1
Exhibit 10.1
$65,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
among
PUEBLO XTRA INTERNATIONAL, INC.,
PUEBLO INTERNATIONAL, INC.,
XTRA SUPER FOOD CENTERS, INC.,
VARIOUS LENDING INSTITUTIONS,
THE BANK OF NOVA SCOTIA
AS ADMINISTRATIVE AGENT
and
NATIONSBANK, N.A. (SOUTH)
AS SYNDICATION AGENT
-----------------------------
Dated as of April 29, 1997
-----------------------------
2
TABLE OF CONTENTS
Page
----
SECTION 1. Amount and Terms of Credit.............................. 1
1.01 Commitments............................................. 1
1.02 Minimum Borrowing Amounts, etc.......................... 3
1.03 Notice of Borrowing..................................... 3
1.04 Disbursement of Funds................................... 5
1.05 Notes................................................... 6
1.06 Conversions............................................. 7
1.07 Pro Rata Borrowings..................................... 7
1.08 Interest................................................ 7
1.09 Interest Periods........................................ 8
1.10 Increased Costs, Illegality, etc........................ 9
1.11 Compensation............................................ 12
1.12 Change of Lending Office................................ 13
1.13 Notice of Certain Costs................................. 13
1.14 Replacement of Banks.................................... 13
SECTION 2. Letters of Credit....................................... 14
2.01 Letters of Credit....................................... 15
2.02 Letter of Credit Participations......................... 16
2.03 Letter of Credit Requests; Notices of
Issuance............................................ 19
2.04 Agreement to Repay Letter of Credit
Drawings............................................ 19
2.05 Increased Costs......................................... 20
SECTION 3. Fees; Commitments....................................... 21
3.01 Fees.................................................... 21
3.02 Voluntary Reduction of Commitments...................... 23
3.03 Mandatory Reductions of Commitments, etc................ 23
SECTION 4. Payments................................................ 24
4.01 Voluntary Prepayments................................... 24
4.02 Mandatory Prepayments................................... 25
(A) Requirements.................................. 25
(B) Application................................... 25
4.03 Method and Place of Payment............................. 26
4.04 Net Payments............................................ 26
SECTION 5. Conditions Precedent.................................... 29
5.01 Conditions Precedent to Restatement
Effective Date...................................... 29
(a) Effectiveness; Notes........................... 29
(b) Opinions of Counsel............................ 29
-i-
3
Page
----
(c) Corporate Proceedings.......................... 29
(d) Original Credit Agreement...................... 30
(e) Issuance of PXI Senior Notes................... 30
(f) Pledge Agreements.............................. 30
(g) Subsidiary Guaranty............................ 32
(h) Security Agreements............................ 32
(i) Mortgages; Intercompany Mortgages;
Title Insurance; Surveys; Etc.................. 33
(j) Solvency Certificate........................... 34
(k) Insurance Policies............................. 34
(l) Consent Letter................................. 35
(m) Payment of Fees................................ 35
(n) Adverse Change................................. 35
(o) Litigation..................................... 35
(p) Depositary Account Agreement................... 35
5.02 Conditions Precedent to All Credit Events............... 35
SECTION 6. Representations, Warranties and
Agreements......................................... 36
6.01 Corporate Status........................................ 37
6.02 Corporate Power and Authority........................... 37
6.03 No Violation............................................ 37
6.04 Litigation.............................................. 37
6.05 Use of Proceeds......................................... 38
6.06 Governmental Approvals.................................. 38
6.07 Investment Company Act.................................. 38
6.08 Public Utility Holding Company Act...................... 38
6.09 True and Complete Disclosure............................ 38
6.10 Financial Condition; Financial Statements............... 39
6.11 Security Interests...................................... 40
6.12 Tax Returns and Payments................................ 41
6.13 Compliance with ERISA................................... 41
6.14 Subsidiaries............................................ 42
6.15 Patents, etc............................................ 43
6.16 Compliance with Statutes, etc........................... 43
6.17 Properties.............................................. 44
6.18 Labor Relations; Collective Bargaining
Agreements.......................................... 44
6.19 Indebtedness............................................ 45
6.20 Restrictions on Subsidiaries............................ 45
6.21 PXI Senior Notes, etc................................... 45
SECTION 7. Affirmative Covenants................................... 46
7.01 Information Covenants................................... 46
(a) Annual Financial Statements.................... 46
(b) Quarterly Financial Statements................. 46
(c) Monthly Reports................................ 47
(d) Budgets; etc................................... 47
(e) Officer's Certificates......................... 47
(ii)
4
Page
----
(f) Notice of Default or Litigation................ 47
(g) Environmental Matters.......................... 48
(h) Other Information.............................. 48
7.02 Books, Records and Inspections.......................... 49
7.03 Payment of Taxes........................................ 49
7.04 Corporate Franchises.................................... 49
7.05 Compliance with Statutes, etc........................... 50
7.06 ERISA................................................... 51
7.07 Good Repair............................................. 52
7.08 End of Fiscal Years; Fiscal Quarters.................... 53
7.09 Maintenance of Property; Insurance...................... 53
7.10 Additional Security; Further Assurances................. 53
7.11 Maintenance of Corporate Separateness................... 55
SECTION 8. Negative Covenants...................................... 55
8.01 Consolidation, Merger, Sale or Purchase of
Assets, etc......................................... 55
8.02 Liens................................................... 57
8.03 Indebtedness............................................ 59
8.04 Capital Expenditures.................................... 60
8.05 Advances, Investments and Loans......................... 60
8.06 Dividends, etc.......................................... 62
8.07 Transactions with Affiliates............................ 63
8.08 Changes in Business..................................... 63
8.09 EBITDA to Total Cash Interest Expense................... 63
8.10 Consolidated Indebtedness to EBITDA..................... 64
8.11 Senior Secured Debt to EBITDA........................... 65
8.12 Limitation on Voluntary Payments; Preferred
Stock............................................... 65
8.13 Issuance of Subsidiary Stock............................ 66
8.14 Limitation on Restrictions Affecting
Subsidiaries........................................ 66
SECTION 9. Events of Default....................................... 66
9.01 Payments................................................ 66
9.02 Representations, etc.................................... 67
9.03 Covenants............................................... 67
9.04 Default Under Other Agreements.......................... 67
9.05 Bankruptcy, etc......................................... 67
9.06 ERISA................................................... 68
9.07 Security Documents...................................... 69
9.08 Guaranties.............................................. 69
9.09 Judgments............................................... 69
9.10 Change of Control....................................... 69
SECTION 10. Definitions............................................ 70
(iii)
5
Page
----
SECTION 11. The Administrative Agent, etc.......................... 94
11.01 Appointment............................................ 94
11.02 Delegation of Duties................................... 95
11.03 Exculpatory Provisions................................. 95
11.04 Reliance by Administrative Agent, etc.................. 96
11.05 Notice of Default...................................... 96
11.06 Non-Reliance on Administrative Agent and
Other Banks......................................... 96
11.07 Indemnification........................................ 97
11.08 Individual Capacity.................................... 98
11.09 Resignation; Removal; Successors....................... 98
SECTION 12. Miscellaneous.......................................... 98
12.01 Payment of Expenses, etc............................... 98
12.02 Right of Setoff........................................ 99
12.03 Notices................................................100
12.04 Benefit of Agreement...................................100
12.05 No Waiver; Remedies Cumulative.........................102
12.06 Payments Pro Rata......................................103
12.07 Calculations; Computations.............................103
12.08 Governing Law; Submission to Jurisdiction;
Venue...............................................104
12.09 Counterparts...........................................105
12.10 Headings Descriptive...................................105
12.11 Amendment or Waiver....................................105
12.12 Survival...............................................106
12.13 Domicile of Loans......................................106
12.14 Registry...............................................106
SECTION 13. Guaranty...............................................107
13.01 The Guaranty...........................................107
13.02 Bankruptcy.............................................108
13.03 Nature of Liability....................................108
13.04 Independent Obligation.................................108
13.05 Authorization..........................................109
13.06 Reliance...............................................110
13.07 Subordination..........................................110
13.08 Waiver.................................................110
13.09 Limitation on Enforcement..............................112
13.10 Rights of Contribution.................................112
13.11 Post Closing Actions...................................112
(a) Depository Account Agreement...................112
(b) Mortgage Amendments............................113
(c) Intellectual Property..........................113
(d) Insurance Certificates ........................113
(iv)
6
SCHEDULE I - Banks/Commitments
SCHEDULE II - Existing Letters of Credit
SCHEDULE III - Liabilities
SCHEDULE IV - Reportable Events
SCHEDULE V - Subsidiaries
SCHEDULE VI - Real Property
SCHEDULE VII - Collective Bargaining Agreements
SCHEDULE VIII - Permitted Existing Indebtedness
SCHEDULE IX - Insurance
SCHEDULE X - Permitted Liens
SCHEDULE XI - Existing Investments
EXHIBIT A-1 - Revolving Note
EXHIBIT A-2 - Swingline Note
EXHIBIT B - Letter of Credit Request
EXHIBIT C - Officer's Certificate
EXHIBIT D-1 - Opinion of Milbank, Tweed, Xxxxxx
& XxXxxx
EXHIBIT D-2 - Opinion of White & Case
EXHIBIT E-1 - PXI Pledge Agreement
EXHIBIT E-2 - Borrower Pledge Agreement
EXHIBIT E-3 - Xtra Pledge Agreement
EXHIBIT E-4 - XM Pledge Agreement
EXHIBIT F - Subsidiary Guaranty
EXHIBIT G-1 - Borrower Security Agreement
EXHIBIT G-2 - Subsidiary Security Agreement
EXHIBIT H - Solvency Certificate
EXHIBIT I - Consent Letter
EXHIBIT J-1 - Subordinated Intercompany Real Estate
Note
EXHIBIT J-2 - Subordinated Intercompany Notes
EXHIBIT K - Assignment Agreement
EXHIBIT L - Depositary Account Agreement
EXHIBIT M - Cancelled Subordinated Note
(v)
7
AMENDMENT AND RESTATEMENT dated as of April 29, 1997 to Credit
Agreement, dated as of July 21, 1993, among PUEBLO XTRA INTERNATIONAL, INC., a
Delaware corporation ("PXI"), PUEBLO INTERNATIONAL, INC., a Delaware corporation
(the "Borrower"), XTRA SUPER FOOD CENTERS, INC., a Delaware corporation
("Xtra"), the lending institutions listed from time to time on Schedule I hereto
(each a "Bank" and, collectively, the "Banks"), THE BANK OF NOVA SCOTIA as
Administrative Agent and NATIONSBANK, N.A. (SOUTH) as Syndication Agent. Unless
otherwise defined herein, all capitalized terms used herein and defined in
Section 10 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Borrower, PXI, Xtra and certain financial institutions
are party to a Credit Agreement dated as of July 21, 1993 (as the same has been
amended, modified or supplemented prior to the Restatement Effective Date, the
"Original Credit Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the Original
Credit Agreement as herein provided;
NOW, THEREFORE, the parties hereto agree that the Original Credit
Agreement shall be and hereby is amended and restated in its entirety as
follows, provided if the Restatement Effective Date has not occurred on or prior
to June 30, 1997 this amendment and restatement shall be void and of no further
effect, with the Original Credit Agreement to remain in effect;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (A) Subject to and upon the terms and conditions
herein set forth, each Bank severally agrees to make a loan or loans (each a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower,
which Loans (i) may be incurred by the Borrower at any time and from time to
time on and after the Restatement Effective Date and prior to the Maturity Date,
(ii) except as hereinafter provided, may, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or
8
Eurodollar Loans, provided that all Revolving Loans made by all Banks pursuant
to the same Borrowing shall, unless otherwise specifically provided herein,
consist entirely of Loans of the same Type, (iii) may be repaid and reborrowed
in accordance with the provisions hereof, (iv) shall not exceed in aggregate
principal amount for any Bank at any time outstanding the amount which, when
combined with such Bank's Adjusted Percentage of the sum of (x) the L/C
Outstandings plus (y) the outstanding principal amount of Swingline Loans, in
each case at such time, equals the Revolving Commitment of such Bank at such
time and (v) shall not exceed in aggregate principal amount at any time
outstanding the amount which, when added to the outstanding principal amount of
Swingline Loans and the L/C Outstandings, would equal the sum of (x) the
Adjusted Total Revolving Commitment plus (y) the outstanding principal amount of
Revolving Loans of Defaulting Banks.
(B) Subject to and upon the terms and conditions herein set forth,
Scotiabank, in its individual capacity, agrees to make at any time and from time
to time after the Restatement Effective Date and prior to the Swingline
Termination Date, a loan or loans to the Borrower (each a "Swingline Loan," and
collectively the "Swingline Loans"), which Swingline Loans (i) shall be made and
maintained as Base Rate Loans, (ii) shall have the benefit of the provisions of
Section 1.01(C), (iii) may be repaid and reborrowed in accordance with the
provisions hereof, (iv) shall not exceed in aggregate principal amount at any
time outstanding, when combined with the aggregate principal amount of all
Revolving Loans made by Non-Defaulting Banks then outstanding and all L/C
Outstandings at such time, the Adjusted Total Revolving Commitment then in
effect and (v) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount. Scotiabank will not make a Swingline
Loan after it has received written notice from the Borrower, either Agent or the
Required Banks that a Default or Event of Default exists until such time as
Scotiabank shall have received written notice of (x) rescission of all such
notices from the party or parties originally delivering same or (y) the waiver
of such Default or Event of Default by the Required Banks.
(C) On any Business Day, Scotiabank may, in its sole discretion,
give notice to the Banks (with an information copy to the Borrower, provided
that the failure to give such notice to the Borrower shall in no way affect the
validity and effectiveness of such notice) that its outstanding Swingline Loans
shall be funded with a Borrowing of
-2-
9
Revolving Loans (provided that each such notice shall be deemed to have been
automatically given upon the occurrence of an Event of Default under Section
9.05), in which case a Borrowing of Revolving Loans constituting Base Rate Loans
(each such Borrowing, a "Mandatory Borrowing") shall be made on the immediately
succeeding Business Day by all Banks pro rata based on each Bank's Adjusted
Percentage, and the proceeds thereof shall be applied directly to repay
Scotiabank for such outstanding Swingline Loans. Each Bank hereby irrevocably
agrees to make such Base Rate Loans upon one Business Day's notice pursuant to
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified in writing by Scotiabank
notwithstanding (i) that the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 5 are then satisfied, (iii) whether a Default or
an Event of Default (including an Event of Default under Section 9.05) has
occurred and is continuing, (iv) the date of such Mandatory Borrowing and (v)
any reduction in the Adjusted Total Revolving Commitment or the Total Revolving
Commitment after any such Swingline Loans were made. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code in respect of the Borrower), each Bank
(other than Scotiabank) hereby agrees that it shall forthwith purchase from
Scotiabank (without recourse or warranty) such assignment of the outstanding
Swingline Loans as shall be necessary to cause the Banks to share in such
Swingline Loans ratably based upon their respective Adjusted Percentages,
provided that all interest payable on the Swingline Loans shall be for the
account of Scotiabank until the date the respective assignment is purchased and,
to the extent attributable to the purchased assignment, shall be payable to the
Bank purchasing same from and after such date of purchase.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
of each Borrowing shall not be less than the Minimum Borrowing Amount (except
that Mandatory Borrowings shall be made in the amounts required by Section
1.01(C)). More than one Borrowing may be incurred on any day, provided that at
no time shall there be outstanding more than ten Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) The Revolving Loans to be incurred by
the Borrower on the Restatement Effective Date shall be set forth in a written
notice (or telephonic notice promptly confirmed in writing) delivered by
-3-
10
the Borrower to the Administrative Agent at its Notice Office no later than
12:00 Noon (New York time) on the Business Day immediately prior to the
Restatement Effective Date. Whenever the Borrower desires to incur Revolving
Loans after the Restatement Effective Date, it shall give the Administrative
Agent at its Notice Office, written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Eurodollar Loans prior to 12:00 Noon
(New York time) on the third Business Day preceding the date of the proposed
Borrowing and written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing of Base Rate Loans to be made hereunder prior to
10:00 A.M. (New York time) on the date of the proposed Borrowing. Each of the
foregoing notices (each, together with each notice of a Borrowing of Swingline
Loans, a "Notice of Borrowing") shall be irrevocable and shall specify (i) the
aggregate principal amount of the Revolving Loans to be incurred, (ii) the date
of incurrence (which shall be a Business Day) and (iii) whether the respective
incurrence shall consist of Base Rate Loans or, to the extent otherwise
permitted, Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall promptly give each
Bank written notice (or telephonic notice promptly confirmed in writing) of each
proposed Borrowing, of the proportionate share thereof of each Bank and of the
other matters covered by the Notice of Borrowing.
(b) Whenever the Borrower desires to incur a Swingline Loan
hereunder, it shall give Scotiabank not later than 12:00 Noon (New York time) on
the day such Swingline Loan is to be incurred, written notice or telephonic
notice promptly confirmed in writing of such Swingline Loan. Each such notice
shall be irrevocable and specify in each case (i) the date of incurrence (which
shall be a Business Day) and (ii) the principal amount of the Swingline Loan to
be incurred.
(c) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(C), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.
(d) Without in any way limiting the obligation of the Borrower to
confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice, believed by the
Administrative Agent in good faith to be from an Authorized
-4-
11
Officer of the Borrower as a person entitled to give telephonic notices under
this Agreement on behalf of the Borrower. In each such case the Borrower hereby
waives the right to dispute the Administrative Agent's record of the terms of
any such telephonic notice.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (2:00 P.M.
in the case of Swingline Loans) (New York time) on the date specified in each
Notice of Borrowing, each Bank will make available its pro rata share of each
Borrowing requested to be made on such date (or, in the case of Swingline Loans,
Scotiabank shall make available the full amount thereof) in the manner provided
below. Except as otherwise agreed among the Borrower and the Agents with respect
to the disbursement of funds on the Restatement Effective Date, all amounts
shall be made available to the Administrative Agent in U.S. dollars and
immediately available funds at the Payment Office and the Administrative Agent
promptly will make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received. Unless the Administrative Agent shall have been notified by any
Bank prior to the date of Borrowing that such Bank does not intend to make
available to the Administrative Agent its portion of the Borrowing or Borrowings
to be made on such date, the Administrative Agent may assume that such Bank has
made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Bank and the Administrative
Agent has made available same to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover from such Bank
or the Borrower, as the case may be, interest on such corresponding amount in
respect of each day from the date such corresponding amount was made available
by the Administrative Agent to the Borrower to the date such corresponding
amount is recovered by the Administrative Agent, at a rate per annum equal to
(x) if to be paid by such Bank, the customary rate set by the Administrative
Agent for the correction of errors among banks for each day during the period
consisting of the first three
-5-
12
Business Days following such date of availability and thereafter at the Base
Rate or (y) if to be paid by the Borrower, the then applicable rate of interest,
calculated in accordance with Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder to make Loans or to prejudice
any rights which any Borrower may have against any Bank as a result of any
default by such Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made to it by each Bank shall be evidenced (i) if
Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit A-1, with blanks appropriately
completed in conformity herewith (each a "Revolving Note" and collectively the
"Revolving Notes"), and (ii) if Swingline Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit A-2
with blanks appropriately completed in conformity herewith (the "Swingline
Note").
(b) The Revolving Note issued to each Bank shall (i) be payable to
the order of such Bank and be dated the Restatement Effective Date, (ii) be in a
stated principal amount equal to the Revolving Commitment of such Bank and be
payable in the principal amount of the Revolving Loans evidenced thereby, (iii)
mature on the Maturity Date, (iv) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (v) be subject to mandatory repayment as
provided in Section 4.02 and (vi) be entitled to the benefits of this Agreement
and the other Credit Documents.
(c) The Swingline Note shall (i) be payable to the order of
Scotiabank and be dated the Restatement Effective Date, (ii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
principal amount of the Swingline Loans evidenced thereby, (iii) mature on the
Swingline Termination Date, (iv) bear interest as provided in Section 1.08(a)
and (v) be entitled to the benefits of this Agreement and the other Credit
Documents.
(d) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding
-6-
13
principal amount of Loans evidenced thereby and the last date or dates on which
interest has been paid in respect of the Loans evidenced thereby. Failure to
make any such notation shall not affect the Borrower's obligations in respect of
such Loans, or affect the validity of such transfer by any Bank of such Note.
1.06 Conversions. The Borrower shall have the option to convert on
any Business Day (or as otherwise, and to the extent, agreed to by the Agents),
all or a portion at least equal to the applicable Minimum Borrowing Amount of
the outstanding principal amount of the Revolving Loans into a Borrowing or
Borrowings of another Type of Loan provided that (i) no partial conversion of a
Borrowing of Eurodollar Loans shall reduce the outstanding principal amount of
the Loans pursuant to such Borrowing to less than the Minimum Borrowing Amount
applicable thereto, (ii) Loans may only be converted into Eurodollar Loans if no
Default or Event of Default is in existence on the date of the conversion and
(iii) Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be
limited in number as provided in Section 1.02. Each such conversion shall be
effected by the Borrower giving the Administrative Agent at its Notice Office,
prior to 12:00 Noon (New York time), at least three Business Days (or one
Business Day in the case of a conversion into Base Rate Loans) prior written
notice (or telephonic notice promptly confirmed in writing) (each a "Notice of
Conversion") specifying the Loans to be so converted, the Type of Loans to be
converted into and, if to be converted into a Borrowing of Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Bank prompt notice of any such proposed conversion affecting any
of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans shall be
made from the Banks pro rata on the basis of their Revolving Commitments,
provided that all Mandatory Borrowings shall be made from the Banks pro rata on
the basis of their Adjusted Percentages. It is understood that no Bank shall be
responsible for any default by any other Bank in its obligation to make or
support Loans hereunder and that each Bank shall be obligated to make or support
the Loans provided to be made or supported by it hereunder, regardless of the
failure of any other Bank to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate
Loan shall bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration
-7-
14
or otherwise) at a rate per annum which shall at all times be the Base Rate plus
the Base Rate Margin.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
relevant Eurodollar Rate plus the Eurodollar Margin.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum equal
to the Base Rate in effect from time to time plus the sum of (i) 2% and (ii) the
Base Rate Margin, provided that no Loan shall bear interest after maturity
(whether by acceleration or otherwise) at a rate per annum less than 2% plus the
rate of interest applicable thereto at maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable in arrears (i) in respect of each Base Rate Loan, quarterly on the last
Business Day of each calendar quarter, (ii) in respect of each Eurodollar Loan,
on the last day of each Interest Period applicable thereto and, in the case of
an Interest Period of six months on the date occurring three months, after the
first day of such Interest Period and (iii) in respect of each Loan, on any
prepayment (on the amount prepaid), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Borrower and the Banks thereof.
1.09 Interest Periods. At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrow-
-8-
15
ing, which Interest Period shall, at the option of such Borrower, be a one, two,
three or six month period. Notwithstanding anything to the contrary contained
above:
(i) the initial Interest Period shall commence on the date of such
Borrowing (including the date of any conversion from a Borrowing of
another Type of Loan) and each Interest Period occurring thereafter in
respect of such Borrowing shall commence on the day on which the next
preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day
of such calendar month;
(iii) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) no Interest Period may be elected if it would extend beyond the
Maturity Date; and
(v) no Interest Period may be elected at any time when a Default or
Event of Default is then in existence.
If upon the expiration of any Interest Period, the Borrower has failed to elect
a new Interest Period to be applicable to the respective Borrowing of Eurodollar
Loans as provided above, or is unable to elect a new Interest Period as a result
of clause (v) above, the Borrower shall be deemed to have elected to convert
such Borrowing into a Borrowing of Base Rate Loans effective as of the
expiration date of such Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Bank shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
-9-
16
(i) on any date for determining the Eurodollar Rate for any Interest
Period that, by reason of any changes arising after the Restatement
Effective Date affecting the London interbank Eurodollar market, adequate
and fair means do not exist for ascertaining generally the applicable
interest rate on the basis provided for in the definition of Eurodollar
Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate of taxes or similar charges) because of (x) any change since
the Restatement Effective Date in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the force
of law) or in the interpretation or administration thereof and including
the introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to, a
change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Euro-dollar Rate) and/or (y) other circumstances
adversely affecting the London interbank Eurodollar market or the position
of such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Bank in good faith with any
law, governmental rule, regulation, guideline or order (or would conflict
with any such governmental rule, regulation, guideline or order not having
the force of law but with which such Bank customarily complies even though
the failure to comply therewith would not be unlawful), or has become
impracticable as a result of a contingency occurring after the Restatement
Effective Date which adversely affects the London interbank Eurodollar
market;
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall (x) on such date and (y) within three Business Days
of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and (except in the case of clause (i)) to
the Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the
case of clause (i) above, Eurodollar Loans shall no longer be
-10-
17
available until such time as the Administrative Agent notifies the Borrower and
the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans, which have
not yet been incurred shall be deemed rescinded, (y) in the case of clause (ii)
above, the Borrower shall pay to such Bank, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased costs
or reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Bank, showing in reasonable detail the basis for
the calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding upon all parties hereto) and
(z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii),
shall) either (i) if the affected Eurodollar Loan is then being made pursuant to
a Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that such
Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii) or (ii)
if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' notice to the Administrative Agent, require the affected Bank to
convert each such Eurodollar Loan into a Loan of another Type, provided that if
more than one Bank is affected at any time, then all affected Banks must be
treated the same pursuant to this Section 1.10(b).
(c) If any Bank determines at any time that the adoption or
effectiveness of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or actual
compliance by such Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of in-
-11-
18
creasing the costs to such Bank to a level above that, or reducing the rate of
return on such Bank's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that, which such Bank could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy), then from
time to time, upon written demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such reduction. Each Bank, in
determining additional amounts owing under this Section 1.10(c) will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Bank's determination of such additional
amounts so performed shall, absent manifest error, be final and conclusive and
binding on all parties hereto. Each Bank, upon determining that any additional
amounts will be payable pursuant to this Section 1.10(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth the basis
of the calculation of such additional amounts, although the failure to give any
such notice shall not release or diminish any of the Borrower's obligations to
pay additional amounts pursuant to this Section 1.10(c) upon receipt of such
notice.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans to the Borrower) which such Bank may sustain: (i) if
for any reason (other than a default by such Bank or the Administrative Agent) a
Borrowing of Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the
Borrower or deemed withdrawn pursuant to Section 1.10); (ii) if, for any reason,
any repayment or conversion of any of its Eurodollar Loans occurs on a date
which is not the last day of an Interest Period applicable thereto; (iii) if,
for any reason, any prepayment of any of its Eurodollar Loans is not made on any
date specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Eurodollar
Loans when required by the terms of this Agreement or (y) an election made
pursuant to Section 1.10(b). Calculation of all amounts payable to a Bank with
respect to Eurodollar Loans under this Section 1.11 shall be made as though that
Bank had actually
-12-
19
funded its relevant Eurodollar Loan through the purchase of a Eurodollar deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of that
Loan, having a maturity comparable to the relevant Interest Period and through
the transfer of such Eurodollar deposit from an offshore office of that Bank to
a domestic office of that Bank in the United States of America (or if such Bank
has no offshore office, from an offshore office of the Administrative Agent to
the domestic office of the Administrative Agent); provided, however, that each
Bank may fund each of its Eurodollar Loans in any manner it sees fit and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Bank, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Bank) to designate another lending office of such Bank for any Loans or
Letters of Credit affected by such event, provided that such designation is made
on such terms that such Bank or its respective lending offices suffer no
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section 1.12 shall affect or postpone any of the obligations of
the Borrower or the right of any Bank provided in Section 1.10, 2.05 or 4.04.
1.13 Notice of Certain Costs. Notwithstanding anything in this
Agreement to the contrary, to the extent any notice required by Section 1.10 or
2.05 is given by any Bank more than 100 days after the occurrence of the event
giving rise to the additional cost, reduction in amounts or other additional
amounts of the type described in such Section, such Bank shall not be entitled
to compensation under Section 1.10 or 2.05, as the case may be, for any such
amounts incurred or accruing prior to the giving of such notice to the Borrower
or Borrowers.
1.14 Replacement of Banks. (a) If (x) any Bank becomes a Defaulting
Bank or otherwise defaults in its obligations to make Revolving Loans or fund
Unpaid Drawings or (y) any Bank is owed increased costs under Section 1.10(a)
(ii) or (iii), 1.10(c), 2.05 or 4.04, the Borrower shall have the right, in any
such case, if no Event of Default exists and, in the case of clause (y), the
affected Bank has not taken actions to eliminate such increased costs, to
replace
-13-
20
such Bank (a "Replaced Bank") as a Bank hereunder, with one or more existing
Banks or Eligible Assignees reasonably satisfactory to the Administrative Agent
(collectively, the "Replacement Bank").
(b) In the case of a replacement of a Bank pursuant to this Section
1.14, (I) the Replacement Bank shall enter into one or more Assignment
Agreements as provided for in Section 12.04(b) (and with all fees payable
pursuant to said Section 12.04(b) to be paid by the Replacement Bank) pursuant
to which the Replacement Bank shall acquire all of the Revolving Commitment and
outstanding Revolving Loans of, and the existing participations, if any, in L/C
Outstandings by, the Replaced Bank and, in connection therewith, shall pay to
(x) the Replaced Bank an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Revolving Loans of
the Replaced Bank, (B) an amount, if any, equal to all Unpaid Drawings that have
been funded by (and not reimbursed to) such Replaced Bank, together with all
then unpaid interest with respect thereto at such time and (C) an amount equal
to all accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant
to Section 3.01 and (y) Scotiabank an amount, if any, equal to such Replaced
Bank's Adjusted Percentage (prior to any adjustment thereto described in clause
(y) of the immediately succeeding sentence) of any Unpaid Drawing (which at such
time remains an Unpaid Drawing) to the extent such amount was not theretofore
funded by such Replaced Bank, and (II) all obligations of the Borrower owing to
the Replaced Bank (other than those specifically described in clause (I) above
in respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full by the Borrower to such Replaced Bank
concurrently with such replacement. Upon the execution of the respective
Assignment Agreements, the payment of amounts referred to in clauses (I) and
(II) above and, if so requested by the Replacement Bank, delivery of a Revolving
Note executed by the Borrower, (x) the Replacement Bank shall become a Bank
hereunder, the Replaced Bank shall cease to constitute a Bank hereunder, except
with respect to indemnification provisions under this Agreement, which shall
survive as to such Replaced Bank and (y) the Adjusted Percentages of the Banks
shall be automatically adjusted at such time to give effect to such replacement.
SECTION 2. Letters of Credit.
-14-
21
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request the Letter of Credit
Issuer at any time and from time to time on or after the Restatement Effective
Date and prior to the Maturity Date to issue, for the account of the Borrower
and in support of commercial and/or trade obligations incurred in the ordinary
course of business, insurance obligations, workers compensation, bonding
obligations in respect of taxes, licenses and similar requirements, support of
the Borrower's AFICA obligations and other obligations (including such other
obligations as specified in the respective Letter of Credit Request and
consented to by the Letter of Credit Issuer, such consent not to be unreasonably
withheld, it being understood that the Letter of Credit Issuer will notify the
Borrower of its withholding any such consent within 24 hours of its receipt of
the respective Letter of Credit Request) of the Borrower, Xtra and/or other
wholly-owned Subsidiaries of PXI, and subject to and upon the terms and
conditions herein set forth the Letter of Credit Issuer agrees to issue from
time to time, irrevocable letters of credit so requested by the Borrower in such
form as may be approved by the Letter of Credit Issuer in its sole discretion
(not to be unreasonably withheld) (each such letter of credit, together with
each Existing Letter of Credit, a "Letter of Credit" and collectively, the
"Letters of Credit").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the L/C Outstandings at such
time would exceed either (x) $30,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans made by Non-Defaulting Banks and all
Swingline Loans then outstanding, the Adjusted Total Revolving Commitment at
such time (after giving effect to any reductions to the Adjusted Total Revolving
Commitment on such date); (ii) each Letter of Credit shall have an expiry date
occurring not later than one year after such Letter of Credit's date of issuance
(subject to extension provisions acceptable to the Administrative Agent and the
Letter of Credit Issuer, which acceptance is not to be unreasonably withheld, or
except as may be otherwise agreed by the Administrative Agent and the Letter of
Credit Issuer with respect to Letters of Credit issued in respect of the AFICA
Bonds) and in no event occurring later than the third Business Day preceding the
Maturity Date; (iii) each Letter of Credit shall be denominated in U.S. dollars;
(iv) no Letter of Credit shall have a Stated Amount of less than $50,000 unless
otherwise agreed to by the Letter of Credit Issuer; and (v) no Letter of Credit
shall be issued by the
-15-
22
Letter of Credit Issuer after it has received a written notice from the
Borrower, either Agent or the Required Banks stating that a Default or Event of
Default has occurred and is continuing until such time as the Letter of Credit
Issuer shall have received a written notice of (i) rescission of such notice
from the party or parties originally delivering such notice or (ii) the waiver
of such Default or Event of Default by the Required Banks.
(c) Schedule II hereto contains a description of all letters of
credit issued under the Original Credit Agreement that are to be outstanding on,
and to continue in effect after, the Restatement Effective Date. Each such
letter of credit shall constitute a "Letter of Credit" for all purposes of this
Agreement, issued, for purposes of Section 2.02(a) on the Restatement Effective
Date, and the Borrower, the Letter of Credit Issuer, the Agents and the Banks
hereby agree that, from and after such date, the terms of this Agreement shall
apply to such Letters of Credit, superseding the Original Credit Agreement.
2.02 Letter of Credit Participations. (a) Immediately upon the
issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter of
Credit Issuer shall be deemed to have sold and transferred to each other Bank
(each such other Bank, in its capacity under this Section 2.02, a "Participating
Bank"), and each such Participating Bank shall be deemed irrevocably and
unconditionally to have purchased and received from the Letter of Credit Issuer,
without recourse or warranty, an undivided interest and participation, to the
extent of such Participating Bank's Adjusted Percentage, in such Letter of
Credit, each substitute letter of credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto (although L/C Fees will be paid
directly to the Administrative Agent for the ratable account of the
Participating Banks as provided in Section 3.01(b) and the Participating Banks
shall have no right to receive any portion of any Facing Fees). Upon any change
in the Revolving Commitments of the Banks pursuant to Section 1.14 or 12.04 or
upon the occurrence of a Bank Default, it is hereby agreed that, with respect to
all outstanding Letters of Credit and Unpaid Drawings, there shall be an
automatic adjustment to the participations pursuant to this Section 2.02 to
reflect the new Adjusted Percentages of the assignor and assignee Bank or of all
Non-Defaulting Banks, as the case may be.
-16-
23
(b) In determining whether to pay under any Letter of Credit, the
Letter of Credit Issuer issuing same shall have no obligation relative to any
other Bank other than to confirm that any documents required to be delivered
under such Letter of Credit have been delivered and that they appear to comply
on their face with the requirements of such Letter of Credit. Any action taken
or omitted to be taken by the Letter of Credit Issuer under or in connection
with any Letter of Credit issued by it if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for the Letter of
Credit Issuer any resulting liability.
(c) In the event that the Letter of Credit Issuer makes any payment
under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to the Letter of Credit Issuer pursuant to
Section 2.04(a), the Letter of Credit Issuer shall promptly notify the
Administrative Agent and after receipt of such notice, the Administrative Agent
will notify each Participating Bank of such failure, and each Participating Bank
shall promptly and unconditionally pay to the Administrative Agent for the
account of the Letter of Credit Issuer, the amount of such Participating Bank's
Adjusted Percentage of such unreimbursed payment in lawful money of the United
States of America and in same day funds, together with interest at the customary
rate set by the Letter of Credit Issuer for the correction of errors among banks
for each day during the period consisting of the first three days following such
date of notice and thereafter at the Base Rate; provided, however, that no
Participating Bank shall be obligated to pay to the Administrative Agent for the
account of the Letter of Credit Issuer its Adjusted Percentage of such
unreimbursed amount for any wrongful payment made by the Letter of Credit Issuer
under a Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Letter of Credit Issuer. If
the Letter of Credit Issuer so notifies, prior to 11:00 A.M. (New York time) on
any Business Day, any Participating Bank required to fund a payment under a
Letter of Credit, such Participating Bank shall make available to the
Administrative Agent for the account of the Letter of Credit Issuer such
Participating Bank's Adjusted Percentage of the amount of such payment on such
Business Day in same day funds. If and to the extent such Participating Bank
shall not have so made its Adjusted Percentage of the amount of such payment
available to the Administrative Agent for the account of the Letter of Credit
Issuer, such Participating Bank agrees to pay to the Administrative Agent for
the account of the Letter of Credit Issuer, forthwith on demand
-17-
24
such amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Administrative Agent for the account of such
Letter of Credit Issuer at the overnight Federal Funds Rate. The failure of any
Participating Bank to make available to the Administrative Agent for the account
of the Letter of Credit Issuer its Adjusted Percentage of any payment under any
Letter of Credit shall not relieve any other Participating Bank of its
obligation hereunder to make available to the Administrative Agent for the
account of the Letter of Credit Issuer its Adjusted Percentage of any payment
under any Letter of Credit on the date required, as specified above, but no
Participating Bank shall be responsible for the failure of any other
Participating Bank to make available to the Administrative Agent, such other
Participating Bank's Adjusted Percentage of any such payment.
(d) Whenever the Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of the Letter of Credit Issuer any payments from the Participating
Banks pursuant to clause (c) above, the Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participating Bank which has paid its Adjusted Percentage thereof, in lawful
money of the United States of America and in same day funds, an amount equal to
such Participating Bank's Adjusted Percentage of the principal amount of such
reimbursement and of interest reimbursed thereon accruing from and after the
date of the purchase of the respective participations.
(e) The obligations of the Participating Banks to make payments to
the Administrative Agent for the account of the Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right which
the Borrower may have at any time against a beneficiary named in a Letter
of Credit, any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), any Agent, the
-18-
25
Letter of Credit Issuer, any Bank, or other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying transaction
between the Borrower and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.03 Letter of Credit Requests; Notices of Issuance. (a) Whenever it
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the Letter of Credit Issuer written notice (including
by way of telecopier) thereof in substantially the form of Exhibit B hereto
prior to 1:00 P.M. (New York time) at least three Business Days (or such shorter
period as may be acceptable to the Letter of Credit Issuer) prior to the
proposed date (which shall be a Business Day) of issuance (each a "Letter of
Credit Request"), which Letter of Credit Request shall include an application
for the Letter of Credit and any other documents that such Letter of Credit
Issuer customarily requires in connection therewith. The Administrative Agent
shall promptly notify each Bank of each Letter of Credit Request.
(b) The delivery of each Letter of Credit Request shall be deemed a
representation and warranty by the Borrower that the Letter of Credit may be
issued in accordance with and will not violate the requirements of Section
2.01(b). The Letter of Credit Issuer shall, on the date of each issuance of a
Letter of Credit by it, give the Administrative Agent, each Bank and the
Borrower written notice of the issuance of such Letter of Credit, accompanied by
a copy to the Administrative Agent of the Letter of Credit or Letters of Credit
issued by it.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse the Letter of
-19-
26
Credit Issuer, by making payment to the Administrative Agent in U.S. dollars in
immediately available funds at the Payment Office, for any payment or
disbursement made by the Letter of Credit Issuer under any Letter of Credit
issued by it (each such amount so paid or disbursed until reimbursed, an "Unpaid
Drawing") immediately after, and in any event on the date of, notice from the
Letter of Credit Issuer of such payment or disbursement with interest on the
amount so paid or disbursed by the Letter of Credit Issuer, to the extent not
reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but not including
the date the Letter of Credit Issuer is reimbursed therefor at a rate per annum
which shall be the Base Rate Margin plus the Base Rate as in effect from time to
time (plus an additional 2% per annum if not reimbursed by the third Business
Day after the date of notice of such payment or disbursement), such interest to
be payable on demand.
(b) The Borrower's obligation under this Section 2.04 to reimburse
the Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Letter of Credit Issuer, the
Administrative Agent, any Agent or any Bank, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such drawing; provided,
however, that the Borrower shall not be obligated to reimburse the Letter of
Credit Issuer for any wrongful payment made by the Letter of Credit Issuer under
a Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Letter of Credit Issuer.
2.05 Increased Costs. If at any time after the Restatement Effective
Date, the adoption or effectiveness of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or actual compliance by the
Letter of Credit Issuer or any Participating Bank with any request or directive
(whether or not having the force of law) by any such authority, central bank or
comparable agency shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against
-20-
27
Letters of Credit issued by the Letter of Credit Issuer or such Participating
Bank's participation therein, or (ii) shall impose on the Letter of Credit
Issuer or any Participating Bank any other conditions affecting this Agreement,
any Letter of Credit or such Participating Bank's participation therein; and the
result of any of the foregoing is to increase the cost to the Letter of Credit
Issuer or such Participating Bank of issuing, maintaining or participating in
any Letter of Credit, or to reduce the amount of any sum received or receivable
by the Letter of Credit Issuer or such Participating Bank hereunder (other than
any increased cost or reduction in the amount received or receivable resulting
from the imposition of or a change in the rate of taxes or similar charges),
then, upon demand to the Borrower by the Letter of Credit Issuer or such
Participating Bank (a copy of which notice shall be sent by the Letter of Credit
Issuer or such Participating Bank to the Administrative Agent), the Borrower
shall pay to the Letter of Credit Issuer or such Participating Bank such
additional amount or amounts as will compensate the Letter of Credit Issuer or
such Participating Bank for such increased cost or reduction. Each of the Letter
of Credit Issuer and each Participating Bank, in determining additional amounts
owing under this Section, will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable, provided that such
Person's determination of such additional amounts so performed shall, absent
manifest error, be final and conclusive and binding on all parties hereto. A
certificate shall be submitted to the Borrower by the Letter of Credit Issuer or
such Participating Bank, as the case may be (a copy of which certificate shall
be sent by the Letter of Credit Issuer or such Participating Bank to the
Administrative Agent) setting forth the basis for the determination of such
additional amount or amounts necessary to compensate the Letter of Credit Issuer
or such Participating Bank as aforesaid, although the failure to deliver any
such certificate shall not release or diminish any of the Borrower's obligations
to pay additional amounts pursuant to this Section 2.05 upon receipt of such
certificate.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower agrees to pay to the Administrative
Agent a commitment commission ("Commitment Commission") for the account of each
Non-Defaulting Bank for the period from and including the Restatement Effective
Date to but not including the date the Total Revolving Commitment has been
terminated, computed at a rate for each day equal to
-21-
28
the then CC Percentage on the daily average of such Bank's Unutilized Revolving
Commitment. Such Commitment Commission shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter and on the date upon
which the Total Revolving Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of the Non-Defaulting Banks pro rata on the basis of their respective
Revolving Commitments, a fee in respect of each Letter of Credit (the "L/C Fee")
in an amount equal to the applicable Eurodollar Margin per annum on the average
daily Stated Amount of such Letter of Credit. Accrued L/C Fees shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
and on the date upon which the Total Revolving Commitment shall be terminated.
(c) The Borrower agrees to pay to the Administrative Agent for the
account of the Letter of Credit Issuer a fee in respect of each Letter of Credit
issued by it (the "Facing Fee") computed at the rate of 1/8 of 1% per annum on
the average daily Stated Amount of such Letter of Credit. Accrued Facing Fees
shall be due and payable quarterly in arrears on the last Business Day of each
calendar quarter and on the date upon which the Total Revolving Commitment shall
be terminated.
(d) The Borrower hereby agrees to pay to any Letter of Credit Issuer
upon each issuance of, drawing under and/or amendment of, a Letter of Credit
such amount as shall at the time of such issuance, drawing and/or amendment
equal the administrative charge which such Letter of Credit Issuer is
customarily charging at such time for issuances of, drawings under and/or
amendments of letters of credit issued by it other than with respect to standby
letters of credit issued by such Letter of Credit Issuer.
(e) The Borrower shall pay to the Administrative Agent (x) on the
Restatement Effective Date for its own account and/or for distribution to the
Agents and/or the Banks such fees as heretofore agreed by such Borrower and the
Agents and (y) for the account of the Agents, such other fees as may be agreed
to from time to time between the Borrower and the Agents, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
-22-
29
3.02 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, without premium or penalty, to terminate the Total
Unutilized Revolving Commitment, in part or in whole, provided that (x) any such
termination shall apply to proportionately and permanently reduce the Revolving
Commitment of each of the Banks and (y) partial reduction pursuant to this
sentence shall be in the amount of at least $2,000,000.
3.03 Mandatory Reductions of Commitments, etc. (a) The Total
Revolving Commitment shall terminate on the Maturity Date.
