available to Borrower) are sufficient to
repair or replace such property. Prior to the making of any prepayment required
pursuant to this Section 1.9(c), any such proceeds shall be (i) deposited and
held in the Kimco Collateral Account and, if permitted hereunder, withdrawn by
Borrower upon prior written notice to Lender as such repair costs are incurred
and (ii) shall at no time be deposited or held in either the Concentration
Account (as defined in the Working Capital Facility) or any deposit account
whose balances are transferred to such Concentration Account under the Working
Capital Facility; provided, further, that if an Event of Default shall have
occurred and be continuing, all proceeds of insurance required to be maintained
pursuant to this Credit Agreement or any other Fundamental Document which would
otherwise be payable to Borrower shall be paid to Lender and applied pursuant to
Section 1.9(d).
(d) So long as no Default or Event of Default has occurred and
is then continuing, any prepayments required under Section 1.9(b) or (c) shall
be applied: (i) first to any outstanding unpaid Fees, costs and expenses of
Lender, (ii) second to any outstanding interest
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due hereunder, (iii) third to the outstanding principal balance of the Term Loan
and (iv) fourth to the outstanding principal balance of the Revolving Credit
Loans.
(e) In the event that Lender elects to exercise its purchase
rights under the Warrant Agreement by either application of unpaid principal of
the Loans or by payment to Borrower, in each case in accordance with section
1B(i)(d) of the Warrant Agreement, such application or payment, as the case may
be, may, at the option of Lender, be deemed to be a prepayment of the Loans
hereunder, and Lender's interest in the outstanding principal amount of Loans
shall be reduced by the amount so applied or paid, with such reduction applying
first to the outstanding principal amount of the Term Loans and next, to the
extent that the amount applied or paid exceeds the outstanding principal amount
of the Term Loans, such excess shall be applied to the reduction of the
outstanding principal amount of the Revolving Credit Loans.
(f) All prepayments under this Section shall be accompanied by
accrued but unpaid interest on the principal amount being prepaid to (but not
including) the date of prepayment.
SECTION 1.10 Default Interest. In the event that, and for so
long as, any Event of Default shall have occurred and be continuing, Borrower
shall on demand from time to time pay interest, to the extent permitted by
Applicable Law, on all Loans and overdue amounts outstanding up to (but not
including) the date of actual payment of such Loan or overdue amount (after as
well as before judgment) for all Loans and for all other overdue amounts
hereunder, at 2% in excess of the rate then in effect for Loans.
SECTION 1.11 INTENTIONALLY OMITTED.
SECTION 1.12 Interest Adjustments. If the provisions of this
Credit Agreement or any note evidencing any of the Loans hereunder would at any
time require payment by Borrower to Lender of any amount of interest in excess
of the maximum amount then permitted by Applicable Law, the applicable interest
payments to Lender in connection with such Loan shall be reduced to the extent
and in such a manner as is necessary in order that Lender shall not receive
interest in excess of such maximum amount. If, as a result of the foregoing,
Lender shall receive interest payments hereunder with respect to a Loan or under
a note evidencing such Loan in an amount less than the amount otherwise provided
hereunder or thereunder, such deficit (hereinafter called the "Interest
Deficit") will, to the fullest extent permitted by Applicable Law, cumulate and
will be carried forward (without interest) until the Facility Termination Date
(except to the extent paid pursuant to the immediately succeeding sentence).
Interest otherwise payable to Lender hereunder with respect to such Loan and
under any note evidencing such Loan for any subsequent period shall be increased
by the maximum amount of the Interest Deficit that may be so added without
causing Lender to receive interest in excess of the maximum amount then
permitted by Applicable Law.
The amount of any Interest Deficit relating to any Loan and
any note evidencing such Loan shall be treated as a prepayment premium and
shall, to the fullest extent permitted by Applicable Law, be paid in full at the
time of any optional prepayment by Borrower to Lender of all the Loans within
the applicable Tranche at that time outstanding pursuant to Section 1.8 hereof.
The amount of any Interest Deficit relating to a Loan and any note at the time
of any
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complete payment of the Loans within the applicable Tranche at that time
outstanding (other than an optional prepayment thereof pursuant to Section 1.8
hereof) shall be canceled and not paid.
SECTION 1.13 Manner of Payments. All payments by Borrower
hereunder and under any notes evidencing the Loans hereunder shall be made
without offset, counterclaim, recoupment, defense, setoff or other deduction in
Dollars, in Federal or other immediately available funds, at JPMorgan Chase
Bank, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, ABA No. 000-000-000,
For credit to: Kimco Realty Corp. Agency Account, Account No. 006-007996,
Reference: Frank's Nursery Mortgage Loan, Attention Xxxxxxx X. Xxxxxxxxxx
(516-869-7185), no later than 1:00 p.m.(Eastern time), on the date on which such
payment shall be due. Any payment received after such time shall be deemed
received on the following Business Day.
SECTION 1.14 Use of Proceeds. The Loans shall be used to
finance Borrower's obligations under the Plan of Reorganization, to pay Fees and
other expenses incurred in connection with this Credit Agreement and for general
corporate purposes in accordance with the provisions of this Credit Agreement.
2. REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Credit Agreement
and to make Loans, Borrower makes the following representations and warranties
to, and agreements with, Lender, all of which shall survive the execution and
delivery of this Credit Agreement, the issuance of any notes evidencing any of
the Loans hereunder and the making of the Loans:
SECTION 2.1 Existence and Power. (a) The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware and is qualified to do business and is in good standing in all
jurisdictions where either (i) the nature of its properties or business so
requires or (ii) the failure to be in good standing could reasonably be expected
to have a Material Adverse Effect. Schedule 2.1(a) hereto sets forth a list of
all jurisdictions in which Borrower is so qualified.
(b) The Borrower has the corporate power and authority (i) to
own its properties and carry on its business as now being, or as now intended to
be, conducted, (ii) to execute, deliver and perform, as applicable, its
obligations under the Fundamental Documents and any other documents contemplated
hereby or thereby to which it is or will be a party, and (iii) to grant to
Lender a security interest in the Collateral as contemplated by this Credit
Agreement and the other Fundamental Documents to which it is or will be a party;
and to execute, deliver and perform its obligations under this Credit Agreement
and any notes evidencing any of the Loans hereunder and to borrow hereunder.
SECTION 2.2 Authority and No Violation. The execution,
delivery and performance of this Credit Agreement and the other Fundamental
Documents to which it is a party, the grant to Lender of the security interest
in the Collateral as contemplated by this Credit Agreement and the other
Fundamental Documents to which it is or will be a party, and, the Borrowings
hereunder and the execution, delivery and performance of any notes evidencing
any
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of the Loans hereunder, (i) have been duly authorized by all necessary corporate
action on the part of Borrower, (ii) will not constitute a violation of any
provision of Applicable Law or any order of any Governmental Authority
applicable to Borrower or any of its properties or assets, (iii) will not
violate any provision of the Certificate of Incorporation, By-Laws, or any other
organizational document of, or any provision of any material indenture,
agreement, bond, note, mortgage, deed of trust, or other similar instrument to
which Borrower is a party or by which Borrower or any of its properties or
assets are bound or to which Borrower is subject, (iv) will not be in conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under, or create any right to terminate, any such indenture,
agreement, bond, note, mortgage, deed of trust, or other instrument and (v) will
not result in the creation or imposition of (or the obligation to create or
impose) any Lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of Borrower other than pursuant to this Credit Agreement or
the other Fundamental Documents.
SECTION 2.3 Governmental Approval. (a) All authorizations,
approvals, orders, consents, licenses, registrations or filings from or with any
Governmental Authority (other than the Security Documents all of which will be
delivered to Lender in accordance with the terms of this Credit Agreement, in
form suitable for recording or filing with the appropriate filing office)
required for the execution, delivery and performance by Borrower of this Credit
Agreement and the other Fundamental Documents to which it is a party, and the
execution and delivery by Borrower of any notes evidencing any of the Loans
hereunder, have been duly obtained or made, and are in full force and effect,
and if any further authorizations, approvals, orders, consents, licenses,
registrations or filings should hereafter become necessary, Borrower shall
obtain or make all such authorizations, approvals, orders, consents, licenses,
registrations or filings.
(b) The Borrower has obtained and holds in full force and
effect all licenses, authorizations, consents, franchises, permits,
certificates, accreditations, easements, rights of way and other approvals
necessary to own its respective property and assets and to carry on its
respective business as now being, or as now intended to be, conducted, other
than those the absence of which is not reasonably likely to have a Material
Adverse Effect.
SECTION 2.4 Binding Agreements. The Borrower has duly executed
and delivered this Credit Agreement and each other Fundamental Document to which
it is a party. Each of this Credit Agreement and the other Fundamental Documents
constitutes the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and to general principles of equity,
whether such enforceability is considered in a proceeding at law or in equity.
SECTION 2.5 Title to Properties. (a) Except as set forth on
Schedule 2.5(a) hereto, Borrower has good and marketable title to, or valid
leasehold interests in, the Collateral and other leasehold interests of Borrower
listed on Schedules 2.14(a) and 2.14(b) hereto (other than such properties or
assets disposed of in the ordinary course of business as permitted hereunder)
and all such properties and assets are free and clear of Liens, except Permitted
Liens.
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(b) The Borrower has complied in all material respects with
all leases constituting Collateral to which it is a party and as specified on
Schedule 2.14(b), and, except as specified on Schedule 2.5(b), is aware of no
defaults by Borrower under any such lease or any conditions which with the
passage of time or delivery of notice would constitute a default thereunder and
all such leases are in full force and effect. The Borrower enjoys peaceful and
undisturbed possession of the leasehold interest in each Leased Property subject
to Permitted Liens.
(c) Except as set forth on Schedule 2.5(c) hereto, Borrower
has not received any notice of, nor has any knowledge of, any pending or
contemplated condemnation proceeding affecting any Collateral or any sale or
disposition thereof in lieu of condemnation which proceeding or sale or
disposition is reasonably likely to adversely affect Borrower's current use of
the property or likely to result in a taking of a material portion of the real
property to which it relates or any portion of a building.
(d) The Borrower is not obligated under any right of first
refusal, option or other contractual right to sell, assign or otherwise dispose
of any of the Collateral or any interest therein except for such rights of first
refusal, options or other contractual rights described on Schedule 2.5(d)
hereto.
SECTION 2.6 Litigation; Judgments. (a) Except as set forth on
Schedule 2.6 hereto, there are no actions, suits or other proceedings at law or
in equity by or before any arbitrator or arbitration panel, or any Governmental
Authority (including, but not limited to, matters relating to environmental
liability) or, to the best of Borrower's knowledge, any investigation by any
Governmental Authority of the affairs of, or to the best of Borrower's
knowledge, threatened action, suit or other proceeding against or affecting,
Borrower or any of its properties which could reasonably be expected to have a
Material Adverse Effect or which relate to this Credit Agreement, any
Fundamental Document, any of the Collateral or any of the transactions
contemplated hereby or thereby or the Loans hereunder. The Borrower is not in
default with respect to any order, writ, injunction, decree, rule or regulation
of any Governmental Authority binding upon Borrower, which default could
reasonably be expected to have a Material Adverse Effect.
(b) There are no unpaid final, nonappealable judgments or
decrees in an aggregate amount of $500,000 or more entered by a court or courts
of competent jurisdiction against Borrower (other than any judgment as to which,
and only to the extent, a reputable insurance company has acknowledged coverage
of such claim in writing).
SECTION 2.7 Taxes. Except as set forth on Schedule 2.7 hereto,
Borrower has filed or caused to be filed all United States federal tax returns,
material state income tax returns and all other material tax returns which are
required to be filed with any Governmental Authority after giving effect to
applicable extensions, and has paid or has caused to be paid all taxes as shown
on said returns or on any assessment received by them, to the extent that such
taxes have become due, except as permitted by Section 4.8 hereof. The Borrower
has no knowledge of any material additional assessments or any basis therefor.
In the reasonable, good faith opinion of Borrower, the charges, accruals and
reserves on the books of Borrower in respect of taxes or other governmental
charges are adequate.
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SECTION 2.8 Compliance with ERISA. (a) Each Plan has been
maintained and operated in all material respects in accordance with all
Applicable Laws, including ERISA and the Code except to the extent that any
failure thereof could not reasonably be expected to result in a material
liability. Each Plan intended to qualify under Section 401(a) of the Code so
qualifies except to the extent that any failure to so qualify could not
reasonably be expected to result in a material liability. No Reportable Event
has occurred since the effective date of the Plan of Reorganization. No Plan has
an "accumulated funding deficiency," within the meaning of Section 412 of the
Code or Section 302 of ERISA, or has applied for or received a waiver of the
minimum funding standards or an extension of any amortization period, within the
meaning of Section 412 of the Code or Section 303 or 304 of ERISA. No material
liability has been, and no circumstances exist pursuant to which any such
material liability could reasonably likely be, imposed upon any Credit Party or
ERISA Affiliate (i) under Sections 4971 through 4980B of the Code, Section 409,
502(i), 502(l) or 515 of ERISA, or under Title IV of ERISA with respect to any
Plan or Multiemployer Plan, or with respect to any plan heretofore maintained by
Borrower or ERISA Affiliate, or any entity that heretofore was an ERISA
Affiliate, or (ii) for the failure to fulfill any obligation to contribute to
any Multiemployer Plan. Neither Borrower nor any ERISA Affiliate has received
any notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, no Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated and, using
actuarial assumptions and computation methods consistent with Part 1 of Subtitle
E of Title IV of ERISA, the aggregate liabilities of Borrower and its ERISA
Affiliates to all Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such Plan then
ended would not exceed $1,000,000.
(b) Assuming Lender is not using assets of any employee
benefit plan subject to Title I of ERISA or any "plan" (within the meaning of
Section 4975(e) of the Code) maintained by Borrower or any of its ERISA
Affiliates to make the Loans, the execution, delivery and performance of the
Fundamental Documents and the consummation of the transactions contemplated
hereby and thereby will not involve any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
SECTION 2.9 Agreements. (a) The Borrower is not in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument to which it is a party or
by which it or any of its property or assets is bound in any respect except for
defaults which could not reasonably be expected to result in a Material Adverse
Effect.
(b) Schedule 2.9(b) hereto is a true and complete listing as
of the Closing Date of (i) all material credit agreements, indentures, and other
agreements related to any Indebtedness of Borrower, other than the Fundamental
Documents, (ii) all material joint venture agreements to which Borrower is a
party, (iii) all material agreements or other arrangements pursuant to which
Borrower has granted a Lien to any Person, and (iv) all other contractual
arrangements entered into by Borrower or by which Borrower or any of its
property or assets is bound which arrangements are material to Borrower,
including but not limited to, Guaranties.