(b) The Total Revolving Commitment shall be reduced:
(I) On the date that is ten Business Days after the date of receipt
by PXI or any of its Subsidiaries of the Cash Proceeds of any Asset Sale (other
than the Hialeah & Dadeland Transfer), by an amount equal to the Net Cash
Proceeds of such Asset Sale, provided the Total Revolving Commitment shall not
be so reduced as a result of any Asset Sale to the extent the Borrower elects,
as hereinafter provided, to cause such Net Cash Proceeds to be reinvested in
Reinvestment Assets (a "Reinvestment Election"). The Borrower may exercise its
Reinvestment Election with respect to an Asset Sale provided that (x) no Default
or Event of Default exists at the time of such Asset Sale and (y) the Borrower
delivers a Reinvestment Notice to the Administrative Agent no later than thirty
days after the end of the second and fourth fiscal quarters of each fiscal year
with respect to the Asset Sales occurring during the previous two or four fiscal
quarters respectively, with such Reinvestment Election being effective with
respect to the Net Cash Proceeds of such Asset Sales equal to the respective
Reinvestment Amounts specified in such Reinvestment Notice;
(II) On the date of the receipt by PXI or any of its Subsidiaries of
the proceeds of any incurrence of Indebtedness (other than Indebtedness
permitted by Section 8.03 as such Section is in effect on the Restatement
Effective Date), by an amount equal to the Net Debt Issuance Proceeds of such
incurrence;
-23-
30
(III) On each date that is five Business Days after the date of the
receipt by PXI of proceeds from the issuance of equity, by an amount equal to
60% of the Net Equity Issuance Proceeds of any such issuance; and
(IV) (x) On the date of delivery of any Reinvestment Notice with
respect to an Asset Sale, by an amount equal to the difference between the Net
Cash Proceeds of such Asset Sale and the Reinvestment Amount specified in such
Reinvestment Notice with respect to such Asset Sale and (y) on the Reinvestment
Reduction Date with respect to an Asset Sale, by an amount equal to the
Reinvestment Reduction Amount, if any, for such Asset Sale.
(c) Each reduction of the Total Revolving Commitment pursuant to
this Section 3.03 shall apply proportionately to the Revolving Commitment of
each Bank.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right to
prepay Loans owing by it in whole or in part, without penalty or fee except as
otherwise provided in this Agreement, from time to time on the following terms
and conditions: (i) the Borrower shall give the Administrative Agent at the
Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay Loans, whether such Loans are Revolving Loans
or Swingline Loans, the amount of such prepayment and (in the case of Eurodollar
Loans) the specific Borrowing(s) pursuant to which made, which notice shall be
given by the Borrower at least two Business Days prior to (or in the case of
Swingline Loans prior to 12:00 Noon (New York Time) on) the date of such
pre-payment, which notice shall promptly be transmitted by the Administrative
Agent to each of the Banks (except in respect of Swingline Loans); (ii) each
partial prepayment of any Borrowing shall be in an aggregate principal amount of
at least $2,000,000 (or, in respect of a partial prepayment of any Borrowing of
Swingline Loans, in such lesser principal amount as may be satisfactory to
Scotiabank), provided that no partial prepayment of Eurodollar Loans shall
reduce the aggregate principal amount of Eurodollar Loans outstanding pursuant
to a Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto; and (iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans provided that at the
Borrower's election no portion of any voluntary prepayment shall be applied to
the Revolving Loans of a Defaulting Bank.
-24-
31
4.02 Mandatory Prepayments.
(A) Requirements:
(a) If on any date the sum of the aggregate outstanding principal
amount of Revolving Loans made by Non-Defaulting Banks and Swingline Loans and
the aggregate amount of L/C Outstandings exceeds the Adjusted Total Revolving
Commitment as then in effect, the Borrower shall repay on such date the
principal of Swingline Loans (and, after Swingline Loans have been paid in full,
Revolving Loans of Non-Defaulting Banks) in an aggregate amount equal to such
excess. If, after giving effect to the prepayment of all outstanding Swingline
Loans and Revolving Loans of Non-Defaulting Banks, the aggregate amount of L/C
Outstandings exceeds the Adjusted Total Revolving Commitment then in effect, the
Borrower shall pay to the Administrative Agent an amount in cash and/or Cash
Equivalents equal to such excess and the Administrative Agent shall hold such
payment as security for the obligations of the Borrower hereunder pursuant to a
cash collateral agreement to be entered into in form and substance satisfactory
to the Administrative Agent (which shall permit certain investments in Cash
Equivalents, until the proceeds are applied to the Obligations).
(b) If on any date the outstanding principal amount of Revolving
Loans made by a Defaulting Bank exceeds the Revolving Commitment of such
Defaulting Bank, the Borrower shall repay the Revolving Loans of such Defaulting
Bank in an amount equal to such excess.
(c) On the date of any equity contribution to the Borrower by PXI in
an amount equal to the principal amount of any PXI Subordinated Notes (which
equity contribution PXI agrees to make upon its receipt of the proceeds of any
PXI Subordinated Notes), the Borrower shall apply the proceeds of such equity
contribution to reduce the principal amount of then outstanding Revolving Loans
to the extent thereof (but such prepayment shall not reduce the Revolving
Commitment).
(B) Application:
(a) With respect to each repayment of Loans required by Section
4.02(A), the Borrower may designate the specific Borrowing(s) to be repaid,
provided that (i) each repayment of any Loans made pursuant to a Borrowing shall
be applied pro rata among such Loans; (ii) if any repayment of Eurodollar Loans
made pursuant to a single Borrowing shall reduce the outstanding Loans made
pursuant to such Borrowing
-25-
32
to an amount less than the Minimum Borrowing Amount for such Eurodollar Loans,
such Borrowing shall be immediately converted into Base Rate Loans; and (iii)
notwithstanding the provisions of the preceding clause (i), no repayment of
Revolving Loans pursuant to Section 4.02(A)(a) shall be applied to the Revolving
Loans of a Defaulting Bank. In the absence of a designation by any Borrower as
described in the preceding sentence, the Administrative Agent shall, subject to
the above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 1.11.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable account of the Banks entitled thereto, not
later than 1:00 P.M. (New York time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
at the Payment Office. Any payments under this Agreement which are made later
than 1:00 P.M. (New York time) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder,
under any Note or under any other Credit Document will be made without setoff,
counterclaim or other defense. All such payments will be made free and clear of,
and without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now or
hereafter imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein (but excluding, except as provided below, any tax
imposed on or measured by the net income of a Bank pursuant to the laws of the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Bank is located) and all interest, penalties or similar
liabilities with respect thereto (collectively, "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes, and
such additional amounts as may be necessary so that every payment of all
-26-
33
amounts due from such Borrower hereunder, under any Note or under any other
Credit Document, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note. The
Borrower shall also reimburse each Bank, upon the written request of such Bank,
for taxes imposed on or measured by the net income of such Bank pursuant to the
laws of the jurisdiction in which the principal office or applicable lending
office of such Bank is located or of any political subdivision or taxing
authority of any such jurisdiction as such Bank shall determine are payable by
such Bank in respect of Taxes paid to or on behalf of such Bank pursuant to this
or the preceding sentence by the Borrower. The Borrower will furnish to the
Administrative Agent within five days after the date the payment of any Taxes,
or any withholding or deduction on account thereof, is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by such
Borrower. The Borrower will indemnify and hold harmless the Administrative Agent
and each Bank, and reimburse the Administrative Agent or such Bank upon its
written request, for the amount of any Taxes so levied or imposed and paid or
withheld by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Restatement Effective Date, or in the case of a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.14 (unless
the respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement, under any Note and under
any Credit Document, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit C (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement, under
any Note and under any Credit Document. In addition, each Bank agrees that from
-27-
34
time to time after the Restatement Effective Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement, any Note and under any Credit
Document, or it shall immediately notify the Borrower and the Administrative
Agent of its inability to deliver any such Form or Certificate, in which case
such Bank shall not be required to deliver any such Form or Certificate pursuant
to this Section 4.04(b). Notwithstanding anything to the contrary contained in
Section 4.04(a), but subject to the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be
made to a Bank in respect of income or similar taxes imposed by the United
States if (I) such Bank has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish a
complete exemption from withholding of such taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
4.04 and except as set forth in Section 12.04(a), the Borrower agrees to pay any
additional amounts and to indemnify each Bank in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any Taxes deducted or withheld by it as
described in the immediately preceding sentence as a result of any changes after
the Restatement Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of such Taxes.
-28-
35
SECTION 5. Conditions Precedent.
5.01 Conditions Precedent to Restatement Effective Date. This
Agreement shall become effective on the date (the "Restatement Effective Date")
when each of the following conditions are first satisfied:
(a) Effectiveness; Notes. On or prior to the Restatement Effective
Date (i) the Borrower and each of the Banks shall have signed a copy of this
Agreement (whether the same or different copies) and shall have delivered the
same to the Administrative Agent at its Notice Office or, in the case of the
Banks, shall have given to the Administrative Agent telephonic (confirmed in
writing), written, telex or facsimile transmitted notice (actually received) at
its Notice Office that the same has been signed and mailed to it and (ii) there
shall have been delivered to the Administrative Agent for the account of each
Bank the appropriate Note or Notes executed by the Borrower, in each case, in
the amount, maturity and as otherwise provided herein.
(b) Opinions of Counsel. On the Restatement Effective Date, the
Administrative Agent shall have received opinions, addressed to the Agents and
each of the Banks and dated the Restatement Effective Date, from (i) Milbank,
Tweed, Xxxxxx & XxXxxx, counsel to the Credit Parties in the form of Exhibit D-1
hereto, which opinion shall cover such other matters incident to the
transactions contemplated herein as the Agents may reasonably request, (ii)
Fiddler, Xxxxxxxx & Xxxxxxxxx, which opinion shall cover enforceability,
validity and binding effect of certain Security Documents, the perfection and
priority of the security interests granted pursuant to certain Security
Documents, the applicability of Puerto Rican withholding taxes to the
transactions contemplated herein and such other matters incident to the
transactions contemplated herein or therein, as the Agents may reasonably
request and shall be in form and substance satisfactory to the Agents and (iii)
White & Case, special counsel to the Banks, in the form of Exhibit D-2 hereto.
(c) Corporate Proceedings. (i) On the Restatement Effective Date,
the Agents shall have received from each Credit Party a certificate, dated the
Reinstatement Effective Date, signed by an Authorized Officer of each Credit
Party in the form of Exhibit C hereto with appropriate insertions and deletions,
together with (x) copies of the articles of
-29-
36
incorporation and the by-laws (or other organizational documents) of each Credit
Party, (y) the resolutions of each Credit Party which shall be satisfactory to
the Agents and (z) a statement that all of the applicable conditions set forth
in Sections 5.01(g), (m), (n) and (o) and 5.02 exist as of such date.
(ii) On the Restatement Effective Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be satisfactory in form and substance to the Agents and the Agents shall have
received all information and copies of all certificates and any other records of
corporate proceedings and governmental approvals, if any, which the Agents may
have requested in connection therewith, such records, where appropriate, to be
certified by proper corporate or governmental authorities.
(d) Original Credit Agreement. On the Restatement Effective Date and
concurrently with the initial borrowing hereunder, the Borrower and Xtra shall
have (i) repaid in full the outstanding principal amount of all Loans under and
as defined in the Original Credit Agreement, (ii) terminated all letters of
credit issued thereunder (other than Existing Letters of Credit) and (iii) paid
all accrued but unpaid interest and fees under the Original Credit Agreement,
whether or not otherwise then due and payable.
(e) Issuance of PXI Senior Notes. On or prior to the Restatement
Effective Date, (i) PXI shall have consummated the issuance of the Additional
PXI Senior Notes and received net cash proceeds therefrom (after the payment of
fees and expenses in connection therewith) in an aggregate amount of at least
$73,000,000, and (ii) the Agents and the Banks shall have received copies of the
Additional PXI Senior Note Documents certified as true and correct by PXI in a
certificate signed by an Authorized Officer, and the PXI Senior Note Documents
shall be in full force and effect and the terms and conditions thereof shall be
substantially identical to the Existing PXI Senior Notes Documents and otherwise
shall be in form and substance satisfactory to the Agents and the Required
Banks. All of the proceeds of the Additional PXI Senior Notes shall have been
contributed to the Borrower and used to repay outstandings under the Original
Credit Agreement.
(f) Pledge Agreements. (i) On the Restatement Effective Date, PXI
shall have duly authorized, executed and
-30-
37
delivered an amended and restated Pledge Agreement substantially in the form of
Exhibit E-1, together with such changes (or with such other documents) as may be
requested by the Collateral Agent in connection with local law (each as
modified, supplemented, amended or restated from time to time, a "PXI Pledge
Agreement") and shall have delivered to the Collateral Agent, as Pledgee, all
the Pledged Securities referred to therein (including the Subordinated
Intercompany Real Estate Note and Subordinated Intercompany Notes, each of which
shall have been endorsed in favor of the Collateral Agent, and all shares of
capital stock) then owned by PXI, (x) endorsed in blank in the case of
promissory notes (except as set forth above) and (y) together with executed and
undated stock powers, in the case of capital stock.
(ii) On the Restatement Effective Date, the Borrower shall have duly
authorized, executed and delivered an amended and restated Pledge Agreement
substantially in the form of Exhibit E-2 (as modified, supplemented, amended or
restated from time to time, the "Borrower Pledge Agreement") and shall have
delivered to the Collateral Agent, as Pledgee, all the Pledged Securities
referred to therein then owned by the Borrower, (x) endorsed in blank in the
case of promissory notes and (y) together with executed and undated stock
powers, in the case of capital stock.
(iii) On the Restatement Effective Date, Xtra shall have duly
authorized, executed and delivered an amended and restated Pledge Agreement
substantially in the form of Exhibit E-3 (as modified, supplemented, amended or
restated from time to time, the "Xtra Pledge Agreement") and shall have
delivered to the Collateral Agent, as Pledgee, all of the Pledged Securities
referred to therein then owned by Xtra (x) endorsed in blank in the case of
promissory notes and (y) together with executed and undated stock powers, in the
case of capital stock.
(iv) On the Restatement Effective Date, Xtra Merger Corporation shall
have duly authorized, executed and delivered an amended and restated Pledge
Agreement substantially in the form of Exhibit E-4 (as modified, supplemented,
amended or restated from time to time, the "XM Pledge Agreement") and shall have
delivered to the Collateral Agent, as Pledgee, all of the Pledged Securities
referred to therein then owned by Xtra Merger Corporation (x) endorsed in blank
in the case of promissory notes and (y) together with executed and undated stock
powers, in the case of capital stock.
-31-
38
(g) Subsidiary Guaranty. On the Restatement Effective Date, each
Subsidiary of PXI (other than the Borrower, Xtra and Caribad, Inc.) shall have
duly authorized, executed and delivered an amended and restated Guaranty in the
form of Exhibit F (as modified, supplemented or amended from time to time, the
"Subsidiary Guaranty").
(h) Security Agreements. On the Restatement Effective Date, (i) the
Borrower shall have duly authorized, executed and delivered an amended and
restated Security Agreement substantially in the form of Exhibit G-1, together
with such changes (or with such other documents) as may be requested by the
Collateral Agent in connection with local law (each, as modified, supplemented
or amended from time to time, the "Borrower Security Agreement") covering all of
the Borrower's respective present and future Security Agreement Collateral and
(ii) Xtra and each Subsidiary Guarantor shall have duly authorized, executed and
delivered the Security Agreement substantially in the form of Exhibit G-2,
together with such changes (or with such other documents) as may be requested by
the Collateral Agent in connection with local law (each, as modified,
supplemented or amended from time to time, the "Subsidiary Security Agreement")
covering all of each Subsidiary's respective present and future Security
Agreement Collateral, together in each case with:
(A) executed copies of Financing Statements (Forms UCC-1 or
UCC-3) or appropriate local equivalent in appropriate form for
filing under the UCC or appropriate local equivalent of each
jurisdiction as may be necessary to perfect or maintain the security
interests purported to be created by the Security Agreements and
capable of being perfected by the filing of such Financing
Statements or appropriate local equivalent;
(B) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, each of recent date listing
all effective financing statements that name PXI, the Borrower or,
Xtra as debtor and that are filed in the jurisdictions referred to
in clause (A), together with copies of such financing statements
(none of which shall cover the Collateral except (x) those with
respect to which appropriate termination statements executed by the
secured lender there-under have been delivered to the Administrative
Agent and (y) to the extent evidencing Permitted Liens);
-32-
39
(C) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreements as may be
necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests intended to be created by the
Security Agreements; and
(D) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the
Security Agreements have been taken.
(i) Mortgages; Intercompany Mortgages; Title Insurance; Surveys;
Etc. (i) On the Restatement Effective Date, the Collateral Agent shall
have received fully executed counterparts of amendments to the Mortgages
in form and substance satisfactory to the Collateral Agent, and
arrangements reasonably satisfactory to the Collateral Agent shall be in
place to provide that counterparts of such amendments shall be recorded on
the Restatement Effective Date or within one Business Day thereof in all
places to the extent necessary or desirable, in the judgment of the
Collateral Agent, effectively to maintain a valid and enforceable first
priority Lien, subject only to Permitted Encumbrances, on each Mortgaged
Property in favor of the Collateral Agent for the benefit of the Secured
Parties.
(ii) On the Restatement Effective Date, (A) the Collateral Agent shall
have received certified copies of fully executed counterparts of
amendments to (x) deeds of trust, leasehold deeds of trust, mortgages,
leasehold mortgages and similar documents in each case in form and
substance satisfactory to the Collateral Agent (each an "Intercompany
Mortgage" and collectively the "Intercompany Mortgages") and covering all
of the PRMP, (y) one or more amendments to chattel mortgages covering the
Borrower's personal property located in Puerto Rico and (z) amendments to
other Security Documents with respect to personal property of the Borrower
located in Puerto Rico, and arrangements reasonably satisfactory to the
Collateral Agent shall be in place to provide that counterparts of such
amendments shall be presented for recording on the Restatement Effective
Date or within one Business Day thereof in all places to the extent
necessary or desirable, in the judgment of the Collateral Agent,
effectively to maintain a valid and
-33-
40
enforceable first priority Lien, subject only to Permitted Encumbrances,
on each such PRMP and such personal property and (B) PXI and the Borrower
shall have executed an amendment to pledge agreement (the "Puerto Rico
Pledge Agreement") and the Borrower shall have delivered to the Collateral
Agent the Mortgage Notes (as defined in the Puerto Rico Pledge Agreement)
in respect of such Intercompany Mortgages and chattel mortgages.
(iii) The Collateral Agent shall have received updated ALTA mortgagee
title insurance policies or the equivalent thereof (or binding commitments
to issue such title insurance policies) issued by title insurers
satisfactory to the Collateral Agent (the "Mortgage Policies") in amounts
satisfactory to the Collateral Agent and assuring the Collateral Agent
that the Mortgages and Intercompany Mortgages are valid and enforceable
first priority mortgage Liens on the respective Mortgaged Properties, free
and clear of all defects and encumbrances except Permitted Encumbrances.
Such Mortgage Policies shall be in form and substance satisfactory to the
Collateral Agent and shall include an endorsement for future advances (to
the extent available in the respective jurisdiction of each Mortgaged
Property) under this Agreement, the Notes and the Mortgages and
Intercompany Mortgages, for mechanics' liens (to the extent available in
the respective jurisdiction of each Mortgaged Property) and for any other
matter that the Collateral Agent in its discretion may reasonably request
prior to the Restatement Effective Date, and shall provide for affirmative
insurance and such reinsurance (including direct access agreements) as the
Collateral Agent in its discretion may request prior to the Restatement
Effective Date.
(j) Solvency Certificate. On the Restatement Effective Date, the
Agents shall have received from the President and Chief Executive Officer of
PXI, acting on behalf of PXI, a certificate in the form of Exhibit H hereto,
expressing opinions of value and other appropriate facts or information
regarding the solvency of PXI and its Subsidiaries taken as a whole and of the
Borrower.
(k) Insurance Policies. On the Restatement Effective Date, the
Agents shall have received evidence of insurance complying with the requirements
of Section 7.09 for the business and properties of PXI and its Subsidiaries, in
form and substance satisfactory to the Agents and, with
-34-
41
respect to all casualty insurance, naming the Collateral Agent on behalf of the
Secured Parties, as mortgagee/secured party and loss payee.
(l) Consent Letter. On the Restatement Effective Date, the
Administrative Agent shall have received a letter from CT Corporation System,
presently located at 0000 Xxxxxxxx, Xxx Xxxx, XX 00000, in the form of Exhibit I
indicating its consent to its appointment by each Credit Party as their agent to
receive service of process.
(m) Payment of Fees. On or prior to the Restatement Effective Date,
all costs, fees and expenses, and all other compensation contemplated by this
Agreement, due to the Agents or the Banks (including, without limitation, legal
fees and expenses) shall have been paid by the Borrower to the extent due.
(n) Adverse Change. From January 25, 1997 to the Restatement
Effective Date, nothing shall have occurred which the Required Banks or either
Agent shall determine has, or is reasonably likely to have, a material adverse
effect on the rights or remedies of the Banks, or the Agents, or on the ability
of any Credit Party to perform its obligations to the Banks or the Agents under
this Agreement or any other Credit Document.
(o) Litigation. No litigation by any entity (private or
governmental) shall be pending or threatened on the Restatement Effective Date
(a) with respect to this Agreement or any other Credit Document or (b) which
either Agent or the Required Banks shall determine could reasonably be expected
to have a Material Adverse Effect.
(p) Depositary Account Agreement. On the Restatement Effective Date,
the Borrower shall have duly authorized, executed and delivered a Depositary
Account Agreement substantially in the form of Exhibit L hereto.
5.02 Conditions Precedent to All Credit Events. The obligation of
each Bank to make any Loans and the obligation of the Letter of Credit Issuer to
issue any Letter of Credit is subject, at the time of each such Credit Event
(including Credit Events occurring on the Restatement Effective Date) to the
satisfaction of the following conditions at such time:
(a) At the time of each Credit Event and also after giving effect
thereto (i) there shall exist no Default
-35-
42
or Event of Default and (ii) all representations and warranties contained herein
or in the other Credit Documents in effect at such time shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event (except to the extent any representation or warranty is expressly
made as of a specific date, in which case such representation and warranty shall
be true and correct in all material respects as of such date).
(b) The Administrative Agent shall have received a Notice of
Borrowing with respect to such Borrowing of Loans meeting the requirements of
Section 1.02 or a Letter of Credit Request for such issuance of a Letter of
Credit meeting the requirements of Section 2.03, as the case may be.
The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by each Credit Party to each of the Banks that all
of the applicable conditions specified in this Section 5 are then satisfied. All
of the certificates, legal opinions and other documents and papers referred to
in this Section 5, unless otherwise specified, shall be delivered to the
Administrative Agent at its Notice Office for the account of each of the Banks
and, except for the Notes, in sufficient counterparts or copies for each of the
Banks and shall be satisfactory in form and substance to the Agents.
SECTION 6. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and the Banks to make the Loans
and participate in Letters of Credit and the Letter of Credit Issuer to issue
Letters of Credit as provided for herein, each of PXI, the Borrower or Xtra make
the following representations and warranties to, and agreements with, the Banks
and the Letter of Credit Issuer, all of which shall survive the execution and
delivery of this Agreement and the making of the Loans and the issuance of
Letters of Credit (with the occurrence of each Credit Event being deemed to
constitute a representation and warranty that the matters specified in this
Section 6 are true and correct in all material respects on and as of the date
hereof and as of the date of each such Credit Event, except to the extent that
any representation or warranty is expressly made as of a specific date, in which
case such representation or warranty shall be true and correct in all material
respects as of such specific date):
-36-
43
6.01 Corporate Status. Each of the Credit Parties (i) is a duly
organized and validly existing corporation in good standing under the laws of
the jurisdiction of its organization and has the corporate power and authority
to own its property and assets and to transact the business in which it is
engaged and presently proposes to engage and (ii) has duly qualified and is
authorized to do business and is in good standing in all jurisdictions where it
is required to be so qualified and where the failure to be so qualified is
reasonably likely to have a Material Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. Each Credit Party has duly
executed and delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding obligation of such
Credit Party enforceable in accordance with its terms.
6.03 No Violation. Neither the execution, delivery and performance
by any Credit Party of the Credit Documents to which it is a party nor
compliance with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or (other than pursuant to the Security Documents) result in the creation
or imposition of (or the obligation to create or impose) any Lien upon any of
the property or assets of any Credit Party pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument to which any
Credit Party is a party or by which it or any of its property or assets are
bound or to which it may be subject, including without limitation any Permitted
Existing Indebtedness Agreements but excluding any agreements in respect of
pre-existing indebtedness that is being refinanced on the Restatement Effective
Date, or (iii) will violate any provision of the Certificate of Incorporation or
ByLaws of any Credit Party.
6.04 Litigation. There are no actions, suits or proceedings pending
or threatened with respect to any Credit Party (i) that are likely to have a
Material Adverse Effect or (ii) that could have a material adverse effect on the
-37-
44
rights or remedies of the Administrative Agent or the Banks or on the ability of
any Credit Party to perform its obligations to them hereunder and under the
other Credit Documents to which it is, or will be, a party.
6.05 Use of Proceeds. (a) The proceeds of all Revolving Loans
incurred on the Restatement Effective Date shall be utilized to repay Loans
under and as defined in the Original Credit Agreement.
(b) The proceeds of Revolving Loans incurred after the Restatement
Effective Date and also Swingline Loans shall be utilized for general corporate
purposes of the Borrower and its Subsidiaries.
(c) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock.
6.06 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with
(other than UCC and other "security interest perfection" filings and/or mortgage
recordings contemplated by this Agreement in respect of the Collateral), or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document.
6.07 Investment Company Act. No Credit Party is an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
6.08 Public Utility Holding Company Act. No Credit Party is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
6.09 True and Complete Disclosure. All factual information (taken as
a whole) heretofore or contemporaneously furnished by or on behalf of any Credit
Party in writing to either Agent or any Bank for purposes of or in connection
with this Agreement or any transaction contemplated
-38-
45
herein is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of any Credit Party in writing to any Bank will be,
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided. The projections and pro forma financial information
contained in such materials are based on good faith estimates and assumptions
believed by the Credit Parties to be reasonable at the time made, it being
recognized by the Banks that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections may differ from the projected results in any material
respect. There is no fact known to any Credit Party which has, or is reasonably
likely to have, a Material Adverse Effect which has not been disclosed herein or
in such other documents, certificates and statements furnished to the Banks for
use in connection with the transactions contemplated hereby.
6.10 Financial Condition; Financial Statements. (a) On and as of the
Restatement Effective Date on a pro forma basis after giving effect to the
Refinancing and all Indebtedness incurred, and to be incurred, and Liens created
and to be created, by each Credit Party in connection therewith, with respect to
each of PXI and its Subsidiaries taken as a whole, and of the Borrower (x) the
sum of its or their assets, at a fair valuation, will exceed its or their debts,
(y) it or they will not have incurred nor intended to, or believes that it or
they will not, incur debts beyond its or their ability to pay such debts as such
debts mature during the period prior to the Maturity Date and (z) it and they
will have sufficient capital with which to conduct its or their businesses. For
purposes of this Section 6.10(a), "debt" means any liability on a claim, and
"claim" means (i) right to payment whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured; or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(b) The consolidated and consolidating balance sheets of PXI and its
Subsidiaries at January 25, 1997, January 26, 1996 and January 27, 1995 and the
related con-
-39-
46
solidated and consolidating statements of income and (in consolidated form only)
cash flows of PXI and its Subsidiaries for the fiscal years ended as of said
dates, which have been examined by Deloitte & Touche, independent certified
public accountants, and the unaudited pro forma (after giving effect to the
Refinancing) balance sheet of PXI and its Subsidiaries as at January 25, 1997,
copies of which have heretofore been furnished to each Bank, present fairly in
all material respects the consolidated and consolidating financial position of
PXI and its Subsidiaries at the dates of said statements and the consolidated
and consolidating income and cash flows for the periods covered thereby (or, in
the case of the pro forma consolidated balance sheet, present a good faith
estimate of the consolidated pro forma financial condition of PXI and its
Subsidiaries at the date thereof). All such financial statements (other than the
aforesaid pro forma balance sheet) have been prepared in accordance with GAAP
and practices consistently applied except to the extent provided in the notes to
said financial statements.
(c) There has been no material adverse change in the business,
property, assets, liabilities, condition (financial or otherwise) or prospects
of PXI and its Subsidiaries taken as a whole since January 25, 1997.
(d) Except as fully reflected in the pro forma financial statements,
and in the audited financial statements for the fiscal year ended January 25,
1997, described in Section 6.10(b), there were as of the Restatement Effective
Date (and after giving effect to any Loans made on such date), no liabilities or
obligations (excluding current obligations incurred in the ordinary course of
business) with respect to PXI or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due), and PXI does not know of any basis for the assertion against PXI or
any of its Subsidiaries of any such liability or obligation which, either
individually or in aggregate, are or would be reasonably likely to be material
to PXI and its Subsidiaries taken as a whole.
6.11 Security Interests. On and after the Restatement Effective
Date, each of the Security Documents creates, as security for the Obligations, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral, superior to and prior to the rights of all third persons and subject
to no other Liens (except (i) that the Security Agreement Collateral may be
subject to the security interests evidenced by Permitted Liens relating
-40-
47
thereto and (ii) the Mortgaged Properties may be subject to Permitted
Encumbrances relating thereto), in favor of the Collateral Agent for the benefit
of the respective Secured Parties. No filings or recordings are required in
order to perfect the security interests created under any Security Document
except for filings or recordings required in connection with any such Security
Document which shall have been made, or provided for as contemplated by Sections
5.01(i), on or prior to the Restatement Effective Date.
6.12 Tax Returns and Payments. Each Credit Party has filed all
federal income tax returns and all other material tax returns, domestic and
foreign, required to be filed by it and has paid all material taxes and
assessments payable by it which have become due, other than those not yet
delinquent and except for those contested in good faith. Holdings, PXI and each
of its Subsidiaries has paid, or has provided adequate reserves (in accordance
with GAAP) for the payment of, all federal, state and foreign income taxes
applicable for all prior fiscal years and for the current fiscal year to the
date hereof. There is no material action, suit, proceeding, investigation,
audit, or claim now pending or, to the knowledge of the Borrower or any of its
subsidiaries, threatened by any authority regarding any taxes relating to the
Borrower or any of its subsidiaries. Neither the Borrower nor any of its
subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of the Borrower or any of its subsidiaries.
6.13 Compliance with ERISA. Each Plan is in compliance with its
terms and with ERISA and the Code; each Plan (and each related trust, if any),
which is intended to be qualified under Section 401(a) of the Code has received
a determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Section 401(a) and 501(a) of the Code; no Reportable
Event has occurred with respect to a Plan other than as set forth in Schedule
IV; no Plan is insolvent or in reorganization; no Plan has an Unfunded Current
Liability in excess of $2,500,000 and the aggregate Unfunded Current Liabilities
for all Plans does not exceed $2,500,000; no Plan has an accumulated or waived
funding deficiency or permitted decreases in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Code or Section 303 or 304 of ERISA; all contributions
required to be made with respect to a Plan have been timely made; no Credit
Party nor any of its ERISA Affiliates has
-41-
48
incurred any liability to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code, or expects to incur any liability
under any of the foregoing Sections with respect to any Plan; no proceedings
have been instituted to terminate or appoint a trustee to administer any Plan;
no condition exists which presents a risk to any Credit Party or any ERISA
Affiliate of incurring a liability to or on account of a plan pursuant to the
foregoing provisions of ERISA and the Code; no action, suit, proceeding,
hearing, audit or investigation with respect to the administration, operation or
the investment of assets of any Plan (other than routine claims for benefits) is
pending, expected or threatened; except to the extent that any breach of the
representations set forth above in this Section 6.13 (except where specific
standards have been established) could not have a Material Adverse Effect. Using
actuarial assumptions and computation methods consistent with Part 1 of subtitle
E of Title IV of ERISA, the aggregate liabilities of all Credit Parties and
their ERISA Affiliates to all Plans which are multiemployer plans (as defined in
Section 4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as
of the close of the most recent fiscal year of each such Plan ended prior to the
date of the most recent Credit Event would not exceed $1,000,000. Each group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the
Code) which covers or has covered employees or former employees of any Credit
Party or any ERISA Affiliate has at all times been operated in compliance with
the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of
the Code. No lien imposed under the Code or ERISA on the assets of any Credit
Party or any ERISA Affiliate exists or is likely to arise on account of any Plan
which would violate Section 8.02 and all Credit Parties and their Subsidiaries
do not maintain or contribute to any employee welfare benefit plan (as defined
in Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA) the
obligations with respect to which could reasonably be expected to have a
Material Adverse Effect.
6.14 Subsidiaries. Schedule V hereto lists each Subsidiary of PXI,
and the direct and indirect ownership interest of PXI therein, in each case as
of the Restatement Effective Date.
-42-
49
6.15 Patents, etc. PXI and each of its Subsidiaries owns or holds a
valid license to use all material patents, trademarks, servicemarks, trade
names, copyrights, licenses and other rights, that are necessary for, and no
restriction applicable to any such patent, trademark, servicemark, trade name,
copyright, license or other right would interfere in any material respect with,
the operation of their businesses taken as a whole as presently conducted and as
proposed to be conducted.
6.16 Compliance with Statutes, etc. (a) Each Credit Party is in
compliance with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls), except such noncompliance as
is not likely to, in the aggregate, have a Material Adverse Effect.
(b) Each Credit Party is in compliance with all applicable
Environmental Laws governing its business for which failure to comply is likely
to have a Material Adverse Effect, and no Credit Party is liable for any
material penalties, fines or forfeitures for failure to comply with any of the
foregoing in the manner set forth above. All licenses, permits, registrations or
approvals required for the business of any Credit Party, as conducted as of the
Restatement Effective Date, under any Environmental Law have been secured and
each Credit Party is in substantial compliance therewith, except such licenses,
permits, registrations or approvals the failure to secure or to comply therewith
is not likely to have a Material Adverse Effect. No Credit Party is in any
respect in noncompliance with, breach of or default under any applicable writ,
order, judgment, injunction, or decree to which such Credit Party is a party or
which would affect the ability of such Credit Party to operate any Real Property
and no event has occurred and is continuing which, with the passage of time or
the giving of notice or both, would constitute noncompliance, breach of or
default thereunder, except in each such case, such noncompliance, breaches or
defaults as are not likely to, in the aggregate, have a Material Adverse Effect.
There are as of the Restatement Effective Date no Environmental Claims pending
or, to the best knowledge of any Credit Party, threatened, which (a) question
the validity, term or entitlement of such Credit Party for any permit, license,
order or registration required for the operation of any facility which such
Credit Party currently operates and (b) wherein an unfavorable decision, ruling
or
-43-
50
finding would be reasonably likely to have a Material Adverse Effect. There are
no facts, circumstances, conditions or occurrences on any Real Property or, to
the knowledge of any Credit Party, on any property adjacent to any such Real
Property that could reasonably be expected (i) result in an Environmental Claim
against such Credit Party or any Real Property of such Credit Party, or (ii) to
cause such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property under any Environmental
Law, except in each such case, such Environmental Claims or restrictions that
individually or in the aggregate are not reasonably likely to have a Material
Adverse Effect.
(c) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property of any
Credit Party or (ii) Released on any Real Property, in each case where such
occurrence or event is reasonably likely to have a Material Adverse Effect.
6.17 Properties. Except as set forth in Schedule VI, each Credit
Party has good and legal title to all properties owned by it and valid and
subsisting leasehold interests in all properties leased by it, in each case,
including all property reflected in the financial statements referred to in
Section 6.10(b) (except as sold or otherwise disposed of since the date of the
January 27, 1997 financial statements in the ordinary course of business) free
and clear of all Liens, other than Liens permitted by Section 8.02. Schedule VI
contains a true and complete list of each Real Property owned and each Real
Property leased by any Credit Party on the Restatement Effective Date and the
type of interest therein held by such Credit Party.
6.18 Labor Relations; Collective Bargaining Agreements. (a) Set
forth on Schedule VII hereto is a list and description (including dates of
termination) of all collective bargaining agreements between or applicable to
any Credit Party and any union, labor organization or other bargaining agent in
respect of the employees of any Credit Party on the Restatement Effective Date.
(b) No Credit Party is engaged in any unfair labor practice that is
reasonably likely to have a Material Adverse Effect. There is (i) no significant
unfair labor practice complaint pending against any Credit Party or, to the best
knowledge of any Credit Party, threatened against it, before the National Labor
Relations Board, and no significant griev-
-44-
51
ance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is now pending against any Credit Party or, to
the best knowledge of any Credit Party, threatened against it, (ii) no
significant strike, labor dispute, slowdown or stoppage is pending against any
Credit Party or, to the best knowledge of any Credit Party, threatened against
it and (iii) to the best knowledge of each Credit Party, no union representation
question exists with respect to the employees of such Credit Party, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as is not reasonably likely to have a
Material Adverse Effect.
6.19 Indebtedness. Schedule VIII sets forth a true and complete list
of (x) all Indebtedness (other than intercompany indebtedness) of PXI and each
of its Subsidiaries outstanding as of the Restatement Effective Date and which
is to remain outstanding after the Restatement Effective Date and (y) all
agreements existing on the Restatement Effective Date and which are to remain
outstanding after the Restatement Effective Date pursuant to which PXI or any of
its Subsidiaries is entitled to incur Indebtedness (other than intercompany
indebtedness) (whether or not any condition to such incurrence could be met)
(collectively, as in effect and outstanding on the Restatement Effective Date
and without giving effect to any extension, renewal or refinancing thereof, the
"Permitted Existing Indebtedness"), in each case showing the aggregate principal
amount thereof and the name of the respective borrower and any other entity
which directly or indirectly guaranteed such debt.
6.20 Restrictions on Subsidiaries. Except for restrictions contained
in the Credit Documents and the PXI Senior Note Documents, as of the Restatement
Effective Date there are no contractual or consensual restrictions on any Credit
Party which prohibit or otherwise restrict (i) the transfer of cash or other
assets (x) between PXI and any of its Subsidiaries or (y) between any
Subsidiaries of PXI or (ii) the ability of any Credit Party or any of its
Subsidiaries to grant security interests to the Banks in their respective
assets.
6.21 PXI Senior Notes, etc. As of the Restatement Effective Date,
the PXI Senior Notes have been duly authorized, issued and delivered in
accordance with applicable law.
-45-
52
SECTION 7. Affirmative Covenants. PXI, the Borrower and Xtra
covenant and agree that on the Restatement Effective Date and thereafter for so
long as this Agreement is in effect and until the Revolving Commitments have
terminated, no Letters of Credit are outstanding and the Loans, Unpaid Drawings
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 12.13 hereof which are not then due and
payable) incurred hereunder are paid in full:
7.01 Information Covenants. PXI and the Borrower will furnish to
each Bank:
(a) Annual Financial Statements. Within 90 days after the close of
each fiscal year of PXI, the consolidated and consolidating balance sheets of
PXI and its Subsidiaries, as at the end of such fiscal year and the related
statements of income and cash flows (other than consolidating annual statements
of cash flows) for such fiscal year, setting forth comparative figures for the
preceding fiscal year, and in the case of such consolidated statements examined
by Coopers & Xxxxxxx (or other independent certified public accountants of
recognized national standing acceptable to the Required Banks) whose opinion
shall not be qualified as to the scope of audit and as to the status of PXI or
any of its Subsidiaries as a going concern, together, in each case, with a
certificate of the accounting firm referred to above stating that in the course
of its regular audit of the business of PXI and its Subsidiaries, which audit
was conducted in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge of any payment default or Default or
Event of Default under any of Sections 8.09, 8.10 and 8.11 which has occurred
and is continuing or, if in the opinion of such accounting firm such a Default
or Event of Default has occurred and is continuing, a statement as to the nature
thereof.
(b) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the close of each of the first three quarterly
accounting periods in each fiscal year of PXI, the consolidated and
consolidating balance sheets of PXI and its Subsidiaries, as at the end of such
quarterly period and the related statements of income and cash flows (other than
consolidating quarterly statements of cash flows) for such quarterly period and
for the elapsed portion of the fiscal year ended with the last day of such
quarterly period, and setting forth commencing with the quarterly statements for
the period ended in May 1997, comparative figures for the related periods in the
prior fiscal
-46-
53
year, in each case, certified by PXI in a certificate signed by an Authorized
Officer, subject to changes resulting from audit and normal year-end audit
adjustments.
(c) Monthly Reports. As soon as practicable, and in any event within
30 days, after the end of each monthly accounting period of each fiscal year,
the consolidated and consolidating operating reports for PXI and its
Subsidiaries for such period, in reasonable detail and in a form acceptable to
the Agents.
(d) Budgets; etc. Not less than 30 days after the commencement of
each fiscal year of PXI a budget in form satisfactory to the Agents prepared by
PXI for each of the four fiscal quarters of such fiscal year, setting forth,
with appropriate discussion, the principal assumptions upon which such budgets
are based. Together with each delivery of consolidated financial statements of
PXI pursuant to Section 7.01(a) and (b), a comparison of the current year to
date financial results (other than in respect of the balance sheets and
statements of cash flow included therein) against the budgets required to be
submitted pursuant to this clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 7.01(a) and (b), a certificate of
PXI signed by an Authorized Officer to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying the
nature and extent thereof, which certificate shall set forth the calculations
required to establish whether PXI and its Subsidiaries were in compliance with
the provisions of Section 8.04 and Sections 8.09, 8.10 and 8.11, as at the end
of such fiscal quarter or year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any event
within three Business Days after an officer of PXI or the Borrower obtains
knowledge thereof, notice of (x) the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify the nature thereof, the
period of existence thereof and what action the appropriate Credit Party
proposes to take with respect thereto and (y) the commencement of or any
significant development in any litigation or governmental proceeding pending
against Holdings, PXI or any of its Subsidiaries which could have a Material
Adverse Effect or a material adverse effect on the ability of any Credit Party
to perform its obligations hereunder or under any other Credit Document.
-47-
54
(g) Environmental Matters. Promptly upon obtaining knowledge
thereof, notice of (i) any pending or threatened Environmental Claim against
Holdings, PXI or any of its Subsidiaries or any Real Property of Holdings, PXI
or any of its Subsidiaries unless such Environmental Claim could not,
individually or when aggregated with all other such Environmental Claims,
reasonably be expected to have a Material Adverse Effect; (ii) any condition or
occurrence on any Real Property of Holdings, PXI or any of its Subsidiaries that
(a) results in material noncompliance by Holdings, PXI or such Subsidiary with
any applicable Environmental Law, or (b) could reasonably be anticipated to
result in an Environmental Claim against Holdings, PXI or such Subsidiary or any
Real Property of Holdings, PXI or such Subsidiary, unless, with respect to
clauses (a) and (b) above, such noncompliance or such Environmental Claim could
not, individually or when aggregated with all other such non-compliance claims,
reasonably be expected to have a Material Adverse Effect; (iii) any condition or
occurrence on any Real Property of Holdings, PXI or any of its Subsidiaries that
could reasonably be anticipated to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property under any Environmental Law unless such restrictions could not,
individually or when aggregated with all other such restrictions, reasonably be
expected to have a Material Adverse Effect; and (iv) the taking of any removal
or remedial action in response to the actual or alleged presence of any
Hazardous Material on any Real Property of Holdings, PXI or any of its
Subsidiaries, unless the presence of such Hazardous Materials and the removal or
remedial action in response thereto could not, individually or when aggregated
with all such other occurrences or events, reasonably be expected to have a
Material Adverse Effect. All such notices shall describe in reasonable detail
the nature of the claim, investigation, condition, occurrence or removal or
remedial action and the response thereto of Holdings, PXI or such Subsidiary. In
addition, each Credit Party will provide the Agents with copies of all material
written communications with any government or governmental agency relating to
Environmental Laws, all communications with any government or governmental
agency relating to Environmental Claims, and such detailed reports of any
Environmental Claim, in each case as may reasonably be requested in writing from
time to time by the Agents.
(h) Other Information. (i) Promptly upon trans- mission thereof,
copies of any filings and registrations with, and reports to, the SEC by any
Credit Party or any of
-48-
55
its Subsidiaries, copies of all press releases and copies of all financial
statements, notices and reports that any Credit Party or any of its Subsidiaries
shall send to analysts or the holders of the PXI Senior Notes or any other
publicly issued debt of any Credit Party or any of its Subsidiaries (in each
case, to the extent not theretofore delivered to the Banks pursuant to this
Agreement) and (ii) with reasonable promptness, such other information or
documents (financial or otherwise) as the Administrative Agent on its own behalf
or on behalf of the Required Banks may reasonably request from time to time.
7.02 Books, Records and Inspections. PXI will, and will cause each
of its Subsidiaries to, permit, upon notice to the Chief Financial Officer or
any other Authorized Officer of PXI, officers and designated representatives of
the Administrative Agent or the Banks to visit and inspect any of the properties
or assets of PXI and any of its Subsidiaries in whomsoever's possession, and to
examine the books of account and other financial and operating records
(including, without limitation, any reports or "management letters" submitted by
independent accountants) of PXI and any of its Subsidiaries and discuss the
affairs, finances and accounts of PXI and any of its Subsidiaries with, and be
advised as to the same by, the officers and independent accountants of PXI or
such Subsidiary, all at such reasonable times and intervals and to such
reasonable extent as the Administrative Agent or any Bank may request.
7.03 Payment of Taxes. PXI will, and will cause each of its
Subsidiaries to, pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties attach thereto,
and all lawful claims which, if unpaid, might become a Lien or charge upon any
properties of PXI or any of its Subsidiaries, provided that neither PXI nor any
of its Subsidiaries shall be required to pay any such tax, assessment, charge,
levy or claim which is being contested in good faith and by proper proceedings
if it has maintained adequate reserves (in the good faith judgment of the
management of such Person) with respect thereto in accordance with GAAP.
7.04 Corporate Franchises. PXI will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence, material rights and authority to do
business, provided that any transaction permitted by Section 8.01 will not
constitute a breach of this Section 7.04.