SECTION 2.10 Security Documents. The Security Documents, when
executed and delivered, will create in favor of Lender, a legal, valid and
enforceable first priority Lien on
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all of Borrower's right, title and interest in and to the Collateral and the
proceeds thereof (in each case subject only to Permitted Liens), and when the
Security Documents are filed in the offices specified on Schedule 2.10 hereto,
the proper amount of mortgage recording or similar taxes (if any and if not paid
as a result of an exemption under 11 U.S.C. 1146(c)) are paid and when the UCC
financing statements relating to fixtures, Assigned Lease Proceeds and all
Proceeds (as defined in the UCC) relating to any of the foregoing are duly filed
with the filing offices listed on Schedule 2.10 hereto and in Delaware, the
Security Documents shall constitute fully perfected first priority Liens on, and
fully perfected first priority security interests in, all right, title and
interest of Borrower in the Collateral and the proceeds thereof, in each case
subject only to Permitted Liens.
SECTION 2.11 Disclosure. Neither this Credit Agreement nor any
other Fundamental Document nor any agreement, document, certificate or statement
furnished to Lender by or on behalf of Borrower in connection with the
transactions contemplated hereby, at the time it was furnished or delivered,
contained any untrue statement of a material fact regarding Borrower or, when
taken together with all such other agreements, documents, certificates and
statements, omitted to state a material fact necessary under the circumstances
under which it was made in order to make the statements contained herein or
therein not misleading.
SECTION 2.12 Environmental Matters. Except as set forth on
Schedule 2.12 hereto:
(a) There are no past, pending, or, to the knowledge of
Borrower, threatened Environmental Claims against, affecting or with respect to
Borrower's or any Premises, and Borrower is not aware of any facts or
circumstances which could reasonably be expected to form the basis for any such
Environmental Claim, except to the extent that any such Environmental Claims,
individually or in the aggregate, would not have a Material Adverse Effect;
(b) No Premises is currently or was formerly used for the
handling, storage, treatment, disposal, manufacture, processing or generation of
Hazardous Materials, except to the extent that any such activity, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect;
(c) The Borrower and any tenants, operators or occupants of
any Premises have obtained and hold all required material Environmental Permits,
except to the extent that any failure to obtain or hold any such Environmental
Permit, individually or in the aggregate, would not have a Material Adverse
Effect;
(d) The Borrower is in compliance with all terms, conditions
and provisions of all applicable (1) Environmental Permits, and (2)
Environmental Laws, except to the extent that any such non-compliance,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect;
(e) No Releases of Hazardous Materials have occurred at, from,
in, to, on, or under any Premises, and no Hazardous Materials are present in,
on, about or migrating to or from any Premises, except to the extent that any
such Releases or presence of Hazardous Materials,
10
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect;
(f) Neither Borrower, nor any predecessor of Borrower, nor any
entity previously owned by Borrower, has transported or arranged for the
treatment, storage, handling, disposal, or transportation of any Hazardous
Material to any location (other than any Premises) which could result in an
Environmental Claim against Borrower, except to the extent that any such
activity, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect;
(g) No Premises is a current, or to the knowledge of Borrower,
a proposed Environmental Clean-up Site, except to the extent as would not
reasonably be expected to have a Material Adverse Effect;
(h) There are no (i) underground storage tanks (active or
abandoned), (ii) polychlorinated biphenyl containing equipment, (iii)
asbestos-containing material at any Premises, or (iv) lead-based paint located
at any Premises, except to the extent that the presence of any of the foregoing,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect; and
(i) There have been no material environmental investigations,
studies, audits, tests, reviews or other analyses conducted by, or on behalf of,
and which are in the possession of Borrower with respect to any Premises which
have not been delivered to Lender except for such investigations, studies,
audits, tests, reviews or analyses which do not individually or in the aggregate
reveal environmental conditions that could have a Material Adverse Effect.
SECTION 2.13 Compliance with Laws. (a) The Borrower is not in
violation of any Applicable Law (including, without limitation, any
Environmental Law) or any restrictions of record or agreements affecting the
Collateral, except for such violations which in the aggregate are not reasonably
likely to have a Material Adverse Effect.
(b) The Borrower is not in violation of any zoning or building
law, ordinance, rule, regulation or restriction affecting any of the Collateral
or any building permit, including, without limitation, any certificate of
occupancy, where such violation could reasonably be expected to result in a
Material Adverse Effect.
SECTION 2.14 Real Property. (a) Schedule 2.14(a) is a true and
complete list as of the Closing Date of (i) the facility number and street
address of each Fee Property, (ii) the lease(s), if any, to which each such Fee
Property is subject, together with any amendments thereto, and (iii) the name
and address of the lessee of each such Fee Property. Subject to Section 2.5
hereof, the Borrower has a fee simple title to each Fee Property.
(b) Schedule 2.14(b) is a true and complete list as of the
Closing Date of (i) the facility number and the street address of each Leased
Property and each of the other leases to which Borrower is a party, (ii) the
name and address of the owner/lessor of each such leased property, (iii) the
leases to which each such leased property is subject, together with any
amendments thereto, and (v) the name and address of any sublessee of each such
leased property.
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Subject to Section 2.5 hereof, the Borrower has a valid leasehold interest in
each leased property on Schedule 2.14(b).
SECTION 2.15 No Default. No Default or Event of Default exists
under or with respect to any Fundamental Document.
SECTION 2.16 No Tenants in Possession. Except as set forth on
Schedule 2.16 hereto, or as may be otherwise agreed to in writing between the
parties hereto, there are no tenants in possession with respect to any of the
Collateral.
SECTION 2.17 Subsidiaries. (a) Except as set forth on Schedule
2.17, Borrower does not have any direct or indirect Subsidiaries or Affiliates
and is not engaged in any joint venture or partnership.
(b) Borrower is the record and beneficial owner of all issued
and outstanding shares of capital stock of each of its Subsidiaries listed on
Schedule 2.17 and there are no proxies, irrevocable or otherwise, with respect
to such shares and no equity securities of any of the Subsidiaries are or may
become required to be issued by reason of any options, warrants, rights to
subscribe to, calls or commitments of any kind or nature and there are no
contracts, commitments, understandings or arrangements by which any such
Subsidiary is or may become bound to issue additional shares of its capital
stock or securities convertible into or exchangeable for such shares.
(c) None of Borrower's Subsidiaries is engaged in any business
or operation nor has title to any asset material to the business or operation of
Borrower.
3. CONDITIONS TO THE EFFECTIVENESS OF THIS CREDIT AGREEMENT AND THE MAKING OF
THE LOANS
SECTION 3.1 Conditions Precedent to the Effectiveness of This
Credit Agreement and the Making of the Loans. The effectiveness of this Credit
Agreement and the making of the Loans are subject to the satisfaction in full or
waiver of the following conditions precedent:
(a) The Credit Agreement. The Lender shall have received
executed counterparts of this Credit Agreement, which, when taken together, bear
the signatures of Lender and Borrower;
(b) The Warrant Agreement. The Lender shall have received
executed counterparts of the Warrant Agreement, which, when taken together, bear
the signatures of all parties thereto;
(c) Opinion of Counsel. The Lender shall have received the
written opinion of Willkie, Xxxx & Xxxxxxxxx, counsel to Borrower, dated the
Closing Date and addressed to Lender with respect to such matters relating to
this Credit Agreement and the Fundamental Documents as may be requested by
Lender and its counsel, which opinion shall be in form and substance
satisfactory to Lender and its counsel;
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(d) Material Agreements. The Lender or its counsel shall have
received a copy, certified by Borrower, of each agreement listed on Schedule
2.9(b) hereto;
(e) Security Documents. The Lender shall have received duly
executed Mortgages, appropriate UCC financing statements, and any other Security
Documents requested by Lender with respect to the Collateral, and evidence
satisfactory to Lender that Borrower has paid (or reimbursed Lender) all
applicable mortgage recording taxes, transfer taxes, title charges, filing fees
and any other fees, costs or expenses in connection with the foregoing;
(f) Title Policies; Surveys. (i) The Lender shall have
received from the Title Company an ALTA-form loan policy or policies (A)
insuring each Mortgage to be a valid first lien with respect to each Fee
Property and each of the following nine (9) Leased Properties: 8, 38, 53, 95,
96, 97, 203, 207 and 647 (as identified on Schedule 2.14(b)), (B) without
exceptions and subject to no Liens (other than the Permitted Liens), (C) in
policy amounts acceptable to Lender, (D) with such endorsements and affirmative
coverage as Lender shall require (including, without limitation, such "date
down" endorsements as Lender may desire from time to time to insure Lender's
first lien position) and (E) otherwise in form and substance acceptable to
Lender in its sole and absolute discretion;
(ii) With respect to each Fee Property, Lender shall
have received a current ALTA survey in form and substance acceptable to Lender
together with any affidavits of Borrower sufficient to remove the standard
survey exception, or Lender shall have received a current ALTA survey in form
and substance acceptable to Lender in its sole and absolute discretion (A)
updated to within 30 days of the Closing, (B) certified to the Title Company,
Lender and their respective successors and assigns, and (C) prepared, signed and
sealed by a surveyor in the state in which each Fee Property is located. In
addition, Lender shall have received a subordination agreement in favor of
Lender from any tenant or subtenant of any Fee Property unless such lease shall
be subordinate by its terms;
(g) Zoning Laws, etc. The Lender shall be satisfied with
Borrower's compliance with all zoning, environmental and other laws, ordinances,
rules and regulations affecting or relating to each Fee Property and each Leased
Property;
(h) Leases. The Lender or its counsel shall have received
certified true and complete copies of (i) all leases with respect to each Leased
Property and each of the other leased properties listed on Schedule 2.14(b),
(ii) a recordable memorandum of lease or evidence of a previously recorded
memorandum of lease satisfactory in all respects to Lender of each Leased
Property together with such executed and acknowledged subordination,
non-disturbance and attornment agreements as Lender may request from the holder
of each mortgage encumbering the fee interest with respect to each such Leased
Property identified on Schedule 2.14(b)(1), (iii) such estoppel certificates as
Lender may request, in form and substance reasonably satisfactory to Lender and
Borrower, and (iv) such other certificates, documents and agreements respecting
each Leased Property as Lender may, in its sole discretion, reasonably request
(including, but not limited to, estoppel certificates identified on Schedule
2.14(b)(2) from lessors under any such lease, consents from lessors under any
lease of each Leased Property identified on Schedule 2.14(b)(3), and
modifications of any lease of any Leased Property identified on Schedule
2.14(b)(4) to incorporate customary leasehold financing provisions);
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(i) Evidence of Title. The Lender shall be satisfied that
Borrower has sufficient right, title and interest in and to the Collateral, and
other assets which it purports to own, as set forth in the documents and other
materials presented to Lender to enable Borrower to grant to Lender for the
benefit of Lender the security interests contemplated by the Fundamental
Documents, and that all financing statements, mortgages and other filings under
Applicable Law necessary to provide Lender with a first priority perfected
security interest in the Collateral and proceeds thereof (subject to Permitted
Liens, if any) have been filed, or, have been delivered to Lender in
satisfactory form for filing and all taxes, recording or other fees due and
payable with respect thereto have been paid; provided, however, that with
respect to the Fee Properties, the delivery of a lender's title insurance policy
in accordance with Section 3.1(f) shall satisfy this condition;
(j) Insurance. The Lender shall have received (i) a summary of
all existing insurance coverage maintained by Borrower which summary shall
include for each insurance policy, the policy number, the type of coverage, the
policy limits and deductibles, the insurer and the expiration date and (ii)
evidence acceptable to Lender that the insurance policies required by Section
4.5 have been obtained and are in full force and effect, including Certificates
of Insurance with respect to all existing insurance coverage maintained by
Borrower which is set forth on the summary delivered pursuant to clause (i)
above, which certificates shall comply with the requirements set forth in
Section 4.5 hereof;
(k) Payment of Fees. The Lender shall have received all Fees
due and payable on or before the Closing Date pursuant to this Credit Agreement;
(l) Notes. If Lender requests that the Loans made by it be
evidenced by a promissory note, Lender shall have received one or more
promissory notes each duly executed on behalf of Borrower, dated the date hereof
and payable to the order of Lender in the principal amount equal to Lender's
Term Loan and Revolving Credit Commitment;
(m) Payment of Other Fees and Expenses. All reasonable
out-of-pocket expenses incurred by Lender in connection with this Credit
Agreement and the transactions contemplated hereby, including, without
limitation, all statements presented for reasonable fees and disbursements of
any financial, accounting or valuation advisors or special counsel retained by
Lender (including, but not limited to, Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel to
Lender), shall have been paid by Borrower;
(n) Litigation. No litigation, inquiry, injunction or
restraining order shall be pending, entered or threatened which involves this
Credit Agreement or any of the other Fundamental Documents or which could
reasonably be expected to have a Material Adverse Effect;
(o) Representations and Warranties; No Default. The
representations and warranties set forth in Article 2 hereof and in any other
Fundamental Documents then in existence shall be true and correct in all
material respects, and no Default or Event of Default shall have occurred and be
continuing hereunder;
14
(p) Closing Certificate. The Lender shall have received a
closing certificate signed by an Authorized Officer of Borrower, substantially
in the form of Exhibit C hereto;
(q) Final Order. A Final Order approving the Plan of
Reorganization and the credit facilities contemplated hereby shall have been
entered by the Bankruptcy Court (which shall, among other things, approve this
Credit Agreement, the Fundamental Documents, the Loans and the transactions
contemplated by this Credit Agreement and the Fundamental Documents);
(r) Termination Documents. The Lender shall have received, in
form and substance satisfactory to Lender, all releases, terminations and such
other documents as Lender may request to evidence and effectuate the termination
by Xxxxx Fargo Retail Finance LLC and the other existing lenders of their
respective financing arrangements with Borrower and the termination and release
by such lenders of any interest in and to the Collateral;
(s) Post-Closing Undertaking. The Lender shall have received
executed counterparts of the Post-Closing Undertaking which, when taken
together, bear the signatures of all parties thereto; and
(t) Other Documents. The Lender and its counsel shall have
received fully executed originals of such other documentation as Lender or its
counsel may reasonably request.
SECTION 3.2 Conditions Precedent to Each Revolving Credit
Loan. The obligation of Lender to make each Revolving Credit Loan (including the
initial Revolving Credit Loan) is subject to the following conditions precedent:
(a) Borrowing Certificate. The Lender shall have received a
Borrowing Certificate with respect to such Borrowing, duly executed by an
Authorized Officer of Borrower;
(b) Representations and Warranties. The representations and
warranties set forth in Article 2 hereof and in the other Fundamental Documents
shall be true and correct in all material respects on and as of the date of each
Borrowing (except to the extent that such representations and warranties
expressly relate to an earlier date) with the same effect as if made on and as
of such date;
(c) No Event of Default. On the date of each Borrowing
hereunder, no Default or Event of Default shall have occurred and be continuing,
nor shall any such Default or Event of Default occur by reason of the making of
the requested Revolving Credit Loan; and
(d) Total Revolving Credit Commitment. After giving effect to
the Revolving Credit Loans to be made, the aggregate principal amount
outstanding of all Revolving Credit Loans shall not exceed the Total Revolving
Credit Commitment.