-49-
56
7.05 Compliance with Statutes, etc. (a) PXI will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable Environmental Laws) other than
those the non-compliance with which (individually or in the aggregate) would not
have a Material Adverse Effect or a material adverse effect on the ability of
any Credit Party to perform its obligations under any Credit Document to which
it is party. Neither PXI nor any of its Subsidiaries will generate, use, treat,
store, Release or dispose of, or permit the generation, use, treatment, storage,
Release or disposal of Hazardous Materials on any of its Real Property, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property, except for quantities used or stored at such Real Properties
in material compliance with all applicable Environmental Laws and required in
connection with the normal operation, use and maintenance of such Real Property.
If required to do so under any applicable Environmental Law, each Credit Party
agrees to undertake, and agrees to cause each of its Subsidiaries to undertake,
any cleanup, removal, remedial or other action necessary to remove and clean up
any Hazardous Materials from any Real Property in accordance with the
requirements of all such applicable Environmental Laws and in accordance with
orders and directives of all governmental authorities; provided that no Credit
Party nor any of their Subsidiaries shall be required to take any such action
where same is being contested by appropriate legal proceedings in good faith by
such Credit Party or such Subsidiary.
(b) At the request of the Agents or the Required Banks, at any time
and from time to time, but in any event no more frequently than once in any
calendar year, each of the Borrower and Xtra will provide, at its sole cost and
expense, an environmental site assessment report concerning any Real Property of
the Borrower or Xtra or any of their respective Subsidiaries, prepared by an
environmental consulting firm approved by the Agents, indicating the presence or
Release of Hazardous Materials and the potential cost of any removal or remedial
action in connection with any Hazardous Materials on such Real Property,
provided that no such request may be made unless the Agents or the Required
Banks reasonably believe that (i) the Borrower or Xtra or any of their
respective Subsidiaries is in noncompliance with any Environmental Law with
respect to such Real Property and that such noncompliance could, individually,
or when aggregated with all such other noncompliance claims, reasonably be
expected
-50-
57
to have a Material Adverse Effect, (ii) such non-compliance was not disclosed in
the environmental reports delivered in connection with the closing of the
Original Credit Agreement or (iii) an Event of Default is in existence. If the
Borrower or Xtra fails to provide the same after 60 days' written notice, the
Administrative Agent may order the same, and the Borrower or Xtra, as the case
may be, shall grant and hereby grants to the Administrative Agent and the Banks
and their agents access to such Real Property at all reasonable times and
without unreasonably interfering with the Borrower's or Xtra's operations and
specifically grant the Administrative Agent and the Banks an irrevocable
nonexclusive license, subject to the rights of tenants, to undertake such an
assessment all at the Borrower's or Xtra's, as the case may be, sole expense,
provided that the Borrower and Xtra shall have 120 days to obtain any necessary
governmental approvals to provide an environmental site assessment report that
includes subsurface soil or ground water sampling or analysis.
7.06 ERISA. As soon as possible and, in any event, within 15 days
after any Credit Party or any of its Subsidiaries or any ERISA Affiliate knows
or has reasonable cause to know of the occurrence of any of the following, PXI
will deliver to each of the Banks a certificate of PXI signed by an Authorized
Officer setting forth details as to such occurrence and the action, if any,
which such Credit Party, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by such Credit Party, such Subsidiary, the ERISA Affiliate, the
PBGC, a Plan participant or the Plan administrator with respect thereto: that a
Reportable Event has occurred (except to the extent that PXI has previously
delivered to the Banks a certificate and notices (if any) concerning such event
pursuant to the next clause hereof); that a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject
to the advance reporting requirement of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b)(1) thereof), and an event described in subsection
.62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is
reasonably expected to occur with respect to such Plan within the following 30
days; that an accumulated funding deficiency, within the meaning of Section 412
of the Code or Section 302 of ERISA has been incurred or an application may be
or has been made to the Secretary of the Treasury for a waiver or modification
of the minimum funding standard (including any required installment payments) or
an extension of any amortization period under
-51-
58
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that a Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability
giving rise to a lien under ERISA or the Code; that proceedings may be or have
been instituted to terminate or appoint a trustee to administer a Plan; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; or that any Credit Party, any of its
Subsidiaries or any ERISA Affiliate will or may incur any material liability
(including any indirect, contingent or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 4971,
401(a)(29), or 4975 of the Code or Section 409 or 502(i) or 502(l) of ERISA or
with respect to a group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) under Section 4980B of the Code. PXI will
deliver to each of the Banks a complete copy of the Internal Revenue Service
Annual Report (Form 5500) of each Plan, other than a multiemployer plan (as
defined in Section 3(37) of ERISA), required to be filed with the Internal
Revenue Service and copies of any records, documents or other information that
must be furnished to the PBGC with respect to any Plan pursuant to Section 4010
of ERISA. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof, copies of (i) annual reports filed by any
Credit Party or any of its Subsidiaries or any ERISA Affiliate with respect to
any Plan and (ii) any material notices received by any Credit Party or any of
its Subsidiaries or any ERISA Affiliate from any governmental agency or court
with respect to any Plan, shall in either case be delivered to the Banks no
later than 15 days after the date such report or notice has been filed with the
Internal Revenue Service or received by Holdings or such Subsidiary or the ERISA
Affiliate, as applicable.
7.07 Good Repair. PXI will, and will cause each of its Subsidiaries
to, use its best efforts to ensure that its properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted and, subject
to Section 8.04, that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto, to the extent and in the manner
customary for companies in similar businesses.
-52-
59
7.08 End of Fiscal Years; Fiscal Quarters. PXI will, for financial
reporting purposes, cause (i) each of its, and of each of its Subsidiaries'
fiscal years to end on the last Saturday of January each year and (ii) each of
its, and each of its Subsidiaries' fiscal quarters to end on dates consistent
with the end of such fiscal years.
7.09 Maintenance of Property; Insurance. PXI will, and will cause
each of its Subsidiaries to, at all times maintain in full force and effect
insurance with carriers rated A- or better by A.M. Best (or such other carriers
as are acceptable to the Agents giving due consideration to market conditions
and availability for similar businesses in the same geographic region) in such
amounts, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice,
provided that in no event will any such deductible or self-insured retention in
respect of liability claims or in respect of casualty damage exceed, in each
such case, $1,000,000 per occurrence, except that casualty damage insurance for
earthquake or windstorm (hurricane) may have a deductible of up to five percent
(5%) of values or as may be the standard for like businesses in the same
geographic area. At any time that insurance at the levels described in Schedule
IX is not being maintained by PXI and its Subsidiaries, PXI will notify the
Agents in writing thereof and, if thereafter notified by the Agents to do so,
PXI will obtain insurance at such levels at least equal to those set forth in
Schedule IX to the extent then generally available (but in any event within the
deductible or self-insured retention limitations set forth in the preceding
sentence) or otherwise as are acceptable to the Agents. PXI will furnish on the
Restatement Effective Date and annually thereafter to the Agents a summary of
the insurance carried in respect of it and its Subsidiaries and its or their
assets together with certificates of insurance and other evidence of such
insurance, if any, naming the Collateral Agent as mortgagee/ secured party
and/or loss payee on applicable policies insuring the assets of PXI and its
Subsidiaries.
7.10 Additional Security; Further Assurances. (a) As and to the
extent requested from time to time by the Agents or the Required Banks, PXI
will, and will cause each of its Subsidiaries to, grant to the Collateral Agent,
for the benefit of the Secured Parties, security interests and mortgages in such
assets and properties of PXI or its Subsidiaries acquired after the Restatement
Effective Date and not otherwise covered by the original Security Documents,
other than assets encumbered by Liens permitted by Section 8.02(i),
(collectively, the "Additional Security Documents").
-53-
60
Such security interests and mortgages shall be granted pursuant to documentation
satisfactory in form and substance to the Administrative Agent and shall
constitute valid and enforceable perfected security interests superior to and
prior to the rights of all third persons and subject to no other Liens except as
are permitted by Section 8.02 at the time of perfection thereof. The Additional
Security Documents or other instruments related thereto shall be duly recorded
or filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens in favor of the Collateral Agent for the
benefit of the Secured Parties, required to be granted pursuant to the
Additional Security Documents and all taxes, fees and other charges payable in
connection therewith shall have been paid in full.
(b) PXI will, and will cause each of its Subsidiaries to, at its own
expense, make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require. Furthermore, PXI shall, and shall cause each of its
Subsidiaries to, cause to be delivered to the Collateral Agent such opinions of
counsel, title insurance and other related documents as may be requested by the
Collateral Agent to assure themselves that this Section 7.10 has been complied
with.
(c) At the written request of the Agents or the Required Banks given
only after, and as a result of, a change in such law and/or the rules and
regulations thereunder and/or in the interpretation of any thereof, in each case
occurring after the Restatement Effective Date and requiring the delivery of
such appraisals, PXI shall, and shall cause each of its Subsidiaries to, provide
to the Agents appraisals satisfying applicable requirements of the Real Estate
Appraisal Reform Amendments of the Financial Institution Reform, Recovery and
Enforcement Act of 1989 in respect of the Real Property of PXI and its
Subsidiaries constituting Collateral, in form and substance satisfactory to the
Agents.
(d) Each Credit Party hereto agrees that each action required by
clauses (a) through (d) of this Section 7.10 shall be completed as soon as
possible, but in no event later than 30 days (60 days in the case of clause (c)
above) after such action is requested to be taken by the Administrative Agent or
the Required Banks.
-54-
61
7.11 Maintenance of Corporate Separateness. PXI will, and will cause
each of its Subsidiaries to, satisfy customary corporate formalities, including
the holding of regular board of directors' and shareholders' meetings and the
maintenance of corporate offices and records. Neither the Borrower nor any other
Subsidiary of PXI shall make any payment to a creditor of Holdings or PXI in
respect of any liability of Holdings or PXI, and no bank account of Holdings or
PXI shall be commingled with any bank account of the Borrower or any other
Subsidiary of PXI. Any financial statements distributed to any creditors of
Holdings or PXI shall, to the extent permitted by GAAP, clearly establish the
corporate separateness of Holdings and PXI from the Borrower and each of PXI's
other Subsidiaries. Finally, no Credit Party nor any of their Subsidiaries shall
take any action, or conduct its affairs in a manner, which is likely to result
in the separate corporate existence of Holdings or PXI from that of any or all
of PXI's Subsidiaries being ignored, or in the assets and liabilities of the
Borrower or any other Subsidiary of PXI being substantively consolidated with
those of Holdings or PXI in a bankruptcy, reorganization or other insolvency
proceeding.
SECTION 8. Negative Covenants. PXI, the Borrower and Xtra hereby
covenant and agree that on the Restatement Effective Date and thereafter for so
long as this Agreement is in effect and until the Commitments have terminated,
no Letters of Credit are outstanding and the Loans, Unpaid Drawings, together
with interest, Fees and all other Obligations (other than any indemnities
described in Section 12.13 hereof which are not then due and payable) incurred
hereunder, are paid in full:
8.01 Consolidation, Merger, Sale or Purchase of Assets, etc. PXI
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
sell or otherwise dispose of all or any part of its property or assets (other
than inventory, obsolete equipment, excess equipment no longer needed in the
conduct of business or equipment being replaced with other equipment, in each
case in the ordinary course of business) or purchase, lease or otherwise acquire
(in one transaction or a series of related transactions) all or any part of the
property or assets of any Person (other than purchases, leases or other
acquisitions of inventory and equipment in the ordinary course of business) or
agree to do any of the foregoing at any future time, except that the following
shall be permitted:
-55-
62
(a) Capital Expenditures to the extent within the limitations set
forth in Section 8.04;
(b) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 8.05;
(c) (i) the merger or consolidation of any Subsidiary of PXI (other
than the Borrower or Xtra) with or into, or the liquidation thereof into, the
Borrower, Xtra or another Wholly-Owned Subsidiary of PXI which is a Subsidiary
Guarantor (so long as the Borrower, Xtra or such Subsidiary Guarantor is the
surviving corporation), and (iv) the conveyance, lease, sale or other transfer
of all or any part of the business, properties and assets of any Subsidiary of
PXI (other than the Borrower or Xtra) to the Borrower, Xtra or another
Wholly-Owned Subsidiary of PXI which is a Subsidiary Guarantor;
(d) leases of stores or warehouses by the Borrower, Xtra or their
Subsidiaries in the ordinary course of business and otherwise in compliance with
this Agreement;
(e) asset sales generating proceeds (A) individually in an amount
equal to or less than $25,000 or (B) individually in an amount greater than
$25,000 but in the aggregate for all such sales not in excess of $1,000,000 in
any fiscal year; provided that the Borrower shall deliver to the Administrative
Agent within thirty days of the end of the second and fourth fiscal quarters of
each fiscal year a schedule showing the asset sales made pursuant to this
Section 8.01(e)(B) during the previous two or four fiscal quarters respectively;
(f) the Hialeah & Dadeland Transfer;
(g) Asset Sales of the Florida Division Assets and the Rio Xxxxxx,
Xxxxxxx and North Mayaquez properties in Puerto Rico for consideration at the
time of such Asset Sale having a value (including the value of any noncash
consideration, as determined in good faith by the Board of Directors of PXI) at
least equal to the appraised value thereof so long as at least 80% of such
consideration is in cash; provided that at the time of any such Asset Sales the
Borrower shall have delivered to the Agents a certificate describing such Asset
Sale and stating that it is permitted under this Section 8.01(g) and under the
PXI Senior Note Documents; and
-56-
63
(h) any acquisition of assets (not including Capital Expenditures)
to be employed in the business of the Borrower, Xtra or their Subsidiaries;
provided that (x) there are no Loans then outstanding, (y) the Leverage Ratio
for the most recently ended Test Period shall have been no greater than 3.5:1.00
and (z) such acquisition (taken together with all such prior acquisitions and
purchases, redemptions or prepayments of PXI Senior Notes since the Restatement
Date pursuant to Section 8.12(b)(ii) do not exceed the lesser of (i) 75% of
Excess Cash Flow for the period from and including January 25, 1997 to and
including the last day of the fiscal quarter ending on or most recently ended
prior to such acquisition and (ii) $25,000,000.
To the extent the Required Banks waive the provisions of this
Section 8.01 with respect to the disposition of any Collateral, or any
Collateral is disposed of as permitted by this Section 8.01, such Collateral in
each case shall be sold free and clear of the Liens in favor of the Secured
Parties created by the Security Documents and the Administrative Agent shall
take such actions (including, without limitation, directing the Collateral Agent
to take such actions) as the Administrative Agent deems appropriate in
connection therewith.
8.02 Liens. PXI will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of PXI or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable or notes with recourse to PXI or any of
its Subsidiaries) or assign any right to receive income, or file or permit the
filing of any financing statement under the UCC or any other similar notice of
Lien under any similar recording or notice statute, except:
(a) Liens for taxes not yet due and payable or Liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of PXI) have been
established;
(b) Liens (other than any Lien imposed by ERISA) in respect of
property or assets of PXI, PXI or any of its Subsidiaries imposed by law which
were incurred in the ordinary course of business, such as carriers',
warehousemen's and mechanics' Liens, statutory landlord's Liens, Liens in favor
-57-
64
of customs and revenue authorities to secure payment of customs duties in
connection with the importation of goods, and other similar Liens arising in the
ordinary course of business, and (x) which, if any such property or asset is
material, do not in the aggregate materially detract from the value of such
property or assets or materially impair the use thereof in the operation of the
business of PXI or such Subsidiary or (y) which are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement or the other
Credit Documents;
(d) Liens on the assets of PXI and its Subsidiaries created prior
to, but that will remain outstanding on and after, the Restatement Effective
Date and listed on Schedule X hereto, without giving effect to any subsequent
extensions or renewals thereof ("Permitted Liens");
(e) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with (x)
liability insurance, workers' compensation, unemployment insurance and other
types of social security, or (y) to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business, in an aggregate amount not to exceed $5,000,000
(exclusive of obligations in respect of borrowed money);
(f) leases or subleases granted to third Persons not interfering
with the ordinary course of business of the Borrower or any of its Subsidiaries;
(g) Capital Leases to the extent permitted under Section 8.03(b)
hereof;
(h) Permitted Encumbrances; and
(i) Liens (x) arising pursuant to purchase money mortgages securing
Indebtedness representing the purchase price (or financing of the purchase price
within 180 days after the respective purchase) of property or other assets
acquired by the Borrower, Xtra or any other operating Subsidiary Guarantor,
provided that (i) any such Liens attach only to the assets so purchased, (ii)
the Indebtedness secured by any such Lien does not exceed 100% of the purchase
price of the assets being purchased and (iii) the
-58-
65
Indebtedness secured thereby is permitted by Section 8.03(b); or (y) existing on
specific tangible assets at the time acquired by the Borrower or any other
Subsidiary of PXI or on assets of a Person at the time such Person first becomes
a Subsidiary of PXI, provided that (i) any such Liens were not created at the
time of or in contemplation of the acquisition of such assets or Person by PXI
or any of its Subsidiaries, (ii) in the case of any such acquisition of a
Person, any such Lien attaches only to specific tangible assets of such Person
and not assets of such Person generally, (iii) the Indebtedness secured by any
such Lien does not exceed 100% of the fair market value of the asset to which
such Lien attaches, determined at the time of the acquisition of such asset or
the time at which such Person becomes a Subsidiary of PXI and (iv) the
Indebtedness secured thereby is permitted by Section 8.03(b).
8.03 Indebtedness. PXI will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Capitalized Lease Obligations, and other Indebtedness secured by
Liens permitted by Section 8.02(i), of the Borrower, Xtra or any other operating
Subsidiary Guarantor so long as the aggregate principal amount of all
Indebtedness permitted by this clause (b) that is incurred (i) in any fiscal
year of PXI does not exceed $3,000,000 and (ii) in the aggregate does not exceed
$20,000,000;
(c) Indebtedness under Interest Rate Protection Agreements of the
Borrower to the extent entered into in respect of the Subordinated Intercompany
Real Estate Note, provided that the Interest Rate Protection Agreements entered
into pursuant to this clause (ii) are, taken as a whole, in the opinion of the
Agents, reasonably likely to result in the incurrence by the Borrower of no
greater liability in respect of interest payments than the stated interest rate
liability of PXI in respect of a like principal amount of the PXI Senior Notes;
(d) Permitted Existing Indebtedness;
(e) Indebtedness of PXI evidenced by (i) the PXI Senior Notes and
(ii) any PXI Subordinated Notes outstanding on the Restatement Effective Date
after giving effect to the Refinancing;
-59-
66
(f) Indebtedness evidenced by the Subordinated Intercompany Real
Estate Note or any of the other intercompany notes issued on or prior to the
Initial Borrowing Date;
(g) Other intercompany Indebtedness permitted by Section 8.05; and
(h) PXI Subordinated Notes incurred after the Restatement Effective
Date in an aggregate principal amount not to exceed $25,000,000; provided that
at the time of incurrence of any such PXI Subordinated Notes, PXI shall be in
compliance with Sections 8.09 and 8.10 hereof calculated on a pro forma basis
after giving effect to such incurrence.
8.04 Capital Expenditures. (a) PXI will not, and will not permit any
of its Subsidiaries to, incur Capital Expenditures except Capital Expenditures
made in compliance with this Section 8.04. During each fiscal year of PXI ending
after the Restatement Effective Date, Capital Expenditures shall be permitted to
be made by the Borrower, Xtra and their respective Subsidiaries in an aggregate
amount for all such Persons not in excess of $25,000,000 (or pro rata portion
thereof for the portion of the then-current fiscal year that has elapsed prior
to the Maturity Date) other than Capital Expenditures made with funds received
by the Borrower pursuant to Section 8.05(l).
(b) To the extent Capital Expenditures made in any fiscal year are
less than the amount set forth for such fiscal year in clause (a) above (without
taking into account any increase pursuant to this clause (b)), an amount equal
to 100% of such difference but no greater than $10,000,000 may be carried
forward and used by the Borrower, Xtra and their respective Subsidiaries to make
Capital Expenditures pursuant to clause (a) in the immediately succeeding fiscal
year of PXI.
8.05 Advances, Investments and Loans. PXI will not, and will not
permit any of its Subsidiaries to, lend money or credit or make advances to any
Person, or purchase or acquire any stock, obligations or securities of, or any
other interest in, or make any capital contribution to any Person, except:
(a) PXI and its Subsidiaries may invest in cash and Cash
Equivalents;
(b) the Borrower, Xtra and Subsidiary Guarantors may acquire and
hold receivables owing to them, if created or
-60-
67
acquired in its ordinary course of business and payable or dischargeable in
accordance with its customary trade terms;
(c) loans and advances to employees in the ordinary course of
business in an aggregate principal amount not to exceed $500,000 at any time
outstanding shall be permitted;
(d) Interest Rate Protection Agreements entered into in compliance
with Section 8.03(c) shall be permitted;
(e) advances, investments and loans existing on the Restatement
Effective Date (and which are to remain outstanding after the Restatement
Effective Date) and listed on Schedule XI hereto, without giving effect to any
additions thereto or replacements thereof shall be permitted;
(f) the Borrower, Xtra and Subsidiary Guarantors may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers in
the ordinary course of business;
(g) any Subsidiary of PXI may make advances, loans or contributions
to the Borrower, Xtra or any Subsidiary Guarantor in the ordinary course of
business;
(h) each Subsidiary of PXI may make (x) payments to its parent
corporation, PXI or Holdings, and PXI may make payments to Holdings, in each
case in satisfaction of its obligations under the Approved Tax Sharing Agreement
and/or (y) loans and/or advances to PXI and/or Holdings to the same extent as,
and in lieu of, Dividends otherwise permitted by Section 8.06(c);
(i) the Borrower and Xtra may make loans or advances to limited
partnerships in which the Borrower or Xtra, as the case may be, is a limited
partner for the purpose of developing shopping centers so long as the aggregate
amount of loans and advances permitted hereunder shall not exceed $3,000,000 at
any time outstanding;
(j) the Borrower and Xtra may make additional loans, advances and
investments of a nature not contemplated by the foregoing clauses (a) through
(i), provided that (x) all loans, advances and investments made pursuant to this
clause (i) shall not exceed $1,000,000 at any time outstanding and (y) no such
loan, advance or investment shall be made in or to (A) Holdings or its
Affiliates (other than
-61-
68
Subsidiaries of PXI) or (B) a Subsidiary that is not, or which upon receipt
thereof does not become, a Subsidiary Guarantor;
(k) PXI may make the equity contributions to the Borrower and Xtra
required by Section 4.02(A)(c);
(l) PXI may make equity contributions to, or purchase common equity
of, the Borrower or Xtra, provided, that the proceeds of such equity
contributions or purchases shall be exclusively used by the Borrower or Xtra, as
the case may be, for the purpose of making Capital Expenditures; and
(m) the Hialeah & Dadeland Transfer shall be permitted.
8.06 Dividends, etc. PXI will not, and will not permit any
Subsidiary to, declare or pay any dividends (other than dividends payable solely
in capital stock of PXI) or return any capital to, its stockholders or authorize
or make any other distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire, directly
or indirectly, for a consideration, any shares of any class of its capital stock
now or hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any of such shares), or set aside any funds
for any of the foregoing purposes and PXI will not, and will not permit any of
its Subsidiaries to, purchase or otherwise acquire for consideration any shares
of any class of the capital stock of Holdings or PXI now or hereafter
outstanding (or any warrants for or options or stock appreciation rights issued
by such Person in respect of any such shares) (all of the foregoing
"Dividends"), except that:
(a) any Subsidiary of PXI may pay dividends to the Borrower, Xtra or
a Subsidiary Guarantor;
(b) any Subsidiary of PXI may pay dividends to its parent
corporation, and PXI may pay dividends to Holdings, in each case to the extent
such dividends are in satisfaction of, or otherwise reduce, such entity's
obligations under an Approved Tax Sharing Agreement; and
(c) PXI's Subsidiaries may pay cash dividends to PXI in an aggregate
amount necessary and to the extent immediately used by PXI to pay (i) accrued
fees and expenses arising from ongoing reporting and related requirements (or to
immediately dividend same to Holdings to be utilized immediately by Holdings to
pay such fees and expenses) and
-62-
69
(ii) so long as no Default or Event of Default then exists or would exist as a
result thereof, interest on the PXI Senior Notes to the extent then due and
payable in accordance with the terms thereof (but only to the extent the funds
required for such interest have not been paid to PXI in respect of interest on
the Subordinated Intercompany Real Estate Note or Xtra's Subordinated
Intercompany Note.
8.07 Transactions with Affiliates. Holdings and PXI will not, and
PXI will not permit any of its Subsidiaries to, enter into any transaction or
series of transactions, whether or not in the ordinary course of business, with
any Affiliate other than on terms and conditions substantially as favorable (or
more favorable) to, PXI or such Subsidiary as would be obtainable by, PXI or
such Subsidiary at the time in a comparable arm's-length transaction with a
Person other than an Affiliate, except the foregoing shall not prohibit
transactions permitted pursuant to Section 8.05.
8.08 Changes in Business. Except as otherwise permitted by Sections
8.01 and 8.05, the Borrower and Xtra will not alter the character of the
business of the Borrower and Xtra and their Subsidiaries from the business
(including grocery retailing and wholesaling) conducted by the Borrower and Xtra
and their Subsidiaries on the Restatement Effective Date.
8.09 EBITDA to Total Cash Interest Expense. PXI will not permit the
ratio of (x) EBITDA to (y) Total Cash Interest Expense for any Test Period
ending on the last day of any fiscal quarter set forth below to be less than the
amount set forth opposite such fiscal quarter below.
Fiscal Quarter Ending Ratio
--------------------- -----
May 18, 1997 1.50:1.00
August 9, 1997 1.50:1.00
November 1, 1997 1.50:1.00
January 31, 1998 1.50:1.00
May 23, 1998 1.50:1.00
August 15, 1998 1.50:1.00
November 7, 1998 1.50:1.00
January 30, 1999 1.75:1.00
May 22, 1999 1.75:1.00
August 14, 1999 1.75:1.00
November 6, 1999 1.75:1.00
January 29, 2000 2.00:1.00
-63-
70
May 20, 2000 2.00:1.00
August 14, 2000 2.00:1.00
November 4, 2000 2.00:1.00
January 27, 2001 2.25:1.00
May 19, 2001 2.25:1.00
August 11, 2001 2.25:1.00
November 3, 2001 2.25:1.00
January 26, 2002 2.25:1.00
May 18, 2002 2.25:1.00
August 10, 2002 2.25:1.00
November 2, 2002 2.25:1.00
January 25, 2003 2.25:1.00
8.10 Consolidated Indebtedness to EBITDA. PXI will not permit the
ratio of (i) Consolidated Indebtedness on the last day of any fiscal quarter set
forth below to (ii) EBITDA for the Test Period ending at the end of such fiscal
quarter to be greater than the amount set forth opposite such fiscal quarter
below:
Fiscal Quarter Ending Ratio
--------------------- -----
May 18, 1997 6.50:1.00
August 9, 1997 6.75:1.00
November 1, 1997 6.75:1.00
January 31, 1998 6.50:1.00
May 23, 1998 6.25:1.00
August 15, 1998 6.00:1.00
November 7, 1998 5.75:1.00
January 30, 1999 5.50:1.00
May 22, 1999 5.50:1.00
August 14, 1999 5.50:1.00
November 6, 1999 5.50:1.00
January 29, 2000 5.00:1.00
May 20, 2000 5.00:1.00
August 14, 2000 5.00:1.00
November 4, 2000 5.00:1.00
January 27, 2001 4.50:1.00
May 19, 2001 4.50:1.00
August 11, 2001 4.50:1.00
November 3, 2001 4.50:1.00
January 26, 2002 4.50:1.00
May 18, 2002 4.50:1.00
-64-
71
August 10, 2002 4.50:1.00
November 2, 2002 4.50:1.00
January 25, 2003 4.50:1.00
8.11 Senior Secured Debt to EBITDA. PXI will not permit the ratio of
(i) Senior Secured Debt on the last day of any fiscal quarter to (ii) EBITDA for
the Test Period ending at the end of such fiscal quarter to be greater than
1.50:1.00.
8.12 Limitation on Voluntary Payments; Preferred Stock. (a) PXI will
not, and will not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment of principal on or voluntary or optional
redemption of or acquisition for value of (including, without limitation, by way
of depositing with the trustee with respect thereto money or securities before
due for the purpose of paying when due), the Indebtedness described in Section
8.03(d) (except for the AFICA Bonds included therein), (e) (other than
cancellation of the $10 million subordinated note of PXI in favor of Holdings as
part of the Hialeah & Dadeland Transfer), (f) and (h);
(ii) amend or modify, or permit the amendment or modification of,
any provision of any such Indebtedness or any provision of its Certificate of
Incorporation or By Laws; or
(iii) issue any preferred or preference stock.
(b) Notwithstanding the foregoing Section 8.12(a) and so long as no
Default or Event of Default then exists (before and after giving effect to the
purchase, redemption or prepayment described below), PXI may purchase, redeem or
prepay PXI Senior Notes (i) on or after the date of any reduction of the Total
Revolving Commitment pursuant to Section 3.03(b)(III) in an amount equal to up
to 40% of the Net Equity Issuance Proceeds relating thereto or (ii) at any other
time provided in the case of this clause (ii) that (x) there are no Revolving
Loans then outstanding, (y) the Leverage Ratio for the most recently ended Test
Period shall have been no greater than 3.50:1.00 and (z) such purchase,
redemption or prepayment is made in an aggregate amount for all such payments
since the Restatement Effective Date (taken together with acquisitions made
during such period pursuant to Section 8.01(h)) not to exceed the lesser of 75%
of Excess Cash Flow for the period from and including January 25, 1997 to and
including the last day of the fiscal quarter ending on
-65-
72
or most recently ended prior to such purchase, redemption or prepayment and
$25,000,000.
8.13 Issuance of Subsidiary Stock. PXI will not permit any of its
Subsidiaries to issue, sell, assign, pledge or otherwise encumber or dispose of
any shares of its capital stock or other equity securities (or warrants, rights
or options to acquire shares or other equity securities) except as part of the
Hialeah & Dadeland Transfer and except to the extent permitted by Sections
8.01(c) and 8.05 (to the extent such securities are pledged in favor of the
Collateral Agent), to PXI, the Borrower, Xtra or any Subsidiary Guarantor.
8.14 Limitation on Restrictions Affecting Subsidiaries. PXI will
not, and will not permit any Subsidiary to, directly, or indirectly, create or
otherwise cause or suffer to exist any encumbrance or restriction which
prohibits or limits the ability of PXI or any Subsidiary to (a) pay dividends or
make other distributions or pay any Indebtedness owed to any Credit Party or any
Subsidiary thereof, (b) make loans or advances to any Credit Party or any
Subsidiary thereof, (c) transfer any of its properties or assets to any Credit
Party or any Subsidiary thereof or (d) create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than encumbrances and restrictions arising under (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii)
Indebtedness permitted pursuant to Sections 8.03(b), (d) and (e), (iv) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of any Credit Party or any of its Subsidiaries and (v)
customary restrictions on dispositions of real property interests found in
reciprocal easement agreements of any Credit Party or any of its Subsidiaries.
SECTION 9. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when
due of any principal of the Loans or any Unpaid Drawing or (ii) default, and
such default shall continue for two or more Business Days, in the payment when
due of any interest on the Loans or Unpaid Drawings or any Fees or any other
amounts owing hereunder or under any other Credit Document; or
-66-
73
9.02 Representations, etc. Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
statement or certificate delivered or required to be delivered pursuant hereto
or thereto shall prove to be untrue in any material respect on the date as of
which made or deemed made; or
9.03 Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 7.10, 7.11, or 8, or (b) default in the due performance or observance
by it of any term, covenant or agreement (other than those referred to in
Section 9.01, 9.02 or clause (a) of this Section 9.03) contained in this
Agreement and such default shall continue unremedied for a period of at least 15
days after notice to the defaulting party by any Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a) Any Credit Party or any of
their respective Subsidiaries (collectively, the "Designated Parties") shall (i)
default in any payment in respect of any Indebtedness (other than the
Obligations) in excess of $1,000,000 individually or $5,000,000 in the aggregate
of such entities or (ii) default in the observance or performance of any
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause, any such Indebtedness to become due prior to its stated maturity; or (b)
any such Indebtedness of any Designated Party shall be declared to be due and
payable, or required to be prepaid other than by a regularly scheduled required
prepayment, prior to the stated maturity thereof; or
9.05 Bankruptcy, etc. Any Designated Party shall commence a
voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy", as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against any
Designated Party and the petition is not controverted within 10 Business Days,
or is not dismissed within 60 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of any Designated Party; or any
Designated Party commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or
-67-
74
similar law of any jurisdiction whether now or hereafter in effect relating to
any Designated Party; or there is commenced against any Designated Party any
such proceeding which remains undismissed for a period of 60 days; or any
Designated Party is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or any Designated
Party suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or any Designated Party makes a general assignment for the
benefit of creditors; or any corporate action is taken by any Designated Party
for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail 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 extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan is, shall have
been or is reasonably likely to have a trustee appointed to administer such
Plan, any Plan is, shall have been or is reasonably likely to be terminated or
the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, any Designated Party or any ERISA Affiliate has
incurred or is reasonably likely to incur a liability to or on account of a Plan
under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code, or on account of
a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or any Designated
Party or any ERISA Affiliate has incurred or is reasonably likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or employee
pension benefit plans (as defined in Section 3(2) of ERISA); (b) there shall
result from any event or events described in clause (a) of this Section 9.06,
the imposition of a lien, the granting of a security interest, or a liability or
a material risk of incurring a liability; and
-68-
75
(c) which lien, security interest or liability referred to in clause (b) of this
Section 9.06, in the opinion of the Required Banks, will have a Material Adverse
Effect; or
9.07 Security Documents. On and after the date required to be filed
and/or recorded pursuant to Section 5.01 or 7.11, any Security Document shall
cease to be in full force and effect, or shall cease to give the Collateral
Agent on behalf of the Secured Parties the material Liens, rights, powers and
privileges purported to be created thereby in favor of the Collateral Agent, or
any Credit Party shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to any
such Security Document; or
9.08 Guaranties. The Guaranties or any provision thereof shall cease
to be in full force and effect, or any Guarantor thereunder or any Person acting
by or on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under any Guaranty or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be entered
against PXI and/or any of PXI's Subsidiaries (and not paid when due or fully
covered by insurance) involving a liability of $1,000,000 or more in the case of
any one such judgment or decree and $5,000,000 or more in the aggregate for all
such judgments and decrees for PXI and all PXI's Subsidiaries and all such
judgments or decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 30 days from the entry thereof; or
9.10 Change of Control. A Change of Control shall have occurred;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Banks, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Bank to enforce its claims against the Borrowers,
except as otherwise specifically provided for in this Agreement (provided that,
if an Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
-69-
76
Revolving Commitment terminated, whereupon the Revolving Commitment of each Bank
shall forthwith terminate immediately and any Commitment Commission shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans and
all obligations owing hereunder (including Unpaid Drawings) to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Borrower; (iii) direct the Collateral Agent to enforce any or all of the Liens
and security interests created pursuant to the Security Documents; (iv)
terminate any Letter of Credit which may be terminated in accordance with its
terms; and (v) direct the Borrower to pay (and the Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 9.05 in respect of the Borrower, it will pay) to the Administrative
Agent at the Payment Office such additional amounts of cash, to be held as
security for the Borrower's reimbursement obligations in respect of Letters of
Credit then outstanding equal to the aggregate Stated Amount of all Letters of
Credit then outstanding.
SECTION 10. Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Additional PXI Senior Note Documents" shall mean and include each
of the Additional PXI Notes and all securities purchase agreements, indentures
and other documents and agreements related thereto.
"Additional PXI Senior Notes" shall mean the aggregate of
$85,000,000 of Senior Notes due August 1, 2003, issued by PXI at or prior to the
Restatement Effective Date.
"Additional Security Documents" shall have the meaning provided in
Section 7.10.
"Adjusted Cash Flow" for any period (taken as one accounting period)
shall mean Consolidated Net Income for such period (after provision for taxes)
plus the amount of all non-cash charges (including, without limitation,
amortization, depreciation, deferred tax expense and non-cash interest expense)
minus any non-cash credits (including in respect of deferred taxes) in each case
that were deducted in arriving at Consolidated Net Income for such fiscal period
-70-
77
less the gains from sales of assets (other than sales of inventory and equipment
in the ordinary course of business) that were added in arriving at Consolidated
Net Income for such period.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank such Bank's Percentage and (y) at a time when an Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Revolving Commitment at such time by the Adjusted Total Revolving
Commitment at such time, it being understood that all references herein to
Revolving Commitments at a time when the Total Revolving Commitment has been
terminated shall be references to the Revolving Commitments in effect
immediately prior to such termination, provided that (A) an increase in a Bank's
Adjusted Percentage pursuant to the foregoing upon the occurrence of a Bank
Default will only be effected to the extent that after giving effect to such
increase, and any repayment of Revolving Loans pursuant to Section 4.02(A)(a) or
otherwise, the sum of (x) such Bank's new Adjusted Percentage of L/C
Outstandings and Swingline Loans plus (y) the outstanding principal amount of
such Bank's Revolving Loans equals its Revolving Commitment and (B) any changes
to the Adjusted Percentages not effected as a result of the preceding clause (A)
shall become effective on the first date or dates thereafter on which the
Revolving Outstandings are reduced, in each case to the extent permitted at such
time pursuant to clause (A).
"Adjusted Total Revolving Commitment" shall mean at any time the
Total Revolving Commitment less the aggregate Revolving Commitments of all
Defaulting Banks.
"Administrative Agent" shall mean Scotiabank in its capacity as
Administrative Agent hereunder and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"AFICA Bonds" shall mean the Series A, B and C Industrial Revenue
Bonds issued on October 1, 1985, November 1, 1985 and December 5, 1985
respectively by the Puerto Rico Industrial, Medical and Environmental Pollution
Control
Facilities Finance Authority.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to con-
-71-
78
trol a corporation if such Person possesses, directly or indirectly, the power
(i) to vote 10% or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall mean and include the Administrative Agent and the
Syndication Agent.
"Agreement" shall mean this Amended and Restated Credit Agreement,
as the same may be from time to time modified, amended and/or supplemented.
"Approved Tax Sharing Agreement" shall mean a tax sharing and/or tax
allocation agreement with Holdings in form and substance satisfactory to the
Agents and providing, inter alia, for an allocation for the payment of U.S.
income taxes on a basis no less favorable to PXI and its Subsidiaries than they
would be obligated to pay on a stand-alone basis.
"Asset Sale" shall mean and include (i) the sale, transfer or other
disposition by PXI or any of its Subsidiaries to any Person (other than the
Borrower or Xtra or any of their respective Wholly-Owned Subsidiaries) of any
asset of PXI or any of its Subsidiaries (other than (x) sales, transfers or
other dispositions in the ordinary course of business of inventory and/or
obsolete or excess equipment, (y) sales generating proceeds individually in an
amount equal to or less than $25,000 or (z) other sales generating proceeds in
the aggregate for all such sales not in excess of $1,000,000 in any fiscal year)
and (ii) the sale, transfer or other disposition by PXI to any Person of any
capital stock of the Borrower owned by PXI.
"Assignment Agreement" shall have the meaning provided in Section
12.04(b).
"Authorized Officer" shall mean any senior officer of any Person
designated as such in writing to the Administrative Agent by the President or
Chief Financial Officer of such Person.
"Bank" shall have the meaning provided in the first paragraph of
this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of an Bank to make available its portion of any Borrowing of
Revolving Loans (including a Man-
-72-
79
datory Borrowing) or to fund its portion of any unreimbursed drawing under
Section 2.02(c) or (ii) a Bank having notified the Administrative Agent and/or
the Borrower that it does not intend to comply with the obligations under
Section 1.01(A) or 1.01(C) or under Section 2.02(c), in either case as a result
of the appointment of a receiver or conservator with respect to such Bank at the
direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" shall mean the higher of (i) Federal Funds Rate plus 1/2
of 1%, or (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Base Rate Margin" shall mean 1.25% minus the then applicable
Reduction Percentage.
"Blockbuster PR" shall mean a division of the Borrower.
"Blockbuster VI" shall mean a division of Xtra, a Wholly-Owned
Subsidiary of the Borrower.
"Borrower" shall mean Pueblo International Inc.
"Borrower Pledge Agreement" shall have the meaning provided in
Section 5.01(f).
"Borrower Security Agreement" shall have the meaning provided in
Section 5.01(h).
"Borrowing" shall mean the incurrence of one Type of Loan by the
Borrower from all of the Banks on a given date (or resulting from conversions on
a given date), having in the case of Eurodollar Loans the same Interest Period,
provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of any related Borrowing of Eurodollar Loans.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York or San Xxxx, Puerto Rico a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect to all notices and determinations in connection
with, and payments
-73-
80
of principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in U.S. dollar deposits in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, for any period, the aggregate of
all expenditures (whether paid in cash or accrued as liabilities, including
Capitalized Lease Obligations but excluding Tape Expenditures, by PXI and its
Subsidiaries during that period that, in conformity with GAAP, are or are
required to be included in the property, plant or equipment reflected in the
balance sheet of PXI and its Subsidiaries, provided that Capital Expenditures
shall in any event include the purchase price paid in connection with the
acquisition of any Person (including through the purchase of all of the capital
stock or other ownership interests of such Person or through merger or
consolidation) to the extent allocable to property, plant and equipment.
"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 conformity with GAAP, is accounted for as a capital lease on the consolidated
balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of PXI and its Subsidiaries in each case taken at the amount
thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (ii) U.S. dollar denominated
time deposits, certificates of deposit and bankers acceptances of (x) any Bank
that is a commercial bank having capital and surplus in excess of $500,000,000
or (y) any bank whose short-term commercial paper rating from S&P is at least
A-1 or the equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent
thereof (any such bank, an "Approved Bank"), in each case with maturities of not
more than six months from the date of acquisition, (iii) commercial paper issued
by any Bank or Approved Bank or by the parent company of any Bank or Approved
Bank and commercial paper issued by, or guaranteed by, any industrial or
financial company with a short-term commercial paper rating of at least A-1 or
the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
-74-
81
Moody's (any such company, an "Approved Company"), or guaranteed by any
industrial company with a long term unsecured debt rating of at least A or A2,
or the equivalent of each thereof, from S&P or Moody's, as the case may be, and
in each case maturing within six months after the date of acquisition and (iv)
any fund or funds investing solely in investments of the type described in
clauses (i) through (iv) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by PXI or a Subsidiary of PXI, as the case may be,
from such Asset Sale.
"CC Percentage" shall mean (x) at all times that the Reduction
Percentage is less than 1/2 of 1%, .50%, (y) at all times that the Reduction
Percentage is 1/2 of 1%, 40%, and (z) at all times that the Reduction Percentage
is 3/4 of 1%, .30%.
"CELA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq.
"Change of Control" shall mean (i) the direct or indirect
acquisition by any Person or group (as such term is defined in Section 13(d)(3)
of the Securities Exchange Act of 1934 (the "Exchange Act")), other than a group
composed in whole or substantially in whole of the Xxxxxxxx Group and/or the
Management Group, of beneficial ownership (as such term is defined in Rule 13d-3
promulgated under the Exchange Act) of 33-1/3% or more of the outstanding shares
of Voting Stock of Holdings, (ii) the failure of PXI to own 100% of the capital
stock of the Borrower or (directly or indirectly through the Borrower) Xtra,
(iii) the failure of the Xxxxxxxx Group to beneficially own and control 80% of
the Voting Stock of Holdings (and indirectly of PXI) or after an initial public
offering of Voting Stock of Holdings or PXI, a majority of the Voting Stock of
Holdings (and indirectly of PXI) or (iv) any "change of control" or similar
event shall occur under the PXI Senior Note Documents.
"Xxxxxxxx Group" shall mean the group of companies directly or
indirectly controlled by Xxxxxxx or Xxxxxxx Xxxxxxxx and trusts for the benefit
of their families.
-75-
82
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor. For purposes of Sections 6.13,
7.06, and 9.06 of this Agreement and the defined terms "ERISA Affiliate" and
"Unfunded Current Liability," all references to the Code shall include the
comparable sections of the Puerto Rico Internal Revenue Code of 1994, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents or other property of any Credit Party on which a Lien is
granted pursuant to any Security Document.
"Collateral Agent" shall mean Scotiabank acting as collateral agent
for the Secured Parties under the Security Documents.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Consolidated Indebtedness" shall mean the principal amount of all
Indebtedness of PXI and its Subsidiaries required to be accounted for as debt in
accordance with GAAP, determined on a consolidated basis.
"Consolidated Net Income" shall mean for any period, the
consolidated net income (or loss) of PXI and its Subsidiaries for such period
taken as a single accounting period determined in conformity with GAAP provided
that there shall be excluded the income (or loss) of any Person in which any
other Person (other than the Borrower, Xtra or a Wholly-Owned Subsidiary of the
Borrower or Xtra) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or Xtra by such
Person during such period.
"Contingent Obligations" shall mean as to any Person any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
-76-
83
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, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes, the
Security Documents and the Subsidiary Guaranty.
"Credit Event" shall mean and include the making of a Loan and the
issuance of a Letter of Credit.
"Credit Party" shall mean each of (i) PXI, (ii) the Borrower, (iii)
Xtra and (iv) the other Subsidiary Guarantors.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, specified in Section 9 would constitute an Event of
Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Designated Parties shall have the meaning provided in Section 9.04.