Each request for a Borrowing hereunder shall be deemed to be a representation
and warranty by Borrower on the date of such Borrowing hereunder as to the
matters specified in paragraphs (b), (c) and (d) of this Section.
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4. AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitments shall
be in effect, any amount remains outstanding with respect to any Loan, or any
Obligation remains unpaid or unsatisfied, Borrower agrees that, unless Lender
shall otherwise consent in writing, it will:
SECTION 4.1 Financial Statements and Reports. Furnish or cause
to be furnished to Lender:
(a) As soon as available, but in any event simultaneously with
the delivery of any such financial statements pursuant to the Working Capital
Facility, the annual, quarterly and monthly balance sheets of Borrower, as at
the end of, and the related statements of income, stockholders' equity and cash
flows for, such period, and the corresponding figures as at the end of, and for,
the preceding period, together with any accompanying opinions, officers
certificates or other documents delivered pursuant to the Working Capital
Facility;
(b) Promptly and in any event within five (5) Business Days
after receipt of any material notice or correspondence from any company or agent
for any company providing insurance coverage to Borrower relating to any
material loss or loss with respect to any item of Collateral, copies of such
notices and/or correspondence;
(c) Simultaneously with the delivery pursuant to the Working
Capital Facility, copies of any documents, agreements, notices, reports,
financial statements or other information required to be delivered pursuant to
the Working Capital Facility (other than borrowing notices);
(d) From time to time such additional information regarding
the financial condition or business of Borrower or any Collateral, promptly
following a request by Lender; provided that Borrower shall not be obligated
hereby to provide such additional information unless it is information (w)
prepared for Congress, (x) prepared pursuant to any other agreements of
Borrower, (y)prepared in the ordinary course of Borrower's business, or (z) is
otherwise available from Borrower's records.
SECTION 4.2 Compliance with Laws. (a) Do or cause to be done
all things necessary (i) to preserve, renew and keep in full force and effect
its existence, licenses, permits, franchises, certificates (including, without
limitation, certificates of need), authorization, accreditations, easements,
rights of way and other rights, consents and approvals the nonexistence of which
is reasonably likely to have a Material Adverse Effect and (ii) to comply with
all applicable statutes, ordinances, rules, regulations and orders of, and all
applicable restrictions or requirements imposed by, any Governmental Authority
(including, without limitation, Environmental Laws, all zoning and building
codes and ERISA) or any other Requirements except where the necessity of
compliance therewith is contested in good faith by the appropriate proceedings
or where such noncompliance in the aggregate would not reasonably be expected to
have a Material Adverse Effect; provided, in each case, that Borrower shall have
set aside on its books reasonable reserves (the presentation of which is
segregated to the extent required by GAAP) with respect thereto if such reserves
are required by GAAP or where such noncompliance in the aggregate would not
reasonably be expected to have a Material Adverse Effect.
16
(b) Obtain or make all further authorizations, approvals,
orders, consents, licenses, registration or filings from or with any
Governmental Authority required for the performance by Borrower of this Credit
Agreement and the other Fundamental Documents to which it is a party.
SECTION 4.3 Maintenance of Properties. Keep each item of
Collateral, in good repair, working order and condition (ordinary wear and tear
and damage by casualty excepted) and, from time to time (i) subject to the terms
hereof, make all necessary, proper and material repairs, renewals, replacements,
additions and improvements thereto and (ii) comply at all times with the
provisions of all leases and other material agreements to which it is a party so
as to prevent any loss or forfeiture thereof or thereunder unless compliance
therewith is being currently contested in good faith by appropriate proceedings
and appropriate reserves have been established in accordance with GAAP or where
such noncompliance in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
SECTION 4.4 Notice of Material Events. (a) Promptly upon, but
in any event within five (5) days after, an Authorized Officer or other
executive officer of Borrower obtaining knowledge of (i) any (X) Default or (Y)
Event of Default, (ii) any Material Adverse Effect, (iii) any action, event or
condition (other than market conditions generally except those that may affect
the industries in which Borrower operates) which could reasonably be expected to
have a Material Adverse Effect, (iv) the opening of any office of Borrower or
the change of the chief executive office or the principal place of business of
Borrower or of the location of Borrower's books and records with respect to any
Collateral (v) any change in the name, corporate structure or the jurisdiction
of organization of Borrower, (vi) a change in the organizational identification
number of Borrower; (vii) any other event which could reasonably be expected to
materially decrease the value of any of the Collateral, (viii) any proposed
material amendment to any agreements that are a material part of or relate to
any of the Collateral or (ix) any Person giving any notice to Borrower or taking
any other action to enforce remedies with respect to a claimed default or event
or condition of the type referred to in paragraphs (g), (h), (i) or (j) of
Article 6, (ix) any strike, walkout, work stoppage or other material labor
difficulty with respect to Borrower, (x) any pending or contemplated
condemnation proceeding affecting any of the Collateral which would result in
Net Cash Proceeds of $500,000 or more, give written notice thereof to Lender
specifying the nature and period of existence of any such condition or event, or
specifying the notice given or action taken by such Person and the nature of
such claimed Event of Default or condition and what action Lender has taken, is
taking and proposes to take with respect thereto.
(b) Promptly upon, but in any event within ten (10) days
after, an Authorized Officer or other executive officer of Borrower obtains
knowledge of (i) the institution of, or threat of, any action, suit, proceeding,
investigation or arbitration by any Governmental Authority or other Person
against or affecting Borrower or any of its assets including, without
limitation, any of the Collateral, but excluding any condemnation proceeding or
any sale or disposition in lieu of condemnation with respect to any of the
Collateral which would result in Net Cash Proceeds of less than $500,000 and
(ii) any material development in any such action, suit, proceeding,
investigation or arbitration (whether or not previously disclosed to Lender),
which, in the case of clause (i) or (ii) above, is reasonably likely to have a
Material Adverse Effect, Borrower shall promptly give written notice thereof to
Lender and provide such other
17
information as may be available to it to enable Lender to evaluate such matters;
and, in addition to the requirements set forth in clauses (i) and (ii) of this
subsection (b), Borrower upon request shall promptly give notice to Lender of
the status of any action, suit, proceeding, investigation or arbitration covered
by a report delivered to Lender pursuant to this subsection and provide such
other information as may be reasonably available to it to enable Lender to
evaluate such matters.
SECTION 4.5 Insurance. (a) Keep the Collateral, or cause its
tenants under applicable leases to keep its Collateral insured at all times with
financially sound and reputable insurance companies, against such risks as is
customary for companies of the same or similar size in the same or similar
businesses; provided, that such insurance shall (i) insure the Collateral
against all risk of loss or damage including, without limitation, loss by fire,
explosion, theft and such other casualties as may be reasonably satisfactory to
Lender, but in no event in an amount less than the replacement cost value
thereof, and (ii) insure Borrower, and Lender, against comprehensive general and
automobile liability, such policies to be in accordance with customary industry
practice and in such form and amounts and having such coverage as is customary
for companies of the same or similar size in the same or similar businesses or
as otherwise may be reasonably satisfactory to Lender. All such insurance shall
(i) contain a lender's Loss Payable Endorsement in all loss or damage insurance
policies, (ii) provide that no cancellation, material reduction in amount or
material change in coverage thereof shall be effective until at least thirty
(30) days after written notice to Lender thereof, (iii) name Lender as loss
payee for physical damage insurance with respect to property which constitutes
Collateral as to which a Lien has been granted to Lender, with the right, if an
Event of Default has occurred and is then continuing, to adjust losses and
claims with respect to such property, and as an additional insured for liability
insurance, (iv) state that Lender shall not be responsible for premiums,
commissions, club calls, assessments or advances and (v) be reasonably
satisfactory in all other respects (including deductibles) to Lender.
(b) Upon the request of Lender, furnish to such Lender, an
updated schedule describing all insurance maintained by Borrower, which schedule
shall set forth, for each insurance policy, the policy number, the type of
coverage, the policy limits and deductibles, the insurer and the expiration
date.
(c) Furnish to Lender, to the extent not previously delivered,
original certificates of insurance for all insurance maintained by Borrower
which certificates shall comply with the requirements of this Section 4.5 set
forth above and contain signatures of duly authorized representatives of the
insurer, at all times prior to policy termination, cessation or cancellation.
SECTION 4.6 Books and Records. (a) Maintain or cause to be
maintained at all times, in accordance with GAAP, true and complete books and
records of its financial operations.
(b) Provide Lender and its representatives (at Borrower's
expense) access to such books and records and to any of its properties or assets
upon reasonable notice and during regular business hours in order that Lender
may make such audits and examinations and make abstracts from such books,
accounts, records and other papers of Borrower pertaining to any of the
Collateral and upon notification to Borrower, permit Lender or its
representatives to discuss the affairs, finances and accounts with, and be
advised as to the same by, officers and independent
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accountants, all as Lender may deem appropriate for the purpose of verifying any
report delivered by Borrower to Lender pursuant to this Credit Agreement or for
otherwise ascertaining compliance with this Credit Agreement or any other
Fundamental Document. The Lender will not prohibit any representative of
Borrower from being present at such meetings or discussions.
SECTION 4.7 Observance of Agreements. (a) Duly observe and
perform all material terms and conditions of any agreement relating to any of
the Collateral, or any other agreement which is material to Borrower and
diligently protect and enforce the rights of Borrower under all such agreements
in a manner consistent with prudent business judgment and subject to the terms
and conditions of such agreements.
(b) Promptly provide Lender copies of any and all agreements
amending, altering, modifying, waiving or supplementing in any material respect
any agreement set forth on Schedule 2.9(b).
(c) Promptly provide Lender copies of any Licenses.
SECTION 4.8 Taxes and Charges. (a) Duly pay and discharge, or
cause to be paid and discharged, before the same shall become in arrears (after
giving effect to applicable extensions), all taxes, assessments, levies and
other governmental charges, imposed upon Borrower or its properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies which if unpaid might by
law become a Lien upon any property of any Borrower; provided, however, that any
tax, assessment, levy, governmental charge or claim for labor, material or
supplies need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if Borrower shall have
set aside on its books reasonable reserves (the presentation of which is
segregated to the extent required by GAAP) with respect thereto if such reserves
are required by GAAP; and provided, further, that Borrower will pay all such
taxes, assessments, levies or other governmental charges and claims for labor,
material or supplies forthwith upon the commencement of proceedings to foreclose
any Lien which may have attached as security therefor.
(b) Unless and until such time as Borrower's long-term
unsecured debt shall be rated at least investment grade by either Standard &
Poor's, a division of The XxXxxx-Xxxx Companies or Xxxxx'x Investors Services,
Inc., deposit with Lender on the first Business Day of each month a sum equal to
the amount of all general and special real estate taxes and assessments next due
and payable by Borrower upon the Collateral divided by the number of months to
elapse before one month prior to the date when such taxes and assessments will
become due and payable. If such deposits are insufficient to pay any such taxes
or assessments when the same become due and payable by Borrower, Borrower,
within ten days after the receipt of a demand therefor from Lender, shall
deposit such additional funds as may be necessary to eliminate such
insufficiency. If such deposits exceed the amount required to pay such taxes and
assessments for any tax payment period, the excess shall be credited against the
next succeeding deposit or deposits to be made by Borrower. Such deposits shall
be used for the payment of taxes and assessments on the Collateral next due and
payable by Borrower when they become due, provided, however, that Lender shall
not be liable for any failure to apply such deposits to the payment of such
taxes and assessments unless Lender shall have received from Borrower a
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request for payment accompanied by the bills for such taxes and assessments not
less than thirty days prior to the due date. Except as may be required by
Applicable Law, such deposits may be commingled with other funds of Lender. Upon
the request of Borrower, Lender shall account to Borrower for the amounts then
on deposit.
SECTION 4.9 Liens. Defend the Collateral against any and all
Liens, claims and other impediments howsoever arising, other than Permitted
Liens, and in any event defend the same against any attempted foreclosure.
SECTION 4.10 Further Assurances; Security Interests. (a) Upon
the request of Lender, duly execute and deliver, or cause to be duly executed
and delivered, at the cost and expense of Borrower, such further instruments as
may be necessary in the reasonable judgment of Lender or its counsel to carry
out the provisions and purposes of this Credit Agreement and the other
Fundamental Documents.
(b) Upon the request of Lender, promptly execute and deliver
or cause to be executed and delivered, at the cost and expense of Borrower, such
further instruments as may be appropriate in the reasonable judgment of Lender
or its counsel, to provide Lender a perfected first priority Lien in the
Collateral (subject to Permitted Liens), and any and all documents (including,
without limitation, an amendment or supplement of any financing statement and a
continuation statement or other statement) for filing under the provisions of
the UCC and the rules and regulations thereunder, or any other Applicable Law of
the United States or any other jurisdiction which Lender may deem reasonably
necessary or advisable, and perform or cause to be performed such other
ministerial acts which are reasonably necessary or advisable, from time to time,
in order to grant and maintain in favor of Lender the security interest in the
Collateral contemplated hereunder and under the other Fundamental Documents,
subject only to Permitted Liens.
(c) Promptly undertake to deliver or cause to be delivered to
Lender from time to time such other documentation, consents, authorizations and
approvals, in form and substance reasonably satisfactory to Lender, as Lender or
its counsel shall reasonably deem necessary or advisable to perfect or maintain
the Liens (and security interests) of Lender contemplated hereby and pursuant to
the other Fundamental Documents.
(d) Without limiting the generality of the foregoing
provisions of this Section 4.10, use commercially reasonable efforts to correct
as soon as practicable, matters with respect to title concerning each Fee
Property not otherwise permitted hereunder.
SECTION 4.11 Environmental Laws. (a) Promptly notify Lender
upon Borrower gaining actual knowledge of any violation or non-compliance with,
or liability or potential liability under, any Environmental Laws which, when
taken together with all other violations of, or liability under, Environmental
Law is reasonably expected to have a Material Adverse Effect, and promptly
furnish to Lender all written notices of any nature which Borrower may receive
from any Governmental Authority or other Person with respect to any violation,
or potential violation or non-compliance with, or liability or potential
liability under, any Environmental Laws which, in any case or when taken
together with all such other notices, could reasonably be expected to have a
Material Adverse Effect.
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(b) Comply with and use reasonable efforts to ensure
compliance by all tenants and subtenants with all Environmental Laws, and obtain
and comply in all respects with and maintain and use reasonable efforts to
ensure that all tenants and subtenants obtain and comply in all respects with
and maintain any and all Environmental Permits required by Environmental Laws,
except where failure to do so is not reasonably likely to have a Material
Adverse Effect.