"Dividends" shall have the meaning provided in Section 8.06.
"EBIT" shall mean, for any period, Consolidated Net Income, before
interest income, interest expense, LIFO adjustment and provision for income
taxes and Puerto Rico withholding taxes and without giving effect to any
non-recurring charges, extraordinary gains, extraordinary losses
-77-
84
or gains from sales of assets (other than sales of inventory in the ordinary
course of business).
"EBITDA" for any period shall mean EBIT, adjusted by (i) adding
thereto the amount during such period of all amortization of intangibles and
depreciation plus all non-cash charges in respect of deferred profit sharing
plans, deferred compensation plans, pension plans and employee health plans and
(ii) subtracting therefrom the amount of Tape Expenditures during such period;
provided that for purposes of determining EBITDA for Sections 8.09, 8.10 and
8.11 for any period ending in May, August or November, EBITDA shall not include
any adjustment for non-cash charges in respect of deferred profit-sharing plans,
deferred compensation plans, pension plans and employee health plans during such
period, but EBITDA determined for any period ending in January shall include all
such adjustments since the end of the preceding fiscal year. In calculating
EBITDA for purposes of Sections 8.10 and 8.11, EBITDA for the Test Period ending
(i) on May 17, 1997 shall be multiplied by 4.0, (ii) on August 9, 1997 shall be
multiplied by 2.0 and (iii) on November 1, 1997 shall be multiplied by 4/3.
"Environmental Claims" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by PXI or any of PXI's Subsidiaries solely in the ordinary course of such
Person's business and not in response to any third party action or request of
any kind) or proceedings relating in any way to any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code and rule of common law now
or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including, without limitation, CELA; RA; the Federal
Water
-78-
85
Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. Section 7401 et seq.; the Clean Air Act, 42
U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 3808
et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq. and any
applicable state and local or foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with PXI or any Subsidiary of Holdings would be deemed
to be a "single employer" within the meaning of Section 414(b) or (c) of the
Code, and with respect to Sections 412 and 4971 of the Code and Section 302 of
ERISA, Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the
rates provided in Section 1.08(b).
"Eurodollar Margin" shall mean 2.25% less the then applicable
Reduction Percentage.
"Eurodollar Rate" shall mean with respect to each Interest Period
for a Eurodollar Loan, (i) the rate determined by the Administrative Agent to be
the arithmetic mean (rounded to the nearest 1/100 of 1%) of the offered
quotation to first-class banks in the London interbank Eurodollar market by each
Reference Bank for Dollar deposits of amounts in same day funds comparable to
the outstanding principal amount of the Eurodollar Loan of such Reference Bank
for which an interest rate is then being determined with maturities comparable
to the Interest Period to be applicable to such Eurodollar Loan, determined as
of 11:00 A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period, divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation
-79-
86
D), provided that if one or more of the Reference Banks fail to provide the
Administrative Agent with its aforesaid rate, then the Eurodollar Rate shall be
determined based on the rate or rates provided to the Administrative Agent by
the other Reference Bank or Banks.
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any period, the remainder of (A)
the sum of (i) Adjusted Cash Flow for such period, and (ii) to the extent not
included in (A)(i) above, any amounts (net of reasonable fees, expenses and
other costs incurred in connection therewith) received by PXI or any of its
Subsidiaries in settlement of, or in payment of any judgments resulting from,
actions, suits or proceedings with respect to PXI or such Subsidiary from the
first day to the last day of such period, minus (B) the sum of (i) the increase
(or plus any decrease) in LIFO reserves established by PXI and its Subsidiaries
from the first day to the last day of such period, (ii) the sum of (x) the
excess of the amount of Capital Expenditures made during such period pursuant to
Section 8.04(a), as modified by Section 8.04(b), over all Capital Expenditures
made during such period pursuant to said Section 8.04(a) (as so modified) that
are financed by Indebtedness (other than the Revolving Loans hereunder) plus (y)
the amount, if any, of Capital Expenditures that the Borrower, Xtra and their
respective Subsidiaries may make pursuant to Section 8.04(a) in the next
following fiscal year in excess of the amount of Capital Expenditures set forth
in said Section for such next fiscal year as a result of the operation of
Section 8.04(b), (iii) all Third Party Debt Repayments made during such period,
and (iv) any Net Debt Issuance Proceeds and Net Equity Issuance Proceeds to the
extent included in Adjusted Cash Flow for such period.
"Existing Letter of Credit" shall mean each of the letters of credit
described in Schedule II.
"Existing PXI Senior Note Documents" shall mean and include each of
the Existing PXI Senior Notes and all securities purchase agreements, indentures
and other documents and agreements related thereto, all as in effect on March 1,
1997.
"Existing PXI Senior Notes" shall mean the aggregate $180,000,000 of
Senior Notes due 2003, issued by PXI at the time of the Initial Borrowing Date.
-80-
87
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"Florida Division Assets" shall mean any of the retail stores and
the distribution center operated by Xtra in Florida and all equipment, inventory
and receivables constituting part of or arising from the business conducted at
such stores and the distribution center.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).
"Guaranties" shall mean and include the guarantees set forth in
Section 13 of this Agreement and the Subsidiary Guaranty.
"Guarantor" shall mean and include PXI, Xtra and each Subsidiary
Guarantor.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that
contained, electric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contamin-
-81-
88
ants," or "pollutants," or words of similar import, under any applicable
Environmental Law.
"Hialeah & Dadeland Transfer" shall mean, collectively, a transfer
or series of related transfers of the Hialeah and Dadeland properties as a
result of which Holdings owns, directly or indirectly, the Hialeah and Dadeland
properties and the subordinated note of PXI in favor of Holdings in the
principal amount of $10,000,000 (a copy of which is attached hereto as Exhibit
M) is satisfied.
"Holdings" shall mean PXC&M Holdings, Inc., a Delaware corporation.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services (other than deferred allowance relating to merchandise)
which in accordance with generally accepted accounting principles would be shown
on the liability side of the balance sheet of such Person, (iii) the face amount
of all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed, (v) all Capitalized Lease Obligations
of such Person, (vi) all obligations of such Person to pay a specified purchase
price for goods or services whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vii) all obligations of such Person under
Interest Rate Protection Agreements, (viii) all reimbursement or other monetary
obligations with respect to surety, performance and bid bonds, and (ix) all
Contingent Obligations of such Person, provided that Indebtedness shall not
include trade payables and accrued expenses, in each case arising in the
ordinary course of business.
"Initial Borrowing Date" shall have the meaning provided in the
Original Credit Agreement.
"Intercompany Mortgages" shall have the meaning provided in Section
5.01(i)(ii).
"Interest Period", with respect to any Loan, shall mean the interest
period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, any interest rate cap agreement, any interest rate collar
agreement or other similar
-82-
89
agreement or arrangement designed to hedge the risks for a Person with respect
to, or otherwise manage, interest rates.
"L/C Fee" shall have the meaning provided in Section 3.01(b).
"L/C Outstandings" shall mean, at any time, the sum of, without
duplication, (i) the aggregate Stated Amount of all outstanding Letters of
Credit and (ii) the aggregate amount of all Unpaid Drawings.
"Leasehold" of any Person means all of the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Issuer" shall mean and include Scotiabank and/or
its Affiliates.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean the ratio described in Section 8.10.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Loan" shall mean each and every Loan made by any Bank hereunder,
including Revolving Loans and Swingline Loans.
"Management Group" shall mean the group of shareholders of Holdings
that are employees of PXI or its Subsidiaries.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(C).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on
the business, properties, assets, liabili-
-83-
90
ties, condition (financial or otherwise) or prospects of the Borrower or PXI and
its Subsidiaries taken as a whole.
"Maturity Date shall mean February 1, 2003.
"Maximum Swingline Amount" shall mean $5,000,000.
"Minimum Assignment Amount" shall mean, with respect to any
assignment by any Bank of its Revolving Commitment hereunder an amount equal to
$5,000,000.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans (other
than Swingline Loans), $1,000,000, (ii) for Eurodollar Loans $2,000,000 and
(iii) for Swingline Loans, $500,000.
"Xxxxx'x" shall mean Xxxxx'x Investors Services, Inc.
"Mortgages" shall mean deeds of trust, leasehold deeds of trust,
mortgages, leasehold mortgages or similar documents covering the Mortgaged
Properties located in Florida and the U.S. Virgin Islands.
"Mortgage Policies" shall have the meaning provided in Section
5.01(i).
"Mortgaged Properties" shall mean and include (i) all Real
Properties owned or leased by PXI or any of its Subsidiaries, to the extent
designated as such on Schedule VI hereto and (ii) each Real Property subjected
to a mortgage in favor of the Collateral Agent for the benefit of the Secured
Parties pursuant to Section 7.11.
"NationsBank" shall mean NationsBank, N.A. (South).
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of reasonable costs and expenses of sale
and related cash settlements (including payment of severance and other
termination costs, other current liabilities attaching to the assets sold and
retained by the seller and principal, premium and interest of Indebtedness other
than the Loans, required to be, and which is, repaid under the terms thereof as
a result of such Asset Sale) and incremental taxes paid or payable as a result
thereof.
"Net Debt Issuance Proceeds" shall mean the proceeds (net of
reasonable costs associated therewith) received from the incurrence of
Indebtedness.
-84-
91
"Net Equity Issuance Proceeds" shall mean the proceeds (net of
underwriting discounts and commissions and other reasonable costs associated
therewith) received from the sale of equity.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.02.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent at
000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, or such other
office as the Administrative Agent may designate to the Borrowers and the Banks
from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Collateral Agent, any Agent or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Participating Bank" shall have the meaning provided in Section
2.02(a).
"Payment Office" shall mean the office of the Administrative Agent
in Atlanta or such other office as the Administrative Agent may designate to the
Borrower and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean at any time for each Bank, the percentage
obtained by dividing such Bank's Revolving Commitment by the Total Revolving
Commitment.
"Permitted Encumbrances" shall mean (i) those liens, encumbrances
and other matters affecting title to any Mortgaged Property listed in the
Mortgage Policies in respect thereof and found reasonably acceptable by the
Administrative Agent (which shall include all thereof specified in the Mort-
-85-
92
gage Policies delivered to and accepted by the Collateral Agent pursuant to
Section 5.01(i)(iii)), (ii) as to any particular Mortgaged Property at any time,
such easements, encroachments, covenants, rights of way, minor defects,
irregularities or encumbrances on title which are not unusual with respect to
property similar in character to any such Mortgaged Property and which do not,
materially impair such Mortgaged Property for the purpose for which it is held
by the mortgagor thereof, or the lien held by the Collateral Agent, (iii)
municipal and zoning ordinances, which are not violated by the existing
improvements and the present use made by the mortgagor thereof of the Premises
(as defined in the respective Mortgage), (iv) general real estate taxes and
assessments not yet delinquent, (v) as to any Mortgage encumbering any PRMP, the
lien of the Intercompany Mortgage and (vi) such other items as the
Administrative Agent may consent to.
"Permitted Existing Indebtedness" shall have the meaning provided in
Section 6.19.
"Permitted Liens" shall have the meaning provided in Section
8.02(d).
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of), any Credit Party or any ERISA Affiliate, and each
such plan for the five year period immediately following the latest date on
which any Credit Party or any ERISA Affiliate maintained, contributed to or had
an obligation to contribute to such plan.
"Pledge Agreements" shall mean and include the PXI Pledge Agreement,
the Borrower Pledge Agreement, the Xtra Pledge Agreement and the XM Pledge
Agreement.
"Pledged Securities" shall mean and include the Pledged Securities
as defined in each of the Pledge Agreements.
"Prime Lending Rate" shall mean the rate which Scotiabank announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference
-86-
93
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Scotiabank may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"PRMP" shall mean and include each Mortgaged Property located in
Puerto Rico.
"Puerto Rico Pledge Agreement" shall have the meaning provided in
Section 5.01(i)(ii).
"PXI" shall have the meaning provided in the first paragraph of this
Agreement.
"PXI Pledge Agreement" shall have the meaning provided in Section
5.01(f).
"PXI Senior Note Documents" shall mean and include the Existing PXI
Senior Note Documents and the Additional PXI Senior Note Documents.
"PXI Senior Notes" shall mean and include the Existing PXI Senior
Notes and the Additional PXI Senior Notes.
"PXI Subordinated Notes" shall mean any subordinated indebtedness of
PXI to any member of the Xxxxxxxx Group, the entire proceeds of which are
provided immediately to the Borrower and used immediately thereafter to prepay
Revolving Loans; provided that (i) no such Indebtedness shall be guaranteed by
any Subsidiary of PXI, (ii) no such Indebtedness shall be secured by any asset
of PXI or any of its Subsidiaries, (iii) any such Indebtedness shall be
subordinated to the Obligations to the satisfaction of the Administrative Agent,
(iv) no PXI Subordinated Notes shall mature prior to July 31, 2004, (v) no PXI
Subordinated Notes shall bear interest at a rate per annum in excess of 1% in
excess of the interest rate applicable to the Loans, (vi) the incurrence of such
Indebtedness is permitted pursuant to the terms of the PXI Senior Note Documents
and (vii) all other terms and conditions of such Indebtedness are in form and
substance reasonably satisfactory to the Administrative Agent. The incurrence of
PXI Subordinated Notes shall be deemed to be a representation and warranty by
PXI that all conditions thereto have been satisfied and that same is permitted
in accordance with the terms of this Agreement, which representation and
warranty shall be deemed to be a representation and warranty for all purposes
hereunder, including, without limitation, Sections 5.02 and 9.02.
-87-
94
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Reduction Percentage" shall mean (a) initially zero, (b) at any
time there exists a Default or Event of Default, zero and (c) from and after the
first day of any fiscal quarter of PXI (such first day being the "Start Date")
commencing after the Restatement Effective Date to and including the last day of
such fiscal quarter, the applicable percentage set forth below to the extent
that the ratio (the "Leverage Ratio") of (x) Consolidated Indebtedness on the
last day of the second to last fiscal quarter ending prior to the Start Date to
(y) EBITDA for the period of four consecutive fiscal quarters (taken as a whole)
ending on the last day of the second to last fiscal quarter ending prior to the
Start Date equals the ratio set forth opposite such percentage, and no less than
5 Business Days before the Start Date, a certificate signed by the Chief
Financial Officer of PXI is delivered to the Administrative Agent certifying as
to the entitlement to, and the amount of, a Reduction Percentage (and providing
for the calculation thereof):
Leverage Reduction
Ratio Percentage
------------------- ----------
4.5:1 or greater, 1/4 of 1%
but less than 5.0:1
4.0:1 or greater 1/2 of 1%
but less than 4.5:1
less than 4.0:1 3/4 of 1%
"Reference Banks" shall mean and include Scotiabank and NationsBank.
"Refinancing" shall mean the issuance of the Additional PXI Senior
Notes and the repayment of all Loans under and as defined in the Original Credit
Agreement.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
-88-
95
"Reinvestment Amount" shall mean, with respect to any Asset Sale,
the amount specified in the Reinvestment Notice delivered by the Borrower in
connection therewith as the portion of the Net Cash Proceeds from such Asset
Sale that the Borrower and/or Xtra has used or intends to use to purchase,
construct or otherwise acquire Reinvestment Assets.
"Reinvestment Assets" shall mean any assets to be employed in the
business of the Borrower, Xtra and their Subsidiaries as permitted in Section
8.08.
"Reinvestment Election" shall have the meaning provided in Section
3.03(b)(I).
"Reinvestment Notice" shall mean a written notice signed by an
Authorized Officer of the Borrower stating that the Borrower and/or Xtra has
used or in good faith intends and expects to use the portion specified therein
of the Net Cash Proceeds of an Asset Sale to purchase, construct or otherwise
acquire Reinvestment Assets.
"Reinvestment Reduction Amount" shall mean, with respect to any
Asset Sale, the amount, if any, on the Reinvestment Reduction Date relating
thereto by which (a) the Reinvestment Amount in respect of such Asset Sale
exceeds (b) the aggregate amount thereof expended by the Borrower, Xtra and
their Subsidiaries to acquire Reinvestment Assets.
"Reinvestment Reduction Date" shall mean, with respect to any Asset
Sale, the earlier of (i) the date occurring one year after such Asset Sale and
(ii) the date on which the Borrower and/or Xtra shall have determined not to, or
shall have otherwise ceased to, proceed with the purchase, construction or other
acquisition of Reinvestment Assets with the related Reinvestment Amount.
"Release" shall mean disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing and
the like, into or upon any land or water or air, or otherwise entering into the
environment.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan 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.
"Required Banks" shall mean, at any time, Banks whose Adjusted
Percentages exceed 50%.
-89-
96
"Restatement Effective Date" shall have the meaning provided in
Section 5.01.
"Revolving Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Schedule I hereto directly below
the column entitled "Revolving Commitment", as same may be reduced from time to
time pursuant to Section 3.02, 3.03 and/or 9.
"Revolving Loan" shall have the meaning provided in Section 1.01(A).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Revolving Outstandings" shall mean, at any time, the sum of the
outstanding principal amount of Revolving Loans and Swingline Loans at such time
plus the L/C Outstandings at such time.
"S&P" shall mean Standard & Poor's Corporation.
"Scotiabank" shall mean The Bank of Nova Scotia.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Secured Parties" shall mean the Banks, the Agents, and the
Collateral Agent.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreements.
"Security Agreements" shall mean and include (i) the Borrower
Security Agreement, (ii) the Subsidiary Security Agreements and (iii) any other
security agreement executed by PXI or any of its Subsidiaries pursuant to
Section 7.10.
"Security Documents" shall mean and include the Security Agreements,
the Pledge Agreements, the Mortgages, the Intercompany Mortgages, the Puerto
Rico Pledge Agreement, any other document entered into by any Credit Party
granting a Lien in favor of the Collateral Agent on property in Puerto Rico and
after the execution and delivery thereof, each Additional Security Document.
"Senior Secured Debt" shall mean at any time (x) Consolidated
Indebtedness less (y) Indebtedness included in Consolidated Indebtedness that
(x) is expressly subordinated
-90-
97
to the Obligations on a basis satisfactory to the Agents and/or (y) is
unsecured.
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Subordinated Intercompany Notes" shall mean the promissory notes,
copies of which are attached hereto as Exhibit J-2.
"Subordinated Intercompany Real Estate Note" shall mean a
Subordinated Intercompany Real Estate Note, a copy of which is attached hereto
as Exhibit J-1.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of PXI.
"Subsidiary Guarantor" shall mean any Subsidiary party to the
Subsidiary Guaranty on the Restatement Effective Date or any Subsidiary that,
after the Restatement Effective Date, executes a counterpart of the Subsidiary
Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in Section
5.01(g).
"Subsidiary Security Agreement" shall have the meaning provided in
Section 5.01(h).
"Swingline Loan" shall have the meaning provided in Section 1.01(B).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Swingline Termination Date" shall mean the date which is three
Business Days prior to the Maturity Date.
-91-
98
"Syndication Agent" shall mean NationsBank.
"Tape Expenditures" shall mean all cash payments in respect of the
acquisition by Blockbuster PR or Blockbuster VI of video tapes.
"Taxes" shall have the meaning provided in Section 4.04.
"Test Period" shall mean, with respect to any Test Period ending (x)
on or prior to January 31, 1998, a period (taken as one accounting period)
commencing on January 26, 1997 and ending on (i) May 17, 1997, (ii) August 9,
1997 and (iii) November 1, 1997, respectively, and (y) thereafter, the four
consecutive fiscal quarters of PXI (taken as one accounting period) then last
ended.
"Third Party Debt Repayments" shall mean any repayment by the
Borrower, Xtra or any of their Subsidiaries of principal on Indebtedness of the
Borrower, Xtra or any such Subsidiary provided that Third Party Debt Repayments
shall not include (i) any repayment on the Revolving Loans except to the extent
the Total Revolving Commitment has been permanently reduced in connection with
such repayment, (ii) any repayment on any other revolving loans of the Borrower,
Xtra or any Subsidiary other than any such repayment at the final maturity
thereof but then only to the extent such revolving loans have not been replaced
or refinanced through a new loan or credit facility, (iii) any repayment
financed through the incurrence of new Indebtedness (excluding any repayment
financed through the incurrence of Revolving Loans), (iv) any repayment of
Indebtedness with proceeds of the sale of assets or issuance of equity and (v)
any repayments of Capital Lease Obligations and/or other indebtedness, to the
extent in each case described in this clause (v) deducted in computing Adjusted
Cash Flow for the applicable period.
"Total Cash Interest Expense" shall mean for any period total
interest expense (net of interest income) of PXI and its Subsidiaries on a
consolidated basis (including, without limitation, the interest expense
associated with Capitalized Lease Obligations but excluding expense for interest
not payable in cash).
"Total Revolving Commitment" shall mean the sum of the Revolving
Commitments of each of the Banks.
-92-
99
"Total Unutilized Revolving Commitment" shall mean, at any time, the
excess, if any, of (i) the Total Revolving Commitment over (ii) the sum of (x)
the outstanding principal amount of all Revolving Loans and Swingline Loans plus
(y) the L/C Outstandings, in each case at such time.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with Statement of Financial Accounting Standards No. 87, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.
"Unpaid Drawing" shall have the meaning provided in Section 2.04(a).
"Unutilized Revolving Commitment" for any Bank at any time shall
mean an amount (not less than zero) equal to the excess of (x) the Revolving
Commitment of such Bank over (y) the sum of (i) the aggregate outstanding
Revolving Loans of such Bank plus (ii) such Bank's Adjusted Percentage of the
L/C Outstandings plus (iii) in the case of Scotiabank, the aggregate outstanding
principal amount of Swingline Loans.
"Voting Stock" shall mean the shares of capital stock and any other
securities of any Person entitled to vote generally for the election of
directors of such Person or any other securities (including, without limitation,
rights and options), convertible into, exchangeable into or exercisable for, any
of the foregoing (whether or not presently exercisable, convertible or
exchangeable).
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsidiary, other than directors' qualifying shares, is owned directly
or indirectly by such Person.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, telecopier device, telegraph
or cable.
-93-
100
"XM Pledge Agreement" shall have the meaning provided in Section
5.01(f)(iv).
"Xtra" shall have the meaning provided in the first paragraph of
this Agreement.
"Xtra Pledge Agreement" shall have the meaning provided in Section
5.01(f)(iii).
SECTION 11. The Administrative Agent, etc.
11.01 Appointment. Each Bank hereby irrevocably designates and
appoints Scotiabank as Administrative Agent (such term as used in this Section
11 to include Scotiabank in its capacity as Collateral Agent), and NationsBank
as Syndication Agent, for such Bank to act as specified herein and in the other
Credit Documents, and each such Bank hereby irrevocably authorizes Scotiabank as
the Administrative Agent, and NationsBank as Syndication Agent, for such Bank,
to take such action on its behalf under the provisions of this Agreement and the
other Credit Documents and to exercise such powers and perform such duties as
are expressly delegated to the Administrative Agent or Syndication Agent or the
Agents, as the case may be, by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent and Syndication Agent each agrees to act as such upon
the express conditions contained in this Section 11. Notwithstanding any
provision to the contrary elsewhere in this Agreement, neither the
Administrative Agent nor the Syndication Agent shall have any duties or
responsibilities, except those expressly set forth herein or in the other Credit
Documents, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent
or Syndication Agent. Provisions of this Section 11 are solely for the benefit
of the Administrative Agent, the Syndication Agent and the Banks, and no Credit
Party shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement,
the Administrative Agent and Syndication Agent each shall act solely as agent of
the Banks and the Administrative Agent and Syndication Agent each does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for any Credit Party.
-94-
101
11.02 Delegation of Duties. The Administrative Agent and Syndication
Agent each may execute any of its duties under this Agreement or any other
Credit Document by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent and Syndication Agent each shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither Agent, nor any of its
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by any Credit Party or any of their
respective officers contained in this Agreement, any other Credit Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by either Agent under or in connection with, this Agreement or
any other Credit Document or for any failure of any Credit Party or any of their
respective officers to perform its obligations hereunder or thereunder. Neither
Agent shall be under any obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
any Credit Party. Neither Agent shall be responsible to any Bank for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by either Agent to the Banks or by or on behalf of any Credit
Party to either Agent or any Bank or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.
-95-
102
11.04 Reliance by Administrative Agent, etc. Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Credit Parties), independent accountants and other experts selected by either
Agent. Each Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Required Banks as it deems appropriate
or it shall first be indemnified to its satisfaction by the Banks against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Banks, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Banks.
11.05 Notice of Default. Neither Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Bank or the Borrower or any other
Credit Party referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Agent receives such a notice, it shall give prompt notice thereof to the
Banks. Each Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required Banks, provided that,
unless and until an Agent shall have received such directions, such Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Banks.
11.06 Non-Reliance on Administrative Agent and Other Banks. Each
Bank expressly acknowledges that neither Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by either Agent
hereinafter taken, including any review of the affairs of any Credit Party,
shall be deemed to constitute any representation or warranty by an Agent to any
Bank. Each Bank represents to the Agents that it has, independently and
-96-
103
without reliance upon either Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, assets, operations, property, financial
and other conditions, prospects and creditworthiness of the Credit Parties and
made its own decision to make its Loans hereunder and enter into this Agreement.
Each Bank also represents that it will, independently and without reliance upon
either Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Credit Parties. Neither Agent shall have
any duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, assets, property, financial and
other conditions, prospects or creditworthiness of any Credit Party which may
come into the possession of such Agent or any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates.
11.07 Indemnification. The Banks agree to indemnify each Agent and
Syndication Agent in its capacity as such ratably according to the Banks'
aggregate Loans and Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against such Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Credit Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby or any action taken or omitted to be taken
by such Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by the Borrower, provided that no
Bank shall be liable to either Agent for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the gross negligence or
willful misconduct of such Agent. If any indemnity furnished to either Agent for
any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, the Agents may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The
-97-
104
agreements in this Section 11.07 shall survive the payment of all Obligations.
11.08 Individual Capacity. The Administrative Agent and the
Syndication Agent and their respective affiliates may make loans to, accept
deposits from and generally engage in any kind of business with any Credit Party
as though such Agent were not an Agent hereunder. With respect to the Loans made
by it and all Obligations owing to it, each Agent shall have the same rights and
powers under this Agreement as any Bank and may exercise the same as though it
were not an Agent and the terms "Bank" and "Banks" shall include the each Agent
in its individual capacity.
11.09 Resignation; Removal; Successors. Either Agent may resign as
Agent upon 20 days' notice to the Banks, and either Agent may be removed at any
time with or without cause by the Required Banks. Upon the resignation or
removal of the Administrative Agent, the Required Banks shall appoint from among
the Banks a successor Administrative Agent for the Banks subject to prior
approval by the Borrower (such approval not to be unreasonably withheld),
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment, and the resigning or removed
Administrative Agent's rights, powers and duties as the Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement. After
the retiring Administrative Agent's resignation or removal hereunder as the
Administrative Agent, the provisions of this Section 11 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to: (i) whether
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agents in connection with the
negotiation, preparation, execution and delivery of the Credit Documents and the
documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements of White & Case and any local counsel) and of the Agents and each
of the Banks in connection with the enforcement of the Credit Documents and the
documents and instru-
-98-
105
ments referred to therein (including, without limitation, the reasonable fees
and disbursements of counsel for the Agents and for each of the Banks); (ii) pay
and hold each of the Banks harmless from and against any and all present and
future stamp and other similar taxes with respect to the foregoing matters and
save each of the Banks harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Bank) to pay such taxes; and (iii) indemnify each Agent and
each Bank, their respective officers, directors, employees, representatives and
agents (each, an "indemnified person") from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses incurred by
any of them as a result of, or arising out of, or in any way related to, or by
reason of, (a) any investigation, litigation or other proceeding (whether or not
any Bank is a party thereto) related to the entering into and/or performance of
any Credit Document or the use of the proceeds of any Loans hereunder or the
consummation of any other transactions contemplated in any Credit Document, (b)
any settlement entered into in connection with the foregoing to the extent such
settlement has been consented to by the Borrower or PXI, which consent shall not
be unreasonably withheld or (c) the actual or alleged presence of Hazardous
Materials on, or Released from, any Real Property of any Credit Party or any
Environmental Claim with respect to any Credit Party, in each case including,
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation, Environmental Claim or any
of such Credit Party's acts, omissions, business, operations or Real Property,
or other proceeding (but excluding any such losses, liabilities, claims, damages
or expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the undertaking
to indemnify and hold harmless set forth in this Section 12.01 may be
unenforceable because it is violative of any law or public policy as determined
by a final judgment of a court of competent jurisdiction, the Borrower shall
make the maximum contribution to the payment and satisfaction of each of the
liabilities giving rise to claims under the indemnification provisions of this
12.01 which is permissible under applicable law.
12.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Bor-
-99-
106
rower or to any other Person, any such notice being hereby expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of any Credit Party hereto against and on
account of the Obligations and liabilities of such Credit Party to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations of such Credit Party (but
excluding any amounts held by such Bank in a trustee capacity) purchased by such
Bank pursuant to Section 12.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Bank shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
12.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing and
mailed, telegraphed, telexed, telecopied, cabled or delivered, if to PXI, the
Borrower or Xtra, at the address specified opposite its signature below; if to
any Bank, at its address specified for such Bank on Schedule I hereto; or, at
such other address as shall be designated by any party in a written notice to
the other parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and
shall be effective when received.
12.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that no Credit Party may assign or
transfer any of its rights or obligations hereunder (except as expressly
provided herein) without the prior written consent of the Banks. Each Bank may
at any time grant participations in any of its rights hereunder or under any of
the Notes to a Person that is a commercial bank, other financial institution,
mutual fund or "Accredited Investor" as such term is defined in Regulation D of
the Securities Act of 1933, as amended, provided that in the case of any such
participation, the participant shall not have any rights under this Agreement or
any of the other Credit Documents (the participant's rights against such Bank in
respect of such participation to be those set forth in the agreement executed by
such Bank in favor of the participant relating thereto) and all amounts payable
by any Borrower hereunder shall be
-100-
107
determined as if such Bank had not sold such participation, except that the
participant shall be entitled to the benefits of Sections 1.10, 1.11, 2.04 and
4.04 of this Agreement to the extent that such Bank would be entitled to such
benefits if the participation had not been entered into or sold, and provided
further, that no Bank shall transfer, grant or assign any participation under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would (i) extend the final scheduled maturity of any Loan or Note in
which such participant is participating (it being understood that any waiver of
any prepayment of Loans shall not constitute an extension of the final maturity
date) or reduce the rate or extend the time of payment of interest or Fees
thereon (except in connection with a waiver of the applicability of any
post-default increase in interest rates), or reduce the principal amount
thereof, or increase such participant's participating interest in any Commitment
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Commitment,
or a mandatory prepayment, shall not constitute a change in the terms of any
Commitment), (ii) release all or substantially all of the Collateral (except as
expressly provided herein) or (iii) consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under this Agreement (except
as expressly provided herein or therein).
(b) Notwithstanding the foregoing, (x) any Bank may assign all or a
portion of its Revolving Commitment (and the outstanding Revolving Loans
thereunder) and its rights and obligations hereunder to its parent company
and/or any affiliate of such Bank which is at least 50% owned by such Bank or
its parent company or to one or more Banks and (y) any Bank may, after
consultation with, but with no obligation to obtain the consent of, PXI, assign
a portion, in an amount equal to at least the Minimum Assignment Amount (or the
remaining balance thereof if less) of its Revolving Commitment and its rights
and obligations hereunder to a Person that is a commercial bank, other financial
institution, mutual fund or "Accredited Investors" as such term is defined in
Regulation D of the Securities Act of 1933, as amended (each an "Eligible
Assignee"), each of which Eligible Assignees to become a party to this Agreement
as a Bank prior to or after the Restatement Effective Date by executing an
assignment agreement in the form of Exhibit K hereto, appropriately completed
(an "Assignment Agreement") with the assigning Bank, provided that, in each
case, (i) at such time Schedule I shall be deemed to have been modified to
reflect the Loans
-101-
108
and/or Commitments of such new Bank and of the existing Banks, (ii) if requested
by such new Bank or the assigning Bank, the Borrower shall issue new Notes to
such new Bank and to the assigning Bank in conformity with the requirements of
Section 1.05, and (iii) the Administrative Agent shall have received at the time
of each such assignment from either the assigning or assignee Bank the payment
of a nonrefundable assignment fee of $5,000. To the extent of any assignment
pursuant to this Section 12.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Loans and/or Commitment. No
Bank may assign all or a portion of its Revolving Commitment to an Eligible
Assignee not already a Bank hereunder unless the Letter of Credit Issuer shall
have consented in writing to such assignment.
(c) Notwithstanding any other provisions of this Section 12.04, no
transfer or assignment of the interests or obligations of any Bank hereunder or
any grant of participations therein shall be permitted if such transfer,
assignment or grant would require any Borrower to file a registration statement
or qualify an indenture with the SEC or to qualify the Loans under the "Blue
Sky" laws of any State.
(d) Each Bank initially party to this Agreement hereby represents,
and each Person that becomes a Bank pursuant to an assignment permitted by this
Section 12.04 will, upon its becoming party to this Agreement, represent that it
is a commercial lender, other financial institution or other "Accredited
Investor" which makes and/or invests in loans in the ordinary course of its
business and that it will make or acquire Loans or participations for its own
account in the ordinary course of such business, provided that, subject to the
preceding clauses (a) and (b), the disposition of any promissory notes or other
evidences of or interests in Indebtedness held by such Bank shall at all times
be within its exclusive control.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Bank in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between any Credit Party and either Agent or any Bank shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which each Agent or any
Bank would otherwise have. No notice to or demand on any Credit Party
-102-
109
in any case shall entitle any Credit Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the Agents or the Banks to any other or further action in any circumstances
without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of any Borrower in
respect of any Obligations, it shall, except as otherwise provided in this
Agreement, distribute such payment to the Banks (other than any Bank that has
consented in writing to waive its pro rata share of such payment) pro rata based
upon their respective shares, if any, of the Obligations with respect to which
such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligations then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
in such amount as shall result in a proportional participation by all of the
Banks in such amount, provided that if all or any portion of such excess amount
is thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP consistently applied throughout the periods involved (except as set
forth in the notes thereto or as otherwise disclosed in writing by any Borrower
to the Banks), provided that, except as otherwise specifically provided herein,
all computations determining compliance with Section 8, including definitions
used therein, shall utilize accounting principles and policies in effect at the
time of the preparation of, and in conformity with those used to prepare, the
historical financial statements delivered to the Banks pursuant to Section
6.10(b) provided that FAS 109 shall be utilized in making all
-103-
110
such determinations. At any time the computations determining compliance with
Section 8 utilize accounting principles or treatments different from those
utilized in the financial statements then being furnished to the Banks pursuant
to Section 7.01, such financial statements shall be accompanied by
reconciliation work-sheets.
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
12.08 Governing Law; Submission to Jurisdiction; Venue. (a) This
Agreement and the other Credit Documents and the rights and obligations of the
parties hereunder and thereunder shall, except as otherwise provided in the
Mortgages or certain other Security Documents, be construed in accordance with
and be governed by the law of the State of New York. Any legal action or
proceeding with respect to this Agreement or any other Credit Document may be
brought in the courts of the State of New York or of the United States for the
Southern District of New York, and, by execution and delivery of this Agreement,
each Credit Party hereto hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Credit Party hereto hereby irrevocably designates, appoints and
empowers CT Corporation System with offices on the date hereof at 0000 Xxxxxxxx,
Xxx Xxxx, XX 00000 as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of
any and all legal process, summons, notices and documents which may be served in
any such action or proceeding. The Administrative Agent agrees to use reasonable
good faith efforts to mail, by registered or certified mail, to the respective
Credit Party, at its address set forth opposite its signature below, copies of
any and all legal process, summons, notices and documents mailed or delivered to
CT Corporation System in connection with the immediately preceding sentence;
provided that the failure of any Credit Party to receive, for any reason, copies
of such correspondence shall not in any way affect the effectiveness of the
delivery of any legal process, summons, notice or documents delivered to CT
Corporation System. If for any reason such designee, appointee and agent shall
cease to be available to act as such, each Credit Party hereto agrees to
designate a new designee, appointee and agent in New York City on the terms and
for the purposes of this provision satisfactory to the Administrative Agent.
Each Credit Party hereto further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies there-
-104-
111
of by registered or certified mail, postage prepaid, to such Credit party, at
its address set forth opposite its signature below, such service to become
effective thirty days after such mailing. Nothing herein shall affect the right
of the Administrative Agent, any Bank or the holder of any Note to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereto hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum. Each Credit Party hereto
further waives any right it may have to trial by jury in any court or
jurisdiction, including without limitation those referred to in clause (a)
above, in respect of any matter arising out of or relating to this Agreement and
the other Credit Documents.
12.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with each Credit Party and
the Administrative Agent.
12.10 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.11 Amendment or Waiver. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by PXI and the Borrower and the Required Banks, provided that
no such change, waiver, discharge or termination shall, without the consent of
each Bank (other than a Defaulting Bank) affected thereby (or its Obligations
being directly affected in the case of the following clause (i)), (i) extend the
final scheduled maturity of any Unpaid Drawing, Loan or Note (it being
understood that any waiver of any prepayment of the Loans shall not constitute
an extension of the final maturity
-105-
112
date), or reduce the rate or extend the time of payment of interest (other than
as a result of waiving the applicability of any post-default increase in
interest rates) thereon or Fees, or reduce the amount thereof, or increase the
Commitments of any Bank over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment, or mandatory prepayment, shall not constitute
a change in the terms of any Commitment of any Bank), (ii) release all or
substantially all of the collateral (except as expressly provided in the Credit
Documents), (iii) amend, modify or waive any provision of this Section, or
Section 9.01, 11.07, 12.01, 12.02, 12.04, 12.06 or 12.07(b), (iv) reduce the
percentage specified in the definition of Required Banks (it being understood
that, with the consent of the Required Banks, additional extensions of credit
pursuant to this Agreement may be included in the determination of the Required
Banks on substantially the same basis as the Revolving Commitments are included
on the Restatement Effective Date), (v) consent to the assignment or transfer by
any Credit Party of any of its rights and obligations under any Credit Document
(except as expressly provided herein or therein). No provision of Section 2 or
Section 11 may be amended without the consent of the affected Letter of Credit
Issuer or affected Agent, respectively. All modifications and amendments to this
Agreement and to Schedules I and II described in Section 12.04 may be effective
as described therein.
12.12 Survival. All indemnities set forth herein including, without
limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01 shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans and the satisfaction of all other Obligations.
12.13 Domicile of Loans. Each Bank may transfer and carry its Loans
or participations at, to or for the account of any branch office, subsidiary or
affiliate of such Bank, provided that no Borrower shall be responsible for costs
arising under Section 1.10, 1.11, 2.05 or 4.04 resulting from any such transfer
to the extent not otherwise applicable to such Bank prior to such transfer.
12.14 Registry. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
12.14, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Revolving Loans made by
each of the Banks and each repayment in respect of the principal amount of the
Revolving Loans of
-106-
113
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Revolving Loans. With respect to any Bank, the transfer of the Commitments of
such Bank and the rights to the principal of, and interest on, any Revolving
Loan made pursuant to such Commitments shall not be effective until such
transfer is recorded on the Register maintained by the Administrative Agent with
respect to ownership of such Revolving Commitments and Revolving Loans and prior
to such recordation all amounts owing to the transferor with respect to such
Revolving Commitments and Revolving Loans shall remain owing to the transferor.
The registration of assignment or transfer of all or part of any Revolving
Commitments and Revolving Loans shall be recorded by the Administrative Agent on
the Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment Agreement pursuant to Section 12.04(b).
Coincident with the delivery of such an Assignment Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Revolving Loan, or as soon thereafter as practicable, the
assigning or transferor Bank shall surrender the Revolving Note evidencing such
Revolving Loan, and thereupon one or more new Revolving Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Bank
and/or the new Bank. The Borrower agrees to indemnify the Administrative Agent
from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 12.14.
SECTION 13. Guaranty.
13.01 The Guaranty. In order to induce the Banks to enter into this
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by each Guarantor from the proceeds of the Loans and the
issuance of the Letters of Credit, each Guarantor hereby agrees with the Banks
as follows (for purposes of this Section 13, Guarantor shall mean PXI and Xtra):
each Guarantor hereby unconditionally and irrevocably, jointly and severally,
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, by acceleration or otherwise, of any
and all indebtedness of the Borrower to the Banks. If any or all of the
indebtedness of the Borrower to the Banks becomes due and payable hereunder,
each Guarantor, jointly and severally, unconditionally promises to pay such
indebtedness to the Banks, or order, on
-107-
114
demand, together with any and all reasonable expenses which may be incurred by
any Agent or the Banks in collecting any of the indebtedness. The word
"indebtedness" is used in this Section 13 in its most comprehensive sense and
means any and all advances, debts, obligations and liabilities of the Borrower
arising in connection with this Agreement, heretofore, now, or hereafter made,
incurred or created, whether voluntarily or involuntarily, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether or
not such indebtedness is from time to time reduced, or extinguished and
thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.
13.02 Bankruptcy. Additionally, each Guarantor unconditionally and
irrevocably, jointly and severally, guarantees the payment of any and all
indebtedness of the Borrower to the Banks whether or not due or payable by such
Borrower upon the occurrence in respect of the Borrower of any of the events
specified in Section 9.05, and unconditionally and irrevocably, jointly and
severally promises to pay such indebtedness to the Banks, or order, on demand,
in lawful money of the United States.
13.03 Nature of Liability. The liability of each Guarantor hereunder
is exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrowers whether executed by such Guarantor, any other
Guarantor, any other guarantor or by any other party, and the liability of each
Guarantor hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or
of any other party as to the indebtedness of the Borrower, or (c) any payment on
or in reduction of any such other guaranty or undertaking, or (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to the Agents or the Banks on the indebtedness
which the Agents or such Banks repay to the Borrower pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding.
13.04 Independent Obligation. The obligations of each Guarantor
hereunder are independent of the obligations
-108-
115
of any other Guarantor, any other guarantor of the Borrower, and a separate
action or actions may be brought and prosecuted against each Guarantor whether
or not action is brought against any other Guarantor, any other guarantor of the
Borrower and whether or not any other Guarantor, any other guarantor or the
Borrower be joined in any such action or actions. Each Guarantor waives, to the
fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by the
Borrower or other circumstance which operates to toll any statute of limitations
as to the Borrower shall operate to toll the statute of limitations as to each
Guarantor.
13.05 Authorization. Each Guarantor authorizes the Agents and the
Banks without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter,
any of the indebtedness (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the Guaranty herein made
shall apply to the indebtedness as so changed, extended, renewed or
altered;
(b) take and hold security for the payment of the indebtedness and
sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged
or mortgaged to secure, or howsoever securing, the indebtedness or any
liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors,
the Borrower or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate
the payment
-109-
116
of all or any part thereof to the payment of any liability (whether due
or not) of the Borrower to its creditors other than the Banks;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of any Borrower to the Banks regardless of what
liability or liabilities of the Guarantors or the Borrower remain unpaid;
and/or
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this
Agreement or any of such other instruments or agreements.
13.06 Reliance. It is not necessary for any Agent or the Banks to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on behalf of any of them, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
13.07 Subordination. Any indebtedness of the Borrower now or
hereafter owing to a Guarantor, is hereby subordinated to the indebtedness of
the Borrower owing to the Agents and the Banks, provided that payment may be
made by the Borrower on any such indebtedness owing to a Guarantor so long as
the same is not prohibited by this Agreement, and provided further, that if the
Administrative Agent so requests at a time when an Event of Default exists, all
such indebtedness of the Borrower to such Guarantor shall be collected, enforced
and received by such Guarantor as trustee for the Banks and be paid over to the
Banks on account of the indebtedness of the Borrower to the Banks, but without
affecting or impairing in any manner the liability of such Guarantor under the
other provisions of this Guaranty, and provided further that this Section 13.07
shall not apply to the Subordinated Intercompany Real Estate Note or other
Subordinated Intercompany Notes. Prior to the transfer by any Guarantor of any
note or negotiable instrument evidencing any indebtedness of the Borrower to
such Guarantor, such Guarantor shall xxxx such note or negotiable instrument
with a legend that the same is subject to this subordination.
13.08 Waiver. (a) Each Guarantor waives any right (except as shall
be required by applicable statute and cannot be waived) to require the
Administrative Agent or the Banks to (i) proceed against the Borrower, any other
Guarantor, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrower, any
-110-
117
other Guarantor, any other guarantor or any other party or (iii) pursue any
other remedy in the Administrative Agent's or the Banks' power whatsoever. Each
Guarantor waives any defense based on or arising out of any defense of the
Borrower, any other Guarantor, any other guarantor or any other party other than
payment in full of the indebtedness, including, without limitation, any defense
based on or arising out of the disability of the Borrower, any other Guarantor,
any other guarantor or any other party, or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the indebtedness.
The Administrative Agent and the Banks may, at their election, foreclose on any
security held by the Administrative Agent, the Collateral Agent or the Banks by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Administrative Agent
and the Banks may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the indebtedness has been paid. Each Guarantor
waives any defense arising out of any such election by the Administrative Agent
and the Banks, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the indebtedness and
the nature, scope and extent of the risks which such Guarantor assumes and
incurs hereunder, and agrees that the Administrative Agent and the Banks shall
have no duty to advise any Guarantor of information known to them regarding such
circumstances or risks.
(c) Until such time as all the Obligations have been paid in full in
cash or Cash Equivalents, each Guarantor hereby waives all rights of subrogation
which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code, or otherwise) to the
claims of the Banks against the Borrower or
-111-
118
any other guarantor of the Obligations and all contractual, statutory or common
law rights of reimbursement, contribution or indemnity from the Borrower or any
other guarantor which it may at any time otherwise have as a result of this
Guaranty.
13.09 Limitation on Enforcement. The Banks agree that this Guaranty
may be enforced only by the action of the Administrative Agent, in each case
acting upon the instructions of the Required Banks and that no Bank shall have
any right individually to seek to enforce or to enforce this Guaranty it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent for the benefit of the Banks upon the terms of this
Agreement. The Banks further agree that this Guaranty may not be enforced
against any director, officer, employee or stockholder of any Guarantor.
13.10 Rights of Contribution. Without in any manner modifying its
obligations to the Banks under this Guaranty, to the extent that any Guarantor
makes any payment under this Guaranty in respect of any indebtedness (other than
indebtedness of any Subsidiary of such Guarantor) that is in excess of its
Percentage of the aggregate payments made by all Guarantors under this Guaranty
in respect of such indebtedness, then such Guarantor shall have a right of
contribution from each other Guarantor whose payments, if any, in respect of
such indebtedness are less than its percentage of the aggregate payments made by
all Guarantors under this Guaranty in respect of such indebtedness in an amount,
and with the effect, that after giving effect to any such contribution right,
such Guarantor shall be responsible only for its Percentage of all payments made
hereunder by all Guarantors in respect of such indebtedness. As used in this
Section 13.10, a Guarantor's Percentage shall mean the percentage obtained by
dividing (i) the amount by which the present fair saleable value of its assets
on the date of this Guaranty exceeds its liabilities on such date (without
giving effect to this Guaranty) (such excess for such Guarantor, its "Net
Worth") by (ii) the aggregate Net Worth of all Guarantors at such time.
13.11 Post Closing Actions. Notwithstanding any- thing to the
contrary contained in this Agreement or the other Credit Documents, the parties
hereto acknowledge and agree that:
(a) Depository Account Agreement. The Borrower shall not be required
to have authorized, executed and delivered the depository account
agreement on the
-112-
119
Restatement Effective Date, but instead if the effective date of the
Puerto Rico Commercial Transactions Act (Act No. 241 enacted on September
19, 1996) does not occur on or prior to July 2, 1997, then the Borrower
shall authorize, execute and deliver a depositary account agreement
satisfactory in form and substance to the Administrative Agent and the
Borrower, among the Borrower, the Collateral Agent and a depository bank
organized under the laws of the Commonwealth of Puerto Rico and having an
office in Puerto Rico, within 60 days of receipt of a written request from
the Administrative Agent that the Borrower do so, provided that no such
request may be made by the Administrative Agent prior to July 2, 1997.
(b) Mortgage Amendments. The amendments to the Mortgages with
respect to Mortgaged Properties located in the U.S. Virgin Islands shall
not be required to be delivered by the Borrower on the Restatement
Effective Date but shall instead be required to be delivered by the
Borrower within 60 days following the Restatement Effective Date.
(c) Intellectual Property. The Borrower shall not be required to
deliver any additional assignments of security interests relating to
intellectual property on the Restatement Effective Date provided that the
Borrower shall deliver such additional assignments of security interests
relating to intellectual property as the Administrative Agent may request
in form and substance satisfactory to the Administrative Agent within 30
days of receipt of a written request from the Administrative Agent to do
so.
(d) Insurance Certificates. The Borrower shall not be required to
deliver all of the evidence of insurance complying with the requirements
of Section 7.09, instead the Borrower will deliver, within 30 days
following the Restatement Effective Date to the Agents, evidence of
insurance in form and substance satisfactory to the Agents, which evidence
of insurance shall comply with the requirements of Section 5.01(k).
All conditions precedent and representations contained in this
Agreement and the other Credit Documents shall be deemed modified to the extent
necessary to effect the foregoing (and to permit the taking of the actions
described above within the time periods required above, rather than as elsewhere
provided in the Credit Documents); provided, that (x) to the extent any
representation and warranty would not
-113-
120
be true because the foregoing actions were not taken on the Restatement
Effective Date, the respective representation and warranty shall be required to
be true and correct in all material respects at the time the respective action
is taken (or was required to be taken) in accordance with the foregoing
provisions of Section 13.11 and (y) all representations and warranties relating
to the Security Documents shall be required to be true immediately after the
actions required to be taken by Section 13.11 have been taken (or were required
to be taken). The acceptance of the benefits of each Credit Event shall
constitute a representation, warranty and covenant by the Borrower to each of
the Banks that the actions required pursuant to this Section 13.11 will be taken
within the relevant time periods referred to in this Section 13.11 and that, at
such time, all representations and warranties contained in this Agreement and
the other Credit Documents shall then be true and correct without any
modification pursuant to this Section 13.11. Any failure to comply with the
requirements of this Section 13.11 shall constitute a breach of covenant by the
Borrower (including, without limitation, for purposes of Section 9.03 of this
Agreement).
-114-
121
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address for Notices: PUEBLO XTRA INTERNATIONAL,
0000 X.X. 00xx Xxxxxx INC.
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000 By /s/ Xxxxxxx X. Xxxx,III
Fax: (000) 000-0000 -----------------------------
Attn: Chief Financial Officer Title: President/CEO
Address for Notices: PUEBLO INTERNATIONAL, INC.
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000 By /s/ Xxxxxxx X. Xxxx,III
Tel: (000) 000-0000 -----------------------------
Fax: (000) 000-0000 Title: President/CEO
Attn: Chief Financial Officer
Address for Notices: XTRA SUPER FOOD CENTERS, INC.
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000 By /s/ Xxxxxxx X. Xxxx,III
Tel: (000) 000-0000 -----------------------------
Fax: (000) 000-0000 Title: President/CEO
Attn: Chief Financial Officer
THE BANK OF NOVA SCOTIA, as
Administrative Agent and a Bank
By /s/ Xxxxxxx X. Xxxxx
-----------------------------
Title: Vice President
NATIONSBANK, N.A. (SOUTH), as
Syndication Agent and a Bank
By /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Title: Senior Vice President
-115-
122
EXHIBIT A-1
[FORM OF REVOLVING NOTE]
$[_____________] New York, New York
No.___________ [April __], 1997
FOR VALUE RECEIVED, PUEBLO INTERNATIONAL, INC., a corporation
organized and existing under the laws of the State of Delaware (the "Borrower"),
hereby promises to pay to the order of [_________________________] (the "Bank"),
in lawful money of the United States of America in immediately available funds,
at the office of The Bank of Nova Scotia (the "Administrative Agent") located at
000 Xxxxxxxxx Xxxxxx, XX Xxxxx 0000, Xxxxxxx, Xxxxxxx, 00000 on the Maturity
Date (as defined in the Agreement referred to below) the principal sum of
[_______________] or, if less, the then unpaid principal amount of all Revolving
Loans (as defined in the Agreement) made by the Bank pursuant to the Agreement.
The Borrower also promises to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement
referred to below.
This Note is one of the Revolving Notes referred to in the
Amendment and Restatement, dated as of April __, 1997, amending and restating
the Credit Agreement, dated as of July 21, 1993, among the Borrower, Pueblo Xtra
International, Inc., Xtra Super Food Centers, Inc., the lending institutions
from time to time party thereto (including the Bank), the Administrative Agent
and NationsBank, N.A. (South) as Syndication Agent (as from time to time in
effect, the "Agreement") and is entitled to the benefits thereof. This Note is
guaranteed pursuant to the Guaranties and is secured by the Security Documents
(each as defined in the Agreement), including one or more Mortgages (as defined
in the Agreement). As provided in the Agreement, this Note is subject to
voluntary prepayment and mandatory repayment prior to the Maturity Date, in
whole or in part, and Revolving Loans may be converted from one Type (as defined
in the Agreement) into another Type to the extent provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due
123
EXHIBIT A-1
Page 2
and payable in the manner and with the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
PUEBLO INTERNATIONAL, INC.
By
------------------------------
Name:
Title:
124
EXHIBIT A-2
[FORM OF SWINGLINE NOTE]
$5,000,000 New York, New York
No. 1 [April __], 1997
FOR VALUE RECEIVED, PUEBLO INTERNATIONAL, INC., a corporation
organized and existing under the laws of the State of Delaware (the "Borrower"),
hereby promises to pay to the order of THE BANK OF NOVA SCOTIA (the "Bank"), in
lawful money of the United States of America in immediately available funds, at
the office of The Bank of Nova Scotia (the "Administrative Agent") located at
000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, on the Swingline
Termination Date (as defined in the Agreement referred to below) the principal
sum of $5,000,000.00 (FIVE MILLION DOLLARS) or, if less, the then unpaid
principal amount of all Swingline Loans (as defined in the Agreement) made by
the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08(a) of the Agreement
referred to below.
This Note is one of the Swingline Notes referred to in the
Amendment and Restatement, dated as of April __, 1997, amending and restating
the Credit Agreement, dated as of July 21, 1993, among the Borrower, Pueblo Xtra
International, Inc., Xtra Super Food Centers, Inc., the lending institutions
from time to time party thereto (including the Bank), the Administrative Agent
and NationsBank, N.A. (South) as Syndication Agent (as from time to time in
effect, the "Agreement") and is entitled to the benefits thereof. This Note is
guaranteed pursuant to the Guaranties and is secured by the Security Documents
(each as defined in the Agreement), including one or more Mortgages (as defined
in the Agreement). As provided in the Agreement, this Note is subject to
voluntary prepayment and mandatory repayment prior to the Swingline Termination
Date, in whole or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due
125
EXHIBIT A-2
Page 2
and payable in the manner and with the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
PUEBLO INTERNATIONAL, INC.
By
---------------------------------
Name:
Title:
126
EXHIBIT B
[FORM OF LETTER OF CREDIT REQUEST]
No. _______________(1) Dated ______________(2)
To: The Bank of Nova Scotia, as
Administrative Agent for the Banks party to
the Credit Agreement referred to below and
_____________,(3) as Letter of Credit
Issuer, under the Amendment and Restatement,
dated as of April __, 1997, amending and
restating the Credit Agreement, dated as of
July 21, 1993 (as subsequently amended from
time to time, the "Credit Agreement"), among
Pueblo Xtra International, Inc., Pueblo
International, Inc., Xtra Super Food
Centers, Inc., the lending institutions from
time to time party thereto (the "Banks"),
The Bank of Nova Scotia, as Administrative
Agent, and NationsBank, N.A. (South), as
Syndication Agent.
Ladies and Gentlemen:
Pursuant to Section 2.03 of the Credit Agreement, the undersigned
hereby requests that the Letter of Credit Issuer issue a Letter of Credit on
_____________(4) (the "Date of
----------
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request (prior to 1:00 P.M. (New York time) at
least three Business Days prior to the Date of Issuance or such shorter period
as may be agreed by the relevant Letter of Credit Issuer).
(3) Name of Letter of Credit Issuer.
(4) Date of Issuance.
127
EXHIBIT B
Page 2
Issuance") in the aggregate stated amount of __________________.(5)
For purposes of this Letter of Credit Request, unless otherwise
defined, all capitalized terms used herein which are defined in the Credit
Agreement shall have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit will be
______________,(6) and such Letter of Credit will be in support of
______________(7) and will have a stated termination date of
_________________.(8)
The undersigned hereby certifies that:
(1) the representations and warranties contained in the Credit
Documents will be true and correct in all material respects on and as of
the Date of Issuance, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as
of such earlier date); and
(2) no Default or Event of Default has occurred and is continuing nor,
after giving effect to the
----------
(5) Aggregate initial stated amount of Letter of Credit (not less than $50,000
or such lower amount agreed to by the Letter of Credit Issuer).
(6) Insert name and address of beneficiary.
(7) Insert description of supported obligations and name of agreement, if any,
or, in the case of trade Letters of Credit, the commercial transaction, to which
it relates.
(8) Insert last date upon which drafts may be presented (not later than (x)
one year after the Date of Issuance (unless otherwise agreed by the
Administrative Agent and the Letter of Credit Issuer with respect to Letters of
Credit Issued in respect of the AFICA Bonds) and (y) the third Business Day
preceding the Maturity Date).
128
EXHIBIT B
Page 3
issuance of the Letter of Credit requested hereby, would such a Default or
Event of Default occur.
Copies of all documentation with respect to the supported transaction
are attached hereto.
PUEBLO INTERNATIONAL, INC.
By
--------------------------------
Name:
Title:
129
EXHIBIT E-1
[FORM OF PXI PLEDGE AGREEMENT]
AMENDMENT AND RESTATEMENT dated as of April [___], 1997 to
PLEDGE AGREEMENT, dated as of July 28, 1993 (as amended, modified, supplemented
or restated from time to time, the "Agreement"), made by PUEBLO XTRA
INTERNATIONAL, INC. ("Pledgor"), a Delaware corporation, in favor of THE BANK OF
NOVA SCOTIA, as Collateral Agent (the "Pledgee") for the benefit of (x) the
Banks, the Syndication Agent and the Administrative Agent under and as defined
in the Credit Agreement hereinafter referred to (the Banks, the Syndication
Agent and the Administrative Agent are hereinafter called the "Bank Creditors")
and (y) each Bank which enters into one or more interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements or other similar
agreements or arrangements with any Borrower designed to hedge the risks for
such Borrower with respect to interest rates as permitted by Section 8.03(c) of
the Credit Agreement (each such agreement or arrangement with a Bank, an
"Interest Rate Protection Agreement", and any such Bank (even if such Bank
subsequently ceases to be a Bank under the Credit Agreement for any reason) and
such Bank's assigns, if any, collectively, the "Interest Rate Protection
Creditors" and, together with the Bank Creditors, herein called the "Secured
Parties"). Except as otherwise defined herein, terms used herein and defined in
the Credit Agreement shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, the Pledgor, Pueblo International, Inc., a Delaware
corporation, Xtra Super Food Centers, Inc., a Delaware corporation, the Banks
party thereto, The Bank of Nova Scotia, as Administrative Agent, and
NationsBank, N.A. (South), as Syndication Agent, have entered into an Amendment
and Restatement, dated as of April [___], 1997, amending and restating the
Credit Agreement, dated as of July 21, 1993 (as modified, supplemented, amended
or restated from time to time, the "Credit Agreement"), providing for the making
of Loans and the issuance of, and participation in, Letters of Credit as
contemplated therein;
130
EXHIBIT E-1
Page 2
WHEREAS, the Borrower desires to incur Loans and to have
Letters of Credit issued for its account to the extent provided in the Credit
Agreement;
WHEREAS, the Borrower may enter into Interest Rate Protection
Agreements with the Interest Rate Protection Creditors as permitted by Section
8.03(c) of the Credit Agreement;
WHEREAS, pursuant to Section 13 of the Credit Agreement (the
"Credit Agreement Guaranty"), Pledgor has unconditionally guaranteed the
obligations and liabilities of the Borrower under the Credit Agreement;
WHEREAS, the Borrower is a direct or indirect Wholly-Owned
Subsidiary of Pledgor;
WHEREAS, it is a condition precedent to the above-described
extensions of Credit that the Pledgor shall have executed and delivered to the
Pledgee this Agreement; and
WHEREAS, the Pledgor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
the Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by the
Pledgor for the benefit of the Secured Parties to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities of the Pledgor to the Bank Creditors under the Credit
Agreement Guaranty and the due performance of and compliance with all
of the terms, conditions and agreements contained in the Credit
Agreement by the Pledgor (all such obligations and liabilities under
this clause (i), except to the extent consisting of obligations under
or with respect to
131
EXHIBIT E-1
Page 3
Interest Rate Protection Agreements, being herein collectively called
the "Credit Agreement Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities of the Pledgor pursuant to any guaranty by the Pledgor of
any Interest Rate Protection Agreement entered into by the Borrower
(all such obligations and liabilities under this clause (ii) being
herein collectively called the "Interest Rate Protection Obligations");
(iii) any and all sums reasonably advanced by the Pledgee in
order to preserve the Collateral (as hereinafter defined) or preserve
its security interest in the Collateral (as hereinafter defined); and
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred
to in clauses (i), (ii) and (iii) above, after an Event of Default
(such term, as used in this Agreement, shall mean any Event of Default
under, and as defined in, the Credit Agreement, or any payment default
by the Borrower under any Interest Rate Protection Agreement and shall
in any event include, without limitation, any payment default (after
the expiration of any applicable grace period) on any of the
Obligations (as hereinafter defined)) shall have occurred and be
continuing, the reasonable expenses of re-taking, holding, preparing
for sale or lease, selling or otherwise disposing or realizing on the
Collateral, or of any exercise by the Pledgee of its rights hereunder,
together with reasonable attorneys' fees and court costs;
all such obligations, liabilities, sums and expenses set forth in clauses (i) -
(iv) of this Section 1 being herein collectively called the "Obligations".
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used
herein, (i) the term "Stock" shall mean, collectively, (x) all of the issued
and outstanding shares of stock at any time owned by the Pledgor of any
corporation (other than any corporation organized outside of the United States
(any such corporation, a "Foreign Corporation")) and (y) 65% of
132
EXHIBIT E-1
Page 4
the issued and outstanding shares of stock at any time owned by the Pledgor of
any Foreign Corporation, (ii) the term "Notes" shall mean all promissory notes
at any time issued to the Pledgor by any of its Subsidiaries (including any
Subordinated Intercompany Note and Subordinated Intercompany Real Estate Note)
and (iii) the term "Securities" shall mean all of the Stock and Notes. The
Pledgor represents and warrants, as to the stock of corporations and promissory
notes owned by the Pledgor, that (a) the Stock consists of the number and type
of shares of the stock of the corporations as described in Annex A hereto, and
that such Stock constitutes that percentage of the issued and outstanding
capital stock of the issuing corporation as is set forth in Annex A hereto; (b)
the Notes consist of the promissory notes described in Annex B hereto; (c) the
Pledgor is the holder of record and sole beneficial owner of such Securities;
and (d) on the date hereof the Pledgor owns no other Securities.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations and for the purposes
set forth in Section 1 hereof, the Pledgor hereby (i) grants to the Pledgee a
security interest in all of the Collateral (as hereinafter defined) owned by the
Pledgor; (ii) pledges and deposits as security with the Pledgee the Securities
owned by the Pledgor on the date hereof, and delivers to the Pledgee
certificates or instruments therefor, duly endorsed in blank in the case of
promissory notes and accompanied by undated stock powers duly executed in blank
by the Pledgor in the case of capital stock, or such other instruments of
transfer as are acceptable to the Pledgee, and (iii) assigns, transfers,
hypothecates, mortgages, charges and sets over to the Pledgee all of the
Pledgor's right, title and interest in and to such Securities (and in and to all
certificates or instruments evidencing such Securities), to be held by the
Pledgee, upon the terms and conditions set forth in this Agreement.
3.2. Subsequently Acquired Securities. If the Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Securities at
any time or from time to time after the date hereof, the Pledgor will forthwith
pledge and deposit such Securities (or certificates or instruments representing
such Securities) as security with the Pledgee
133
EXHIBIT E-1
Page 5
and deliver to the Pledgee certificates therefor or instruments thereof, duly
endorsed in blank in the case of promissory notes and accompanied by undated
stock powers duly executed in blank in the case of capital stock, or such other
instruments of transfer as are acceptable to the Pledgee, and will promptly
thereafter deliver to the Pledgee a certificate executed by any of the Chairman
of the Board, the President, a Vice Chairman, the Vice President-Finance or the
Treasurer of the Pledgor describing such Securities and certifying that the same
have been duly pledged with the Pledgee hereunder; provided that the Pledgor
shall not be required at any time to pledge hereunder more than 65% of the
aggregate amount of issued and outstanding shares of stock at any time owned by
the Pledgor of any Foreign Corporation.
3.3 Uncertificated Securities. Notwithstanding anything to
the contrary contained in Sections 3.1 and 3.2 hereof, if any Securities
(whether or not now owned or hereafter acquired by the Pledgor) are
uncertificated securities, the Pledgor shall promptly notify the Pledgee
thereof, and shall promptly take all actions required to perfect the security
interest of the Pledgee under applicable law (including, in any event, under
Sections 8-313 and 8-321 of the New York Uniform Commercial Code if applicable).
The Pledgor further agrees to take such actions as the Pledgee deems necessary
or desirable to effect the foregoing and to permit the Pledgee to exercise any
of its rights and remedies hereunder, and agrees to provide an opinion of
counsel reasonably satisfactory to the Pledgee with respect to any such pledge
of uncertificated Securities promptly upon request of the Pledgee.
3.4 Definition of Pledged Stock, Pledged Notes, Pledged
Securities and Collateral. All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Stock", all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes," all of the Pledged Stock and Pledged Notes together are
hereinafter called the "Pledged Securities," which together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, is hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The
Pledgee shall have the right to appoint one or more sub-
134
EXHIBIT E-1
Page 6
agents for the purpose of retaining physical possession of the Pledged
Securities, which may be held (in the discretion of the Pledgee) in the name of
the Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any
nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee.
5. ASSIGNMENT; VOTING, ETC. (a) On the date hereof, the
Pledgor hereby has, and at all times during the term of this Agreement, the
Pledgor shall have, assigned and transferred to Pledgee all of its rights,
title, and interest to and under the Subordinated Intercompany Notes made
payable to it and Subordinated Intercompany Real Estate Notes, including,
without limitation, all rights to receive and direct payments (other than
payments of interest which are permitted under the Credit Agreement to be
applied to the payment of interest on the PXI Senior Notes), all rights and
remedies thereunder (including the right to accelerate same) and under any
Intercompany Mortgages securing same and all rights to grant or make waivers or
modifications to the provisions thereof, all without any notice to or consent
from, the Pledgor, who at no time shall have any rights with respect to same.
(b) Unless and until an Event of Default shall have
occurred and be continuing, the Pledgor shall be entitled to vote any and all
Pledged Stock and to give consents, waivers or ratifications in respect thereof,
provided that no vote shall be cast or any consent, waiver or ratification given
or any action taken which would violate or be inconsistent with any of the terms
of this Agreement, the Credit Agreement, any Interest Rate Protection Agreement
or any other Credit Document, or which would have the effect of impairing the
position or interests of the Pledgee or any Secured Party. All such rights of
the Pledgor to vote and to give consents, waivers and ratifications shall cease
in case an Event of Default shall occur and be continuing, and Section 7 hereof
shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of
Default shall have occurred and be continuing, all cash dividends payable in
respect of the Pledged Stock and all payments in respect of the Pledged Notes
(other than the Subordinated Intercompany Notes and Subordinated Intercompany
Real Estate Notes, payments with respect to which shall be
135
EXHIBIT E-1
Page 7
governed by paragraph 5(a) of this Agreement) shall be paid to the Pledgor,
provided that all cash dividends payable in respect of the Pledged Stock in
connection with the dissolution, liquidation, recapitalization or
reclassification of the capital of any corporation (other than any such
transaction permitted by the Credit Agreement) which are determined by the
Pledgee to represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital, to the Pledgee and retained by it as part of the Collateral (unless
such cash dividends are applied to the repayment of the Obligations on the basis
set forth in Section 9 hereof). The Pledgee shall also be entitled to receive
directly, and to retain as part of the Collateral:
(a) all other or additional stock or securities or property
(other than cash) paid or distributed by way of dividend or otherwise
in respect of the Pledged Stock;
(b) all other or additional stock or other securities or
property (including cash, unless such cash dividends are applied to the
repayment of the Obligations on the basis set forth in Section 9
hereof) paid or distributed in respect of the Pledged Stock by way of
stock-split, spin-off, split-up, reclassification, combination of
shares or similar rearrangement; and
(c) all other or additional stock or other securities or
property (including cash, unless such cash is applied to the repayment
of the Obligations on the basis set forth in Section 9 hereof) which
may be paid in respect of the Collateral by reason of any
consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization (other than any such
transaction permitted by the Credit Agreement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event
of Default shall have occurred and be continuing, the Pledgee shall be entitled
to exercise all of the rights, powers and remedies (whether vested in it by this
Agreement, the Credit Agreement, by any Interest Rate Protection Agreement or by
any other Credit Document or by law) for the
136
EXHIBIT E-1
Page 8
protection and enforcement of its rights in respect of the Collateral, and the
Pledgee shall be entitled, without limitation, to exercise the following rights,
which the Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable in respect of the
Collateral otherwise payable under Section 6 hereof to the Pledgor;
(b) to transfer all or any part of the Pledged Securities into
the Pledgee's name or the name of its nominee or nominees;
(c) to accelerate the Pledged Notes, whether or not a default
under the Subordinated Intercompany Real Estate Note shall have
occurred, and take any other action to collect upon the Pledged Notes
(including, without limitation, to make any demand for payment thereon
and realize upon any underlying collateral security for the Pledged
Notes);
(d) to vote all or any part of the Pledged Stock (whether or
not transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof
(the Pledgor hereby irrevocably constituting and appointing the Pledgee
the proxy and attorney-in-fact of the Pledgor, with full power of
substitution to do so); and
(e) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by the Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion may
determine, provided that at least 10 days' notice of the time and place
of any such sale shall be given to the Pledgor. The Pledgor hereby
waives and releases to the
137
EXHIBIT E-1
Page 9
fullest extent permitted by law any right or equity of redemption with
respect to the Collateral, whether before or after sale hereunder, and
all rights, if any, of marshalling the Collateral and any other
security for the Obligations or otherwise. At any such sale, unless
prohibited by applicable law, the Pledgee on behalf of the Secured
Parties may bid for and purchase all or any part of the Collateral so
sold free from any such right or equity of redemption. Neither the
Pledgee nor any Secured Party shall be liable for failure to collect or
realize upon any or all of the Collateral or for any delay in so doing
nor shall any of them be under any obligation to take any action
whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy
of the Pledgee provided for in this Agreement, the Credit Agreement, the
Interest Rate Protection Agreements, or the other Credit Documents or now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by the Pledgee or any Secured Party of
any one or more of the rights, powers or remedies provided for in this
Agreement, the Credit Agreement, the Interest Rate Protection Agreements or the
other Credit Documents or now or hereafter existing at law or in equity or by
statute or otherwise shall not preclude the simultaneous or later exercise by
the Pledgee or any Secured Party of all such other rights, powers or remedies,
and no failure or delay on the part of the Pledgee or any Secured Party to
exercise any such right, power or remedy shall operate as a waiver thereof.
9. APPLICATION OF PROCEEDS. All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral, together with all
other moneys received by the Pledgee hereunder, shall be applied to the payment
of the Obligations in the manner provided by Section 7.4 of the Borrower
Security Agreement.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to
138
EXHIBIT E-1
Page 10
the purchaser or purchasers of the Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to the Pledgee or such officer or be answerable in any
way for the misapplication or nonapplication thereof.
11. INDEMNITY. The Pledgor agrees (a) to indemnify and hold
harmless the Pledgee and each Secured Party from and against any and all claims,
demands, losses, judgments and liabilities (including liabilities for penalties)
of whatsoever kind or nature, and (b) to reimburse the Pledgee and each Secured
Party for all reasonable costs and expenses, including reasonable attorneys'
fees, growing out of or resulting from this Agreement or the exercise by the
Pledgee or any Secured party of any right or remedy granted to it hereunder or
under the Credit Agreement, the Interest Rate Protection Agreements or under the
other Credit Documents except, with respect to clauses (a) and (b) above, for
those arising from the Pledgee's or any Secured Party's gross negligence or
willful misconduct. In no event shall the Pledgee or any Secured Party be
liable, in the absence of gross negligence or willful misconduct on its part,
for any matter or thing in connection with this Agreement other than to account
for moneys actually received by it in accordance with the terms hereof. If and
to the extent that the obligations of the Pledgor under this Section 11 are
unenforceable for any reason, the Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES. The Pledgor agrees that it will join
with the Pledgee in executing and, at the Pledgor's own expense, file and refile
under the Uniform Commercial Code such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of the Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instru-
139
EXHIBIT E-1
Page 11
ments as the Pledgee may reasonably require or deem advisable to carry into
effect the purposes of this Agreement or to further assure and confirm unto the
Pledgee its rights, powers and remedies hereunder.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. By accepting the benefits hereof, each
Secured Party shall be deemed to have agreed to the terms and conditions set
forth in Article X of the Borrower Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time, which is
incorporated herein by reference in its entirety; provided that all references
therein to "this Agreement" shall be a reference to this Agreement, provided
further that all references therein to the "Assignor" shall be a reference to
the "Pledgor", and provided further that all references therein to the
"Collateral Agent" shall be a reference to the "Pledgee". The Pledgee shall act
hereunder on the terms and conditions set forth in said Article X and the rights
of each Secured Party shall be enforceable solely by the Pledgee in accordance
with said Article X.
14. TRANSFER BY PLEDGOR. The Pledgor will not sell or
otherwise dispose of, grant any option with respect to, or mortgage, pledge or
otherwise encumber any of the Collateral or any interest therein (except in
accordance with the terms of this Agreement, the Credit Agreement and the other
Credit Documents).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. The
Pledgor represents, warrants and covenants that (a) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by this Agreement; (b) it has full power,
authority and legal right to pledge all the Securities pledged by it pursuant to
this Agreement; (c) this Agreement has been duly authorized,
140
EXHIBIT E-1
Page 12
executed and delivered by the Pledgor and constitutes a legal, valid and binding
obligation of the Pledgor enforceable in accordance with its terms, except to
the extent that the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws generally
affecting creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law); (d) no consent of any other party
(including, without limitation, any stockholder or creditor of the Pledgor or
any of its Subsidiaries) and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by the
Pledgor in connection with the execution, delivery or performance of this
Agreement, except those which have been obtained or made or as may be required
by laws affecting the offering and sale of securities generally in connection
with the exercise by the Pledgee of its remedies hereunder; (e) the execution,
delivery and performance of this Agreement does not violate any provision of any
applicable law or regulation or of any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or foreign, or of the
certificate of incorporation or by-laws of the Pledgor or of any securities
issued by the Pledgor or any of its Subsidiaries, or of any mortgage, indenture,
lease, deed of trust, loan agreement, credit agreement or other material
agreement, instrument or undertaking to which the Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon the Pledgor or any
of its Subsidiaries or upon any of their respective assets and will not result
in the creation or imposition of any lien or encumbrance on any of the assets of
the Pledgor or any of its Subsidiaries except as contemplated by this Agreement;
(f) all the shares of the Stock pledged by the Pledgor hereunder have been duly
and validly issued, are fully paid and non-assessable; (g) each of the Pledged
Notes pledged by the Pledgor hereunder, when executed by the obligor thereof,
will be the legal, valid and binding obligation of such obligor, enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
and (h) the pledge and assignment of the Securities pledged by the Pledgor
pursuant to
141
EXHIBIT E-1
Page 13
this Agreement, together with the delivery of such Securities pursuant to this
Agreement and any relevant filings or recordings (which delivery, filings and
recordings have been made or obtained), creates a valid and perfected first
security interest in such Securities and the proceeds thereof, subject to no
prior lien or encumbrance or to any agreement purporting to grant to any third
party a lien or encumbrance on the property or assets of the Pledgor which would
include such Securities. The Pledgor covenants and agrees that it will defend
the Pledgee's right, title and security interest in and to the Securities
pledged by the Pledgor hereunder and the proceeds thereof against the claims and
demands of all persons whomsoever; and the Pledgor covenants and agrees that it
will have like title to and right to pledge any other property at any time
hereafter pledged to the Pledgee as Collateral hereunder and will likewise
defend the right thereto and security interest therein of the Pledgee and the
Secured Parties.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
the Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance
or occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from the Interest Rate Protection Agreements, the Credit Documents or any other
instrument or agreement referred to therein, or any assignment or transfer of
any thereof; (b) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Agreement; (c) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the Pledgee
or its assignee; (d) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof; or
(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the Pledgor or
any Subsidiary of the Pledgor, or any action taken with respect to this
Agreement by any trustee or receiver, or by any court, in any such proceeding,
whether or not the
142
EXHIBIT E-1
Page 14
Pledgor shall have notice or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that the Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock of the Pledgor,
the Pledgor as soon as practicable and at its expense will use its best efforts
to cause such registration to be effected (and be kept effective) and will use
its best efforts to cause such qualification and compliance to be effected (and
be kept effective) as may be so requested and as would permit or facilitate the
sale and distribution of such Pledged Stock, including, without limitation,
registration under the Securities Act of 1933 as then in effect (or any similar
statute then in effect), appropriate qualifications under applicable blue sky or
other state securities laws and appropriate compliance with any other government
requirements, provided that the Pledgee shall furnish to the Pledgor such
information regarding the Pledgee as the Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. The Pledgor will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee and all others participating in the distribution of such Pledged Stock
against all claims, losses, damages and liabilities caused by any untrue
statement (or alleged untrue statement) of a material fact contained therein (or
in any related registration statement, notification or the like) or by any
omission (or alleged omission) to state therein (or in any related registration
statement, notification or the like) a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same may have been caused by an untrue statement or omission
based upon information furnished in writing to the Pledgor by the Pledgee
expressly for use therein.
143
EXHIBIT E-1
Page 15
(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Pledged Securities pursuant to
Section 7 hereof, such Pledged Securities or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the Securities
Act of 1933, as then in effect, the Pledgee may, in its sole and absolute
discretion, sell such Pledged Securities or part thereof by private sale in such
manner and under such circumstances as Pledgee may deem necessary or advisable
in order that such sale may legally be effected without such registration,
provided that at least 10 days' notice of the time and place of any such sale
shall be given to the Pledgor. Without limiting the generality of the foregoing,
in any such event the Pledgee, in its sole and absolute discretion (i) may
proceed to make such private sale notwithstanding that a registration statement
for the purpose of registering such Pledged Securities or part thereof shall
have been filed under such Securities Act, (ii) may approach and negotiate with
a single possible purchaser to effect such sale, and (iii) may restrict such
sale to a purchaser who will represent and agree that such purchaser is
purchasing for its own account, for investment, and not with a view to the
distribution or sale of such Pledged Securities or part thereof. In the event of
any such sale, the Pledgee shall incur no responsibility or liability for
selling all or any part of the Pledged Securities at a price which the Pledgee,
in its sole and absolute discretion, may in good xxxxx xxxx reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until after registration as
aforesaid.
18. TERMINATION. (a) After the Termination Date (as defined
below), this Agreement shall terminate and the Pledgee, at the request and
expense of the Pledgor, will execute and deliver to the Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to the Pledgor (without
recourse and without any representation or warranty) such of the Collateral of
the Pledgor as may be in the possession of the Pledgee and as has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any moneys at the time held by the Pledgee hereunder.
As used in this Agreement, "Termination Date" shall mean the date upon which the
Total Revolving
144
EXHIBIT E-1
Page 16
Commitment and all Interest Rate Protection Agreements are terminated, when no
Note or Letter of Credit is outstanding and when all Obligations have been paid
in full.
(b) The Pledgee shall, at the request and expense of the
Pledgor, release (without recourse and without any representation or warranty)
any or all of the Collateral of the Pledgor and deliver an appropriate
instrument acknowledging such release, provided that either (x) such Collateral
is sold pursuant to a sale permitted under Section 8.01 of the Credit Agreement
(it being understood and agreed that the sale of any Person that owns, directly
or indirectly, such Collateral shall be deemed to be a sale of such Collateral
for purposes of this clause (x)) or (y) such release has been approved in
writing by the Required Banks (or all Banks if required by Section 12.11 of the
Credit Agreement).
(c) At any time that the Pledgor desires that Collateral of
the Pledgor be released as provided in the foregoing Section 18(a) or (b), it
shall deliver to the Pledgee a certificate signed by its chief financial officer
stating that the release of the respective Collateral is permitted pursuant to
Section 18(a) or (b). The Pledgee shall have no liability whatsoever to any
Secured Party as the result of any release of Collateral by it as permitted by
this Section 18.
19. NOTICES, ETC. All notices and other communications
hereunder shall be in writing and shall be delivered or mailed by first class
mail, postage prepaid, addressed:
(a) if to the Pledgor, at:
Pueblo Xtra International, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer;
145
EXHIBIT E-1
Page 17
(b) if to the Pledgee, at:
The Bank of Nova Scotia
Suite 2700
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx;
(c) if to any Bank (other than the Pledgee), at such address
as such Bank shall have specified in Schedule I to the Credit
Agreement; and
(d) if to any Interest Rate Protection Creditor, at such
address as such Interest Rate Protection Creditor shall have specified
in writing to the Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the Pledgor and the Pledgee (with
the consent of the Required Banks or, to the extent required by Section 12.11 of
the Credit Agreement, with the consent of each of the Banks); provided that no
such change, waiver, modification or variance shall be made to Section 9 hereof
or this Section 20 without the consent of each Secured Party adversely affected
thereby; and provided, further, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class of Secured Parties
(and not all Secured Parties in a like or similar manner) shall require the
written consent of the Required Class Banks of such Class. For the purpose of
this Agreement, the term "Class" shall mean each class of Secured Parties, i.e.,
whether (x) the Bank Creditors as holders of the Credit Agreement Obligations
(except for the Interest Rate Protection Obligations) or (y) the Interest Rate
Protection Creditors as holders of the Interest Rate Protection Obligations. For
the purpose of this Agreement, the term "Required Class Banks" of any Class
shall mean each
146
EXHIBIT E-1
Page 18
of (x) with respect to the Credit Agreement Obligations, the Required Banks and
(y) with respect to the Interest Rate Protection Obligations, the holders of 51%
of all obligations outstanding from time to time under the Interest Rate
Protection Agreements.
21. CONSENT TO JURISDICTION; SERVICE OF PROCESS. Any legal
action or proceeding with respect to this Agreement may be brought in the courts
of the State of New York or of the United States of America for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Pledgor hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts and hereby irrevocably
waives any right it may have to object to the laying of venue of any such action
or proceeding in the aforesaid courts and hereby further irrevocably waives and
agrees not to plead or claim that any such action or proceeding has been brought
in an inconvenient forum. The Pledgor hereby irrevocably designates, appoints
and empowers CT Corporation System with offices on the date hereof at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
which may be served in any such action or proceeding. If for any reason such
designee, appointee and agent shall cease to be available to act as such, the
Pledgor agrees to designate a new designee, appointee and agent in New York City
on the terms and for the purposes of this provision satisfactory to the Pledgee
for the Secured Parties under this Agreement. The Pledgor further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Pledgor at its address set forth
opposite its signature below. Nothing herein shall affect the right of any of
the Secured Parties to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Pledgor in any other
jurisdiction.
22. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND
147
EXHIBIT E-1
Page 19
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
The headings in this Agreement are for purposes of reference only and shall not
limit or define the meaning hereof. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
constitute one instrument. In the event that any provision of this Agreement
shall prove to be invalid or unenforceable, such provision shall be deemed to be
severable from the other provisions of this Agreement which shall remain binding
on all parties hereto.
148
EXHIBIT E-1
Page 20
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
PUEBLO XTRA INTERNATIONAL, INC.,
as Pledgor
By________________________________
Title:
THE BANK OF NOVA SCOTIA,
as Pledgee
By________________________________
Title:
149
ANNEX A
to
EXHIBIT E-1
LIST OF SECURITIES
Percentage of
Name of Issuing Type of Number Outstanding Shares
Corporation Shares of Shares of Capital Stock
--------------------- ------- --------- ------------------
Pueblo International, common 100 100%
Inc.
150
ANNEX B
to
EXHIBIT E-1
LIST OF NOTES
Amount Maturity Date
Lender Obligor (if any) (if any)
------ ------- -------- -------------
PXI Pueblo International, $125,000,000
Inc.
PXI Xtra Super Food $ 25,000,000
Centers, Inc.
PXI Xtra Merger $ 25,000,000
Corporation
151
EXHIBIT E-2
[FORM OF BORROWER PLEDGE AGREEMENT]
AMENDMENT AND RESTATEMENT, dated as of April __, 1997 to
PLEDGE AGREEMENT, dated as of July 28, 1993 (as amended, modified, supplemented
or restated from time to time, the "Agreement"), made by PUEBLO INTERNATIONAL,
INC., a Delaware corporation (the "Pledgor") in favor of THE BANK OF NOVA
SCOTIA, as Collateral Agent (the "Pledgee") for the benefit of (x) the Banks,
the Syndication Agent and the Administrative Agent under and as defined in the
Credit Agreement hereinafter referred to (the Banks, the Syndication Agent and
the Administrative Agent are hereinafter called the "Bank Creditors") and (y)
each Bank which enters into one or more interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements or other similar agreements
or arrangements with any Pledgor designed to hedge the risks for such Pledgor
with respect to interest rates as permitted by Section 8.03(c) of the Credit
Agreement (each such agreement or arrangement with a Bank, an "Interest Rate
Protection Agreement", and any such Bank (even if such Bank subsequently ceases
to be a Bank under the Credit Agreement for any reason) and such Bank's assigns,
if any, collectively, the "Interest Rate Protection Creditors" and, together
with the Bank Creditors, herein called the "Secured Parties"). Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement
shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, the Pledgor, Pueblo Xtra International, Inc., a
Delaware corporation ("PXI"), Xtra Super Food Centers, Inc., the Banks party
thereto, The Bank of Nova Scotia, as Administrative Agent, and NationsBank, N.A.
(South), as Syndication Agent, have entered into an Amendment and Restatement,
dated as of April __, 1997, amending and restating the Credit Agreement, dated
as of July 21, 1993 (as modified, supplemented, amended or restated from time to
time, the "Credit Agreement"), providing for the making of Loans and the
issuance of, and participation in, Letters of Credit as contemplated therein;
152
EXHIBIT E-2
Page 2
WHEREAS, the Pledgor desires to incur Loans and to have
Letters of Credit issued for its account to the extent provided in the Credit
Agreement;
WHEREAS, the Pledgor may enter into Interest Rate Protection
Agreements with the Interest Rate Protection Creditors as permitted by Section
8.03(c) of the Credit Agreement;
WHEREAS, it is a condition precedent to the making of Loans to
the Pledgor and the issuance of Letters of Credit for the account of the Pledgor
under the Credit Agreement that the Pledgor shall have executed and delivered to
the Pledgee this Agreement; and
WHEREAS, the Pledgor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
the Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by the
Pledgor for the benefit of the Secured Parties to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of (x) the principal of
and interest on the Notes issued by, and the Loans made to, the Pledgor
under the Credit Agreement and all reimbursement obligations and Unpaid
Drawings with respect to the Letters of Credit issued for the account
of the Pledgor under the Credit Agreement, and (y) all other
obligations and indebtedness (including, without limitation,
indemnities, Fees and interest thereon) of the Pledgor, now existing or
hereafter incurred under, arising out of or in connection with the
Credit Agreement and the other Credit Documents and the due performance
of and compliance with the terms of the Credit Documents by the Pledgor
(all such principal, interest, obligations, and liabilities
153
EXHIBIT E-2
Page 3
under this clause (i), except to the extent consisting of obligations
under or with respect to Interest Rate Protection Agreements, being
herein collectively called the "Credit Agreement Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities owing by the Pledgor under any Interest Rate Protection
Agreement or with respect thereto, whether such Interest Rate
Protection Agreement is now in existence or hereafter arising, and the
due performance and compliance by the Pledgor with all of the terms,
conditions and agreements contained therein (all such obligations and
liabilities under this clause (ii) being herein collectively called the
"Interest Rate Protection Obligations");
(iii) any and all sums reasonably advanced by the Pledgee in
order to preserve the Collateral (as hereinafter defined) or preserve
its security interest in the Collateral (as hereinafter defined); and
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities referred
to in clauses (i), (ii) and (iii) above, after an Event of Default
(such term, as used in this Agreement, shall mean any Event of Default
under, and as defined in, the Credit Agreement, or any payment default
by the Pledgor under any Interest Rate Protection Agreement and shall
in any event include, without limitation, any payment default(after the
expiration of any applicable grace period) on any of the Obligations
(as hereinafter defined)) shall have occurred and be continuing, the
reasonable expenses of re-taking, holding, preparing for sale or lease,
selling or otherwise disposing or realizing on the Collateral, or of
any exercise by the Pledgee of its rights hereunder, together with
reasonable attorneys' fees and court costs;
all such obligations, liabilities, sums and expenses set forth in clauses (i) -
(iv) of this Section 1 being herein collectively called the "Obligations".
154
EXHIBIT E-2
Page 4
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used
herein, (i) the term "Stock" shall mean, collectively, (x) all of the issued and
outstanding shares of stock at any time owned by any Pledgor of any corporation
(other than any corporation organized outside of the United States (any such
corporation, a "Foreign Corporation")) and (y) 65% of the issued and outstanding
shares of stock at any time owned by the Pledgor of any Foreign Corporation,
(ii) the term "Notes" shall mean all promissory notes at any time issued to the
Pledgor by any of its Subsidiaries and (iii) the term "Securities" shall mean
all of the Stock and Notes. The Pledgor represents and warrants, as to the stock
of corporations and promissory notes owned by the Pledgor, that (a) the Stock
consists of the number and type of shares of the stock of the corporations as
described in Annex A hereto, and that such Stock constitutes that percentage of
the issued and outstanding capital stock of the issuing corporation as is set
forth in Annex A hereto; (b) the Notes consist of the promissory notes described
in Annex B hereto; (c) the Pledgor is the holder of record and sole beneficial
owner of such Securities; and (d) on the date hereof, the Pledgor owns no other
Securities.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations and for the purposes
set forth in Section 1, the Pledgor hereby (i) grants to the Pledgee a security
interest in all of the Collateral (as hereinafter defined) owned by the Pledgor;
(ii) pledges and deposits as security with the Pledgee the Securities owned by
the Pledgor on the date hereof, and delivers to the Pledgee certificates or
instruments therefor, duly endorsed in blank in the case of promissory notes and
accompanied by undated stock powers duly executed in blank by the Pledgor in the
case of capital stock, or such other instruments of transfer as are acceptable
to the Pledgee, and (iii) assigns, transfers, hypothecates, mortgages, charges
and sets over to the Pledgee all of the Pledgor's right, title and interest in
and to such Securities (and in and to all certificates or instruments evidencing
such Securities), to be held by the Pledgee, upon the terms and conditions set
forth in this Agreement.