(c) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under all
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities, except where failure to
do so would not have a Material Adverse Effect. Any order or directive whose
lawfulness is being contested in good faith by appropriate proceedings shall be
considered a lawful order or directive when such proceedings, including any
judicial review of such proceedings, have been finally concluded by the issuance
of a final non-appealable order; provided, however, that Borrower shall have set
aside on its books reasonable reserves (the presentation of which is segregated
to the extent required by GAAP) with respect thereto.
(d) Indemnify, defend and hold harmless Lender, and its
respective officers, directors, shareholders, employees, agents,
representatives, successors and assigns from and against any liability, fine,
penalty, loss, damage, suit, settlement, action, expense and cost (including,
but not limited to, reasonable attorneys' fees (including cost of in-house
counsel) and environmental consultant fees), arising out of or relating to: (A)
the presence or Release of any Hazardous Materials at, to, on, under, from, or
about any Premises; (B) any violation of any Environmental Law or Environmental
Permit by Borrower; (C) the transportation or the arrangement for the
transportation, handling, treatment, or disposal of any Hazardous Materials to
any location other than any Premises by or on behalf of Borrower; (D) any
Environmental Claim relating to any Premises or any activities conducted at any
Premises; and (E) any breach of any environmental representation or covenant in
this Credit Agreement or any other Fundamental Document (but excluding any such
liability, fine, penalty, loss, damage, suit, settlement, action, expense or
cost of an indemnified party to the extent primarily caused by the gross
negligence or willful misconduct of such indemnified party as determined by a
final judgment of a court of competent jurisdiction). The obligations of
Borrower under this Section 4.11(d) shall survive the Facility Termination Date,
the termination of this Credit Agreement and the payment of the Obligations
hereunder indefinitely.
(e) Promptly, but in no event later than sixty (60) days after
the Closing Date, undertake the following activities and submit a report to
Lender, in form and substance reasonably satisfactory to Lender, confirming that
such activities have been undertaken: (1) bring the water supply xxxxx located
at the Fee Properties located at 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx and 000
Xxxxx 00, Xxxxxxx, Xxx Xxxxxx into compliance with applicable Environmental Laws
(including but not limited to undertaking all required water sampling and
testing and submission of the same to applicable Governmental Authorities) and
develop and implement a compliance program to ensure that Borrower will continue
to be in compliance with such requirements in the future; or (2) close such
water supply xxxxx in compliance with applicable Environmental Laws.
SECTION 4.12 Lease Agreements. From time to time (i) furnish
to Lender such information and reports regarding any lease agreement with
respect to any Fee Property, Leased
21
Property or any other property listed on Schedule 2.14(b) to which Borrower is a
party as Lender may reasonably request and (ii) upon the occurrence and
continuation of an Event of Default and the reasonable request of Lender, make
such demands and requests for information, reports or action to the other
parties to a lease agreement to which Borrower is a party, as Borrower is
entitled to make under each such lease agreement.
SECTION 4.13 Use of Proceeds of Loans. Use the proceeds of the
Loans for the purposes identified in Section 1.14.
SECTION 4.14 ERISA Plan Compliance and Reports. Furnish to
Lender (i) as soon as possible, and in any event within thirty (30) days after
any executive officer of Borrower has knowledge that (A) any Reportable Event
with respect to any Plan has occurred, a statement of an executive officer of
Borrower, setting forth details as to such Reportable Event and the action which
it proposes to take with respect thereto, together with a copy of the notice, if
any, required to be filed of such Reportable Event given to the PBGC or (B) an
accumulated funding deficiency has been incurred or an application has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard or an extension of any amortization period under Section 412 of
the Code with respect to a Plan or Multiemployer Plan has been or is proposed to
be terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA, proceedings have been instituted to terminate a Plan if such Plan is
subject to Title IV of ERISA, an action has been instituted pursuant to Section
515 of ERISA to collect a delinquent contribution to a Multiemployer Plan, or
Borrower or ERISA Affiliate will incur any liability to or on account of the
termination of or withdrawal from a Plan subject to Title IV of ERISA or
Multiemployer Plan under Sections 4062, 4063, 4201 or 4204 of ERISA, a statement
of an executive officer of Borrower, setting forth details as to such event and
the action Borrower proposes to take with respect thereto, (ii) promptly upon
reasonable request of Lender, copies of each annual and other report with
respect to each Plan and (iii) promptly after receipt thereof, a copy of any
notice Borrower or ERISA Affiliate may receive from the PBGC relating to the
PBGC's intention to terminate any Plan subject to Title IV of ERISA or to
appoint a trustee to administer any Plan subject to Title IV of ERISA.
SECTION 4.15 Kimco Collateral Account. By no later than May
30, 2002, establish a deposit account (the "Kimco Collateral Account") with a
bank acceptable to Lender into which all cash Collateral and cash proceeds of
Collateral shall be deposited in accordance with the terms hereof, which account
shall be for all purposes part of the Collateral hereunder.
5. NEGATIVE COVENANTS
From the date hereof and for so long as any Commitments shall
be in effect, any amount remains outstanding with respect to any Loan, or any
Obligation remains unpaid or unsatisfied, Borrower agrees that, unless Lender
shall otherwise consent in writing, it will not:
SECTION 5.1 Limitations on Indebtedness and Preferred Stock.
Incur, create, assume or suffer to exist any Preferred Stock or Indebtedness,
other than:
(a) the Indebtedness and other Obligations of Borrower under
this Credit Agreement, and any Indebtedness refinancing all or any portion of
the Indebtedness and/or other
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Obligations under this Credit Agreement; provided, that the terms of any
Indebtedness refinancing only a portion of the Indebtedness and other
Obligations under this Credit Agreement shall have been approved in writing by
Lender;
(b) existing Indebtedness of Borrower described on Schedule
5.1(b) hereto, but not any extensions or renewals or refinancings thereof unless
effected on substantially the same terms or terms more favorable to Borrower
(provided, that the interest rate may be at the then prevailing rate for the
same type of Indebtedness);
(c) Indebtedness of Borrower under the Working Capital
Facility;
(d) obligations of Borrower under Interest Rate Protection
Agreements entered into in the ordinary course of business and not for purposes
of speculation;
(e) (i) any revocable license (each, a "License") demising an
aggregate of less than one thousand (1,000) useable square feet per Fee Property
and per Leased Property which is entered into after the date hereof, or (ii) any
lease of all or any portion of a Fee Property or Leased Property (each, a
"Substitute Lease") which is entered into by Borrower after the date of this
Agreement which is entered into in substitution for a lease in effect as of the
date of this Agreement; provided, that in the case of either (i) or (ii), (w)
such License or Substitute Lease, as the case may be, is on a form license or
lease agreement previously approved in writing by Lender (which approval Lender
shall not unreasonably withhold or delay), (x) such License or Substitute Lease
is on not less than fair market rental terms as determined by Lender in its
reasonable discretion, (y) such License or Substitute Lease is by its express
terms subject and subordinate to each Mortgage, and (z) no Event of Default
shall have occurred under this Agreement or any other Fundamental Documents.;
(f) unsecured Indebtedness of Borrower not in excess of
$500,000 in an aggregate principal amount outstanding at any time;
(g) Indebtedness of Borrower secured by purchase money Liens
not in excess of $1,000,000 in an aggregate principal amount outstanding at any
time;
(h) Indebtedness of Borrower incurred in connection with
insurance premium financing not in excess of $7,000,000 in an aggregate
principal amount outstanding at any time;
(i) Preferred Stock which does not require the redemption
thereof at the option of the holder prior to the Facility Termination Date; and
(j) extensions, renewals or refinancings by Borrower of any
Indebtedness permitted under this Section ("Refinancing Indebtedness") so long
as (i) such Refinancing Indebtedness is in an original aggregate principal
amount not greater than the aggregate principal amount of and unpaid interest on
the Indebtedness being extended, renewed or refinanced plus the amount of any
premiums required to be paid thereon and fees and expenses associated therewith,
(ii) if the Indebtedness being extended, renewed or refinanced is subordinated
to the Obligations, such Refinancing Indebtedness is subordinated to the
Obligations on terms not less favorable to the Lender than the subordination
provisions governing the Indebtedness being extended, renewed or refinanced,
(iii) at the time of and after giving effect to such extension,
23
renewal or refinancing, no Event of Default shall have occurred and be
continuing, and (iv) the other terms and conditions of such Refinancing
Indebtedness (including, without limitation, amortization, interest rates and
fees) are no less favorable to Borrower than the Indebtedness being extended,
renewed or refinanced (provided that the restrictions set forth in clauses (iii)
and (iv) shall not be applicable to any refinancing of the Indebtedness under
the Working Capital Facility).
SECTION 5.2 Limitations on Liens. Incur, create, assume or
suffer to exist any Lien on the Collateral, including, any right of first
refusal, option or other contractual right to sell, assign, lease or otherwise
dispose of any of the Collateral, whether now owned or hereafter acquired,
except:
(a) the Liens in favor of Lender under this Credit Agreement,
the other Fundamental Documents and any other document contemplated hereby or
thereby;
(b) to the extent incurred after the Closing Date, Liens
customarily granted or incurred in the ordinary course of business with regard
to services rendered by carriers, warehouses, suppliers of materials and
equipment, mechanics and repairmen and other Liens imposed by Applicable Law
which obligations are not yet due and payable (unless such obligations are being
contested in good faith and with respect to which appropriate reserves have been
established in accordance with GAAP);
(c) existing Liens listed on Schedule 5.2(c) hereto;
(d) to the extent incurred after the Closing Date, Liens
arising out of attachments, judgments or awards as to which an appeal or other
appropriate proceedings for contest or review are timely commenced (and as to
which foreclosure and other enforcement proceedings shall not have been
commenced (unless fully bonded or otherwise effectively stayed)) and as to which
appropriate reserves have been established in accordance with GAAP;
(e) to the extent incurred after the Closing Date, Liens for
taxes, assessments or other governmental charges or levies not yet due and
payable, or the validity or amount of which is currently being contested in good
faith by appropriate proceedings and for which reserves have been set aside on
the books of Borrower, in each case pursuant to and in accordance with the terms
of Section 4.8 hereof;
(f) to the extent incurred after the Closing Date, easements
(including, without limitation, reciprocal easement agreements and utility
agreements), rights of way requirements, restrictions (including, without
limitation, zoning restrictions), covenants, consents, reservations,
encroachments, variations and other similar restrictions, charges, encumbrances
(whether or not recorded) (but specifically excluding rights of first refusal,
options and other contractual rights to sell, assign or otherwise dispose of any
Collateral or any interest therein) on any Collateral which, in the aggregate,
(i) do not materially detract from the value of the applicable Collateral
subject thereto, (ii) do not materially interfere with the ordinary conduct of
the business of Borrower or any lessee under a lease or (iii) do not materially
impair the use of the applicable item of Collateral by Borrower or any lessee
under a lease;
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(g) to the extent incurred after the Closing Date, Liens
securing refinancing Indebtedness permitted by Section 5.1(b); provided, that
such Liens shall by their terms cover only such property or assets as are
covered by the Liens securing the Indebtedness being refinanced and no new or
additional property or assets and any Liens granted with respect to such
refinancing Indebtedness shall be subordinated to at least the same extent as
the existing Liens securing such Indebtedness being refinanced;
(h) to the extent incurred after the Closing Date, Liens
securing purchase money Indebtedness permitted by Section 5.1(g); provided that
such Liens shall by their terms cover only such property or assets as are
covered by the Liens securing such Indebtedness; and
(i) to the extent incurred after the Closing Date, Liens
arising from the filing of UCC financing statements or other documents (x) as to
which Borrower has not authorized such filing, (y) as to which Borrower shall
promptly, after it has knowledge thereof, use reasonable efforts to obtain a
termination or release, and (z) which have not been in place for more than 30
days after Borrower has knowledge thereof.
SECTION 5.3 Merger, Sale of Assets, Purchases, etc. Whether in
one transaction or a series of transactions, wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation, or sell or
otherwise dispose of any of the Collateral or agree to do or suffer any of the
foregoing, except for (i) sales or dispositions by Borrower of up to ten (10) of
the Fee Properties for fair market value in arms-length transactions, the Net
Cash Proceeds of which are applied as mandatory prepayments of the Loans as
required by Section 1.9(b) hereof, and (ii) the dissolution, liquidation,
winding up or merger of the Borrower's Subsidiaries.
SECTION 5.4 Places of Business; Change of Name. Change the
location of its chief executive office or principal place of business (except to
another location in Troy, Michigan with prior written notice to Lender) or any
of the locations where it keeps any portion of the books and records with
respect to the Collateral, change its name or change its jurisdiction of
incorporation or organization, without in each case (i) giving Lender thirty
(30) days prior written notice of such change and (ii) filing any additional UCC
financing statements, Security Documents and such other documents requested by
either Lender to maintain perfection of the security interest of Lender in the
Collateral.
SECTION 5.5 Sale and Leaseback. Enter into any arrangement
with any Person or Persons, whereby in contemporaneous transactions Borrower
sells essentially all of its right, title and interest in an asset and, in
connection therewith, acquires, leases or licenses back the right to use such
asset, except to the extent the asset subject to such sale and leaseback
arrangement was sold by Borrower in a transaction permitted by Section 5.3
hereof.
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SECTION 5.6 Changes to Material Agreements.
(a) Consent to any modification or waiver of any material
agreement listed on Schedule 2.9(b) hereto if such modification or waiver would
have a Material Adverse Effect with respect to Borrower. The Borrower will not
consent to the assignment by any other party to any material agreement of any
rights, obligations or interests of such party thereunder except as expressly
permitted by any such material agreement.
(b) Amend the articles of incorporation or by-laws of Borrower
in any manner which could be reasonably expected to have a Material Adverse
Effect.
SECTION 5.7 ERISA Compliance. Engage in a "prohibited
transaction," as defined in Section 406 of ERISA or Section 4975 of the Code,
with respect to any Plan or Multiemployer Plan or knowingly consent to any
"party in interest" or any "disqualified person", as such terms are defined in
Section 3(14) or ERISA and Section 4975(e)(2) of the Code, respectively,
engaging in any "prohibited transaction", with respect to any Plan or
Multiemployer Plan; or permit any Plan to incur any "accumulated funding
deficiency", as defined in Section 302 of ERISA or Section 412 of the Code; or
terminate any Plan in a manner which could result in the imposition of a Lien on
any property of Borrower or any ERISA Affiliate pursuant to Section 4068 of
ERISA; or breach or knowingly permit any employee or officer or any trustee or
administrator of any Plan to breach any fiduciary responsibility imposed under
Title I of ERISA with respect to any Plan; engage in any transaction which would
result in the incurrence of a liability under Section 4069 of ERISA; or fail to
make contributions to a Plan or Multiemployer Plan which could result in the
imposition of a Lien on any property of Borrower or any ERISA Affiliate pursuant
to Section 302(f) of ERISA or Section 412(n) of the Code, if the occurrence of
any of the foregoing events (alone or in the aggregate) would result in a
liability which has a Material Adverse Effect.
SECTION 5.8 Hazardous Materials. Cause or permit any of its
properties or assets to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or process Hazardous Materials,
except in compliance with all applicable Environmental Laws; nor release,
discharge, dispose of or permit or suffer any release or disposal as a result of
any intentional act or omission on its part of Hazardous Materials onto any such
property or asset in violation of any Environmental Law or in a manner that
could result in liability under any Environmental Law, except as are not
reasonably likely to have a Material Adverse Effect.
SECTION 5.9 Transactions with Subsidiaries. Except as
otherwise permitted hereunder, sell or transfer any property to, or sell, convey
or purchase any assets from, or enter into any other transaction (whether
material or otherwise) with, make any investment with or to, or engage in any
other business arrangement with, any Subsidiary or Affiliate of Borrower, or
enter into an agreement to do any of the foregoing.
6. EVENTS OF DEFAULT
In the case of the happening and during the continuance of any
of the following events (herein called "Events of Default"):
26
(a) any representation, warranty, certification or statement
made by Borrower in this Credit Agreement or any other Fundamental Document to
which it is a party or in connection with this Credit Agreement or any
Fundamental Document or any statement or representation made by or on behalf of
Borrower in any report, financial statement, certificate or other document
furnished to Lender pursuant to, or in connection with, this Credit Agreement or
any other Fundamental Document, shall prove to have been false or misleading in
any material respect when made or delivered;
(b) default shall be made in the payment of principal of any
of the Loans as and when due and payable, whether at the due date thereof, by
reason of maturity, mandatory prepayment, acceleration or otherwise;
(c) default shall be made in the payment of interest on the
Loans, the Fees, or other amounts payable to Lender under this Credit Agreement,
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise and such default shall continue unremedied for two (2) Business Days,
provided, however, that such two Business Day period shall be extended to five
(5) Business Days if and only if (x) such default relates to amounts other than
interest and (y) no other such default has occurred during the immediately
preceding 12-month period;
(d) default shall be made by Borrower in the due observance or
performance of any covenant, condition or agreement contained in Sections 4.4,
4.5 or Article 5 of this Credit Agreement;
(e) default shall be made by Borrower in the due observance or
performance of Section 4.1 of the Credit Agreement, and such default shall
continue unremedied for ten (10) days;
(f) default shall be made by Borrower in the due observance or
performance of any other covenant, condition or agreement to be observed or
performed pursuant to the terms of this Credit Agreement or any other
Fundamental Document (other than those covered by paragraphs (a), (b), (c), (d)
or (e) of this Article 6), and such default shall continue unremedied for thirty
(30) days after Borrower receives written notice or obtains knowledge of such
occurrence, and Borrower shall not be diligently moving towards curing such
default;
(g) default shall be made by Borrower with respect to any
payment, when due, of any Indebtedness in excess of $500,000 of Borrower, or any
other default shall occur, if the effect of such non-payment default is to
accelerate the maturity of such Indebtedness or to permit the holder thereof to
cause such Indebtedness to become due prior to its stated maturity, and such
default shall not be remedied, cured, waived or consented to within the period
of grace with respect thereto; or any such Indebtedness shall become or be
declared to be due and payable prior to its stated maturity;
(h) Borrower shall generally not pay its debts as they become
due or shall admit in writing its inability to pay its debts, or shall make a
general assignment for the benefit of creditors; or Borrower shall commence any
case, proceeding or other action seeking to have an order for relief entered on
its behalf as a debtor or to adjudicate it a bankrupt or insolvent or
27
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property or shall file an answer or other pleading in
any such case, proceeding or other action admitting the material allegations of
any petition, complaint or similar pleading filed against it or consenting to
the relief sought therein; or Borrower shall take any action to authorize, or in
contemplation of, any of the foregoing;
(i) any involuntary case, proceeding or other action against
Borrower shall be commenced seeking to have an order for relief entered against
it as debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition
of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property, and such case, proceeding or other action (i)
results in the entry of any order for relief against it or (ii) shall remain
undismissed for a period of sixty (60) days;
(j) one or more judgment(s) for the payment of money in excess
of $500,000 in the aggregate (other than a judgment as to which, and only to the
extent, a reputable insurance company has acknowledged coverage of such claim in
writing or which, but only to the extent, a surety bond has been provided by a
reputable insurance or other company) shall be rendered against Borrower and
either (i) within thirty (30) days from the entry of such judgment, shall not
have been discharged or stayed pending appeal, or shall not have been discharged
within thirty (30) days from the entry of a final order of affirmance on appeal
or (ii) enforcement proceedings shall be commenced by any creditor on any such
judgment;
(k) (i) failure by Borrower or any ERISA Affiliate to make any
contributions required to be made to a Plan subject to Title IV of ERISA or a
Multiemployer Plan, (ii) any accumulated funding deficiency (within the meaning
of Section 4971(c) of the Code) shall exist with respect to any Plan (whether or
not waived), (iii) failure by any Plan to satisfy the minimum funding standard
required for any plan year or part thereof under Section 412 of the Code or
Section 302 of ERISA or a waiver of such standard or an extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, (iv) Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan, or that a Multiemployer Plan is
in reorganization or is being terminated, (v) a Reportable Event with respect to
a Plan shall have occurred, (vi) the withdrawal by Borrower or any ERISA
Affiliate from a Plan during a plan year in which it was a substantial employer
(within the meaning of Section 4001(a)(2) or 4062(e) of ERISA), (vii) the
termination of a Plan, or the filing of a notice of intent to terminate a Plan
under Section 4041(c) of ERISA, (viii) the institution of proceedings to
terminate, or the appointment of a trustee with respect to, a Plan by the PBGC,
(ix) any other event or condition which could constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or (x) the imposition of a Lien pursuant to Section 412 of
the Code or Section 302 of ERISA as to any Credit Party or ERISA Affiliate; and
the occurrence of any of the foregoing events, individually or in the aggregate,
could reasonably be expected to result in a liability in excess of $1,000,000;
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(l) Borrower is liable under or in violation of any
Environmental Law which liability or violation is reasonably likely to have a
Material Adverse Effect and either (i) such liability or violation shall not
have been resolved within thirty (30) days after Borrower has knowledge thereof
or (ii) enforcement proceedings shall be commenced with respect to any such
liability or violation;
(m) (i) this Credit Agreement, any Mortgage, or any other
Fundamental Document shall, for any reason, not be or shall cease to be in full
force and effect or shall be declared null and void or any of the Fundamental
Documents shall not give or shall cease to give Lender the Liens, rights, powers
and privileges purported to be created thereby in favor of Lender, superior to
and prior to the rights of all third Persons and subject to no other Liens
(other than Permitted Liens), or (ii) the validity or enforceability of the
Liens granted, to be granted, or purported to be granted, by any of the
Fundamental Documents shall be contested by Borrower or any of its Affiliates;
(n) any Event of Default shall occur and be continuing under
the Working Capital Facility;
(o) at any time, for any reason, Borrower shall repudiate, or
seek to repudiate, any of its Obligations under any Fundamental Document to
which it is a party; and
(p) failure by Borrower, on or before June 19, 2002, to make
any payments required to be made by it under Section 6.02 of the Plan of
Reorganization on account of any executory contract and unexpired lease to be
assumed by it under the Plan of Reorganization;
then, in every such event and at any time thereafter during the continuance of
such event, Lender may take any or all of the following actions, at the same or
different times: (x) terminate forthwith the Commitments and/or (y) declare the
principal of and the interest on the Loans and the notes evidencing the Loans
hereunder and all other amounts payable hereunder or thereunder to be forthwith
due and payable, whereupon the same shall become and be forthwith due and
payable, without presentment, demand, protest, notice of acceleration or other
notice of any kind, all of which are hereby expressly waived, anything in this
Credit Agreement or in any note evidencing any Loan hereunder to the contrary
notwithstanding. If an Event of Default specified in subsection (h) or (i) above
shall have occurred, the Commitments shall automatically terminate and the
principal of, and interest on, the Loans and any notes evidencing the Loans
hereunder and all other amounts payable hereunder and thereunder shall
automatically become due and payable without presentment, demand, protest, or
other notice of any kind, all of which are hereby expressly waived, anything in
this Credit Agreement or any note evidencing any Loan hereunder to the contrary
notwithstanding. Such remedies shall be in addition to any other remedy
available to Lender pursuant to Applicable Law or otherwise.
7. MISCELLANEOUS
SECTION 7.1 Notices. (a) Notices and other communications
provided for herein shall be in writing and shall be delivered addressed:
(i) if to Lender:
KIMCO CAPITAL CORP.
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c/o Kimco Realty Corporation
0000 Xxx Xxxx Xxxx Xxxxx
Xxx Xxxx Xxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxx
With a courtesy copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxx.xxx
(ii) if to Borrower:
Frank's Nursery & Crafts, Inc.
0000 Xxxx Xxxx Xxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attn: Mr. Xxxxxx Xxxxxxx
Xx. Xxxxx Xxxxx
With a courtesy copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
E-mail: xxxxxxx@xxxxxxx.xxx
or such other address as such party may from time to time designate by giving
written notice to the other parties hereunder.
Any failure of any Person giving notice pursuant to this Section, to provide a
courtesy copy to a party as provided herein, shall not affect the validity of
such notice. All notices and other communications given to any party hereto in
accordance with the provisions of this Credit Agreement shall be deemed to have
been given (x) on the fifth Business Day after the date when sent by registered
or certified mail, postage prepaid, return receipt requested, if by mail, (y)
when delivered, if delivered by hand or overnight courier service or (z) when
receipt is acknowledged, if by facsimile communications equipment or e-mail in
each case addressed to such party as provided in this Section or in accordance
with the latest unrevoked written direction from such party.
(b) No notice to or demand on Borrower shall entitle Borrower
to any other or further notice or demand in the same, similar or other
circumstances.
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SECTION 7.2 Survival of Agreement, Representations and
Warranties, etc. All warranties, representations and covenants made by Borrower
herein, in any other Fundamental Document or in any certificate or other
instrument delivered by it or on its behalf in connection with this Credit
Agreement or any other Fundamental Document shall be considered to have been
relied upon by Lender and, except for any terminations, amendments,
modifications or waivers thereof in accordance with the terms hereof, shall
survive the execution and delivery of this Credit Agreement, the making of the
Loans herein contemplated and the execution and delivery of any notes evidencing
any Loan hereunder regardless of any investigation made by Lender or on its
behalf, and shall continue in full force and effect so long as any Obligation is
outstanding and unpaid and so long as the Commitments have not been terminated.
All statements in any such certificate or other instrument shall constitute
representations and warranties by Borrower hereunder.
SECTION 7.3 Successors and Assigns; Syndications; Loan Sales;
Participations.
(a) Whenever in this Credit Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party; provided, however, that Borrower may not assign its
rights hereunder without the prior written consent of Lender, and all covenants,
promises and agreements by or on behalf of Borrower which are contained in this
Credit Agreement shall inure to the benefit of the successors and assigns of
Lender.
(b) The Lender may (but only with the prior written consent of
Borrower, which consent shall not be unreasonably withheld and which consent
shall not be required if at the time an Event of Default has occurred and is
then continuing) assign to an Eligible Assignee all or a portion of its
interests, rights and obligations under this Credit Agreement (including,
without limitation, all or a portion of any Loans at the time owing to it, any
note held by it evidencing such Loans, or all or a portion of its Commitment(s)
and the same portion of all Loans at the time owing to it and any notes held by
it evidencing its Loans) provided, however, that the aggregate amount of the
Commitment and/or Loans of Lender subject to each such assignment shall in no
event be less than $5,000,000 or, if less, the remaining portion of Lender's
Commitment and/or Loans. The Lender and such assignee shall execute appropriate
documentation (i) evidencing such assignment, which documentation shall set
forth the respective rights and obligations of Lender and such assignee and (ii)
to the extent that Lender shall retain a portion of the Commitment, appointing
Kimco Capital Corp., as agent for Lender and such assignee(s). Upon the
effectiveness of such assignment, the assignee thereunder shall become a party
to this Credit Agreement. The Lender shall give prompt written notice to
Borrower of each assignment made hereunder. The Borrower will promptly, at its
own expense, execute such amendments to the Loan Documents to which it is a
party and such additional documents, and take such other actions as Lender or
the assignee of Lender may reasonably request in order to give such assignee of
Lender the full benefit of the Liens contemplated by the Fundamental Documents.
(c) The Lender may, without the consent of Borrower, sell
participations to one or more banks, mutual funds or other financial
institutions in all or a portion of its rights and obligations under this Credit
Agreement (including, without limitation, all or a portion of any Term Loans at
the time owing to it and any note held by it evidencing such Loans or all or a
portion of its Revolving Credit Commitment and the same portion of all Revolving
Credit Loans
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(if any) at the time owing to it and any notes held by it evidencing its
Revolving Credit Loans); provided, however, that (i) Lender's obligations under
this Credit Agreement shall remain unchanged, (ii) such participant shall not be
granted any voting rights or any right to control the vote of Lender under this
Credit Agreement, except that such participant may be granted voting rights (or
a right to control the vote of Lender under this Credit Agreement) with respect
to (A) proposed decreases to interest rates or fees, (B) subject to Section 7.11
hereof, changes to the amount of the Revolving Credit Commitment (except for a
ratable decrease in the Revolving Credit Commitment), (C) final maturity of any
Loan and fees (in each case, as applicable to such participant) and (D) releases
of all or substantially all of the Collateral, (iii) Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iv) the participating banks or other entities shall be entitled to the cost
protection provisions contained in Sections 1.12 hereof, but a participant shall
not be entitled to receive pursuant to such provisions an amount larger than its
share of the amount to which Lender granting such participation would have been
entitled to receive and (v) Borrower shall continue to deal solely and directly
with Lender in connection with Lender's and its participants' rights and
obligations under this Credit Agreement.
(d) The Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant, any
information relating to Borrower furnished to Lender by or on behalf of
Borrower; provided, that prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall agree in writing to be
bound by the provisions of Section 7.16 hereof.
(e) Any assignment pursuant to subsection (a) of this Section
shall constitute an amendment of the Commitments as of the effective date of
such assignment.
(f) Notwithstanding anything contained in this Section Lender
may at any time assign or pledge all or any portion of its rights under this
Agreement without the prior written consent of Borrower to secure extensions of
credit to Lender or in support of obligations owed by Lender; provided that (i)
no such assignment or pledge shall release Lender from any of its obligations
hereunder or substitute any such assignee or pledgee for Lender as a the party
hereto and (ii) the right of any such assignee or pledgee to exercise any of
Lender's the rights hereunder or to further transfer all or any portion of the
rights pledged or granted to it, whether by means of foreclosure or otherwise
shall at all times be subject to the other terms and provisions of this Section.