3.2. Subsequently Acquired Securities. If the Pledgor shall
acquire (by purchase, stock dividend or other-
155
EXHIBIT E-2
Page 5
wise) any additional Securities at any time or from time to time after the date
hereof, the Pledgor will forthwith pledge and deposit such Securities (or
certificates or instruments representing such Securities) as security with the
Pledgee and deliver to the Pledgee certificates therefor or instruments thereof,
duly endorsed in blank in the case of promissory notes and accompanied by
undated stock powers duly executed in blank in the case of capital stock, or
such other instruments of transfer as are acceptable to the Pledgee, and will
promptly thereafter deliver to the Pledgee a certificate executed by any of the
Chairman of the Board, the President, a Vice Chairman, the Vice
President-Finance or the Treasurer of the Pledgor describing such Securities and
certifying that the same have been duly pledged with the Pledgee hereunder;
provided that the Pledgor shall not be required at any time to pledge hereunder
more than 65% of the aggregate amount of issued and outstanding shares of stock
at any time owned by the Pledgor of any Foreign Corporation.
3.3. Uncertificated Securities. Notwithstanding anything to
the contrary contained in Sections 3.1 and 3.2 hereof, if any Securities
(whether or not now owned or hereafter acquired by the Pledgor) are
uncertificated securities, the Pledgor shall promptly notify the Pledgee
thereof, and shall promptly take all actions required to perfect the security
interest of the Pledgee under applicable law (including, in any event, under
Sections 8-313 and 8-321 of the New York Uniform Commercial Code if applicable).
The Pledgor further agrees to take such actions as the Pledgee deems necessary
or desirable to effect the foregoing and to permit the Pledgee to exercise any
of its rights and remedies hereunder, and agrees to provide an opinion of
counsel reasonably satisfactory to the Pledgee with respect to any such pledge
of uncertificated Securities promptly upon request of the Pledgee.
3.4. Definition of Pledged Stock, Pledged Notes, Pledged
Securities and Collateral. All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Stock", all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes", all of the Pledged Stock and Pledged Notes together are
hereinafter called the "Pledged Securities", which together with all proceeds
thereof, including any
156
EXHIBIT E-2
Page 6
securities and moneys received and at the time held by the Pledgee hereunder, is
hereinafter called the "Collateral".
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The
Pledgee shall have the right to appoint one or more subagents for the purpose of
retaining physical possession of the Pledged Securities, which may be held (in
the discretion of the Pledgee) in the name of the Pledgor, endorsed or assigned
in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or
a sub-agent appointed by the Pledgee.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and
until an Event of Default shall have occurred and be continuing, the Pledgor
shall be entitled to vote any and all Pledged Stock and to give consents,
waivers or ratifications in respect thereof, provided that no vote shall be cast
or any consent, waiver or ratification given or any action taken which would
violate or be inconsistent with any of the terms of this Agreement, the Credit
Agreement, any Interest Rate Protection Agreement or any other Credit Document,
or which would have the effect of impairing the position or interests of the
Pledgee or any Secured Party. All such rights of the Pledgor to vote and to give
consents, waivers and ratifications shall cease in case an Event of Default
shall occur and be continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of
Default shall have occurred and be continuing, all cash dividends payable in
respect of the Pledged Stock and all payments in respect of the Pledged Notes
shall be paid to the Pledgor, provided that all cash dividends payable in
respect of the Pledged Stock in connection with the dissolution, liquidation,
recapitalization or reclassification of the capital of any corporation (other
than any such trans- action permitted by the Credit Agreement) which are deter-
mined by the Pledgee to represent in whole or in part an extraordinary,
liquidating or other distribution in return of capital shall be paid, to the
extent so determined to re- present an extraordinary, liquidating or other
distribution in return of capital, to the Pledgee and retained by it as part of
the Collateral (unless such cash dividends are applied to the repayment of the
Obligations on the basis set forth in Section 9 hereof). The Pledgee shall also
be enti-
157
EXHIBIT E-2
Page 7
tled to receive directly, and to retain as part of the Collateral:
(a) all other or additional stock or securities or property
(other than cash) paid or distributed by way of dividend or otherwise
in respect of the Pledged Stock;
(b) all other or additional stock or other securities or
property (including cash, unless such cash dividends are applied to the
repayment of the Obligations on the basis set forth in Section 9
hereof) paid or distributed in respect of the Pledged Stock by way of
stock-split, spin-off, split-up, reclassification, combination of
shares or similar rearrangement; and
(c) all other or additional stock or other securities or
property (including cash, unless such cash dividends are applied to the
repayment of the Obligations on the basis set forth in Section 9
hereof) which may be paid in respect of the Collateral by reason of any
consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization (other than any such
transaction permitted by the Credit Agreement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement, the Credit Agreement, by any Interest Rate Protection Agreement or by
any other Credit Document or by law) for the protection and enforcement of its
rights in respect of the Collateral, and the Pledgee shall be entitled, without
limitation, to exercise the following rights, which each Pledgor hereby agrees
to be commercially reasonable:
(a) to receive all amounts payable in respect of the
Collateral otherwise payable under Section 6 hereof to the Pledgor;
(b) to transfer all or any part of the Pledged Securities into
the Pledgee's name or the name of its nominee or nominees;
158
EXHIBIT E-2
Page 8
(c) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(d) to vote all or any part of the Pledged Stock (whether or
not transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof
(the Pledgor hereby irrevocably constituting and appointing the Pledgee
the proxy and attorney-in-fact of the Pledgor, with full power of
substitution to do so); and
(e) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof or to
redeem or otherwise (all of which are hereby waived by the Pledgor),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Pledgee in its absolute discretion may
determine, provided that at least 10 days' notice of the time and place
of any such sale shall be given to the Pledgor. The Pledgor hereby
waives and releases to the fullest extent permitted by law any right or
equity of redemption with respect to the Collateral, whether before or
after sale hereunder, and all rights, if any, of marshalling the
Collateral and any other security for the Obligations or otherwise. At
any such sale, unless prohibited by applicable law, the Pledgee on
behalf of the Secured Parties may bid for and purchase all or any part
of the Collateral so sold free from any such right or equity of
redemption. Neither the Pledgee nor any Secured Party shall be liable
for failure to collect or realize upon any or all of the Collateral or
for any delay in so doing nor shall any of them be under any obligation
to take any action whatsoever with regard thereto.
159
EXHIBIT E-2
Page 9
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy
of the Pledgee provided for in this Agreement, the Credit Agreement, the
Interest Rate Protection Agreements, or the other Credit Documents or now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by the Pledgee or any Secured Party of
any one or more of the rights, powers or remedies provided for in this
Agreement, the Credit Agreement, the Interest Rate Protection Agreements or the
other Credit Documents or now or hereafter existing at law or in equity or by
statute or otherwise shall not preclude the simultaneous or later exercise by
the Pledgee or any Secured Party of all such other rights, powers or remedies,
and no failure or delay on the part of the Pledgee or any Secured Party to
exercise any such right, power or remedy shall operate as a waiver thereof.
9. APPLICATION OF PROCEEDS. All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral, together with all
other moneys received by the Pledgee hereunder, shall be applied to the payment
of the Obligations in the manner provided by Section 7.4 of the Borrower
Security Agreement.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. The Pledgor agrees (a) to indemnify and hold
harmless the Pledgee and each Secured Party from and against any and all claims,
demands, losses, judgments and liabilities (including liabilities for penalties)
of whatsoever kind or nature, and (b) to reimburse the Pledgee and each Secured
Party for all reasonable costs and expenses, including reasonable attorneys'
fees, growing out of or resulting from this Agreement or the exercise by the
Pledgee or any Secured Party of any right or remedy
160
EXHIBIT E-2
Page 10
granted to it hereunder or under the Credit Agreement, the Interest Rate
Protection Agreements or under the other Credit Documents except, with respect
to clauses (a) and (b) above, for those arising from the Pledgee's or any
Secured Party's gross negligence or willful misconduct. In no event shall the
Pledgee or any Secured Party be liable, in the absence of gross negligence or
willful misconduct on its part, for any matter or thing in connection with this
Agreement other than to account for moneys actually received by it in accordance
with the terms hereof. If and to the extent that the obligations of the Pledgor
under this Section 11 are unenforceable for any reason, the Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
12. FURTHER ASSURANCES. The Pledgor agrees that it will join
with the Pledgee in executing and, at the Pledgor's own expense, file and refile
under the Uniform Commercial Code such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of such Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. By accepting the benefits hereof, each
Secured Party shall be deemed to have agreed to the terms and conditions set
forth in Article X of the Borrower Security
161
EXHIBIT E-2
Page 11
Agreement, as the same may be amended, supplemented or otherwise modified from
time to time, which is incorporated herein by reference in its entirety;
provided that all references therein to "this Agreement" shall be a reference to
this Agreement, provided further that all references therein to the "Assignor"
shall be a reference to the "Pledgor", and provided further that all references
therein to the "Collateral Agent" shall be a reference to the "Pledgee". The
Pledgee shall act hereunder on the terms and conditions set forth in said
Article X and the rights of each Secured Party shall be enforceable solely by
the Pledgee in accordance with said Article X.
14. TRANSFER BY PLEDGOR. The Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except in accordance
with the terms of this Agreement, the Credit Agreement and the other Credit
Documents).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. The
Pledgor represents, warrants and covenants that (a) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by this Agreement; (b) it has full power,
authority and legal right to pledge all the Securities pledged by it pursuant to
this Agreement; (c) this Agreement has been duly authorized, executed and
delivered by the Pledgor and constitutes a legal, valid and binding obligation
of the Pledgor enforceable in accordance with its terms, except to the extent
that the enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law); (d) no consent of any other party (including,
without limitation, any stockholder or creditor of the Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required to be obtained by the Pledgor in
connection with the execution, delivery or performance of this Agreement, except
those which have been
162
EXHIBIT E-2
Page 12
obtained or made or as may be required by laws affecting the offering and sale
of securities generally in connection with the exercise by the Pledgee of its
remedies hereunder; (e) the execution, delivery and performance of this
Agreement does not violate any provision of any applicable law or regulation or
of any order, judgment, writ, award or decree of any court, arbitrator or
governmental authority, domestic or foreign, or of the certificate of
incorporation or by-laws of the Pledgor or of any securities issued by the
Pledgor or any of its Subsidiaries, or of any mortgage, indenture, lease, deed
of trust, loan agreement, credit agreement or other material agreement,
instrument or undertaking to which the Pledgor or any of its Subsidiaries is a
party or which purports to be binding upon the Pledgor or any of its
Subsidiaries or upon any of their respective assets and will not result in the
creation or imposition of any lien or encumbrance on any of the assets of the
Pledgor or any of its Subsidiaries except as contemplated by this Agreement; (f)
all the shares of the Stock pledged by the Pledgor hereunder have been duly and
validly issued, are fully paid and non-assessable; (g) each of the Pledged Notes
pledged by the Pledgor hereunder, when executed by the obligor thereof, will be
the legal, valid and binding obligation of such obligor, enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
and (h) the pledge and assignment of the Securities pledged by the Pledgor
pursuant to this Agreement, together with the delivery of such Securities
pursuant to this Agreement and any relevant filings or recordings (which
delivery, filings and recordings have been made or obtained), creates a valid
and perfected first security interest in such Securities and the proceeds
thereof, subject to no prior lien or encumbrance or to any agreement purporting
to grant to any third party a lien or encumbrance on the property or assets of
the Pledgor which would include such Securities. The Pledgor covenants and
agrees that it will defend the Pledgee's right, title and security interest in
and to the Securities pledged by the Pledgor hereunder and the proceeds thereof
against the claims and demands of all persons whomsoever; and the Pledgor
covenants and agrees that it will have like title to and right to pledge any
other property at any time hereafter pledged to the Pledgee as
163
EXHIBIT E-2
Page 13
Collateral hereunder and will likewise defend the right thereto and security
interest therein of the Pledgee and the Secured Parties.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
the Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance
or occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from the Interest Rate Protection Agreements, the Credit Documents or any other
instrument or agreement referred to therein, or any assignment or transfer of
any thereof; (b) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Agreement; (c) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the Pledgee
or its assignee; (d) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof; or
(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the Pledgor or
any Subsidiary of the Pledgor, or any action taken with respect to this
Agreement by any trustee or receiver, or by any court, in any such proceeding,
whether or not the Pledgor shall have notice or knowledge of any of the
foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that the Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock of the Pledgor,
the Pledgor as soon as practicable and at its expense will use its best efforts
to cause such registration to be effected (and be kept effective) and will use
its best efforts to cause such qualification and compliance to be effected (and
be kept effective) as may be so requested and as would permit or facilitate the
sale and distribution of such Pledged Stock, including, without
164
EXHIBIT E-2
Page 14
limitation, registration under the Securities Act of 1933 as then in effect (or
any similar statute then in effect), appropriate qualifications under applicable
blue sky or other state securities laws and appropriate compliance with any
other government requirements, provided that the Pledgee shall furnish to the
Pledgor such information regarding the Pledgee as the Pledgor may request in
writing and as shall be required in connection with any such registration,
qualification or compliance. The Pledgor will cause the Pledgee to be kept
reasonably advised in writing as to the progress of each such registration,
qualification or compliance and as to the completion thereof, will furnish to
the Pledgee such number of prospectuses, offering circulars or other documents
incident thereto as the Pledgee from time to time may reasonably request, and
will indemnify the Pledgee and all others participating in the distribution of
such Pledged Stock against all claims, losses, damages and liabilities caused by
any untrue statement (or alleged untrue statement) of a material fact contained
therein (or in any related registration statement, notification or the like) or
by any omission (or alleged omission) to state therein (or in any related
registration statement, notification or the like) a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same may have been caused by an untrue statement or
omission based upon information furnished in writing to the Pledgor by the
Pledgee expressly for use therein.
(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Pledged Securities pursuant to
Section 7 hereof, such Pledged Securities or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the Securities
Act of 1933, as then in effect, the Pledgee may, in its sole and absolute
discretion, sell such Pledged Securities or part thereof by private sale in such
manner and under such circumstances as Pledgee may deem necessary or advisable
in order that such sale may legally be effected without such registration,
provided that at least 10 days' notice of the time and place of any such sale
shall be given to the Pledgor. Without limiting the generality of the foregoing,
in any such event the Pledgee, in its sole and absolute discretion (i) may
proceed to make such private sale notwithstanding that a registration statement
for the purpose of registering such Pledged Securities or part thereof shall
165
EXHIBIT E-2
Page 15
have been filed under such Securities Act, (ii) may approach and negotiate with
a single possible purchaser to effect such sale, and (iii) may restrict such
sale to a purchaser who will represent and agree that such purchaser is
purchasing for its own account, for investment, and not with a view to the
distribution or sale of such Pledged Securities or part thereof. In the event of
any such sale, the Pledgee shall incur no responsibility or liability for
selling all or any part of the Pledged Securities at a price which the Pledgee,
in its sole and absolute discretion, may in good xxxxx xxxx reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until after registration as
aforesaid.
18. TERMINATION. (a) After the Termination Date (as defined
below), this Agreement shall terminate and the Pledgee, at the request and
expense of the Pledgor, will execute and deliver to the Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to the Pledgor (without
recourse and without any representation or warranty) such of the Collateral of
the Pledgor as may be in the possession of the Pledgee and as has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any moneys at the time held by the Pledgee hereunder.
As used in this Agreement, "Termination Date" shall mean the date upon which the
Total Revolving Commitment and all Interest Rate Protection Agreements are
terminated, when no Note or Letter of Credit is outstanding and when all
Obligations have been paid in full.
(b) The Pledgee shall, at the request and expense of the
Pledgor, release (without recourse and without any representation or warranty)
any or all of the Collateral of the Pledgor and deliver an appropriate
instrument acknowledging such release, provided that either (x) such Collateral
is sold pursuant to a sale permitted under Section 8.01 of the Credit Agreement
(it being understood and agreed that the sale of any Person that owns, directly
or indirectly, such Collateral shall be deemed to be a sale of such Collateral
for purposes of this clause (x)) or (y) such release has been approved in
writing by the Required Banks (or all Banks if required by Section 12.11 of the
Credit Agreement).
166
EXHIBIT E-2
Page 16
(c) At any time that the Pledgor desires that Collateral of
the Pledgor be released as provided in the foregoing Section 18(a) or (b), it
shall deliver to the Pledgee a certificate signed by its chief financial officer
stating that the release of the respective Collateral is permitted pursuant to
Section 18(a) or (b). The Pledgee shall have no liability whatsoever to any
Secured Party as the result of any release of Collateral by it as permitted by
this Section 18.
19. NOTICES, ETC. All notices and other communications
hereunder shall be in writing and shall be delivered or mailed by first class
mail, postage prepaid, addressed:
(a) if to the Pledgor at:
Pueblo International, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer;
(b) if to the Pledgee, at:
The Bank of Nova Scotia
Suite 2700
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx;
(c) if to any Bank (other than the Pledgee), at such address
as such Bank shall have specified in Schedule I to the Credit
Agreement; and
(d) if to any Interest Rate Protection Creditor, at such
address as such Interest Rate Protection Creditor shall have specified
in writing to the Pledgor and the Pledgee;
167
EXHIBIT E-2
Page 17
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the Pledgor and the Pledgee (with
the consent of the Required Banks or, to the extent required by Section 12.11 of
the Credit Agreement, with the consent of each of the Banks); provided that no
such change, waiver, modification or variance shall be made to Section 9 hereof
or this Section 20 without the consent of each Secured Party adversely affected
thereby; and provided, further, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class of Secured Parties
(and not all Secured Parties in a like or similar manner) shall require the
written consent of the Required Class Banks of such Class. For the purpose of
this Agreement, the term "Class" shall mean each class of Secured Parties, i.e.,
whether (x) the Bank Creditors as holders of the Credit Agreement Obligations
(except for the Interest Rate Protection Obligations) or (y) the Interest Rate
Protection Creditors as holders of the Interest Rate Protection Obligations. For
the purpose of this Agreement, the term "Required Class Banks" of any Class
shall mean each of (x) with respect to the Credit Agreement Obligations, the
Required Banks and (y) with respect to the Interest Rate Protection Obligations,
the holders of 51% of all obligations outstanding from time to time under the
Interest Rate Protection Agreements.
21. CONSENT TO JURISDICTION; SERVICE OF PROCESS. Any legal
action or proceeding with respect to this Agreement may be brought in the courts
of the State of New York or of the United States of America for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Pledgor hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts and hereby irrevocably
waives any right it may have to object to the laying of venue of any such action
or proceeding in the aforesaid courts and hereby further irrevocably waives and
agrees not to plead or claim that any such action or proceeding has been brought
in an inconvenient forum. The Pledgor hereby irrevocably designates, appoints
and empowers CT Corporation System with
168
EXHIBIT E-2
Page 18
offices on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. If for any reason such designee, appointee and agent shall cease to
be available to act as such, the Pledgor agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Pledgee for the Secured Parties under this
Agreement. The Pledgor further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Pledgor at its address set forth opposite its signature below. Nothing
herein shall affect the right of any of the Secured Parties to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Pledgor in any other jurisdiction.
22. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto.
169
EXHIBIT E-2
Page 19
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
PUEBLO INTERNATIONAL, INC.,
Pledgor
By___________________________
Title:
THE BANK OF NOVA SCOTIA,
Pledgee
By___________________________
Title:
170
ANNEX A
to
EXHIBIT E-2
LIST OF SECURITIES
Percentage of
Name of Issuing Type of Number Outstanding Shares
Corporation Shares of Shares of Capital Stock
--------------- ------- --------- ------------------
Xtra Super Food common 1000 100% owned by Pueblo
Centers, Inc.
Caribad, Inc. common 100 100% owned by Pueblo
Pueblo Markets, Inc. common 100 100% owned by Pueblo
Pueblo Super common 100 100% owned by Pueblo
Videos, Inc.
171
ANNEX B
to
EXHIBIT E-2
LIST OF NOTES
Amount Maturity Date
Lender Obligor (if any) (if any)
------ ------- -------- -------------
NONE -- -- --
172
EXHIBIT E-3
[FORM OF XTRA PLEDGE AGREEMENT]
AMENDMENT AND RESTATEMENT dated as of April ____, 1997 to PLEDGE
AGREEMENT, dated as of July 28, 1993 (as amended, modified, supplemented or
restated from time to time, the "Agreement"), made by XTRA SUPER FOOD CENTERS,
INC. (the "Pledgor"), a Delaware corporation, in favor of THE BANK OF NOVA
SCOTIA, as Collateral Agent (the "Pledgee") for the benefit of (x) the Banks,
the Syndication Agent and the Administrative Agent under and as defined in the
Credit Agreement hereinafter referred to (the Banks, the Syndication Agent and
the Administrative Agent are hereinafter called the "Bank Creditors") and (y) in
the event of any guaranty by the Pledgor of any Interest Rate Protection
Agreement (as defined below), each Bank which enters into one or more interest
rate swap agreements, interest rate cap agreements, interest rate collar
agreements or other similar agreements or arrangements with the Borrower
designed to hedge the risks for the Borrower with respect to interest rates as
permitted by Section 8.03(c) of the Credit Agreement (each such agreement or
arrangement with a Bank or other financial institution, an "Interest Rate
Protection Agreement", and any such Bank (even if such Bank subsequently ceases
to be a Bank under the Credit Agreement for any reason) and such Bank's assigns,
if any, collectively, the "Interest Rate Protection Creditors" and, together
with the Bank Creditors, herein called the "Secured Parties"). Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement
shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Pueblo Xtra International, Inc., a Delaware Corporation,
Pueblo International, Inc., a Delaware corporation, the Pledgor, the Banks party
thereto, The Bank of Nova Scotia, as Administrative Agent, and NationsBank, N.A.
(South), as Syndication Agent, have entered into an Amendment and Restatement,
dated as of April _____, 1997, amending and restating the Credit Agreement,
dated as of July 21, 1993 (as modified, supplemented, amended or restated from
time to time, the "Credit Agreement"), providing for the making of Loans and the
issuance of, and participation in, Letters of Credit as contemplated therein;
173
EXHIBIT E-3
Page 2
WHEREAS, the Borrower desires to incur Loans and to have Letters of
Credit issued for its account to the extent provided in the Credit Agreement;
WHEREAS, the Borrower may enter into Interest Rate Protection
Agreements with the Interest Rate Protection Creditors as permitted by Section
8.03(c) of the Credit
Agreement;
WHEREAS, pursuant to Section 13 of the Credit Agreement (the "Credit
Agreement Guaranty"), Pledgor has unconditionally guaranteed the obligations and
liabilities of the Borrower under the Credit Agreement;
WHEREAS, it is a condition precedent to the above-described
extensions of credit that the Pledgor shall have executed and delivered to the
Pledgee this Agreement; and
WHEREAS, the Pledgor desires to execute this Agreement to satisfy
the conditions described in Section 5.01(f)(iii) of the Credit Agreement;
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by the Pledgor
for the benefit of the Secured Parties to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
of the Pledgor to the Bank Creditors under the Credit Agreement Guaranty
and the due performance of and compliance with all of the terms,
conditions and agreements contained in the Credit Agreement by the Pledgor
(all such obligations and liabilities under this clause (i), except to the
extent consisting of obligations under or with respect to Interest Rate
Protection Agreements being herein collectively called the "Credit
Agreement Obligations");
174
EXHIBIT E-3
Page 3
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
of the Pledgor pursuant to any guaranty by the Pledgor of any Interest
Rate Protection Agreement entered into by the Borrower (all such
obligations and liabilities under this clause (ii) being herein
collectively called the "Interest Rate Protection Obligations");
(iii) any and all sums reasonably advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its security
interest in the Collateral (as hereinafter defined); and
(iv) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities referred to in clauses
(i), (ii) and (iii) above, after an Event of Default (such term, as used
in this Agreement, shall mean any Event of Default under, and as defined
in, the Credit Agreement, or any payment default by the Borrower under any
Interest Rate Protection Agreement and shall in any event include, without
limitation, any payment default (after the expiration of any applicable
grace period) on any of the Obligations (as hereinafter defined)) shall
have occurred and be continuing, the reasonable expenses of re-taking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court
costs;
all such obligations, liabilities, sums and expenses set forth in clauses
(i)-(iv) of this Section 1 being herein collectively called the "Obligations".
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used herein, (i)
the term "Stock" shall mean, collectively, (x) all of the issued and outstanding
shares of stock at any time owned by the Pledgor of any corporation (other than
any corporation organized outside of the United States (any such corporation, a
"Foreign Corporation")) and (y) 65% of the issued and outstanding shares of
stock at any time owned by the Pledgor of any Foreign Corporation, (ii) the term
"Notes" shall mean all promissory notes at any time issued to
175
EXHIBIT E-3
Page 4
the Pledgor by any Subsidiaries of PXI and (iii) the term "Securities" shall
mean all of the Stock and Notes. The Pledgor represents and warrants, as to the
stock of corporations and promissory notes owned by the Pledgor, that (a) the
Stock consists of the number and type of shares of the stock of the corporations
as described in Annex A hereto, and that such Stock constitutes that percentage
of the issued and outstanding capital stock of the issuing corporation as is set
forth in Annex A hereto; (b) the Notes consist of the promissory notes described
in Annex B hereto; (c) the Pledgor is the holder of record and sole beneficial
owner of such Securities; and (d) on the date hereof, the Pledgor owns no other
Securities.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations and for the purposes set
forth in Section 1 hereof, the Pledgor hereby (i) grants to the Pledgee a
security interest in all of the Collateral (as hereinafter defined) owned by the
Pledgor; (ii) pledges and deposits as security with the Pledgee the Securities
owned by the Pledgor on the date hereof, and delivers to the Pledgee
certificates or instruments therefor, duly endorsed in blank in the case of
promissory notes and accompanied by undated stock powers duly executed in blank
by the Pledgor in the case of capital stock, or such other instruments of
transfer as are acceptable to the Pledgee, and (iii) assigns, transfers,
hypothecates, mortgages, charges and sets over to the Pledgee all of the
Pledgor's right, title and interest in and to such Securities (and in and to all
certificates or instruments evidencing such Securities), to be held by the
Pledgee, upon the terms and conditions set forth in this Agreement.
3.2. Subsequently Acquired Securities. If the Pledgor shall acquire
(by purchase, stock dividend or otherwise) any additional Securities at any time
or from time to time after the date hereof, the Pledgor will forthwith pledge
and deposit such Securities (or certificates or instruments representing such
Securities) as security with the Pledgee and deliver to the Pledgee certificates
therefor or instruments thereof, duly endorsed in blank in the case of
promissory notes and accompanied by undated stock powers duly executed in blank
in the case of capital stock, or such other instruments of transfer as are
acceptable to the Pledgee, and
176
EXHIBIT E-3
Page 5
will promptly thereafter deliver to the Pledgee a certificate executed by any of
the Chairman of the Board, the President, a Vice Chairman, the Vice
President-Finance or the Treasurer of the Pledgor describing such Securities and
certifying that the same have been duly pledged with the Pledgee hereunder;
provided that the Pledgor shall not be required at any time to pledge hereunder
more than 65% of the aggregate amount of issued and outstanding shares of stock
at any time owned by the Pledgor of any Foreign Corporation.
3.3 Uncertificated Securities. Notwithstanding anything to the
contrary contained in Sections 3.1 and 3.2, if any Securities (whether or not
now owned or hereafter acquired by the Pledgor) are uncertificated securities,
the Pledgor shall promptly notify the Pledgee thereof, and shall promptly take
all actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code if applicable). The Pledgor further agrees to
take such actions as the Pledgee deems necessary or desirable to effect the
foregoing and to permit the Pledgee to exercise any of its rights and remedies
hereunder, and agrees to provide an opinion of counsel reasonably satisfactory
to the Pledgee with respect to any such pledge of uncertificated Securities
promptly upon request of the Pledgee.
3.4 Definition of Pledged Stock, Pledged Notes, Pledged Securities
and Collateral. All Stock at any time pledged or required to be pledged
hereunder is hereinafter called the "Pledged Stock", all Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes", all of the Pledged Stock and Pledged Notes together are hereinafter
called the "Pledged Securities", which together with all proceeds thereof,
including any securities and moneys received and at the time held by the Pledgee
hereunder, is hereinafter called the "Collateral".
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub- agents for the purpose of retaining
physical possession of the Pledged Securities, which may be held (in the
discretion of the Pledgee) in the name of the Pledgor, endorsed or assigned in
blank or in favor of the Pledgee or any nominee
177
EXHIBIT E-3
Page 6
or nominees of the Pledgee or a sub-agent appointed by the Pledgee.
5. ASSIGNMENT; VOTING, ETC. (a) On the date hereof, the Pledgor
hereby has, and at all times during the term of this Agreement, the Pledgor
shall have, assigned and transferred to Pledgee all of its rights, title, and
interest to and under the Subordinated Intercompany Note including, without
limitation, all rights to receive and direct payments, all rights and remedies
thereunder (including the right to accelerate same) and all rights to grant or
make waivers or modifications to the provisions thereof, all without any notice
to or consent from, the Pledgor, who at no time shall have any rights with
respect to same.
(b) Unless and until an Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to vote any and all Pledged Stock and
to give consents, waivers or ratifications in respect thereof, provided that no
vote shall be cast or any consent, waiver or ratification given or any action
taken which would violate or be inconsistent with any of the terms of this
Agreement, the Credit Agreement, any Interest Rate Protection Agreement or any
other Credit Document, or which would have the effect of impairing the position
or interests of the Pledgee or any Secured Party. All such rights of the Pledgor
to vote and to give consents, waivers and ratifications shall cease in case an
Event of Default shall occur and be continuing, and Section 7 hereof shall
become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default
shall have occurred and be continuing, all cash dividends payable in respect of
the Pledged Stock and all payments in respect of the Pledged Notes shall be paid
to the Pledgor, provided that all cash dividends payable in respect of the
Pledged Stock in connection with the dissolution, liquidation, recapitalization
or reclassification of the capital of any corporation (other than any such
transaction permitted by the Credit Agreement) which are determined by the
Pledgee to represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital, to the Pledgee and retained by it as part of the Collateral (unless
such cash dividends are
178
EXHIBIT E-3
Page 7
applied to the repayment of the Obligations on the basis set forth in Section 9
hereof). The Pledgee shall also be entitled to receive directly, and to retain
as part of the Collateral:
(a) all other or additional stock or securities or property (other
than cash) paid or distributed by way of dividend or otherwise in respect
of the Pledged Stock;
(b) all other or additional stock or other securities or property
(including cash, unless such cash dividends are applied to the repayment
of the Obligations on the basis set forth in Section 9 hereof) paid or
distributed in respect of the Pledged Stock by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(c) all other or additional stock or other securities or property
(including cash, unless such cash dividends are applied to the repayment
of the Obligations on the basis set forth in Section 9 hereof) which may
be paid in respect of the Collateral by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation or similar
corporate reorganization (other than any such transaction permitted by the
Credit Agreement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of Default
shall have occurred and be continuing, the Pledgee shall be entitled to exercise
all of the rights, powers and remedies (whether vested in it by this Agreement,
the Credit Agreement, by any Interest Rate Protection Agreement or by any other
Credit Document or by law) for the protection and enforcement of its rights in
respect of the Collateral, and the Pledgee shall be entitled, without
limitation, to exercise the following rights, which the Pledgor hereby agrees to
be commercially reasonable:
(a) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 hereof to the Pledgor;
(b) to transfer all or any part of the Pledged Securities into the
Pledgee's name or the name of its nominee or nominees;
179
EXHIBIT E-3
Page 8
(c) to accelerate the Pledged Notes which may be accelerated in
accordance with their terms, and take any other action to collect upon the
Pledged Note (including, without limitation, to make any demand for
payment thereon);
(d) to vote all or any part of the Pledged Stock (whether or not
transferred into the name of the Pledgee) and give all consents, waivers
and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were the outright owner thereof (the Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of the Pledgor, with full power of substitution to do
so); and
(e) at any time or from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time
or place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by the Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of
credit risk, and for such price or prices and on such terms as the Pledgee
in its absolute discretion may determine, provided that at least 10 days'
notice of the time and place of any such sale shall be given to the
Pledgor. The Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if
any, of marshalling the Collateral and any other security for the
Obligations or otherwise. At any such sale, unless prohibited by
applicable law, the Pledgee on behalf of the Secured Parties may bid for
and purchase all or any part of the Collateral so sold free from any such
right or equity of redemption. Neither the Pledgee nor any Secured Party
shall be liable for failure to collect or realize upon any or all of the
Collateral or for any delay in so doing nor shall any of them be under any
obligation to take any action whatsoever with regard thereto.
180
EXHIBIT E-3
Page 9
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement, the Credit Agreement, the Interest Rate
Protection Agreements, or the other Credit Documents or now or hereafter
existing at law or in equity or by statute shall be cumulative and concurrent
and shall be in addition to every other such right, power or remedy. The
exercise or beginning of the exercise by the Pledgee or any Secured Party of any
one or more of the rights, powers or remedies provided for in this Agreement,
the Credit Agreement, the Interest Rate Protection Agreements or the other
Credit Documents or now or hereafter existing at law or in equity or by statute
or otherwise shall not preclude the simultaneous or later exercise by the
Pledgee or any Secured Party of all such other rights, powers or remedies, and
no failure or delay on the part of the Pledgee or any Secured Party to exercise
any such right, power or remedy shall operate as a waiver thereof.
9. APPLICATION OF PROCEEDS. All moneys collected by the Pledgee upon
any sale or other disposition of the Collateral, together with all other moneys
received by the Pledgee hereunder, shall be applied to the payment of the
Obligations in the manner provided by Section 7.4 of the Borrower Security
Agreement.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. The Pledgor agrees (a) to indemnify and hold harmless
the Pledgee from and against any and all claims, demands, losses, judgments and
liabilities (including liabilities for penalties) of whatsoever kind or nature,
and (b) to reimburse the Pledgee for all reasonable costs and expenses,
including reasonable attorneys' fees, growing out of or resulting from this
Agreement or the exercise by the Pledgee of any right or remedy granted to it
hereunder or under the Credit Agreement, the Interest Rate
181
EXHIBIT E-3
Page 10
Protection Agreements or under the other Credit Documents except, with respect
to clauses (a) and (b) above, for those arising from the Pledgee's gross
negligence or willful misconduct. In no event shall the Pledgee be liable, in
the absence of gross negligence or willful misconduct on its part, for any
matter or thing in connection with this Agreement other than to account for
moneys actually received by it in accordance with the terms hereof. If and to
the extent that the obligations of the Pledgor under this Section 11 are
unenforceable for any reason, the Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES. The Pledgor agrees that it will join with
the Pledgee in executing and, at the Pledgor's own expense, file and refile
under the Uniform Commercial Code such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of the Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. By accepting the benefits hereof, each
Secured Party shall be deemed to have agreed to the terms and conditions set
forth in Article X of the Borrower Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time, which is
incorporated
182
EXHIBIT E-3
Page 11
herein by reference in its entirety; provided that all references therein to
"this Agreement" shall be a reference to this Agreement, provided further that
all references therein to the "Assignor" shall be a reference to the "Pledgor",
and provided further that all references therein to the "Collateral Agent" shall
be a reference to the "Pledgee". The Pledgee shall act hereunder on the terms
and conditions set forth in said Article X and the rights of each Secured Party
shall be enforceable solely by the Pledgee in accordance with said Article X.
14. TRANSFER BY PLEDGOR. The Pledgor will not sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except in accordance
with the terms of this Agreement, the Credit Agreement and the other Credit
Documents).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. The
Pledgor represents, warrants and covenants that (a) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by this Agreement; (b) it has full power,
authority and legal right to pledge all the Securities pledged by it pursuant to
this Agreement; (c) this Agreement has been duly authorized, executed and
delivered by the Pledgor and constitutes a legal, valid and binding obligation
of the Pledgor enforceable in accordance with its terms, except to the extent
that the enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law); (d) no consent of any other party (including,
without limitation, any stockholder or creditor of the Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required to be obtained by the Pledgor in
connection with the execution, delivery or performance of this Agreement, except
those which have been obtained or made or as may be required by laws affecting
the offering and sale of securities generally in connection with
183
EXHIBIT E-3
Page 12
the exercise by the Pledgee of its remedies hereunder; (e) the execution,
delivery and performance of this Agreement does not violate any provision of any
applicable law or regulation or of any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or foreign, or of the
certificate of incorporation or by-laws of the Pledgor or of any securities
issued by the Pledgor or any of its Subsidiaries, or of any mortgage, indenture,
lease, deed of trust, loan agreement, credit agreement or other material
agreement, instrument or undertaking to which the Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon the Pledgor or any
of its Subsidiaries or upon any of their respective assets and will not result
in the creation or imposition of any lien or encumbrance on any of the assets of
the Pledgor or any of its Subsidiaries except as contemplated by this Agreement;
(f) all the shares of the Stock pledged by the Pledgor hereunder have been duly
and validly issued, are fully paid and non-assessable; (g) each of the Pledged
Notes pledged by the Pledgor hereunder, when executed by the obligor thereof,
will be the legal, valid and binding obligation of such obligor, enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
and (h) the pledge and assignment of the Securities pledged by the Pledgor
pursuant to this Agreement, together with the delivery of such Securities
pursuant to this Agreement and any relevant filings or recordings (which
delivery, filings and recordings have been made or obtained), creates a valid
and perfected first security interest in such Securities and the proceeds
thereof, subject to no prior lien or encumbrance or to any agreement purporting
to grant to any third party a lien or encumbrance on the property or assets of
the Pledgor which would include such Securities. The Pledgor covenants and
agrees that it will defend the Pledgee's right, title and security interest in
and to the Securities pledged by the Pledgor hereunder and the proceeds thereof
against the claims and demands of all persons whomsoever; and the Pledgor
covenants and agrees that it will have like title to and right to pledge any
other property at any time hereafter pledged to the Pledgee as Collateral
hereunder and will likewise defend the right
184
EXHIBIT E-3
Page 13
thereto and security interest therein of the Pledgee and the Secured Parties.
16. PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of the
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from the Interest Rate Protection Agreements, the Credit Documents or any other
instrument or agreement referred to therein, or any assignment or transfer of
any thereof; (b) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Agreement; (c) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the Pledgee
or its assignee; (d) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof; or
(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the Pledgor or any
Subsidiary of the Pledgor, or any action taken with respect to this Agreement by
any trustee or receiver, or by any court, in any such proceeding, whether or not
the Pledgor shall have notice or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that the Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock of the Pledgor,
the Pledgor as soon as practicable and at its expense will use its best efforts
to cause such registration to be effected (and be kept effective) and will use
its best efforts to cause such qualification and compliance to be effected (and
be kept effective) as may be so requested and as would permit or facilitate the
sale and distribution of such Pledged Stock, including, without limitation,
registration under the Securities Act of 1933 as
185
EXHIBIT E-3
Page 14
then in effect (or any similar statute then in effect), appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with any other government requirements, provided that the
Pledgee shall furnish to the Pledgor such information regarding the Pledgee as
the Pledgor may request in writing and as shall be required in connection with
any such registration, qualification or compliance. The Pledgor will cause the
Pledgee to be kept reasonably advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof, will
furnish to the Pledgee such number of prospectuses, offering circulars or other
documents incident thereto as the Pledgee from time to time may reasonably
request, and will indemnify the Pledgee and all others participating in the
distribution of such Pledged Stock against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to the
Pledgor by the Pledgee expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7
hereof, such Pledged Securities or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Securities Act of
1933, as then in effect, the Pledgee may, in its sole and absolute discretion,
sell such Pledged Securities or part thereof by private sale in such manner and
under such circumstances as Pledgee may deem necessary or advisable in order
that such sale may legally be effected without such registration, provided that
at least 10 days' notice of the time and place of any such sale shall be given
to the Pledgor. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Pledged Securities or part thereof shall have been filed
under such Securities Act, (ii) may approach
186
EXHIBIT E-3
Page 15
and negotiate with a single possible purchaser to effect such sale, and (iii)
may restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment, and not with a view
to the distribution or sale of such Pledged Securities or part thereof. In the
event of any such sale, the Pledgee shall incur no responsibility or liability
for selling all or any part of the Pledged Securities at a price which the
Pledgee, in its sole and absolute discretion, may in good xxxxx xxxx reasonable
under the circumstances, notwithstanding the possibility that a substantially
higher price might be realized if the sale were deferred until after
registration as aforesaid.
18. TERMINATION. (a) After the Termination Date (as defined below),
this Agreement shall terminate and the Pledgee, at the request and expense of
the Pledgor, will execute and deliver to the Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to the Pledgor (without recourse and
without any representation or warranty) such of the Collateral of the Pledgor as
may be in the possession of the Pledgee and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement, together with any
moneys at the time held by the Pledgee hereunder. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Revolving Commitment
and all Interest Rate Protection Agreements are terminated, when no Note or
Letter of Credit is outstanding and when all Obligations have been paid in full.
(b) The Pledgee shall, at the request and expense of the Pledgor,
release (without recourse and without any representation or warranty) any or all
of the Collateral of the Pledgor and deliver an appropriate instrument
acknowledging such release, provided that either (x) such Collateral is sold
pursuant to a sale permitted under Section 8.01 of the Credit Agreement (it
being understood and agreed that the sale of any Person that owns, directly or
indirectly, such Collateral shall be deemed to be a sale of such Collateral for
purposes of this clause (x)) or (y) such release has been approved in writing by
the Required Banks (or all Banks if required by Section 12.11 of the Credit
Agreement).
187
EXHIBIT E-3
Page 16
(c) At any time that the Pledgor desires that Collateral of the
Pledgor be released as provided in the foregoing Section 18(a) or (b), it shall
deliver to the Pledgee a certificate signed by its chief financial officer
stating that the release of the respective Collateral is permitted pursuant to
the foregoing Section 18(a) or (b). The Pledgee shall have no liability
whatsoever to any Secured Party as the result of any release of Collateral by it
as permitted by this Section 18.
19. NOTICES, ETC. All notices and other communications hereunder
shall be in writing and shall be delivered or mailed by first class mail,
postage prepaid, addressed:
(a) if to the Pledgor, at:
Xtra Super Food Centers, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer
(b) if to the Pledgee, at:
The Bank of Nova Scotia
Suite 2700
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx;
(c) if to any Bank (other than the Pledgee), at such address as such
Bank shall have specified in the Credit Agreement; and
(d) if to any Interest Rate Protection Creditor, at such address as
such Interest Rate Protection Creditor shall have specified in writing to
the Pledgor and the Pledgee;
188
EXHIBIT E-3
Page 17
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Pledgor and the Pledgee (with the consent
of the Required Banks or, to the extent required by Section 12.11 of the Credit
Agreement, with the consent of each of the Banks); provided that no such change,
waiver, modification or variance shall be made to Section 9 hereof or this
Section 20 without the consent of each Secured Party adversely affected thereby;
and provided, further, that any change, waiver, modification or variance
affecting the rights and benefits of a single Class of Secured Parties (and not
all Secured Parties in a like or similar manner) shall require the written
consent of the Required Class Banks of such Class. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Parties, i.e.,
whether (x) the Bank Creditors as holders of the Credit Agreement Obligations
(except for the Interest Rate Protection Obligations) or (y) the Interest Rate
Protection Creditors as holders of the Interest Rate Protection Obligations. For
the purpose of this Agreement, the term "Required Class Banks" of any Class
shall mean each of (x) with respect to the Credit Agreement Obligations, the
Required Banks and (y) with respect to the Interest Rate Protection Obligations,
the holders of 51% of all obligations outstanding from time to time under the
Interest Rate Protection Agreements.
21. CONSENT TO JURISDICTION; SERVICE OF PROCESS. Any legal action or
proceeding with respect to this Agreement may be brought in the courts of the
State of New York or of the United States of America for the Southern District
of New York, and, by execution and delivery of this Agreement, the Pledgor
hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts and hereby irrevocably
waives any right it may have to object to the laying of venue of any such action
or proceeding in the aforesaid courts and hereby further irrevocably waives and
agrees not to plead or claim that any such action or proceeding has been brought
in an inconvenient forum. The Pledgor hereby irrevocably designates, appoints
and empowers CT Corporation System with
189
EXHIBIT E-3
Page 18
offices on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. If for any reason such designee, appointee and agent shall cease to
be available to act as such, the Pledgor agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Pledgee for the Secured Parties under this
Agreement. The Pledgor further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Pledgor at its address set forth opposite its signature below. Nothing
herein shall affect the right of any of the Secured Parties to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Pledgor in any other jurisdiction.
22. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto.