In order to facilitate such an assignment, Borrower shall, at the request of
Lender, duly execute and deliver to Lender a note or notes evidencing the Loans
made to Borrower by Lender hereunder.
SECTION 7.4 Expenses; Documentary Taxes. Whether or not the
transactions hereby contemplated shall be consummated, Borrower agrees to pay
(a) all reasonable out-of-pocket expenses incurred by Lender in connection with,
or arising out of, the performance of due diligence, the negotiation,
preparation, execution, delivery, waiver or modification and administration of
this Credit Agreement and any other documentation contemplated hereby and the
making of the Loans, any Collateral or any Fundamental Document, including but
not limited to, the reasonable out-of-pocket costs of Lender in connection with
the administration of this Credit Agreement, the verification of financial data
or the transactions contemplated hereby, and
32
the reasonable fees and disbursements of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel
for Lender, and any other counsel that Lender shall retain and (b) all
reasonable out-of-pocket expenses incurred by Lender in the enforcement or
protection (as distinguished from administration) of the rights and remedies of
Lender in connection with this Credit Agreement, the other Fundamental Documents
or any notes evidencing the Loans hereunder, or as a result of any transaction,
action or non-action arising from any of the foregoing, including but not
limited to, the reasonable fees and disbursements of any counsel for Lender.
Such payments shall be made on the date this Credit Agreement is executed by
Borrower and thereafter on demand. The Borrower agrees that it shall indemnify
Lender from and hold them harmless against any documentary taxes, assessments or
charges made by any Governmental Authority by reason of the execution and
delivery of this Credit Agreement or any notes evidencing any of the Loans
hereunder. The obligations of Borrower under this Section shall survive the
Facility Termination Date, the termination of this Credit Agreement and the
payment of the Loans.
SECTION 7.5 Indemnity. The Borrower agrees to indemnify and
hold harmless Lender and its directors, officers, employees, trustees,
investments advisors and agents, and any professionals retained by them (each an
"Indemnified Party") (to the full extent permitted by Applicable Law) from and
against any and all claims, demands, losses, judgments, damages and liabilities
(including liabilities for penalties) incurred by any of them as a result of, or
arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not any Indemnified Party is a party
thereto) related to the entering into and/or performance of this Credit
Agreement or any other Fundamental Document or the use of the proceeds of any
Loans hereunder or the consummation of any other transaction contemplated in
this Credit Agreement or any other Fundamental Document, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses of an
Indemnified Party to the extent incurred by reason of the gross negligence or
willful misconduct of such Indemnified Party as determined by a final order or
judgment of a court of competent jurisdiction). The foregoing indemnity
agreement includes any reasonable costs incurred by an Indemnified Party in
connection with any action or proceeding which may be instituted in respect of
the foregoing by any other Person either against Lender or in connection with
which any officer or employee of Lender is called as a witness or deponent,
including, but not limited to, the reasonable fees and disbursements of Xxxxxx,
Xxxxx & Xxxxxxx LLP, counsel to Lender, and any out-of-pocket costs incurred by
Lender in appearing as a witness or in otherwise complying with legal process
served upon them. The obligations of Borrower under this Section shall survive
the Facility Termination Date, the termination of this Credit Agreement and the
payment of the Loans and shall inure to the benefit of any Person who was a
Lender notwithstanding such Person's assignment of all its Loans and its
Revolving Credit Commitment hereunder.
If Borrower shall fail to do any act or thing which it has
covenanted to do hereunder or under a Fundamental Document, or any
representation or warranty of Borrower shall be breached, Lender may (but shall
not be obligated to) upon two Business Days' notice to Borrower do the same or
cause it to be done or remedy any such breach, and there shall be added to the
Obligations hereunder the cost or expense incurred by Lender in so doing, and
any and all amounts expended by Lender in taking any such action shall be
repayable to it upon its demand
33
therefor and shall bear interest at a rate per annum of 2% in excess of the rate
set forth in Section 1.10(a) from the date advanced to the date of repayment.
SECTION 7.6 CHOICE OF LAW. THIS CREDIT AGREEMENT, AND ANY NOTE
EVIDENCING ANY OF THE LOANS HEREUNDER, AND THE OTHER FUNDAMENTAL DOCUMENTS SHALL
IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES AND BY
FEDERAL LAW TO THE EXTENT APPLICABLE; PROVIDED, HOWEVER, THAT WITH RESPECT TO
ANY SECURITY DOCUMENT FILED IN A JURISDICTION OUTSIDE THE STATE OF NEW YORK, THE
LAWS OF SUCH JURISDICTION WHERE SUCH SECURITY DOCUMENT WAS FILED SHALL APPLY.
SECTION 7.7 WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED
BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
CREDIT AGREEMENT, THE SUBJECT MATTER HEREOF, ANY OTHER FUNDAMENTAL DOCUMENT OR
THE SUBJECT MATTER THEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO
ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THE
PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH
OTHER PARTIES HAVE RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS
CREDIT AGREEMENT AND ANY OTHER FUNDAMENTAL DOCUMENT. ANY PARTY MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF ANY OTHER PARTY TO THE WAIVER OF ITS RIGHTS TO TRIAL
BY JURY.
SECTION 7.8 WAIVER WITH RESPECT TO DAMAGES. THE BORROWER
ACKNOWLEDGES THAT THE LENDER HAS NO FIDUCIARY RELATIONSHIP WITH, OR FIDUCIARY
DUTY TO, THE BORROWER ARISING OUT OF OR IN CONNECTION WITH THIS CREDIT AGREEMENT
OR ANY OTHER FUNDAMENTAL DOCUMENT AND THE RELATIONSHIP BETWEEN THE BORROWER AND
THE LENDER IN CONNECTION THEREWITH IS SOLELY THAT OF DEBTOR AND CREDITOR. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER SHALL NOT ASSERT, AND THE
BORROWER HEREBY WAIVES, ANY CLAIMS AGAINST THE LENDER ON ANY THEORY OF
LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED
TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT
OF, THIS CREDIT AGREEMENT, ANY FUNDAMENTAL DOCUMENT, ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY OR THEREBY, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
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SECTION 7.9 No Waiver. No failure on the part of Lender to
exercise, and no delay in exercising, any right, power or remedy hereunder,
under any note evidencing any Loan hereunder, or any other Fundamental Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. All remedies hereunder are
cumulative and are not exclusive of any other remedies provided by law.
SECTION 7.10 Extension of Payment Date. Except as otherwise
specifically provided in Article 1 hereof, should any payment or prepayment of
principal of or interest on any of the Loans or any other amount due hereunder,
become due and payable on a day other than a Business Day, the due date of such
payment or prepayment shall be extended to the next succeeding Business Day and,
in the case of a payment or prepayment of principal, interest shall be payable
thereon at the rate herein specified during such extension.
SECTION 7.11 Amendments, etc. Unless otherwise specifically
provided herein any provision of this Credit Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by
Borrower and Lender.
SECTION 7.12 Severability. Any provision of this Credit
Agreement or of any note evidencing any Loan hereunder which is invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating the remaining provisions hereof, and any such invalidity,
illegality or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 7.13 SERVICE OF PROCESS. EACH PARTY HERETO (EACH A
"SUBMITTING PARTY") HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE STATE
COURTS OF THE STATE OF NEW YORK IN NEW YORK COUNTY AND TO THE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING
IN NEW YORK COUNTY, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING
ARISING OUT OF OR BASED UPON THIS CREDIT AGREEMENT (INCLUDING, BUT NOT LIMITED
TO THE SUBJECT MATTER HEREOF AND ANY OTHER FUNDAMENTAL DOCUMENT AND THE SUBJECT
MATTER THEREOF). EACH SUBMITTING PARTY TO THE EXTENT PERMITTED BY APPLICABLE LAW
(A) HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR
OTHERWISE, IN ANY SUCH SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN THE
ABOVE-NAMED COURTS, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE
JURISDICTION OF SUCH COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM
ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER
OR THAT THIS CREDIT AGREEMENT, THE SUBJECT MATTER HEREOF AND ANY OTHER
FUNDAMENTAL DOCUMENT OR THE SUBJECT MATTER THEREOF (AS APPLICABLE) MAY NOT BE
ENFORCED IN OR BY SUCH COURT AND (B) HEREBY WAIVES THE RIGHT TO ASSERT IN ANY
SUCH ACTION, SUIT OR PROCEEDING ANY OFFSETS OR
35
COUNTERCLAIMS EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE FROM
THE SAME SUBJECT MATTER. EACH SUBMITTING PARTY HEREBY CONSENTS TO SERVICE OF
PROCESS BY MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN TO IT PURSUANT
TO SECTION 7.1 HEREOF. EACH SUBMITTING PARTY AGREES THAT ITS SUBMISSION TO
JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS
BENEFIT OF EACH OF THE OTHER SUBMITTING PARTIES. FINAL JUDGMENT AGAINST ANY
SUBMITTING PARTY IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND
MAY BE ENFORCED IN ANY OTHER JURISDICTION (X) BY SUIT, ACTION OR PROCEEDING ON
THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF
THE FACT AND OF THE AMOUNT OF INDEBTEDNESS OR LIABILITY OF THE SUBMITTING PARTY
THEREIN DESCRIBED OR (Y) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS
OF SUCH OTHER JURISDICTION.
SECTION 7.14 Headings. Section headings used herein and the
Table of Contents are for convenience only and are not to affect the
construction of or be taken into consideration in interpreting this Credit
Agreement.
SECTION 7.15 Execution in Counterparts. This Credit Agreement
may be executed in any number of counterparts, each of which shall constitute an
original, but all of which taken together shall constitute one and the same
instrument. Signature pages may be detached from counterpart documents and
reassembled to form duplicate executed originals. Delivery of an executed
signature page to this Credit Agreement by facsimile shall be as effective as
delivery of a manually executed counterpart of this Credit Agreement.
SECTION 7.16 Confidentiality. The Lender understands that some
of the information furnished to it pursuant to this Credit Agreement may be
received by it prior to the time that such information shall have been made
public, and Lender hereby agrees that it will keep all the information received
by it in connection with this Credit Agreement confidential except that Lender
shall be permitted to disclose information (i) to such of its officers,
directors, employees, agents, representatives, auditors, consultants, advisors,
trustees, investments advisors, lawyers and affiliates as need to know such
information in connection with this Credit Agreement or any other Fundamental
Document; (ii) to a proposed assignee or participant in accordance with Section
7.3(f) hereof; (iii) to the extent required by Applicable Law and regulations or
by any subpoena or other legal process (in any which event Lender shall promptly
notify Borrower to the extent not prohibited by Applicable Law); (iv) to the
extent requested by any bank regulatory authority or other regulatory authority;
(v) to the extent such information (A) becomes publicly available other than as
a result of a breach of this Credit Agreement, (B) becomes available to Lender
on a nonconfidential basis from a source other than Borrower or any of its
Affiliates, which source is not known to Lender to be prohibited from
transmitting the information to Lender by any contractual or other obligation to
Borrower or (C) was available to Lender on a nonconfidential basis prior to its
disclosure to Lender; (vi) to the extent Borrower shall have consented to such
disclosure in writing; or (vii) in connection with the servicing of the Loans
hereunder, in protecting or enforcing any rights and/or remedies in connection
with any
36
Fundamental Document or in any proceeding in connection with any Fundamental
Document or any of the transactions contemplated thereby.
SECTION 7.17 Entire Agreement. This Credit Agreement
(including the Exhibits and Schedules hereto) represents the entire agreement of
the parties with regard to the subject matter hereof and the terms of any
letters and other documentation entered into between any of the parties hereto
(other than the Commitment Letter) prior to the execution of this Credit
Agreement which relate to Loans to be made hereunder shall be replaced by the
terms of this Credit Agreement.
SECTION 7.18 Enforcement of Rights; No Obligation to Xxxxxxxx
Assets. In enforcing any rights under this Credit Agreement or any other
Fundamental Document, Lender shall not be required to resort to any particular
security, right or remedy through foreclosure or otherwise, or to proceed in any
particular order of priority, or to otherwise act or refrain from acting; and,
to the extent permitted by Applicable Law, Borrower hereby waives and releases
any right to a marshaling of assets or a sale in inverse order of alienation.
SECTION 7.19 Reproduction of Documents. The Credit Agreement,
all documents constituting Schedules or Exhibits hereto, and all documents
relating hereto received by a party hereto, including, without limitation: (a)
consents, waivers and modifications that may hereafter be executed; (b) the
Fundamental Documents; and (c) financial statements, certificates, and other
information previously or hereafter furnished to Lender may be reproduced by
Lender by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. Each of the parties hereto agrees and
stipulates that, to the extent permitted by Applicable Law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such party in the
regular course of business) and that, to the extent permitted by applicable law,
any enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 7.20 Right of Set-Off. Upon the occurrence and during
the continuance of any Event of Default, Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law and without order
of or application to any court, to set-off and apply any and all deposits
(general or special, time or demand, provisional or final, but excluding trust
funds) at any time held and other indebtedness at any time owing by Lender to or
for the credit or the account of Borrower against any and all of the
Obligations, irrespective of whether or not Lender shall have made any demand
under any Fundamental Document and although the Obligations may not have been
accelerated. The rights of Lender under this Section are in addition to other
rights and remedies which Lender may have upon the occurrence and during the
continuance of any Event of Default.
8. GRANT OF SECURITY INTEREST; REMEDIES
SECTION 8.1 Security Interests. (a) As security for the due
and punctual payment of the Obligations (including interest accruing on and
after the filing of any petition in bankruptcy or of reorganization of Borrower
whether or not post filing interest is allowed in such proceeding), Borrower
hereby mortgages, pledges, assigns, transfers, sets over, conveys and
37
delivers to Lender and grants to Lender a first priority security interest in
the Collateral and the proceeds thereof, including, without limitation, the
Assigned Lease Proceeds.
(b) It is expressly agreed and understood by Borrower that,
with respect to the Assigned Lease Proceeds, the foregoing security interests
shall apply to any future sale of the underlying lease whether such underlying
lease is sold individually or as a package, whether sold as part of a merger or
consolidation or "going concern" sale of Borrower or its assets, and whether
sold pursuant to Section 363 or Section 365 of the Bankruptcy Code or otherwise.
It is further expressly agreed and understood by Borrower that the Lien and
security interest granted by Borrower to Lender herein in the Assigned Lease
Proceeds shall also apply and be fully enforceable in any future or subsequent
bankruptcy filing by Borrower under Chapter 7 or 11 of the Bankruptcy Code and
in any bankruptcy court as well as in Borrower's existing bankruptcy case in the
Bankruptcy Court.
(c) It is the express intention of Borrower that Lender be
treated in all respects as a secured lender in any subsequent bankruptcy case of
Borrower under Chapter 7 or 11 and in any bankruptcy court and that Lender be
treated as a secured creditor under Section 506 of the Bankruptcy Code with a
duly perfected Lien and mortgage in all of Borrower's Collateral and the
proceeds thereof, regardless of whether any such Collateral or any proceeds
thereof is conveyed under Section 363 or 365 of the Bankruptcy Code or by any
other means including, but not limited to, any secured creditor sale.
(d) Any Assigned Lease Proceeds received by Borrower shall be
immediately paid to Lender, provided, however, that prior to such payment, such
Assigned Lease Proceeds shall (i) be deemed at all times to be held by Borrower
in trust for the benefit of Lender, (ii) be deposited in the Kimco Collateral
Account, and (iii) at no time be deposited or held in either the Concentration
Account (as defined in the Working Capital Facility) or any deposit account
whose balances are transferred to such Concentration Account under the Working
Capital Facility.
SECTION 8.2 Use of Collateral. So long as no Event of Default
shall have occurred and be continuing, and subject to the various provisions and
limitations of this Credit Agreement and the other Fundamental Documents,
Borrower may use the Collateral in any lawful manner and as permitted by the
provisions of this Credit Agreement and the other Fundamental Documents.
SECTION 8.3 Borrower to Hold in Trust. Upon the occurrence and
during the continuance of an Event of Default, Borrower will, upon receipt by it
of any revenue, income, proceeds, profits or other sums in which a security
interest is granted by this Article 8 or by the other Fundamental Documents,
payable pursuant to any agreement or otherwise, or of any check, draft, note,
trade acceptance or other instrument evidencing an obligation to pay any such
sum, hold the sum or instrument in trust for Lender, segregate such sum or
instrument from Borrower's own assets (including segregation from any
Concentration Account (as defined in the Working Capital Facility) and any
deposit account whose balances are transferred to such Concentration Account)
by, in the case of any such sum, depositing same into the Kimco Collateral
Account and forthwith, without any notice, demand or other action whatsoever
(all notices, demands, or other actions being expressly waived), endorse,
transfer and deliver any
38
such sums or instruments or both, to Lender to be applied to the repayment of
the Obligations in accordance with the provisions of this Credit Agreement.
SECTION 8.4 Application of Proceeds on Default. Upon the
occurrence and during the continuance of an Event of Default, all income and/or
proceeds from the Collateral shall be applied first toward payment of the
reasonable out-of-pocket costs and expenses paid or incurred by Lender in
enforcing this Credit Agreement or the other Fundamental Documents, in realizing
on or protecting any Collateral and in enforcing or collecting any Obligations,
including, without limitation, court costs, reasonable attorneys' fees and
expenses and reasonable financial consultants' fees incurred by Lender and then
to the indefeasible payment in full in cash of the Obligations in accordance
with the provisions of this Credit Agreement. Any amounts remaining after such
indefeasible payment in full shall be remitted to Borrower or as a court of
competent jurisdiction may otherwise direct.
SECTION 8.5 Power of Attorney. Upon the occurrence and during
the continuance of an Event of Default (a) Borrower does hereby irrevocably
make, constitute and appoint Lender or any of its officers or designees its true
and lawful attorney-in-fact with full power in the name of Lender, such other
Person or Borrower to receive, open and dispose of all mail addressed to
Borrower, and to endorse any notes, checks, drafts, money orders or other
evidences of payment relating to the Collateral that may come into the
possession of Lender with full power and right to cause the mail of such Persons
to be transferred to Lender's own offices or otherwise, and to do any and all
other acts necessary or proper to carry out the intent of this Credit Agreement
and the grant of the security interests hereunder and under the Fundamental
Documents, and Borrower does hereby ratify and confirm all that Lender or its
substitutes shall properly do by virtue hereof, and (b) Borrower does hereby
further irrevocably make, constitute and appoint Lender or any of its officers
or designees its true and lawful attorney-in-fact in the name of Lender, such
other Person or Borrower (i) to enforce all of Borrower's rights under and
pursuant to all agreements with respect to the Collateral, all for the sole
benefit of Lender, (ii) to enter into and perform such agreements as may be
necessary in order to carry out the terms, covenants and conditions of the
Fundamental Documents that are required to be observed or performed by Borrower,
(iii) to execute such other and further mortgages, pledges and assignments of
the Collateral, and related instruments or agreements, as Lender may reasonably
require for the purpose of perfecting, protecting, maintaining or enforcing the
security interests granted to Lender hereunder and under the other Fundamental
Documents, and (iv) to do any and all other things necessary or proper to carry
out the intention of this Credit Agreement and the grant of the security
interests hereunder and under the other Fundamental Documents. The Borrower
hereby ratifies and confirms in advance all that Lender as such attorney-in-fact
or its substitutes shall properly do by virtue of this power of attorney in
accordance with the terms hereof.
SECTION 8.6 Financing Statements, Direct Payments. The
Borrower hereby authorizes Lender to file UCC financing statements and any
amendments thereto or continuations thereof and any other appropriate security
documents or instruments and to give any notices necessary or desirable to
perfect its Lien on the Collateral and proceeds thereof, in all cases without
the signature of Borrower or to execute such items as attorney-in-fact for
Borrower; provided, that Lender shall provide copies of any such documents or
instruments to Borrower. The Borrower further authorizes Lender upon the
occurrence of a default under
39
Article 6(b) or Article 6(c) hereof, and during the continuation of any such
default, to notify any tenants that all sums payable to Borrower relating to the
Collateral shall be paid directly to Lender.
SECTION 8.7 Further Assurances. Upon the request of Lender,
Borrower hereby authorizes Lender to file UCC financing statements and any
amendments thereto or continuations thereof and any other appropriate security
documents or instruments and to give any notices necessary or desirable to
perfect its Lien on the Collateral and proceeds thereof, in all cases without
the signature of Borrower or to execute such items as attorney-in-fact for
Borrower; provided, however that Lender shall provide copies of any such
documents or instruments to Borrower. The Borrower further authorizes Lender
upon the occurrence of a default under Article 6(b) or Article 6(c) hereof, and
during the continuation of any such default, to notify any tenants that all sums
payable to Borrower relating to the Collateral shall be paid directly to Lender.
SECTION 8.8 Termination and Release. (a) The security
interests granted under this Article 8 shall terminate on the Facility
Termination Date. Upon request by Borrower (and at its sole expense) following
such termination, Lender will take all reasonable action and do all things
reasonably necessary, including executing UCC termination statements, to
terminate the security interest granted to it hereunder and under the other
Fundamental Documents.
(b) Upon the written request of Borrower, Lender shall at the
sole cost and expense of Borrower release its security interest, if any, in any
Collateral sold, transferred or otherwise disposed of by Borrower to the extent
such sale, transfer or other disposition is permitted by, and made in accordance
with the terms of, this Credit Agreement.
(c) Upon payment in full of all of the Obligations and
termination of the Commitments (except by reason of the occurrence and
continuance of an Event of Default and the exercise of any remedies hereunder or
under any other Fundamental Document), deliver in recordable form upon the
written request of Borrower, at Borrower's expense, to the person or entity
making such payment, at the election of such person or entity, either (i)
satisfactions of Mortgage, or (ii) if permitted by applicable law, an assignment
without recourse representation or warranty, of its right, title and interest in
Mortgages.
SECTION 8.9 Remedies Not Exclusive. The remedies conferred
upon or reserved to Lender in this Article 8 are intended to be in addition to,
and not in limitation of, any other remedy or remedies available to Lender under
this Credit Agreement, the other Fundamental Documents and applicable law.
Without limiting the generality of the foregoing, Lender shall have all rights
and remedies of a secured creditor under Article 9 of the UCC and under any
other Applicable Law.
SECTION 8.10 Continuation and Reinstatement. The Borrower
further agrees that the security interest granted hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment or any
part thereof of any Obligation is rescinded or must otherwise be restored by
Lender upon the bankruptcy or reorganization of Borrower or otherwise.
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9. DEFINITIONS
For the purposes hereof unless the context otherwise requires,
all references to Sections, Exhibits and Schedules shall be deemed references to
Sections of, and Exhibits and Schedules to, this Credit Agreement. The following
terms shall have the meanings indicated. All accounting terms not otherwise
defined herein shall have the respective meanings accorded to them under GAAP
and all terms defined in the UCC and not otherwise defined herein shall have the
respective meanings accorded to them therein. Whenever the context may require,
any pronoun shall include the masculine, feminine and neuter forms. Unless the
context otherwise requires, any of the following terms may be used in the
singular or the plural, depending on the reference:
"Accounting Period" shall mean a four-week calendar period
within a fiscal year of Borrower with the first such period commencing on the
first day of a fiscal year and each subsequent such four-week calendar period
commencing at the end of the immediately preceding period such that there are
thirteen four-week periods in each fiscal year, provided, that the thirteenth
such period of any fiscal year may be a five-week period.
"Affiliate" shall mean with respect to any Person (including
Borrower), any other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For purposes of
this definition, a Person shall be deemed to be "controlled by" another Person
if such latter Person possesses, directly or indirectly, power either to (i)
vote fifteen percent (15%) or more of the securities or other ownership
interests having ordinary voting power for the election of directors (or the
equivalent) of such controlled Person or (ii) direct or cause the direction of
the management and policies of such controlled Person whether by contract or
otherwise. For purposes of this definition, neither Lender nor any of its
affiliates shall be included in the definition of the term "Affiliate"
hereunder.
"Affiliated Group" shall mean a group of Persons, each of
which is an Affiliate of some other Person in the group.
"Applicable Law" shall mean all applicable provisions of
statutes, rules, regulations and orders of the United States, any state thereof
or municipality therein or of any foreign governmental body or of any regulatory
agency applicable to the Person in question, and all orders and decrees of all
courts and arbitrators in proceedings or actions in which the Person in question
is a party.
"Assigned Lease Proceeds" shall mean the proceeds of any
assignment, sale, lease or sublease or any other conveyance or transfer of any
of the Leased Properties and any of the other properties listed on Schedule
2.14(b). For the avoidance of doubt, "Assigned Lease Proceeds" specifically
includes any proceeds from any future assignment, sale, lease or sublease or any
other conveyance or transfer of any of such leases whether assigned, sold,
leased or subleased individually or as a package with other assets, whether
assigned, sold, leased or subleased as part of a merger or consolidation or
"going concern" sale of Borrower or any of Borrower's assets, and whether
assigned, sold, leased or subleased or otherwise conveyed or transferred
pursuant to Section 363 or Section 365 of the Bankruptcy Code or otherwise in
any future or subsequent bankruptcy filing by Borrower under Chapter 7 or 11 of
the Bankruptcy
41
Code and in any bankruptcy court as well as in Borrower's existing bankruptcy
case in the Bankruptcy Court.
"Authorized Officer" shall mean, with respect to Borrower, the
president, vice president, chief financial officer, chief accounting officer,
secretary or treasurer.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of
1978, as heretofore and hereafter amended, as codified at 11 U.S.C. ss. 101 et
seq.
"Bankruptcy Court" shall mean the United States Bankruptcy
Court for the District of Maryland (Baltimore Division).
"Borrower" shall have the meaning given to such term in the
initial paragraph of this Credit Agreement.
"Borrowing" shall mean a Loan or group of Loans of the same
Tranche.
"Borrowing Certificate" shall mean a borrowing certificate,
substantially in the form of Exhibit A hereto, to be delivered by Borrower to
Lender in connection with each Borrowing.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banks are required or permitted to close in the
State of New York.
"Capital Lease", as applied to any Person, shall mean any
lease of any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Capital Stock" shall mean (i) with respect to corporate
stock, any and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
corporate stock, including without limitation, any Preferred Stock or (ii) with
respect to any other evidence of beneficial ownership of any entity which is not
a corporation, any and all partnership interests or any other equity interests
or evidences of beneficial ownership, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated) a
partnership interest or other equity interest or evidence of beneficial
ownership.
"Closing Date" shall mean the date on which the conditions
precedent set forth in Section 3.1 hereof have been satisfied or waived.
"Code" shall mean the Internal Revenue Code of 1986, as
heretofore and hereafter amended, as codified at 26 U.S.C. ss. 1 et seq., and
the applicable regulations promulgated thereunder, or any successor provision
thereto.
"Collateral" shall mean, collectively, the Mortgaged Property,
each Fee Property, each Leased Property, the Assigned Lease Proceeds, the Kimco
Collateral Account and all funds deposited or held therein, and all of the
proceeds of any kind of the foregoing.
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"Commitment" shall mean any of the commitments of Lender to
make Loans, i.e., whether the Term Loan Commitment or the Revolving Credit
Commitment.
"Commitment Letter" means that certain letter agreement, dated
February 8, 2002, between Lender and Borrower.
"Congress" shall mean Congress Financial Corporation
(Central).
"Credit Agreement" shall have the meaning given to such term
in the initial paragraph of this agreement.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Eligible Assignee" shall mean any (x) Affiliate of Lender or
(y) commercial bank, insurance company, investment or mutual fund or other
entity with assets of at least $100,000,000 that is an "accredited investor" (as
defined in Regulation D under the Securities Act) and which extends credit, buys
loans and is in the business of lending as one of its businesses.
"Environment" shall mean any surface or subsurface water,
groundwater, water vapor, surface or subsurface land, air, fish, wildlife,
microorganisms and all other natural resources.
"Environmental Claim" shall mean any and all administrative or
judicial actions, suits, orders, claims, liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings, or other
written communication, whether criminal or civil, pursuant to or relating to any
applicable Environmental Law by any Person (including, but not limited to, any
Governmental Authority, private person and citizens' group) based upon,
alleging, asserting, or claiming any actual or potential (i) violation of or
liability under any Environmental Law, (ii) violation of any Environmental
Permit, or (iii) liability for investigatory costs, cleanup costs, removal
costs, remedial costs, response costs, natural resource damages, damage,
property damage, personal injury, fines, or penalties arising out of, based on,
resulting from, or related to the presence, Release, or threatened Release into
the Environment, of any Hazardous Materials at any location, including, but not
limited to, any Premises or any location other than any Premises to which
Hazardous Materials or materials containing Hazardous Materials were sent for
handling, storage, treatment, or disposal.
"Environmental Clean-up Site" shall mean any location which is
listed or proposed for listing on the National Priorities List, the
Comprehensive Environmental Response, Compensation and Liability Information
System, or on any similar state list of sites requiring investigation or
cleanup, or which is the subject of any pending action, suit, proceeding, or
investigation related to or arising from a Release, or a threatened or suspected
Release of a Hazardous Material.