190
EXHIBIT E-3
Page 19
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
XTRA SUPER FOOD CENTERS, INC.,
Pledgor
By ____________________________________
Title:
THE BANK OF NOVA SCOTIA,
Pledgee
By ____________________________________
Title:
191
ANNEX A
to
EXHIBIT E-3
LIST OF STOCK
Percentage of
Name of Issuing Type of Number Outstanding Shares
Corporation Shares of Shares of Capital Stock
-------------------- ------- --------- ------------------
Xtra Drugstore, Inc. common 1000 100%
All Truck, Inc. common 1000 100%
Pueblo Caribbean common 100 100%
Videos, Inc.
192
ANNEX B
to
EXHIBIT E-3
LIST OF NOTES
Amount Maturity Date
Lender Obligor (if any) (if any)
------ ------- -------- -------------
NONE
193
EXHIBIT E-4
[FORM OF XM PLEDGE AGREEMENT]
AMENDMENT AND RESTATEMENT dated as of April ____, 1997 to PLEDGE
AGREEMENT, dated as of July 28, 1993 (as amended, modified, supplemented or
restated from time to time, the "Agreement"), made by XTRA MERGER CORPORATION
(the "Pledgor"), a Delaware corporation, in favor of THE BANK OF NOVA SCOTIA, as
Collateral Agent (the "Pledgee") for the benefit of (x) the Banks, the
Syndication Agent and the Administrative Agent under and as defined in the
Credit Agreement hereinafter referred to (the Banks, the Syndication Agent and
the Administrative Agent are hereinafter called the "Bank Creditors") and (y) in
the event of any guaranty by the Pledgor of any Interest Rate Protection
Agreement (as defined below), each Bank which enters into one or more interest
rate swap agreements, interest rate cap agreements, interest rate collar
agreements or other similar agreements or arrangements with the Borrower
designed to hedge the risks for the Borrower with respect to interest rates as
permitted by Section 8.03(c) of the Credit Agreement (each such agreement or
arrangement with a Bank or other financial institution, an "Interest Rate
Protection Agreement", and any such Bank (even if such Bank subsequently ceases
to be a Bank under the Credit Agreement for any reason) and such Bank's assigns,
if any, collectively, the "Interest Rate Protection Creditors" and, together
with the Bank Creditors, herein called the "Secured Parties"). Except as
otherwise defined herein, terms used herein and defined in the Credit Agreement
shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Pueblo Xtra International, Inc., a Delaware Corporation,
Pueblo International, Inc., a Delaware corporation, Xtra Super Food Centers,
Inc., a Delaware Corporation, the Banks party thereto, The Bank of Nova Scotia,
as Administrative Agent, and NationsBank, N.A. (South), as Syndication Agent,
have entered into an Amendment and Restatement, dated as of April _____, 1997,
amending and restating the Credit Agreement, dated as of July 21, 1993 (as
modified, supplemented, amended or restated from time to time, the "Credit
Agreement"), providing for the making of
194
EXHIBIT E-4
Page 2
Loans and the issuance of, and participation in, Letters of Credit as
contemplated therein;
WHEREAS, the Borrower desires to incur Loans and to have Letters of
Credit issued for its account to the extent provided in the Credit Agreement;
WHEREAS, the Borrower may enter into Interest Rate Protection
Agreements with the Interest Rate Protection Creditors as permitted by Section
8.03(c) of the Credit Agreement;
WHEREAS, pursuant to Section 13 of the Credit Agreement (the "Credit
Agreement Guaranty"), Pledgor has unconditionally guaranteed the obligations and
liabilities of the Borrower under the Credit Agreement;
WHEREAS, it is a condition precedent to the above-described
extensions of credit that the Pledgor shall have executed and delivered to the
Pledgee this Agreement; and
WHEREAS, the Pledgor desires to execute this Agreement to satisfy
the conditions described in Section 5.01(f)(iv) of the Credit Agreement;
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by the Pledgor
for the benefit of the Secured Parties to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
of the Pledgor to the Bank Creditors under the Credit Agreement Guaranty
and the due performance of and compliance with all of the terms,
conditions and agreements contained in the Credit Agreement by the Pledgor
(all such obligations and liabilities under this clause (i), except to the
extent consisting of obligations under or with respect to
195
EXHIBIT E-4
Page 3
Interest Rate Protection Agreements being herein collectively called the
"Credit Agreement Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities
of the Pledgor pursuant to any guaranty by the Pledgor of any Interest
Rate Protection Agreement entered into by the Borrower (all such
obligations and liabilities under this clause (ii) being herein
collectively called the "Interest Rate Protection Obligations");
(iii) any and all sums reasonably advanced by the Pledgee in order to
preserve the Collateral (as hereinafter defined) or preserve its security
interest in the Collateral (as hereinafter defined); and
(iv) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities referred to in clauses
(i), (ii) and (iii) above, after an Event of Default (such term, as used
in this Agreement, shall mean any Event of Default under, and as defined
in, the Credit Agreement, or any payment default by the Borrower under any
Interest Rate Protection Agreement and shall in any event include, without
limitation, any payment default (after the expiration of any applicable
grace period) on any of the Obligations (as hereinafter defined)) shall
have occurred and be continuing, the reasonable expenses of re-taking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court
costs;
all such obligations, liabilities, sums and expenses set forth in clauses
(i)-(iv) of this Section 1 being herein collectively called the "Obligations".
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used herein, (i)
the term "Stock" shall mean, collectively, (x) all of the issued and outstanding
shares of stock at any time owned by the Pledgor of any corporation (other than
any corporation organized outside of the United States (any such corporation, a
"Foreign Corporation")) and (y) 65% of
196
EXHIBIT E-4
Page 4
the issued and outstanding shares of stock at any time owned by the Pledgor of
any Foreign Corporation, (ii) the term "Notes" shall mean all promissory notes
at any time issued to the Pledgor by any Subsidiaries of PXI and (iii) the term
"Securities" shall mean all of the Stock and Notes. The Pledgor represents and
warrants, as to the stock of corporations and promissory notes owned by the
Pledgor, that (a) the Stock consists of the number and type of shares of the
stock of the corporations as described in Annex A hereto, and that such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Annex A hereto; (b) the Notes consist of
the promissory notes described in Annex B hereto; (c) the Pledgor is the holder
of record and sole beneficial owner of such Securities; and (d) on the date
hereof, the Pledgor owns no other Securities.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations and for the purposes set
forth in Section 1 hereof, the Pledgor hereby (i) grants to the Pledgee a
security interest in all of the Collateral (as hereinafter defined) owned by the
Pledgor; (ii) pledges and deposits as security with the Pledgee the Securities
owned by the Pledgor on the date hereof, and delivers to the Pledgee
certificates or instruments therefor, duly endorsed in blank in the case of
promissory notes and accompanied by undated stock powers duly executed in blank
by the Pledgor in the case of capital stock, or such other instruments of
transfer as are acceptable to the Pledgee, and (iii) assigns, transfers,
hypothecates, mortgages, charges and sets over to the Pledgee all of the
Pledgor's right, title and interest in and to such Securities (and in and to all
certificates or instruments evidencing such Securities), to be held by the
Pledgee, upon the terms and conditions set forth in this Agreement.
3.2. Subsequently Acquired Securities. If the Pledgor shall acquire
(by purchase, stock dividend or otherwise) any additional Securities at any time
or from time to time after the date hereof, the Pledgor will forthwith pledge
and deposit such Securities (or certificates or instruments representing such
Securities) as security with the Pledgee and deliver to the Pledgee certificates
therefor or instruments thereof, duly endorsed in blank in the case of promis-
197
EXHIBIT E-4
Page 5
sory notes and accompanied by undated stock powers duly executed in blank in the
case of capital stock, or such other instruments of transfer as are acceptable
to the Pledgee, and will promptly thereafter deliver to the Pledgee a
certificate executed by any of the Chairman of the Board, the President, a Vice
Chairman, the Vice President-Finance or the Treasurer of the Pledgor describing
such Securities and certifying that the same have been duly pledged with the
Pledgee hereunder; provided that the Pledgor shall not be required at any time
to pledge hereunder more than 65% of the aggregate amount of issued and
outstanding shares of stock at any time owned by the Pledgor of any Foreign
Corporation.
3.3 Uncertificated Securities. Notwithstanding anything to the
contrary contained in Sections 3.1 and 3.2, if any Securities (whether or not
now owned or hereafter acquired by the Pledgor) are uncertificated securities,
the Pledgor shall promptly notify the Pledgee thereof, and shall promptly take
all actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code if applicable). The Pledgor further agrees to
take such actions as the Pledgee deems necessary or desirable to effect the
foregoing and to permit the Pledgee to exercise any of its rights and remedies
hereunder, and agrees to provide an opinion of counsel reasonably satisfactory
to the Pledgee with respect to any such pledge of uncertificated Securities
promptly upon request of the Pledgee.
3.4 Definition of Pledged Stock, Pledged Notes, Pledged Securities
and Collateral. All Stock at any time pledged or required to be pledged
hereunder is hereinafter called the "Pledged Stock", all Notes at any time
pledged or required to be pledged hereunder are hereinafter called the "Pledged
Notes", all of the Pledged Stock and Pledged Notes together are hereinafter
called the "Pledged Securities", which together with all proceeds thereof,
including any securities and moneys received and at the time held by the Pledgee
hereunder, is hereinafter called the "Collateral".
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
have the right to appoint one or more sub- agents for the purpose of retaining
physical possession of the Pledged Securities, which may be held (in the
discretion
198
EXHIBIT E-4
Page 6
of the Pledgee) in the name of the Pledgor, endorsed or assigned in blank or in
favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent
appointed by the Pledgee.
5. ASSIGNMENT; VOTING, ETC. (a) On the date hereof, the Pledgor
hereby has, and at all times during the term of this Agreement, the Pledgor
shall have, assigned and transferred to Pledgee all of its rights, title, and
interest to and under the Subordinated Intercompany Note including, without
limitation, all rights to receive and direct payments, all rights and remedies
thereunder (including the right to accelerate same) and all rights to grant or
make waivers or modifications to the provisions thereof, all without any notice
to or consent from, the Pledgor, who at no time shall have any rights with
respect to same.
(b) Unless and until an Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to vote any and all Pledged Stock and
to give consents, waivers or ratifications in respect thereof, provided that no
vote shall be cast or any consent, waiver or ratification given or any action
taken which would violate or be inconsistent with any of the terms of this
Agreement, the Credit Agreement, any Interest Rate Protection Agreement or any
other Credit Document, or which would have the effect of impairing the position
or interests of the Pledgee or any Secured Party. All such rights of the Pledgor
to vote and to give consents, waivers and ratifications shall cease in case an
Event of Default shall occur and be continuing, and Section 7 hereof shall
become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default
shall have occurred and be continuing, all cash dividends payable in respect of
the Pledged Stock and all payments in respect of the Pledged Notes shall be paid
to the Pledgor, provided that all cash dividends payable in respect of the
Pledged Stock in connection with the dissolution, liquidation, recapitalization
or reclassification of the capital of any corporation (other than any such
transaction permitted by the Credit Agreement) which are determined by the
Pledgee to represent in whole or in part an extraordinary, liquidating or other
distribution in return of capital shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution
199
EXHIBIT E-4
Page 7
in return of capital, to the Pledgee and retained by it as part of the
Collateral (unless such cash dividends are applied to the repayment of the
Obligations on the basis set forth in Section 9 hereof). The Pledgee shall also
be entitled to receive directly, and to retain as part of the Collateral:
(a) all other or additional stock or securities or property (other
than cash) paid or distributed by way of dividend or otherwise in respect
of the Pledged Stock;
(b) all other or additional stock or other securities or property
(including cash, unless such cash dividends are applied to the repayment
of the Obligations on the basis set forth in Section 9 hereof) paid or
distributed in respect of the Pledged Stock by way of stock-split,
spin-off, split-up, reclassification, combination of shares or similar
rearrangement; and
(c) all other or additional stock or other securities or property
(including cash, unless such cash dividends are applied to the repayment
of the Obligations on the basis set forth in Section 9 hereof) which may
be paid in respect of the Collateral by reason of any consolidation,
merger, exchange of stock, conveyance of assets, liquidation or similar
corporate reorganization (other than any such transaction permitted by the
Credit Agreement).
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of Default
shall have occurred and be continuing, the Pledgee shall be entitled to exercise
all of the rights, powers and remedies (whether vested in it by this Agreement,
the Credit Agreement, by any Interest Rate Protection Agreement or by any other
Credit Document or by law) for the protection and enforcement of its rights in
respect of the Collateral, and the Pledgee shall be entitled, without
limitation, to exercise the following rights, which the Pledgor hereby agrees to
be commercially reasonable:
(a) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 hereof to the Pledgor;
200
EXHIBIT E-4
Page 8
(b) to transfer all or any part of the Pledged Securities into the
Pledgee's name or the name of its nominee or nominees;
(c) to accelerate the Pledged Notes which may be accelerated in
accordance with their terms, and take any other action to collect upon the
Pledged Note (including, without limitation, to make any demand for
payment thereon);
(d) to vote all or any part of the Pledged Stock (whether or not
transferred into the name of the Pledgee) and give all consents, waivers
and ratifications in respect of the Collateral and otherwise act with
respect thereto as though it were the outright owner thereof (the Pledgor
hereby irrevocably constituting and appointing the Pledgee the proxy and
attorney-in-fact of the Pledgor, with full power of substitution to do
so); and
(e) at any time or from time to time to sell, assign and deliver, or
grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time
or place of sale or adjournment thereof or to redeem or otherwise (all of
which are hereby waived by the Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of
credit risk, and for such price or prices and on such terms as the Pledgee
in its absolute discretion may determine, provided that at least 10 days'
notice of the time and place of any such sale shall be given to the
Pledgor. The Pledgor hereby waives and releases to the fullest extent
permitted by law any right or equity of redemption with respect to the
Collateral, whether before or after sale hereunder, and all rights, if
any, of marshalling the Collateral and any other security for the
Obligations or otherwise. At any such sale, unless prohibited by
applicable law, the Pledgee on behalf of the Secured Parties may bid for
and purchase all or any part of the Collateral so sold free from any such
right or equity of redemption. Neither the Pledgee nor any Secured Party
shall be liable for failure to collect or realize upon any or all of the
Collateral or for any
201
EXHIBIT E-4
Page 9
delay in so doing nor shall any of them be under any obligation to take
any action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement, the Credit Agreement, the Interest Rate
Protection Agreements, or the other Credit Documents or now or hereafter
existing at law or in equity or by statute shall be cumulative and concurrent
and shall be in addition to every other such right, power or remedy. The
exercise or beginning of the exercise by the Pledgee or any Secured Party of any
one or more of the rights, powers or remedies provided for in this Agreement,
the Credit Agreement, the Interest Rate Protection Agreements or the other
Credit Documents or now or hereafter existing at law or in equity or by statute
or otherwise shall not preclude the simultaneous or later exercise by the
Pledgee or any Secured Party of all such other rights, powers or remedies, and
no failure or delay on the part of the Pledgee or any Secured Party to exercise
any such right, power or remedy shall operate as a waiver thereof.
9. APPLICATION OF PROCEEDS. All moneys collected by the Pledgee upon
any sale or other disposition of the Collateral, together with all other moneys
received by the Pledgee hereunder, shall be applied to the payment of the
Obligations in the manner provided by Section 7.4 of the Borrower Security
Agreement.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. The Pledgor agrees (a) to indemnify and hold
harmless the Pledgee from and against any and all claims, demands, losses,
judgments and liabilities (including liabilities for penalties) of whatsoever
kind or nature, and (b) to reimburse the Pledgee for all reasonable
202
EXHIBIT E-4
Page 10
costs and expenses, including reasonable attorneys' fees, growing out of or
resulting from this Agreement or the exercise by the Pledgee of any right or
remedy granted to it hereunder or under the Credit Agreement, the Interest Rate
Protection Agreements or under the other Credit Documents except, with respect
to clauses (a) and (b) above, for those arising from the Pledgee's gross
negligence or willful misconduct. In no event shall the Pledgee be liable, in
the absence of gross negligence or willful misconduct on its part, for any
matter or thing in connection with this Agreement other than to account for
moneys actually received by it in accordance with the terms hereof. If and to
the extent that the obligations of the Pledgor under this Section 11 are
unenforceable for any reason, the Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law.
12. FURTHER ASSURANCES. The Pledgor agrees that it will join with
the Pledgee in executing and, at the Pledgor's own expense, file and refile
under the Uniform Commercial Code such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of the Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with
this Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement. By accepting the benefits hereof, each
Secured
203
EXHIBIT E-4
Page 11
Party shall be deemed to have agreed to the terms and conditions set forth in
Article X of the Borrower Security Agreement, as the same may be amended,
supplemented or otherwise modified from time to time, which is incorporated
herein by reference in its entirety; provided that all references therein to
"this Agreement" shall be a reference to this Agreement, provided further that
all references therein to the "Assignor" shall be a reference to the "Pledgor",
and provided further that all references therein to the "Collateral Agent" shall
be a reference to the "Pledgee". The Pledgee shall act hereunder on the terms
and conditions set forth in said Article X and the rights of each Secured Party
shall be enforceable solely by the Pledgee in accordance with said Article X.
14. TRANSFER BY PLEDGOR. The Pledgor will not sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except in accordance
with the terms of this Agreement, the Credit Agreement and the other Credit
Documents).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR. The
Pledgor represents, warrants and covenants that (a) it is the legal, record and
beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by this Agreement; (b) it has full power,
authority and legal right to pledge all the Securities pledged by it pursuant to
this Agreement; (c) this Agreement has been duly authorized, executed and
delivered by the Pledgor and constitutes a legal, valid and binding obligation
of the Pledgor enforceable in accordance with its terms, except to the extent
that the enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law); (d) no consent of any other party (including,
without limitation, any stockholder or creditor of the Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority is required to be obtained by the
204
EXHIBIT E-4
Page 12
Pledgor in connection with the execution, delivery or performance of this
Agreement, except those which have been obtained or made or as may be required
by laws affecting the offering and sale of securities generally in connection
with the exercise by the Pledgee of its remedies hereunder; (e) the execution,
delivery and performance of this Agreement does not violate any provision of any
applicable law or regulation or of any order, judgment, writ, award or decree of
any court, arbitrator or governmental authority, domestic or foreign, or of the
certificate of incorporation or by-laws of the Pledgor or of any securities
issued by the Pledgor or any of its Subsidiaries, or of any mortgage, indenture,
lease, deed of trust, loan agreement, credit agreement or other material
agreement, instrument or undertaking to which the Pledgor or any of its
Subsidiaries is a party or which purports to be binding upon the Pledgor or any
of its Subsidiaries or upon any of their respective assets and will not result
in the creation or imposition of any lien or encumbrance on any of the assets of
the Pledgor or any of its Subsidiaries except as contemplated by this Agreement;
(f) all the shares of the Stock pledged by the Pledgor hereunder have been duly
and validly issued, are fully paid and non-assessable; (g) each of the Pledged
Notes pledged by the Pledgor hereunder, when executed by the obligor thereof,
will be the legal, valid and binding obligation of such obligor, enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law);
and (h) the pledge and assignment of the Securities pledged by the Pledgor
pursuant to this Agreement, together with the delivery of such Securities
pursuant to this Agreement and any relevant filings or recordings (which
delivery, filings and recordings have been made or obtained), creates a valid
and perfected first security interest in such Securities and the proceeds
thereof, subject to no prior lien or encumbrance or to any agreement purporting
to grant to any third party a lien or encumbrance on the property or assets of
the Pledgor which would include such Securities. The Pledgor covenants and
agrees that it will defend the Pledgee's right, title and security interest in
and to the Securities pledged by the Pledgor hereunder and the proceeds thereof
against the claims and demands of all persons whomsoever; and the Pledgor
covenants and agrees that
205
EXHIBIT E-4
Page 13
it will have like title to and right to pledge any other property at any time
hereafter pledged to the Pledgee as Collateral hereunder and will likewise
defend the right thereto and security interest therein of the Pledgee and the
Secured Parties.
16. PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of the
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from the Interest Rate Protection Agreements, the Credit Documents or any other
instrument or agreement referred to therein, or any assignment or transfer of
any thereof; (b) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Agreement; (c) any furnishing of any additional security to the Pledgee or its
assignee or any acceptance thereof or any release of any security by the Pledgee
or its assignee; (d) any limitation on any party's liability or obligations
under any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof; or
(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the Pledgor or any
Subsidiary of the Pledgor, or any action taken with respect to this Agreement by
any trustee or receiver, or by any court, in any such proceeding, whether or not
the Pledgor shall have notice or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the Pledgor shall have received from the Pledgee
a written request or requests that the Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock of the Pledgor,
the Pledgor as soon as practicable and at its expense will use its best efforts
to cause such registration to be effected (and be kept effective) and will use
its best efforts to cause such qualification and compliance to be effected (and
be kept effective) as may be
206
EXHIBIT E-4
Page 14
so requested and as would permit or facilitate the sale and distribution of such
Pledged Stock, including, without limitation, registration under the Securities
Act of 1933 as then in effect (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with any other government requirements, provided
that the Pledgee shall furnish to the Pledgor such information regarding the
Pledgee as the Pledgor may request in writing and as shall be required in
connection with any such registration, qualification or compliance. The Pledgor
will cause the Pledgee to be kept reasonably advised in writing as to the
progress of each such registration, qualification or compliance and as to the
completion thereof, will furnish to the Pledgee such number of prospectuses,
offering circulars or other documents incident thereto as the Pledgee from time
to time may reasonably request, and will indemnify the Pledgee and all others
participating in the distribution of such Pledged Stock against all claims,
losses, damages and liabilities caused by any untrue statement (or alleged
untrue statement) of a material fact contained therein (or in any related
registration statement, notification or the like) or by any omission (or alleged
omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished in writing to the Pledgor by the Pledgee expressly for use
therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7
hereof, such Pledged Securities or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Securities Act of
1933, as then in effect, the Pledgee may, in its sole and absolute discretion,
sell such Pledged Securities or part thereof by private sale in such manner and
under such circumstances as Pledgee may deem necessary or advisable in order
that such sale may legally be effected without such registration, provided that
at least 10 days' notice of the time and place of any such sale shall be given
to the Pledgor. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion (i) may proceed to make
such private sale
207
EXHIBIT E-4
Page 15
notwithstanding that a registration statement for the purpose of registering
such Pledged Securities or part thereof shall have been filed under such
Securities Act, (ii) may approach and negotiate with a single possible purchaser
to effect such sale, and (iii) may restrict such sale to a purchaser who will
represent and agree that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such Pledged
Securities or part thereof. In the event of any such sale, the Pledgee shall
incur no responsibility or liability for selling all or any part of the Pledged
Securities at a price which the Pledgee, in its sole and absolute discretion,
may in good xxxxx xxxx reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were
deferred until after registration as aforesaid.
18. TERMINATION. (a) After the Termination Date (as defined below),
this Agreement shall terminate and the Pledgee, at the request and expense of
the Pledgor, will execute and deliver to the Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to the Pledgor (without recourse and
without any representation or warranty) such of the Collateral of the Pledgor as
may be in the possession of the Pledgee and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement, together with any
moneys at the time held by the Pledgee hereunder. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Revolving Commitment
and all Interest Rate Protection Agreements are terminated, when no Note or
Letter of Credit is outstanding and when all Obligations have been paid in full.
(b) The Pledgee shall, at the request and expense of the Pledgor,
release (without recourse and without any representation or warranty) any or all
of the Collateral of the Pledgor and deliver an appropriate instrument
acknowledging such release, provided that either (x) such Collateral is sold
pursuant to a sale permitted under Section 8.01 of the Credit Agreement (it
being understood and agreed that the sale of any Person that owns, directly or
indirectly, such Collateral shall be deemed to be a sale of such Collateral for
purposes of this clause (x)) or (y) such release has been approved in writing by
the Required Banks
208
EXHIBIT E-4
Page 16
(or all Banks if required by Section 12.11 of the Credit Agreement).
(c) At any time that the Pledgor desires that Collateral of the
Pledgor be released as provided in the foregoing Section 18(a) or (b), it shall
deliver to the Pledgee a certificate signed by its chief financial officer
stating that the release of the respective Collateral is permitted pursuant to
the foregoing Section 18(a) or (b). The Pledgee shall have no liability
whatsoever to any Secured Party as the result of any release of Collateral by it
as permitted by this Section 18.
19. NOTICES, ETC. All notices and other communications hereunder
shall be in writing and shall be delivered or mailed by first class mail,
postage prepaid, addressed:
(a) if to the Pledgor, at:
Xtra Merger Corporation
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer
(b) if to the Pledgee, at:
The Bank of Nova Scotia
Suite 2700
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx;
(c) if to any Bank (other than the Pledgee), at such address as such
Bank shall have specified in the Credit Agreement; and
(d) if to any Interest Rate Protection Creditor, at such address as
such Interest Rate Protection
209
EXHIBIT E-4
Page 17
Creditor shall have specified in writing to the Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Pledgor and the Pledgee (with the consent
of the Required Banks or, to the extent required by Section 12.11 of the Credit
Agreement, with the consent of each of the Banks); provided that no such change,
waiver, modification or variance shall be made to Section 9 hereof or this
Section 20 without the consent of each Secured Party adversely affected thereby;
and provided, further, that any change, waiver, modification or variance
affecting the rights and benefits of a single Class of Secured Parties (and not
all Secured Parties in a like or similar manner) shall require the written
consent of the Required Class Banks of such Class. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Parties, i.e.,
whether (x) the Bank Creditors as holders of the Credit Agreement Obligations
(except for the Interest Rate Protection Obligations) or (y) the Interest Rate
Protection Creditors as holders of the Interest Rate Protection Obligations. For
the purpose of this Agreement, the term "Required Class Banks" of any Class
shall mean each of (x) with respect to the Credit Agreement Obligations, the
Required Banks and (y) with respect to the Interest Rate Protection Obligations,
the holders of 51% of all obligations outstanding from time to time under the
Interest Rate Protection Agreements.
21. CONSENT TO JURISDICTION; SERVICE OF PROCESS. Any legal action or
proceeding with respect to this Agreement may be brought in the courts of the
State of New York or of the United States of America for the Southern District
of New York, and, by execution and delivery of this Agreement, the Pledgor
hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts and hereby irrevocably
waives any right it may have to object to the laying of venue of any such action
or proceeding in the aforesaid courts and hereby further irrevocably waives and
agrees not to plead or claim
210
EXHIBIT E-4
Page 18
that any such action or proceeding has been brought in an inconvenient forum.
The Pledgor hereby irrevocably designates, appoints and empowers CT Corporation
System with offices on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000 as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents which may be served in any such
action or proceeding. If for any reason such designee, appointee and agent shall
cease to be available to act as such, the Pledgor agrees to designate a new
designee, appointee and agent in New York City on the terms and for the purposes
of this provision satisfactory to the Pledgee for the Secured Parties under this
Agreement. The Pledgor further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Pledgor at its address set forth opposite its signature below. Nothing
herein shall affect the right of any of the Secured Parties to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Pledgor in any other jurisdiction.
22. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. THIS AGREEMENT SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. The headings in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall
be deemed to be severable from the other provisions of this Agreement which
shall remain binding on all parties hereto.
211
EXHIBIT E-4
Page 19
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
XTRA MERGER CORPORATION,
Pledgor
By ______________________________
Title:
THE BANK OF NOVA SCOTIA,
Pledgee
By ______________________________
Title:
212
ANNEX A
to
EXHIBIT E-4
LIST OF STOCK
Percentage of
Name of Issuing Type of Number Outstanding Shares
Corporation Shares of Shares of Capital Stock
--------------- ------- --------- ------------------
All Truck, Inc. common 1000 100%
Pueblo Caribbean common 100 100%
Videos, Inc.
213
ANNEX B
to
EXHIBIT E-4
LIST OF NOTES
Amount Maturity Date
Lender Obligor (if any) (if any)
------ ------- -------- -------------
Xtra Merger Pueblo Inter-
Corporation national, Inc. $28,000,000
214
EXHIBIT F
[FORM OF SUBSIDIARY GUARANTY]
Amendment and Restatement, dated as of April __, 1997, to GUARANTY
(as amended, modified, supplemented or restated from time to time, the
"Guaranty"), dated as of July 28, 1993, made by the undersigned (each a
"Guarantor" and, collectively, the "Guarantors"). Except as otherwise defined
herein, terms used herein and defined in the Credit Agreement (as hereinafter
defined) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, Pueblo Xtra International, Inc., a Delaware corporation
("PXI"), Pueblo International, Inc. (the "Borrower"), a Delaware corporation,
Xtra Super Food Centers, Inc., a Delaware corporation, the Banks party thereto,
The Bank of Nova Scotia, as Administrative Agent, and NationsBank N.A. (South),
as Syndication Agent, have entered into an Amendment and Restatement, dated as
of April __, 1997 to Credit Agreement, dated as of July 21, 1993 (as modified,
supplemented, amended or restated from time to time, the "Credit Agreement"),
providing for the making of Loans and the issuance of, and participation in,
Letters of Credit as contemplated therein (the Banks, the Administrative Agent
and the Syndication Agent, herein called the "Bank Creditors");
WHEREAS, the Borrower (as defined in the Credit Agreement) may enter
into one or more Interest Rate Protection Agreements with one or more Banks (any
such Bank party to any such Interest Rate Protection Agreement (even if any such
Bank subsequently ceases to be a Bank under the Credit Agreement for any reason)
and their subsequent assigns, if any, to the extent entitled to the benefits of
this Guaranty as provided in paragraph 1(ii) hereof, herein called "Interest
Rate Protection Creditors," and all Interest Rate Protection Creditors, together
with the Bank Creditors, herein collectively called the "Creditors");
WHEREAS, PXI owns, directly or indirectly, 100% of the capital stock
of the Borrower and each Guarantor;
215
EXHIBIT F
Page 2
WHEREAS, it is a condition to the making of Loans and the issuance
of Letters of Credit under the Credit Agreement that each Guarantor shall have
executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of Letters of Credit for the account of
the Borrower under the Credit Agreement and, accordingly, desires to execute
this Guaranty in order to satisfy the conditions described in the preceding
paragraph and to induce the Banks to make Loans to the Borrower and to issue
Letters of Credit for the account of the Borrower;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees (i) to the Bank Creditors the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of (x)
the principal of and interest on the Notes issued by, and the Loans made to, the
Borrower under the Credit Agreement and all reimbursement obligations and Unpaid
Drawings with respect to the Letters of Credit issued under the Credit Agreement
and (y) all other obligations and liabilities owing by the Borrower to the Bank
Creditors under the Credit Agreement (including, without limitation,
indemnities, Fees and interest thereon) now existing or hereafter incurred
under, arising out of or in connection with the Credit Agreement or any other
Credit Document and the due performance and compliance with the terms of the
Credit Documents by the Borrower (all such principal, interest, liabilities and
obligations being herein collectively called the "Credit Agreement Obligations")
and (ii) to the extent the Guarantors elect after the date hereof, in a written
instrument signed by all parties hereto, to guarantee obligations in respect of
Interest Rate Protection Agreements, to the Interest Rate Protection Creditors
the full and prompt payment when due (whether at the stated maturity, by
acceleration or other-
216
EXHIBIT F
Page 3
wise) of all obligations and liabilities owing by the Borrower under any
Interest Rate Protection Agreement, whether now in existence or hereafter
arising, and the due performance and compliance by the Borrower with all terms,
conditions and agreements contained therein (all such obligations and
liabilities being herein collectively called the "Interest Rate Protection
Obligations," and together with the Credit Agreement Obligations herein
collectively called the "Guaranteed Obligations"). Each Guarantor understands,
agrees and confirms that the Creditors may enforce this Guaranty up to the full
amount of the Guaranteed Obligations against each Guarantor without proceeding
against any other Guarantor, the Borrower, against any security for the
Guaranteed Obligations, or under any other guaranty covering all or a portion of
the Guaranteed Obligations. All payments by each Guarantor under this Guaranty
shall be made on the same basis as payments by the Borrower under Sections 4.03
and 4.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any of
the events specified in Section 9.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money of
the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Borrower or by any other party, (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the indebtedness of the Borrower, (c) any payment on or in reduction of
any such other guaranty or undertaking, (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower or (e) any payment
made to any Creditor on the indebtedness which any Creditor repays the Borrower
pursuant to court order in any bankruptcy, reorgani-
217
EXHIBIT F
Page 4
zation, arrangement, moratorium or other debtor relief proceeding, and each
Guarantor waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Borrower, and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower and whether or not any other Guarantor, any
other guarantor or the Borrower is joined in any such action or actions. Each
Guarantor waives, to the fullest extent permitted by law, the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to each Guarantor.
5. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
there-against;
218
EXHIBIT F
Page 5
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or re- xxxxx from acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the
Borrower;
(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of
what liabilities of the Borrower remain unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements, the Credit
Documents or any of the instruments or agreements referred to therein, or
otherwise amend, modify or supplement any of the Interest Rate Protection
Agreements, the Credit Documents or any of such other instruments or
agreements; and/or
(g) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
6. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
7. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege here-
219
EXHIBIT F
Page 6
under shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein expressly specified are cumulative and not
exclusive of any rights or remedies which any Creditor would otherwise have. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor to
any other further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any Creditor to any other or further action
in any circumstances without notice or demand. It is not necessary for any
Creditor to inquire into the capacity or powers of the Borrower or any of the
Borrower's Subsidiaries or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
8. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Collateral Agent, after an Event of Default has occurred, so requests, shall be
collected, enforced and received by such Guarantor as trustee for the Creditors
and be paid over to the Creditors on account of the Guaranteed Obligations, but
without affecting or impairing in any manner the liability of such Guarantor
under the other provisions of this Guaranty. Prior to the transfer by any
Guarantor of any note or negotiable instrument evidencing any indebtedness of
the Borrower to such Guarantor, such Guarantor shall xxxx such note or
negotiable instrument with a legend that the same is subject to this
subordination.
9. (a) Each Guarantor waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Creditors to (i)
proceed against the Borrower, any other Guarantor, any other guarantor or any
other party, (ii) proceed against or exhaust any security held from the
Borrower, any other Guarantor, any other guarantor or any other party or (iii)
pursue any other remedy in the Administrative Agent's or the Creditors' power
whatsoever. Each Guarantor waives any defense based on or arising out of any
defense of the Borrower, any other Guarantor, any other guarantor or any other
party other than
220
EXHIBIT F
Page 7
payment in full of the Guaranteed Obligations, including without limitation any
defense based on or arising out of the disability of the Borrower, any other
Guarantor, any other guarantor or any other party, or the unenforceability of
the Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of such Borrower other than payment in full of
the Guaranteed Obligations. The Creditors may, at their election, foreclose on
any security held by the Administrative Agent, the Collateral Agent or the other
Creditors by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Creditors may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Guaranteed Obligations have been paid in
full. Each Guarantor waives any defense arising out of any such election by the
Creditors, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
(c) Except as otherwise provided in clause (d) below, each Guarantor
hereby waives all rights of subrogation which it may at any time otherwise have
as a result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code, or otherwise) to the claims of the Creditors against the
Borrower, any other Guarantor or any other guarantor of the Guaranteed
Obligations (collectively, the "Other
221
EXHIBIT F
Page 8
Parties") and all contractual, statutory or common law rights of reimbursement,
contribution or indemnity from any Other Party which it may at any time
otherwise have as a result of this Guaranty. Each Guarantor hereby further
waives any right to enforce any other remedy which the Creditors now have or may
hereafter have against any Other Party, any endorser or any other guarantor of
all or any part of the Guaranteed Obligations and any benefit of, and any right
to participate in, any security or collateral given to or for the benefit of the
Creditors to secure payment of the Guaranteed Obligations.
(d) Notwithstanding the provisions of the preceding clause (c), (A)
each Guarantor shall have and be entitled to (i) all rights of subrogation
otherwise provided by law in respect of any payment it may make or be obligated
to make under this Guaranty and (ii) all claims (as defined in the Bankruptcy
Code) it would have against any Other Party in the absence of the preceding
clause (c), and to assert and enforce same, and (B) the provisions of clause (c)
above shall be of no further force and effect, in each case on and after, but at
no time prior to, the earlier of (I) the date (the "Subrogation Trigger Date")
which is one year and one day after the date on which all the Guaranteed
Obligations owing to any of the Creditors have been paid in full if and only if
(i) no Default or Event of Default of the type described in Section 9.05 of the
Credit Agreement with respect to the respective Other Party has existed at any
time on and after the date of this Guaranty to and including the Subrogation
Trigger Date and (ii) the existence of such Guarantor's rights under this clause
(d) would not make such Guarantor a creditor (as defined in the Bankruptcy Code)
of the respective Other Party in any insolvency, bankruptcy, reorganization or
similar proceeding commenced on or prior to the Subrogation Trigger Date or (II)
the effective date of any amendment to Title 11 of the United States Code or of
any decision of the United States Supreme Court that in the sole opinion of the
Administrative Agent provides, in effect, that the status of such Guarantor as
an insider creditor of the respective Other Party will not cause transfers of an
interest of such Other Party in property (including payments or grants of
security interests by such Other Party) to any Creditor to be subject to
avoidance as a preference for a longer period of time than if the Guaranteed
Obligations of
222
EXHIBIT F
Page 9
such Other Party had not been guaranteed or otherwise secured by such Guarantor
or its assets.
10. In order to induce the respective Creditors to extend credit as
contemplated by the agreements referred to above, each Guarantor represents,
warrants and covenants that:
(a) Such Guarantor and each of its Subsidiaries (i) is a duly
organized and validly existing corporation in good standing under the laws
of the jurisdiction of its incorporation and has the corporate power and
authority to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (ii) is duly
qualified and is authorized to do business and is in good standing in all
jurisdictions where the failure to be so qualified would have a material
adverse effect on the business, property, assets, liabilities, condition
(financial or otherwise) or prospects of PXI and its Subsidiaries taken as
a whole.
(b) Such Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Guaranty and has
taken all necessary corporate action to authorize the execution, delivery
and performance by it of this Guaranty. Such Guarantor has duly executed
and delivered this Guaranty, and this Guaranty constitutes the legal,
valid and binding obligation of such Guarantor enforceable in accordance
with its terms, except to the extent that the enforceability hereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at
law).
(c) Neither the execution, delivery or performance by such Guarantor
of this Guaranty, nor compliance by it with the terms and provisions
hereof, (i) will contravene in any material respect any applicable
provision of any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii)
will conflict or be inconsistent with or result in any breach of any of
the terms, cove-
223
EXHIBIT F
Page 10
nants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or
impose) any Lien upon any of the property or assets of such Guarantor or
any of its Subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, credit agreement, loan agreement or other material
agreement or instrument to which such Guarantor or any of its Subsidiaries
is a party or by which it or any of its property or assets is bound or to
which it may be subject or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws of such Guarantor or any of its
Subsidiaries.
(d) No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by,
any governmental or public body or authority, or any subdivision thereof,
is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Guaranty, or (ii) the
legality, validity, binding effect or enforceability of this Guaranty,
except those which have been obtained or made.
11. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Revolving Commitment and all
Interest Rate Protection Agreements and when no Letter of Credit or Note remains
outstanding and all Guaranteed Obligations have been paid in full, such
Guarantor shall take, or will refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in Section 7 or 8 of the Credit
Agreement, and so that no Event of Default, is caused by the actions of such
Guarantor or any of its Subsidiaries.
12. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses (x) of each Creditor in connection
with the enforcement of this Guaranty and, after an Event of Default shall have
occurred and be continuing, the protection of such Creditor's rights hereunder
and (y) of the Administrative Agent in connection with any amendment, waiver or
consent relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel)
224
EXHIBIT F
Page 11
employed by any of the Creditors or by the Administrative Agent, as the case may
be).
13. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
14. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the Required
Banks (or to the extent required by Section 12.11 of the Credit Agreement, with
the written consent of each Bank) and each Guarantor affected thereby (it being
understood that the addition or release of any Guarantor hereunder shall not
constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released).
15. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents has been made available to its principal
executive officers and such officers are familiar with the contents thereof.
16. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agreement continuing
after any applicable grace period), each Creditor is hereby authorized at any
time or from time to time, without notice to any Guarantor or to any other
Person, any such notice being expressly waived, to set off and to appropriate
and apply any and all deposits (general or special) and any other indebtedness
at any time held or owing by such Creditor to or for the credit or the account
of such Guarantor, against and on account of the obligations and liabilities of
such Guarantor to such Creditor under this Guaranty, irrespective of whether or
not such Creditor shall have made any demand hereunder and although said
obligations, liabilities, deposits or claims, or any of them, shall be
contingent or unmatured.
17. Without in any manner modifying its obligations to the Creditors
under this Guaranty, to the
225
EXHIBIT F
Page 12
extent that any Guarantor makes any payment under this Guaranty in respect of
the Guaranteed Obligations that is in excess of its Percentage of the aggregate
payments made by all Guarantors under this Guaranty in respect of such
Guaranteed Obligations, then such Guarantor shall have a right of contribution
from each other Guarantor whose payments, if any, in respect of such Guaranteed
Obligations are less than its percentage of the aggregate payments made by all
Guarantors under this Guaranty in respect of such Guaranteed Obligations in an
amount, and with the effect, that after giving effect to any such contribution
right, such Guarantor shall be responsible only for its Percentage of all
payments made hereunder by all Guarantors in respect of such indebtedness. As
used in this Section 17, a Guarantor's Percentage shall mean the percentage
obtained by dividing (i) the amount by which the present fair saleable value of
its assets on the date of this Guaranty exceeds its liabilities on such date
(without giving effect to this Guaranty) (such excess for such Guarantor, its
"Net Worth") by (ii) the aggregate Net Worth of all Guarantors at such time.
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of any Guarantor, at its address set forth opposite its signature
below and (iii) in the case of any Interest Rate Protection Creditor, at such
address as such Interest Rate Protection Creditor shall have specified in
writing to the Guarantors; or in any case at such other address as any of the
Persons listed above may hereafter notify the others in writing.
19. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order,
226
EXHIBIT F
Page 13
settlement or compromise shall be binding upon such Guarantor, notwithstanding
any revocation hereof or other instrument evidencing any liability of the
Borrower, and such Guarantor shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee.
20. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE CREDITORS
AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Guaranty, each Guarantor hereby accepts
for itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts and hereby irrevocably waives any right it
may have to object to the laying of venue of any such action or proceeding in
the aforesaid courts and hereby further irrevocably waives and agrees not to
plead or claim that any such action or proceeding has been brought in an
inconvenient forum. Each Guarantor hereby irrevocably designates, appoints and
empowers CT Corporation System with offices on the date hereof at 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 as its designee, appointee and agent to receive, accept
and acknowledge for and on its behalf, and in respect of its property, service
of any and all legal process, summons, notices and documents which may be served
in any such action or proceeding. If for any reason such designee, appointee and
agent shall cease to be available to act as such, each Guarantor agrees to
designate a new designee, appointee and agent in New York City on the terms and
for the purposes of this provision satisfactory to the Administrative Agent for
the Creditors under this Guaranty. Each Guarantor further irrevocably consents
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to each Guarantor at its address set forth opposite its
signature below. Nothing herein shall affect the right of any of the Creditors
to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against each Guarantor in any other
jurisdiction.
227
EXHIBIT F
Page 14
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 8.01 of the Credit Agreement or such sale or other
disposition has been approved in writing by the Required Banks (or all Banks if
required by Section 12.11 of the Credit Agreement), and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of Section 4.02 of the Credit Agreement (to the extent required as a result of a
reduction of the Total Revolving Commitment pursuant to Section 3.03 of the
Credit Agreement), such Guarantor shall be released from this Guaranty and this
Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no
further force or effect (it being understood and agreed that the sale of any
Person that owns, directly or indirectly, that portion of the capital stock of
any Guarantor which constitutes Collateral shall be deemed to be a sale of such
Guarantor for the purposes of this Section 21).
22. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Administrative
Agent.
23. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
228
EXHIBIT F
Page 15
0000 X.X. 00xx Xxxxxx PUEBLO MARKETS, INC.
Xxxxxxx Xxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 By _________________________
Attn: Chief Financial Officer Title:
0000 X.X. 00xx Xxxxxx PUEBLO SUPER VIDEOS, INC.
Xxxxxxx Xxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 By _________________________
Attn: Chief Financial Officer Title:
0000 X.X. 00xx Xxxxxx ALL TRUCK, INC.
Xxxxxxx Xxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 By _________________________
Attn: Chief Financial Officer Title:
0000 X.X. 00xx Xxxxxx XTRA DRUGSTORE, INC.
Xxxxxxx Xxxxx, Xxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Chief Financial Officer By _________________________
Title:
0000 X.X. 00xx Xxxxxx PUEBLO CARIBBEAN VIDEOS,
Xxxxxxx Xxxxx, Xxxxxxx 00000 INC.]