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"Environmental Laws" shall mean any and all applicable
federal, state, local or municipal or foreign laws, rules, orders, regulations,
statutes, ordinances, codes, common law doctrines, decrees or enforceable
requirements of any Governmental Authority regulating, relating to, or imposing
liability or standards of conduct concerning, any Hazardous Material or
environmental protection or worker health and safety, as now or at any time
hereafter in effect, including without limitation, the Clean Water Act also
known as the Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C. ss.1251 et
seq., the Clean Air Act ("CAA"), 42 U.S.C. xx.xx. 7401 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. xx.xx. 136 et
seq., the Surface Mining Control and Reclamation Act ("SMCRA"), 30 U.S.C.
xx.xx. 1201 et seq., the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. ss. 9601 et seq., the Superfund Amendment
and Reauthorization Act of 1986 ("XXXX"), Public Law 99-499, 100 Stat. 1613, the
Emergency Planning and Community Right to Know Act ("EPCRA"), 42 U.S.C. ss.
11001 et seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
ss.6901 et seq., the Occupational Safety and Health Act as amended ("OSHA"), 29
U.S.C. ss. 655 and ss.657, together, in each case, with any amendment thereto,
and the regulations adopted and the publications promulgated thereunder and all
substitutions thereof.
"Environmental Permit" shall mean any federal, state, local,
provincial, or foreign permits, licenses, approvals, consents or authorizations
required by any Governmental Authority under or in connection with any
Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as heretofore and hereafter amended, as codified at 29 U.S.C. ss. 1001
et seq., and applicable regulations promulgated thereunder, or any successor
provision thereto.
"ERISA Affiliate" shall mean each Person (as defined in
Section 3(9) of ERISA) which is treated as a single employer with Borrower under
Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" shall have the meaning given to such term
in Article 6 hereof.
"Extension Fee" shall have the meaning given to such term in
Section 1.4(c) hereof.
"Extension Period" shall have the meaning given to such term
in Section 1.4(c) hereof.
"Facility Termination Date" shall mean the date on which all
of the Obligations have been indefeasibly paid in full in cash and the Revolving
Credit Commitment and the Term Loan Commitment have been permanently terminated
in their entirety.
"Fee Property" shall mean each property identified on Schedule
2.14(a).
"Fees" shall mean all fees payable pursuant to the terms of
this Credit Agreement.
"Final Order" shall mean an order or judgment of the
Bankruptcy Court, or other court of competent jurisdiction with respect to the
subject matter, as to which no stay has been
44
entered and which has not been reversed, modified, vacated or overturned and as
to which the time to appeal or to seek certiorari has expired and no appeal or
petition for certiorari is pending that (i) would be material, (ii) related to
this Credit Agreement or the Working Capital Facility or (iii) related to the
Plan of Reorganization.
"Fundamental Documents" shall mean this Credit Agreement, the
Warrant Agreement, any note issued to evidence any Loan hereunder, each Mortgage
and each of the other Security Documents, the Post-Closing Undertaking and any
other documentation which is required to be or is otherwise executed by Borrower
and delivered in connection with this Credit Agreement or any of the other
documents listed in this definition.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time, consistently
applied (except for accounting changes in response to FASB releases, or other
authoritative pronouncements).
"Governmental Authority" shall mean any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or any court, in each case whether of the United States or any
foreign jurisdiction.
"Guaranty" shall mean, as to any Person, any direct or
indirect obligation of such Person guaranteeing or intending to guarantee, or
otherwise providing credit support, for any Indebtedness, Capital Lease,
dividend or other monetary obligation ("primary obligation") of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, by
contract, as a general partner or otherwise, including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, or (c) to purchase property, securities or services from the
primary obligor or other Person, in each case, primarily for the purpose of
assuring the performance of the primary obligor of any such primary obligation
or assuring the owner of any such primary obligation of the repayment of such
primary obligation. The amount of any Guaranty shall be deemed to be an amount
equal to (x) the stated or determinable amount of the primary obligation in
respect of which such Guaranty is made (or, if the amount of such primary
obligation is not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder)) or (y) the stated maximum liability under such Guaranty, whichever
is less.
"Hazardous Materials" shall mean any chemicals, materials,
substances or wastes in any amount or concentration which are now or hereafter
become defined as or included in the definition of "hazardous substances,"
"hazardous materials," "hazardous wastes," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"pollutants," "regulated substances," "solid wastes," or "contaminants" or words
of similar import, under any Environmental Law, including petroleum, petroleum
hydrocarbons or petroleum products, petroleum by-products, radioactive
materials, asbestos or asbestos-containing materials, gasoline, diesel fuel,
pesticides, radon, urea formaldehyde, lead or lead-containing materials,
polychlorinated biphenyls.
45
"Indebtedness" shall mean (without duplication), at any time
and with respect to any Person, (i) indebtedness of such Person for borrowed
money (whether by loan or the issuance and sale of debt securities) or for the
deferred purchase price of property or services purchased (other than amounts
constituting trade payables arising in the ordinary course of business and
payable in accordance with customary trading terms); (ii) all indebtedness of
such Person evidenced by a note, bond, debenture or similar instrument (whether
or not disbursed in full in the case of a construction loan); (iii) indebtedness
of others which such Person has directly or indirectly assumed or guaranteed or
otherwise provided credit support therefor; (iv) indebtedness of others secured
by a Lien on assets of such Person, whether or not such Person shall have
assumed such indebtedness (provided, that if such Person has not assumed such
indebtedness of another Person then the amount of indebtedness of such Person
pursuant to this clause (iv) for purposes of this Credit Agreement shall be
equal to the lesser of the amount of the indebtedness of the other Person or the
fair market value of the assets of such Person which secures such other
indebtedness); (v) obligations of such Person in respect of letters of credit,
acceptance facilities, or drafts or similar instruments issued or accepted by
banks and other financial institutions for the account of such Person; (vi) any
Guaranty by such Person; (vii) obligations of such Person under Capital Leases;
(viii) all obligations of such Person under any Interest Rate Protection
Agreement; and (ix) deferred payment obligations of such Person resulting from
the adjudication or settlement of any litigation.
"Initial Maturity Date" shall mean the third anniversary of
the Closing Date.
"Interest Deficit" shall have the meaning given to such term
in Section 1.12 hereof.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, synthetic cap, collar or floor
or other financial agreement or arrangement designed to protect Borrower against
fluctuations in interest rates or to reduce the effect of any such fluctuations.
"Kimco Collateral Account" shall have the meaning given to
such term in Section 4.15.
"Leased Property" shall mean each property identified on
Schedule 2.14(b) with an asterisk.
"Lender" shall have the meaning given to such term in the
initial paragraph of this Credit Agreement.
"License" shall have the meaning given to such term in Section
5.1(e).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
agreement to grant a security interest at a future date, any lease in the nature
of security, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code of any jurisdiction).
46
"Loans" shall mean, collectively, the Term Loan and the
Revolving Credit Loans. A "Loan" shall mean any one of such Loans individually.
"Material Adverse Effect" shall mean any event or condition
that (i) has a material adverse effect on the business, assets, properties,
performance, operations, condition (financial or otherwise) of Borrower, (ii)
materially impairs the ability of Borrower to perform its respective obligations
under any Fundamental Document to which it is or will be a party or (iii)
materially and adversely affects the Liens granted to Lender or materially
impairs the validity or enforceability of, or materially impairs the rights,
remedies or benefits available to Lender; provided, however, that any event or
condition will be deemed to have a "Material Adverse Effect" if such event or
condition when taken together with all other events and conditions occurring or
in existence at such time (including all other events and conditions which, but
for the fact that a representation, warranty or covenant is subject to a
"Material Adverse Effect" exception, would cause such representation or warranty
contained herein to be untrue or such covenant to be breached) would result in a
"Material Adverse Effect", even though, individually, such event or condition
would not do so.
"Mortgage" shall mean a Mortgage, Open End Mortgage, Deed of
Trust, Assignment of Leases and Rents, Security Agreement and Financing
Statement, substantially in the form of Exhibit B hereto, executed and delivered
by Borrower to Lender for each Fee Property and each Leased Property and in each
case, as such document may be amended, amended and restated, supplemented or
otherwise modified, renewed or replaced from time to time.
"Mortgaged Property" shall have the meaning given to such term
in the Mortgages with respect to each Fee Property and each Leased Property.
"Multiemployer Plan" shall mean a plan described in Section
4001(a)(3) of ERISA to which Borrower or ERISA Affiliate is making or accruing
an obligation to make contributions, or has within any of the five (5) preceding
plan years made or accrued an obligation to make contributions.
"Net Cash Proceeds" shall mean (a) the aggregate cash proceeds
received by Borrower in a transaction permitted under Section 5.3 hereof
(including, without limitation, as applicable, all cash proceeds received by way
of deferred payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received) and minus (b) the sum of (i)
reasonable and customary brokerage commissions and other reasonable and
customary fees and direct expenses (including reasonable and customary fees and
expenses of counsel and investment bankers actually paid by Borrower) related to
such transaction, (ii) payments made to retire Indebtedness (other than the
Loans) secured by any assets being sold or otherwise disposed of where payment
of such Indebtedness is required in connection with such sale or disposition,
(iii) reasonable reserves for indemnification obligations and (iv) taxes payable
in connection with such transaction; provided, that with respect to taxes,
expenses shall only include taxes to the extent that taxes are payable in cash
in the current year or in the next succeeding year with respect to the current
year as a direct result of the applicable transaction.
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"Obligations" shall mean (a) all obligations, whether direct
or indirect, contingent or absolute, of every type or description and at any
time existing, of Borrower to make due and punctual payment of principal of and
all interest on the Loans, the Fees, costs and attorneys' fees and all other
monetary obligations of Borrower to Lender under or in respect of this Credit
Agreement, any note evidencing any of the Loans hereunder, any other Fundamental
Document, and (b) all other obligations of Borrower pursuant to this Credit
Agreement or any other Fundamental Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Permitted Liens" shall mean Liens permitted under Section 5.2
hereof.
"Person" shall mean any natural person, corporation, division
of a corporation, partnership, limited liability partnership, limited liability
company, trust, joint venture, association, company, estate, unincorporated
organization or government or any agency or political subdivision thereof.
"Plan" shall mean an employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, maintained or
contributed to by Borrowers, or any ERISA Affiliate, or otherwise pursuant to
which Borrowers could have liability.
"Plan of Reorganization" shall mean the plan of reorganization
filed with the Bankruptcy Court and confirmed by the order dated May 7, 2002 (as
amended) with respect to those certain cases pending under Chapter 11 of the
Bankruptcy Code in the District of Maryland (Baltimore Division) filed by (i)
Borrower (Case No. 01-52415-JS) and (ii) FNC Holdings, Inc. (Case No.
01-52416-JS), which cases are jointly administered, together with such
amendments as may be approved by Lender.
"Post-Closing Undertaking" shall mean that certain
Post-Closing Undertaking, dated as of the date hereof, between Lender and
Borrower.
"Preferred Stock" shall mean Capital Stock of any class or
classes (however designated) which is preferred as to the payment of dividends,
or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of the issuer thereof, over shares of Capital Stock
of any other class of such issuer.
"Premises" shall mean any real property currently or formerly
owned, leased or operated by Borrower, including, but not limited to, all soil,
surface water, or groundwater thereat.
"Refinancing Indebtedness" shall have the meaning given to
such term in Section 5.2(j).
"Release" shall mean any discharging, disposing, emitting,
leaking, pumping, pouring, emptying, injecting, escaping, leaching, dumping or
spilling of any Hazardous Material into the Environment.
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"Reportable Event" shall mean any reportable event as defined
in Section 4043(c) of ERISA other than those events as to which the 30-day
notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC
Regulation Section 4043.
"Requirements" shall mean all present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, injunctions, rules,
regulations and requirements of every Governmental Authority having jurisdiction
over any item of Collateral and all restrictive covenants applicable to any item
of Collateral.
"Revolving Credit Commitment" shall mean the commitment of
Lender to make Revolving Credit Loans to Borrower from the Closing Date through
the Revolving Credit Commitment Termination Date up to an aggregate principal
amount, at any one time, not in excess of $10,000,000, as such amount may be
reduced from time to time in accordance with the terms of this Credit Agreement.
"Revolving Credit Commitment Termination Date" shall mean the
earlier of (i) the Revolving Credit Loan Maturity Date, and (ii) the date on
which the Revolving Credit Commitment shall terminate in accordance with Section
1.7 or Article 6 hereof.
"Revolving Credit Loan Maturity Date" shall mean the later of
(i) the Initial Maturity Date and (ii) the date to which such date is extended
in accordance with Section 1.4(c) hereof.
"Revolving Credit Loans" shall have the meaning given to such
term in Section 1.2(a) hereof.
"Security Documents" shall mean the Mortgages and any other
agreements, documents or instruments (including, without limitation, UCC
financing statements or other statements or filings pursuant to the UCC or
Applicable Law, as well as any amendments, supplements or modifications thereto)
executed in connection with or relating to Lender's security interest in the
Collateral.
"Subsidiary" shall mean with respect to any Person, any
corporation, association, joint venture, partnership or other business entity
(whether now existing or hereafter organized) of which at least a majority of
the voting stock or other ownership interests having ordinary voting power for
the election of directors (or the equivalent) is, at the time as of which any
determination is being made, owned or controlled by such Person or one or more
subsidiaries of such Person or by such Person and one or more subsidiaries of
such Person.
"Substitute Lease" shall have the meaning given to such term
in Section 5.1(e).
"Term Loan" shall have the meaning given such term in Section
1.1 hereof.
"Term Loan Commitment" shall mean the commitment of Lender to
make the Term Loan to Borrower up to an aggregate principal amount, at any one
time, not in excess of $20,000,000 as such amount may be reduced from time to
time in accordance with the terms of this Credit Agreement.
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"Term Loan Maturity Date" shall mean the earlier of (i) the
later of (x) the Initial Maturity Date and (y) the date to which such date is
extended in accordance with Section 1.4(c) hereof, and (ii) the date on which
the Term Loan shall become due and payable pursuant to Article 6 hereof.
"Title Company" shall mean Fidelity National Title Insurance
Company of New York or any other title insurance company of recognized national
standing which is acceptable to Lender in its sole discretion.
"Tranche" when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Credit Loans or the Term Loan.
"UCC" shall mean the Uniform Commercial Code in the State of
New York as in effect from time to time.
"Warrant Agreement" shall mean those certain Stock Purchase
Warrants, each dated the date hereof, substantially in the form of Exhibit D
hereto and issued to each of Kimco Realty Services, Inc. and Third Avenue Trust,
on behalf of the Third Avenue Real Estate Value Fund Series.
"Working Capital Facility" shall mean the financing
arrangement evidenced by that certain Loan and Security Agreement, dated as of
May __, 2002, among Borrower, Congress, the Lenders named therein and Congress,
as agent, and any agreements, instruments and documents executed in connection
therewith, in each case, as the same may be amended or modified, and any
subsequent financing arrangement that replaces or refinances such financing
arrangement, to the extent such refinancing is permitted under Section 5.1(j).
[SIGNATURE PAGES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed as of the day and the year first written above.
BORROWER:
FRANK'S NURSERY & CRAFTS, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice Chairman/CFO
LENDER:
KIMCO CAPITAL CORP.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
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