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Chief Financial Officer By _________________________
Title:
Accepted and Agreed to:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By __________________________
Title:
229
EXHIBIT G-1
[FORM OF BORROWER SECURITY AGREEMENT]
between
PUEBLO INTERNATIONAL, INC.
and
THE BANK OF NOVA SCOTIA,
as Collateral Agent
Dated as of April __, 1997
230
EXHIBIT G-1
TABLE OF CONTENTS
Page
----
ARTICLE I SECURITY INTERESTS............................................ 3
1.1. Grant of Security Interests.................................... 3
1.2. Power of Attorney.............................................. 4
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES
AND COVENANTS.............................................. 5
2.1. Necessary Filings.............................................. 5
2.2. No Liens....................................................... 5
2.3. Other Financing Statements..................................... 6
2.4. Chief Executive Office; Records................................ 6
2.5. Location of Inventory and Equipment............................ 7
2.6. Recourse....................................................... 8
2.7. Trade Names; Change of Name.................................... 8
ARTICLE III SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS.................. 9
3.1. Additional Representations and
Warranties.................................................. 9
3.2. Maintenance of Records......................................... 9
3.3. Direction to Account Debtors; Contracting
Parties; etc................................................ 10
3.4. Modification of Terms; etc..................................... 11
3.5. Collection..................................................... 11
3.6. Instruments.................................................... 12
3.7. Further Actions................................................ 12
ARTICLE IV SPECIAL PROVISIONS CONCERNING MARKS........................... 12
4.1. Additional Representations and
Warranties.................................................. 12
4.2. Licenses and Assignments....................................... 13
4.3. Infringements.................................................. 13
4.4. Preservation of Marks.......................................... 13
4.5. Maintenance of Registration.................................... 13
(i)
231
EXHIBIT G-1
Page
----
4.6. Future Registered Marks........................................ 14
4.7. Remedies....................................................... 14
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS
AND COPYRIGHTS............................................. 15
5.1. Additional Representations and
Warranties.................................................. 15
5.2. Licenses and Assignments....................................... 15
5.3. Infringements.................................................. 15
5.4. Maintenance of Patents......................................... 16
5.5. Prosecution of Patent Application.............................. 16
5.6. Other Patents and Copyrights................................... 16
5.7. Remedies....................................................... 16
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL.......................... 17
6.1. Protection of Collateral Agent's
Security.................................................... 17
6.2. Warehouse Receipts Non-negotiable.............................. 18
6.3. Further Actions................................................ 18
6.4. Financing Statements........................................... 18
ARTICLE VII REMEDIES UPON OCCURRENCE OF SPECIFIED
EVENTS..................................................... 19
7.1. Remedies; Obtaining the Collateral Upon
Default..................................................... 19
7.2. Remedies; Disposition of the Collateral........................ 20
7.3. Waiver of Claims............................................... 22
7.4. Application of Proceeds........................................ 23
7.5. Remedies Cumulative............................................ 26
7.6. Discontinuance of Proceedings.................................. 26
ARTICLE VIII INDEMNITY..................................................... 27
8.1. Indemnity...................................................... 27
8.2. Indemnity Obligations Secured by
Collateral; Survival........................................ 29
ARTICLE IX DEFINITIONS................................................... 29
ARTICLE X THE COLLATERAL AGENT.......................................... 36
10.1. Appointment.................................................... 36
10.2. Nature of Duties............................................... 36
10.3. Lack of Reliance on the Collateral Agent....................... 37
10.4. Certain Rights of the Collateral Agent......................... 38
(ii)
232
EXHIBIT G-1
Page
----
10.5. Reliance....................................................... 39
10.6. Indemnification................................................ 39
10.7. The Collateral Agent in its Individual
Capacity.................................................... 40
10.8. Holders........................................................ 40
10.9. Resignation by the Collateral Agent............................ 41
10.10. Fees and Expenses of Collateral Agent.......................... 41
ARTICLE XI MISCELLANEOUS................................................. 42
11.1. Notices........................................................ 42
11.2. Waiver; Amendment.............................................. 43
11.3. Obligations Absolute........................................... 44
11.4. Successors and Assigns......................................... 44
11.5. Headings Descriptive........................................... 44
11.6. Severability................................................... 44
11.7. GOVERNING LAW.................................................. 45
11.8. Assignor's Duties.............................................. 45
11.9. Termination; Release........................................... 45
11.10. Counterparts................................................... 46
ANNEX A Schedule of Permitted Filings
ANNEX B Schedule of Record Locations
ANNEX C Schedule of Inventory and Equipment Locations
ANNEX D Schedule of Trade, Fictitious and Other Names
ANNEX E Schedule of Marks
ANNEX F Schedule of License Agreements and Assignments
ANNEX G Schedule of Patents and Applications
ANNEX H Schedule of Copyrights and Applications
(iii)
233
EXHIBIT G-1
[FORM OF BORROWER SECURITY AGREEMENT]
AMENDMENT AND RESTATEMENT, dated as of April __, 1997, to
SECURITY AGREEMENT (as amended, modified, supplemented or restated from time to
time, this "Agreement"), dated as of July 28, 1993, between PUEBLO
INTERNATIONAL, INC. (the "Assignor") and THE BANK OF NOVA SCOTIA, as Collateral
Agent (the "Collateral Agent"), for the benefit of (x) the Banks, the
Syndication Agent and the Administrative Agent from time to time party to the
Credit Agreement hereinafter referred to (such Banks, Syndication Agent and
Administrative Agent, the "Bank Creditors"), and (y) any Bank that enters into
an interest rate protection agreement (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements, collectively, the
"Interest Rate Protection Agreements") with the Assignor as permitted by Section
8.03(c) of the Credit Agreement, even if any such Bank subsequently ceases to be
a Bank under the Credit Agreement for any reason and for so long as any such
Bank participates in the extension of any such Interest Rate Protection
Agreements, and any subsequent assignee, (collectively, the "Interest Rate
Protection Creditors" and, together with the Bank Creditors, the "Secured
Parties"). All capitalized terms used herein shall have the meanings provided in
Article IX of this Agreement and, if not so defined herein, capitalized terms
used herein and defined in the Credit Agreement shall be used herein as so
defined.
W I T N E S S E T H :
WHEREAS, the Assignor, Pueblo Xtra International, Inc., Xtra
Super Food Centers, Inc., the various Banks from time to time party thereto, The
Bank of Nova Scotia, as Administrative Agent (the "Administrative Agent"), and
NationsBank, N.A. (South), as Syndication Agent (the "Syndication Agent") have
entered into an Amendment and Restatement, dated as of April __, 1997, to,
Credit Agreement, dated as of July 21, 1993, providing for the making of Loans
and the issuance of, and participation in, Letters of Credit as contemplated
therein (as used herein, the term "Credit Agreement" means the Credit Agreement
described above in this paragraph, as the same may be amended, modified, ex-
234
EXHIBIT G-1
Page 2
tended, renewed, restated or supplemented from time to time, and including any
agreement extending the maturity of, or restructuring (including, but not
limited to, the inclusion of additional borrowers or any increase in the amount
borrowed) all or any portion of the Indebtedness under such agreement or any
successor agreements;
WHEREAS, the Assignor may at any time and from time to time
enter into one or more Interest Rate Protection Agreements with one or more
Interest Rate Protection Creditors in compliance with the provisions of the
Credit Agreement;
WHEREAS, it is a condition precedent to each of the
above-described extensions of credit to the Assignor that the Assignor shall
have executed and delivered to the Collateral Agent this Agreement; and
WHEREAS, the Assignor desires to execute and deliver this
Agreement to satisfy the conditions described in the preceding paragraph.
NOW, THEREFORE, in consideration of the extensions of credit
made and to be made to the Assignor and other benefits accruing to the Assignor,
the receipt and sufficiency of which are hereby acknowledged, the Assignor
hereby makes the following representations and warranties to the Collateral
Agent for the benefit of the Secured Parties and hereby covenants and agrees
with the Collateral Agent for the benefit of the Secured Parties as follows:
235
EXHIBIT G-1
Page 3
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the full
and prompt payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all of the Obligations, the Assignor does hereby
sell, assign and transfer unto the Collateral Agent, and does hereby grant to
the Collateral Agent for the benefit of the Secured Parties, a continuing
security interest of first priority (subject to Liens evidenced by Permitted
Filings and other Liens permitted under Section 8.02 of the Credit Agreement and
existing on the Restatement Effective Date) in, all of the right, title and
interest of the Assign- or in, to and under all of the following, whether now
existing or hereafter from time to time acquired (all of the following, with
respect to the Assignor, the "Collateral"): (i) each and every Receivable, (ii)
all Contracts, together with all Contract Rights arising thereunder, (iii) all
Inventory, (iv) the Cash Collateral Account established for the Assignor and all
monies, securities and instruments deposited or required to be deposited in such
Cash Collateral Account, (v) all Equipment, (vi) all Marks, together with the
registrations and right to all renewals thereof, and the goodwill of the
business of the Assignor symbolized by the Marks, (vii) all Patents and
Copyrights, and all reissues, renewals or extensions thereof, (viii) all
computer programs of the Assignor and all intellectual property rights therein
and all other proprietary information of the Assignor, including, but not
limited to, trade secrets, (ix) all other Goods, General Intangibles, Chattel
Paper, Documents and Instruments (other than the Pledged Securities and any
other capital stock not required to be pledged pursuant to the Borrower Pledge
Agreement), and (x) all Proceeds and products of any and all Collateral referred
to in clauses (i) through (ix) above and this clause (x); provided, however,
that to the extent that any Contract may be terminated (in accordance with the
terms thereof after giving effect to any applicable laws) in the event of the
granting of a security interest therein, or in the event the granting of a
security interest in any Contract shall violate applicable law, then the
security interest granted hereby shall be limited to the extent necessary so
that such Contract may not be so
236
EXHIBIT G-1
Page 4
terminated or no such violation of law shall exist, as the case may be.
(b) The security interests of the Collateral Agent under this
Agreement extend to all Collateral of the kind which is the subject of this
Agreement which the Assignor may acquire at any time during the continuation of
this Agreement.
(c) If (i) a Bankruptcy Default or Notified Acceleration
Event has occurred and is continuing or (ii) any other Event of Default or
Acceleration Event has occurred and is continuing, but in the case of this
clause (ii) only if, and to the extent that, the Collateral Agent (acting at the
direction of the Required Banks) has given notice to the Assignor to take the
actions specified below in this sentence, then in either such case all cash
Proceeds of, and cash payments received in respect of, Collateral shall be paid
by the Assignor (or the respective payor) directly to the Cash Collateral
Account or as otherwise directed by the Collateral Agent. At any time while the
circumstances described in the immediately preceding sentence do not exist, all
cash payments received in respect of the Collateral (including, without
limitation, all payments received in respect of Receivables and Contracts, or in
payment for sales of Inventory, but excluding cash Proceeds of sales of other
Collateral unless the respective sale and release of Collateral is permitted
pursuant to this Agreement and the Credit Agreement) shall be paid to the
Assignor for application in accordance with (and to the extent provided by) the
Credit Agreement.
(d) The parties further agree that, as of the effective date
of the Puerto Rico Commercial Transactions Act (Act no. 241 enacted on September
19, 1996), the security interests of the Collateral Agent under this Agreement
shall extend to all Collateral now or hereafter located in the Commonwealth of
Puerto Rico.
1.2. Power of Attorney. The Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of the Assignor or otherwise), in the Collateral Agent's
discretion, to take any action and to execute any
237
EXHIBIT G-1
Page 5
instrument which the Collateral Agent may reasonably deem necessary or advisable
to accomplish the purposes of this Agreement, which appointment as attorney is
coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
The Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and
recordings necessary or appropriate to create, preserve, protect and perfect the
security interest granted by the Assignor to the Collateral Agent hereby in
respect of the Collateral have been or shall have been accomplished and the
security interest granted to the Collateral Agent pursuant to this Agreement in
and to the Collateral constitutes or shall constitute a perfected security
interest therein prior to the rights of all other Persons therein and subject to
no other Liens (except that the Collateral may be subject to the security
interests evidenced by the financing statements disclosed on Annex A hereto, but
only to the respective date, if any, set forth on Annex A (the "Permitted
Filings") and to any other Liens permitted under Section 8.02 of the Credit
Agreement and existing on the Restatement Effective Date) and is or shall be
entitled to all the rights, priorities and benefits afforded by the Uniform
Commercial Code or other relevant law as enacted in any relevant jurisdiction to
perfected security interests.
2.2. No Liens. The Assignor is, and as to Collateral acquired
by it from time to time after the date hereof the Assignor will be, the owner of
all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Liens created hereby, Liens
permitted under Section 8.02 of the Credit Agreement or evidenced by the
Permitted Filings), and the Assignor shall defend the Collateral against all
claims and demands of all Persons at any time claiming the same or any interest
therein adverse to the Collateral Agent.
238
EXHIBIT G-1
Page 6
2.3. Other Financing Statements. As of the date hereof, there
is no financing statement (or similar statement or instrument of registration
under the law of any jurisdiction) on file or of record in any relevant
jurisdiction covering or purporting to cover any interest of any kind in the
Collateral except as disclosed in Annex A hereto and so long as the Termination
Date has not occurred or any of the Credit Agreement Obligations remain unpaid,
the Assignor will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by the Assignor and to the extent permitted to
be granted by the Assignor pursuant to Section 8.02 of the Credit Agreement.
2.4. Chief Executive Office; Records. The chief executive
office of Pueblo International, Inc., is located at 0000 Xxxxxxxxx 00xx Xxxxxx,
Xxxxxxx Xxxxx, Xxxxxxx 00000. The Assignor will not move its chief executive
office except to such new locations as the Assignor may establish in accordance
with the last sentence of this Section 2.4. The originals of all documents
evidencing all Receivables and Contract Rights of the Assignor and the only
original books of account and records of the Assignor relating thereto are, and
will continue to be, kept at such chief executive office, at such other
locations shown on Annex B hereto or at such new locations as the Assignor may
establish in accordance with the last sentence of this Section 2.4, provided
that, so long as (x) true and correct copies of all documents evidencing such
Receivables and Contract Rights and copies of such books and records are kept at
such chief executive office or at such other locations shown on Annex B hereto,
and (y) the failure to maintain any original copies of the foregoing at such
locations could not have an adverse effect upon the validity, perfection or
priority of any security interest granted hereunder, the Assignor shall be
permitted to keep original copies of the foregoing at other locations to be
determined in a manner consistent with its past practices. All Receivables and
Contract Rights of the Assignor are, and will continue to be, maintained at, and
controlled and directed (including, without limitation, for general accounting
purposes) from, the office locations described above. The Assignor shall not
establish new locations for
239
EXHIBIT G-1
Page 7
such offices until (i) it shall have given to the Collateral Agent not less than
45 days' prior written notice of its intention so to do, clearly describing such
new location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new location,
it shall have taken all action to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect and (iii) at the request of the
Collateral Agent, it shall have furnished an opinion of counsel reasonably
acceptable to the Collateral Agent to the effect that all financing or
continuation statements and amendments or supplements thereto have been filed in
the appropriate filing office or offices, and all other actions (including,
without limitation, the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and maintain
the perfection and priority of) the security interest granted hereby.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by the Assignor is located at one of the
locations shown on Annex C hereto. The Assignor agrees that all Inventory and
all Equipment now held or subsequently acquired by it shall be kept at (or shall
be in transport to) any one of the locations shown on Annex C hereto, or such
new location as the Assignor may establish in accordance with the last sentence
of this Section 2.5. The Assignor may establish a new location for Inventory and
Equipment only if (i) it shall give to the Collateral Agent written notice of
such new location as promptly as practicable and in no event later than 60 days
after the establishment thereof, clearly describing such new location and
providing such other information in connection therewith as the Collateral Agent
may reasonably request, (ii) with respect to such new location, as promptly as
practicable and in no event later than 75 days after the establishment thereof,
it shall have taken all action to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect and (iii) at the request of the
Collateral Agent, it shall have furnished an opinion of counsel reasonably
acceptable to the Collateral Agent to the effect that all financing or
continuation statements and amendments or supplements thereto have been filed in
the
240
EXHIBIT G-1
Page 8
appropriate filing office or offices, and all other actions (including, without
limitation, the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to perfect (and maintain
the perfection and priority of) the security interest granted hereby.
2.6. Recourse. This Agreement is made with full recourse to
the Assignor and pursuant to and upon all the warranties, representations,
covenants, and agreements on the part of the Assignor contained herein, in the
other Credit Documents, in the Interest Rate Protection Agreements and otherwise
in writing in connection herewith or therewith.
2.7. Trade Names; Change of Name. The Assignor neither has nor
operates in any jurisdiction under, or in the preceding 12 months has had or has
operated in any jurisdiction under, any trade names, fictitious names or other
names (including, without limitation, any names of divisions or operations)
except its legal name and such other trade, fictitious or other names as are
listed on Annex D hereto. The Assignor shall not change its legal name or assume
or operate in any jurisdiction under any trade, fictitious or other name except
those names listed on Annex D hereto and new names (including, without
limitation, any names of divisions or operations) established in accordance with
the last sentence of this Section 2.7. The Assignor shall not assume nor operate
in any jurisdiction under any new trade, fictitious or other name until (i) it
shall have given to the Collateral Agent not less than 30 days' prior written
notice of its intention so to do, clearly describing such new name and the
jurisdictions in which such new name shall be used and providing such other
information in connection therewith as the Collateral Agent may reasonably
request, (ii) with respect to such new name, the Assignor shall have taken all
action to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect and (iii) at the request of the Collateral Agent, the
Assignor shall have furnished an opinion of counsel reasonably acceptable to the
Collateral Agent to the effect that all financing or continuation statements and
amendments or supplements thereto have been filed in the appropriate filing
office or offices, and all other actions (including, without limitation, the
payment of all filing fees and taxes,
241
EXHIBIT G-1
Page 9
if any, payable in connection with such filings) have been taken, in order to
perfect (and maintain the perfection and priority of) the security interest
granted hereby.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time
when each of its Receivables arises, the Assignor shall be deemed to have
represented and warranted that (x) such Receivable, and all records, papers and
documents relating thereto (if any) are genuine and in all respects what they
purport to be, and that all papers and documents (if any) relating thereto (i)
will represent the obligation of the account debtor evidencing indebtedness
unpaid and owed by the respective account debtor arising out of the performance
of labor or services or the sale or lease and delivery of the merchandise listed
therein, or both, (ii) will be the only original writings evidencing and
embodying such obligation of the account debtor named therein (other than copies
created for general accounting purposes), and (iii) will be in compliance and
will conform in all material respects with all applicable federal, state and
local laws and applicable laws of any relevant foreign jurisdiction and (y)
there is no fact or circumstance known to Assignor which would suggest that any
such Receivable (i) will not represent the genuine, legal, valid and binding
obligation of such account debtor or (ii) will not evidence true and valid
obligations, enforceable in accordance with their respective terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws generally
affecting creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
3.2. Maintenance of Records. The Assignor will keep and
maintain at its own cost and expense satisfactory and complete records of its
Receivables and Contracts, including, but not limited to, the originals of all
documentation (including each Contract) with respect thereto, records of all
payments received, all credits granted thereon,
242
EXHIBIT G-1
Page 10
all merchandise returned and all other dealings therewith, and the Assignor will
make the same available on the Assignor's premises to the Collateral Agent for
inspection, at the Assignor's own cost and expense, at any and all reasonable
times upon demand. Upon the occurrence and during the continuance of any of the
conditions specified in the first sentence of Section 1.1(c) of this Agreement,
and upon the request of the Collateral Agent, the Assignor shall, at its own
cost and expense, deliver all tangible evidence of its Receivables and Contract
Rights (including, without limitation, all documents evidencing the Receivables
and all Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by the Assignor). If the Collateral Agent so directs, the Assignor shall legend,
in form and manner reasonably satisfactory to the Collateral Agent, the
Receivables and the Contracts, as well as books, records and documents of the
Assignor evidencing or pertaining to such Receivables and Contracts with an
appropriate reference to the fact that such Receivables and Contracts have been
assigned to the Collateral Agent and that the Collateral Agent has a security
interest therein.
3.3. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent so directs the Assignor, the Assignor agrees (x) to cause
all payments on account of the Receivables and Contracts to be made directly to
the Cash Collateral Account (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in preceding clause
(x) and (z) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent that the Assignor
might have done. Without notice to or assent by the Assignor, the Collateral
Agent may apply any or all amounts then in, or thereafter deposited in, the Cash
Collateral Account in the manner provided in Section 7.4 of this Agreement. The
reasonable costs and expenses (including attorneys' fees) of collection, whether
incurred by the Assignor or the Collateral Agent, shall be borne by the
Assignor.
243
EXHIBIT G-1
Page 11
3.4. Modification of Terms; etc. The Assignor shall rescind or
cancel any indebtedness evidenced by any Receivable or under any Contract, or
modify any term thereof or make any adjustment with respect thereto, or extend
or renew the same, or compromise or settle any material dispute, claim, suit or
legal proceeding relating thereto, or sell any Receivable or Contract, or
interest therein, without the prior written consent of the Collateral Agent,
except as permitted by Section 3.5 hereof and except, so long as none of the
conditions described in the first sentence of Section 1.1(c) of this Agreement
shall occur and be continuing, such modifications, adjustments and sales
effected by the Assignor in the ordinary course of business consistent with past
practice. The Assignor will duly fulfill all obligations on its part to be
fulfilled under or in connection with the Receivables and Contracts and will do
nothing to impair the rights of the Collateral Agent in the Receivables or
Contracts.
3.5. Collection. The Assignor shall endeavor to cause to be
collected from the account debtor named in each of its Receivables or the
obligor under any Contract, as and when due (including, without limitation,
amounts which are delinquent, such amounts to be collected in accordance with
generally accepted lawful collection procedures) any and all amounts owing under
or on account of such Receivable or Contract, and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivable or under such Contract, except that, at any time when payments in
respect of Receivables and Contracts may be made to the Assignor in accordance
with the second sentence of Section 1.1(c) of this Agreement, the Assignor may
allow in the ordinary course of business as adjustments to amounts owing under
its Receivables and Contracts (i) an extension or renewal of the time or times
of payment, or settlement for less than the total unpaid balance, which the
Assignor finds appropriate in accordance with sound business judgment and (ii) a
refund or credit due as a result of returned or damaged merchandise or
improperly performed services. The reasonable costs and expenses (including,
without limitation, attorneys' fees) of collection, whether incurred by the
Assignor or the Collateral Agent, shall be borne by the Assignor.
244
EXHIBIT G-1
Page 12
3.6. Instruments. If the Assignor owns or acquires any
Instrument constituting Collateral in an amount equal to or greater than
$250,000, the Assignor will within ten days notify the Collateral Agent thereof,
and upon request by the Collateral Agent will promptly deliver such Instrument
to the Collateral Agent appropriately endorsed to the order of the Collateral
Agent as further security hereunder.
3.7. Further Actions. The Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS
4.1. Additional Representations and Warranties. The Assignor
represents and warrants that it is the true and lawful exclusive owner of the
Marks listed in Annex E hereto and that said listed Marks include all the United
States federal registrations or applications registered in the United States
Patent and Trademark Office that the Assignor now owns in connection with its
business. The Assignor represents and warrants that it owns or is licensed to
use all Marks that it uses. The Assignor further warrants that it is aware of no
third party claim that any aspect of the Assignor's present or contemplated
business operations infringes or will infringe any xxxx. The Assignor represents
and warrants that it is the owner of record of all United States Trademark
registrations and applications listed in Annex D hereto and that said
registrations are valid, subsisting, have not been cancelled and that the
Assignor is not aware of any third-party claim that any of said registrations is
invalid or unenforceable. The Assignor hereby grants to the Collateral Agent an
absolute power of attorney to sign, upon the occurrence and during the
continuance of (i) a Bank-
245
EXHIBIT G-1
Page 13
ruptcy Default or Notified Acceleration Event or (ii) any other Event of Default
or Acceleration Event, but in the case of this clause (ii) only to the extent
the Required Banks have so directed, any document which may be required by the
United States Patent and Trademark Office in order to effect an absolute
assignment of all right, title and interest in each Xxxx, and record the same.
4.2. Licenses and Assignments. Other than the license
agreements listed on Annex F hereto and any extensions or renewals thereof, the
Assignor hereby agrees not to divest itself of any right under any Xxxx absent
prior written approval of the Collateral Agent.
4.3. Infringements. The Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available with
respect to, any party who, in any material respect, may be infringing or
otherwise violating any of the Assignor's rights in and to any significant Xxxx,
or with respect to any party claiming that the Assignor's use of any significant
Xxxx violates in any material respect any property right of that party. The
Assignor further agrees, unless otherwise agreed by the Collateral Agent,
diligently to prosecute any Person infringing, in any material respect, any
significant Xxxx.
4.4. Preservation of Marks. The Assignor agrees to use its
significant Marks in interstate or foreign commerce during the time in which
this Agreement is in effect, sufficiently to preserve such Marks as trademarks
or service marks registered under the laws of the United States.
4.5. Maintenance of Registration. The Assignor shall, at its
own expense, diligently process all documents required by the Trademark Act of
1946, 15 U.S.C. Sections 1051 et seq. to maintain trademark registration,
including but not limited to affidavits of use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
significant Marks pursuant to 15 U.S.C. Sections 1058(a), 1059 and 1065, and
shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the Col-
246
EXHIBIT G-1
Page 14
lateral Agent. The Assignor agrees to notify the Collateral Agent six (6) months
prior to the dates on which the affidavits of use or the applications for
renewal registration are due with respect to any significant Xxxx that the
affidavits of use or the renewal is being processed.
4.6. Future Registered Marks. If any Xxxx registration issues
hereafter to the Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within thirty (30)
days of receipt of such certificate the Assignor shall deliver a copy of such
certificate, and a grant of security in such xxxx to the Collateral Agent,
confirming the grant thereof hereunder, the form of such confirmatory grant to
be substantially the same as the form hereof.
4.7. Remedies. If there shall occur and be continuing an Event
of Default, the Collateral Agent may, by written notice to the Assignor, take
any or all of the following actions: (i) declare the entire right, title and
interest of the Assignor in and to each of the Marks, together with all
trademark rights and rights of protection to the same, vested, in which event
such rights, title and interest shall immediately vest, in the Collateral Agent
for the benefit of the Secured Parties, in which case the Collateral Agent shall
be entitled to exercise the power of attorney referred to in Section 4.1 hereof
to execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency; (ii) take and use or sell the Marks and
the goodwill of the Assignor's business symbolized by the Marks and the right to
carry on the business and use the assets of the Assignor in connection with
which the Marks have been used; and (iii) direct the Assignor to refrain, in
which event the Assignor shall refrain, from using the Marks in any manner
whatsoever, directly or indirectly, and, if requested by the Collateral Agent,
change the Assignor's corporate name to eliminate therefrom any use of any Xxxx
and execute such other and further documents that the Collateral Agent may
request to further confirm this and to transfer ownership of the Marks and
registrations and any pending trademark application in the United States Patent
and Trademark Office to the Collateral Agent.
247
EXHIBIT G-1
Page 15
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS
5.1. Additional Representations and Warranties. The Assignor
represents and warrants that it is the true and lawful exclusive owner of all
rights in the Patents listed in Annex G hereto and in the Copyrights listed in
Annex H hereto, that said Patents include all the United States patents and
applications for United States patents that the Assignor now owns and that said
Copyrights constitute all the United States copyrights registered with the
United States Copyright Office and applications for United States copyrights
that the Assignor now owns. The Assignor represents and warrants that it owns or
is licensed to practice under all Patents and Copyrights that it now uses or
practices under. The Assignor further warrants that it is aware of no third
party claim that any aspect of the Assignor's present or contemplated business
operations infringes or will infringe any patent or any copyright. The Assignor
hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of (i) a Bankruptcy Default or
Notified Acceleration Event or (ii) any other Event of Default or Acceleration
Event, but in the case of this clause (ii) only to the extent the Required Banks
have so directed, any document which may be required by the United States Patent
and Trademark Office or the United States Copyright Office in order to effect an
absolute assignment of all right, title and interest in each Patent and
Copyright, and record the same.
5.2. Licenses and Assignments. Other than the license
agreements listed on Annex F hereto and any extensions or renewals thereof, the
Assignor hereby agrees not to divest itself of any right under any Patent or
Copyright absent prior written approval of the Collateral Agent.
5.3. Infringements. The Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all pertinent
information available to the Assignor with respect to any material infringement
or other material violation of the Assignor's rights in any significant Patent
or Copyright, or with respect to any claim that practice of any significant
Patent or Copyright materially
248
EXHIBIT G-1
Page 16
violates any property right of that party. The Assignor further agrees, absent
direction of the Collateral Agent to the contrary, diligently to prosecute any
Person infringing, in any material respect, any significant Patent or Copyright.
5.4. Maintenance of Patents. At its own expense, the Assignor
shall make timely payment of all post-issuance fees required pursuant to 35
U.S.C. Section 41 to maintain in force rights under each Patent.
5.5. Prosecution of Patent Application. At its own expense,
the Assignor shall diligently prosecute all applications for United States
patents listed in Annex F hereto and shall not abandon any such application
prior to exhaustion of all administrative and judicial remedies, absent written
consent of the Collateral Agent.
5.6. Other Patents and Copyrights. Within 30 days of
acquisition of a United States Patent or Copyright by or on behalf of the
Assignor, or of the filing of an application for a United States Patent or
Copyright by or on behalf of the Assignor, the Assignor shall deliver to the
Collateral Agent a copy of said Patent or Copyright or such application, as the
case may be, with a grant of security as to such Patent or Copyright, as the
case may be, confirming the grant thereof hereunder, the form of such
confirmatory grant to be substantially the same as the form hereof.
5.7. Remedies. If there shall occur and be continuing an Event
of Default, the Collateral Agent may by written notice to any Assignor, take any
or all of the following actions: (i) declare the entire right, title, and
interest of the Assignor in each of the Patents and Copyrights vested, in which
event such right, title, and interest shall immediately vest in the Collateral
Agent for the benefit of the Secured Parties, in which case the Collateral Agent
shall be entitled to exercise the power of attorney referred to in Section 5.1
hereof to execute, cause to be acknowledged and notarized and record said
absolute assignment with the applicable agency; (ii) take and practice or sell
the Patents and Copyrights; and (iii) direct the Assignor to refrain, in which
event the Assignor shall refrain, from practicing the Patents and Copyrights
directly or indirectly, and the Assignor shall execute such other and further
documents as the Collateral Agent may request further
249
EXHIBIT G-1
Page 17
to confirm this and to transfer ownership of the Patents and Copyrights to the
Collateral Agent for the benefit of the Secured Parties.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. The Assignor
will not do anything to impair the rights of the Collateral Agent in the
Collateral. The Assignor will at all times keep its Inventory and Equipment
insured in favor of the Collateral Agent, at the Assignor's own expense to the
extent and in the manner provided in the Credit Agreement; all policies or
certificates (or certified copies thereof) with respect to such insurance (and
any other insurance maintained by the Assignor) (i) shall be endorsed to the
Collateral Agent's satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as loss payee),
(ii) shall state that such insurance policies shall not be cancelled or revised
without 30 days' prior written notice thereof by the insurer to the Collateral
Agent (but only 10 days' prior written notice of cancellation for failure to
make payments under such policies), (iii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to the
Collateral Agent and the Secured Parties and (iv) shall be deposited with the
Collateral Agent. If the Assignor shall fail to insure its Inventory and
Equipment in accordance with the preceding sentence, or if the Assignor shall
fail to so endorse and deposit all policies or certificates with respect
thereto, the Collateral Agent shall have the right (but shall be under no
obligation) to procure such insurance and the Assignor agrees to reimburse the
Collateral Agent for all costs and expenses of procuring such insurance. The
Collateral Agent may apply any proceeds of such insurance in accordance with
Section 7.4 hereof. The Assignor assumes all liability and responsibility in
connection with the Collateral acquired by it and the liability of the Assignor
to pay the Obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to the Assignor.
250
EXHIBIT G-1
Page 18
6.2. Warehouse Receipts Non-negotiable. The Assignor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued with respect to any of its Inventory, such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law).
6.3. Further Actions. The Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. Financing Statements. The Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form acceptable to
the Collateral Agent, as the Collateral Agent may from time to time reasonably
request or as are necessary or desirable in the opinion of the Collateral Agent
to establish and maintain a valid, enforceable, first priority perfected
security interest in the Collateral as provided herein and the other rights and
security contemplated hereby all in accordance with the Uniform Commercial Code
as enacted in any and all relevant jurisdictions or any other relevant law. The
Assignor will pay any applicable filing fees, recordation taxes and related
expenses. The Assignor authorizes the Collateral Agent to file any such
financing statements without the signature of the Assignor where permitted by
law. The Assignor further constitutes and appoints the Collateral Agent its true
and lawful attorney, irrevocably and with full power, which appointment is
coupled with an interest, to execute on behalf of the Assignor and file any
financing statements necessary to perfect the security interests granted
hereunder with respect to all Collateral now or hereafter situated in the
Commonwealth of
251
EXHIBIT X-0
Xxxx 00
Xxxxxx Xxxx, as of the effective date of the Puerto Rico Commercial Transactions
Act and at all times thereafter.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF SPECIFIED EVENTS
7.1. Remedies; Obtaining the Collateral Upon Default. The
Assignor agrees that, if there shall have occurred and be continuing Event of
Default, then and in every such case, subject to any mandatory requirements of
applicable law then in effect, the Collateral Agent, in addition to any rights
now or hereafter existing under applicable law, shall have all rights as a
secured creditor under the Uniform Commercial Code in all relevant jurisdictions
and may also:
(a) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from the Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
the Assignor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of the Assignor; and
(b) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent and may exercise any and
all remedies of the Assignor in respect of such Collateral; and
(c) withdraw all monies, securities and instruments in the
Cash Collateral Account for application to the Obligations in
accordance with Section 7.4 hereof; and
(d) sell, assign or otherwise liquidate, or direct the
Assignor to sell, assign or otherwise liquidate, any or all of the
Collateral or any part thereof, and take
252
EXHIBIT G-1
Page 20
possession of the proceeds of any such sale or liquidation; and
(e) take possession of the Collateral or any part thereof, by
directing the Assignor in writing to deliver the same to the Collateral
Agent at any place or places designated by the Collateral Agent, in
which event the Assignor shall at its own expense:
(i) forthwith cause the same to be moved to the
place or places so designated by the Collateral Agent and
there delivered to the Collateral Agent, and
(ii) store and keep any Collateral so delivered to
the Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in Section 7.2
hereof, and
(iii) while the Collateral shall be so stored and
kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in good condition; and
(f) license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Patents or Copyrights included in the
Collateral for such term and on such conditions and in such manner as
the Collateral Agent shall in its sole judgment determine;
it being understood that the Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by the Assignor of said obligation.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and
253
EXHIBIT G-1
Page 21
in general in such manner, at such time or times, at such place or places and on
such terms as the Collateral Agent may, in compliance with any mandatory
requirements of applicable law, determine to be commercially reasonable. Any of
the Collateral may be sold, leased or otherwise disposed of, in the condition in
which the same existed when taken by the Collateral Agent or after any overhaul
or repair which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
to the right of the Assignor or any nominee of the Assignor to acquire the
Collateral involved at a price or for such other consideration at least equal to
the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by such requirements shall be
made upon not less than 10 days' written notice to the Assignor specifying the
time and place of such sale and, in the absence of applicable requirements of
law, shall be by public auction (which may, at the Collateral Agent's option, be
subject to reserve), after publication of notice of such auction not less than
10 days prior thereto in two newspapers in general circulation in the City of
New York. To the extent permitted by any such requirement of law, the Collateral
Agent and the Secured Parties may bid for and become the purchaser of the
Collateral or any item thereof, offered for sale in accordance with this Section
without accountability to the Assignor. If, under mandatory requirements of
applicable law, the Collateral Agent shall be required to make disposition of
the Collateral within a period of time which does not permit the giving of
notice to the Assignor as hereinabove specified, the Collateral Agent need give
the Assignor only such notice of disposition as shall be reasonably practicable
in view of such mandatory requirements of applicable law. The Assignor agrees to
do or cause to be done all such other acts and things as may be reasonably
necessary to make such sale or sales of all or any portion of the Collateral
valid and binding and in compliance with any and all applicable laws,
regulations, orders, writs, injunctions, decrees or awards of any and all
courts, arbitrators or governmental instrumentalities, domestic or
254
EXHIBIT G-1
Page 22
foreign, having jurisdiction over any such sale or sales, all at the Assignor's
expense.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, THE ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH ASSIGNOR WOULD
OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF
ANY STATE, and the Assignor hereby further waives, to the extent permitted by
law:
(a) all damages occasioned by such taking of possession
except any damages which are the direct result of the Collateral
Agent's gross negligence or willful misconduct;
(b) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights here- under; and
(c) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and the
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the Assignor therein and thereto, and
shall be a perpetual bar both at law and in equity against the Assignor and
against any and all Persons claiming or attempting to claim the Collateral so
sold, optioned or realized upon, or any part thereof, from, through and under
the Assignor.
255
EXHIBIT G-1
Page 23
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent any Security Document to which any Credit
Party is a party requires proceeds of collateral under such Security Document to
be applied in accordance with the provisions of this Agreement, the Collateral
Agent, Pledgee or Mortgagee, as the case may be, under such Security Document)
upon any sale or other disposition of the Collateral, together with all other
moneys received by the Collateral Agent hereunder, shall be applied, subject to
the following clause (b), as follows:
(i) first, to the payment of all amounts owing the
Collateral Agent of the type described in clauses (iv) and (v) of the
definition of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations (as defined below) shall be paid to
the Secured Parties as provided in Section 7.4(f) hereof, with each
Secured Party receiving an amount equal to such outstanding Primary
Obligations or, if the proceeds are insufficient to pay in full all
such Primary Obligations, its Pro Rata Share (as defined below) of the
amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations (as defined below) shall
be paid to the Secured Parties as provided in Section 7.4(f) hereof,
with each Secured Party receiving an amount equal to its outstanding
Secondary Obligations or, if the proceeds are insufficient to pay in
full all such Secondary Obligations, its Pro Rata Share of the amount
remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 11.9(a) hereof, to the Assignor or to whomever may be lawfully
entitled to receive such surplus.
256
EXHIBIT G-1
Page 24
(b) For purposes of this Agreement (w) "Pro Rata Share" shall
mean, when calculating a Secured Party's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Party's Primary Obligations or
Secondary Obligations, as the case may be, and the denominator of which is the
then outstanding amount of all Primary Obligations or Secondary Obligations, as
the case may be, (x) "Primary Obligations" shall mean (i) in the case of the
Credit Agreement Obligations, all principal of, and interest on, all Loans under
the Credit Agreement, all Unpaid Drawings theretofore made (together with all
interest accrued thereon), and the aggregate Stated Amounts of all Letters of
Credit issued (or deemed issued) under the Credit Agreement, and all regularly
accruing fees owing by the Assignor under the Credit Agreement, and (ii) in the
case of the Interest Rate Protection Obligations, all amounts due under the
Interest Rate Protection Agreements (other than indemnities, fees (including,
without limitation, attorneys' fees) and similar obligations and liabilities)
and (y) "Secondary Obligations" shall mean all Obligations other than Primary
Obligations.
(c) When payments to Secured Parties are based upon their
respective Pro Rata Shares, the amounts received by such Secured Parties
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Party of its Pro Rata
Share of any distribution would result in overpayment to such Secured Party,
such excess amount shall instead be distributed in respect of the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of the other Secured
Parties, with each Secured Party whose Primary Obligations or Secondary
Obligations, as the case may be, have not been paid in full to receive an amount
equal to such excess amount multiplied by a fraction the numerator of which is
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of
such Secured Party and the denominator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of all Secured Parties
entitled to such distribution.
(d) Each of the Secured Parties agrees and acknowledges that
if the Bank Creditors are to receive a
257
EXHIBIT G-1
Page 25
distribution on account of undrawn amounts with respect to Letters of Credit
issued (or deemed issued) under the Credit Agreement (which shall only occur
after all outstanding Loans and Unpaid Drawings with respect to such Letters of
Credit have been paid in full), such amounts shall be paid to the Administrative
Agent under the Credit Agreement and held by it, for the equal and ratable
benefit of the Bank Creditors, as cash security for the repayment of Obligations
owing to the Bank Creditors as such. If any amounts are held as cash security
pursuant to the immediately preceding sentence, then upon the termination of all
outstanding Letters of Credit, and after the application of all such cash
security to the repayment of all Obligations owing to the Bank Creditors after
giving effect to the termination of all such Letters of Credit, if there remains
any excess cash, such excess cash shall be returned by the Administrative Agent
to the Collateral Agent for distribution in accordance with Section 7.4(a)
hereof.
(e) All payments required to be made hereunder shall be made
to the respective Representative of the Secured Parties entitled to such
payments.
(f) For purposes of applying payments received in accordance
with this Section 7.4, the Collateral Agent shall be entitled to rely upon the
respective Representatives for a determination (which each Representative for
any Secured Parties and the Secured Parties agree (or shall agree) to provide
upon request of the Collateral Agent) of the outstanding Primary Obligations and
Secondary Obligations owed to the Bank Creditors, or the Interest Rate
Protection Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Bank Creditor, or an Interest Rate
Protection Creditor) to the contrary, each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written notice
from an Interest Rate Protection Creditor) to the contrary, the Collateral
Agent, in acting hereunder, shall be entitled to assume that no Interest Rate
Protection Agreements are in existence.
258
EXHIBIT G-1
Page 26
(g) It is understood and agreed that the Assignor shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral hereunder and the aggregate amount of the sums referred to in clauses
(i) through (iii), inclusive, of Section 7.4(a) hereof.
7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement, the
Interest Rate Protection Agreements or the other Credit Documents or now or
hereafter existing at law or in equity, or by statute and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time or simultaneously and as often and in such order as
may be deemed expedient by the Collateral Agent. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of exercise of
one shall not be deemed a waiver of the right to exercise of any other or
others. No delay or omission of the Collateral Agent in the exercise of any such
right, power or remedy and no renewal or extension of any of the Obligations
shall impair any such right, power or remedy or shall be construed to be a
waiver of any Default or Event of Default or an acquiescence therein. No notice
to or demand on the Assignor in any case shall entitle it to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Collateral Agent to any other or further
action in any circumstances without notice or demand. In the event that the
Collateral Agent shall bring any suit to enforce any of its rights hereunder and
shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest
259
EXHIBIT G-1
Page 27
created under this Agreement, and all rights, remedies and powers of the
Collateral Agent shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) The Assignor agrees to indemnify,
reimburse and hold the Collateral Agent, each Secured Party and their respective
successors, assigns, employees, agents and servants (hereinafter in this Section
8.1 referred to individually as "Indemnitee," and collectively as "Indemnitees")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable attorneys' fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement, any Interest Rate Protection Agreement, any other Credit Document, or
any other document executed in connection herewith and therewith or in any other
way connected with the administration of the transactions contemplated hereby
and thereby or the enforcement of any of the terms of, or the preservation of
any rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), any contract claim or, to the
maximum extent permitted under applicable law, the violation of the laws of any
country, state or other governmental body or unit, or any tort (including,
without limitation, claims arising or imposed under the doctrine of strict
liability, or for or on account of injury to or the death of any Person
(including any Indemnitee), or property damage); provided that no Indemnitee
shall be indemnified pursuant to this Section 8.1(a) for expenses to the extent
caused by the gross negligence or willful misconduct of such Indemnitee. The
Assignor agrees that upon written notice by any Indemnitee of the assertion of
such a liability, obligation,
260
EXHIBIT G-1
Page 28
damage, injury, penalty, claim, demand, action, suit or judgment, the Assignor
shall assume full responsibility for the defense thereof. Each Indemnitee agrees
to use its best efforts to promptly notify the Assignor of any such assertion to
which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof,
the Assignor agrees to pay, or reimburse the Collateral Agent for (if the
Collateral Agent shall have incurred fees, costs or expenses because the
Assignor shall have failed to comply with its obligations under this Agreement,
any other Credit Document or any Interest Rate Protection Agreement), any and
all fees, costs and expenses of whatever kind or nature incurred in connection
with the creation, preservation or protection of the Collateral Agent's Liens
on, and security interest in, the Collateral, including, without limitation, all
fees and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral, premiums for insurance with respect to the
Collateral and all other fees, costs and expenses in connection with protecting,
maintaining or preserving the Collateral and the Collateral Agent's interest
therein, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral.
(c) Without limiting the application of Section 8.1(a) or (b),
the Assignor agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, costs, damages and expenses which such Indemnitee may suffer,
expend or incur in consequence of or growing out of any misrepresentation by the
Assignor in this Agreement, any Interest Rate Protection Agreement, any other
Credit Document or in any writing contemplated by or made or delivered pursuant
to or in connection with this Agreement, any Interest Rate Protection Agreement
or any other Credit Document.
(d) If and to the extent that the obligations of the Assignor
under this Section 8.1 are unenforceable for any reason, the Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
261
EXHIBIT G-1
Page 29
8.2. Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of the Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement or the termination of all Interest Rate
Protection Agreements and the payment of all other Obligations and
notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Acceleration Event" shall mean the acceleration prior to the
stated final maturity, or the failure to pay at the stated final maturity, of
Obligations representing principal of, or interest on, extensions of credit
(including without limitation all L/C Outstandings) pursuant to the Credit
Agreement, or any Interest Rate Protection Agreement, provided that in each
case, any such Acceleration Event shall cease to exist upon payment in full of
the Obligations so accelerated or not paid.
"Administrative Agent" shall have the meaning provided in the
first WHEREAS clause of this Agreement.
"Agreement" shall mean this Security Agreement as the same may
be modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first
paragraph of this Agreement.
"Bank Creditor" shall have the meaning provided in the first
paragraph of this Agreement.
262
EXHIBIT G-1
Page 30
"Bankruptcy Default" shall mean any Default or Event of
Default with respect to any Assignor pursuant to Section 9.05 of the Credit
Agreement.
"Banks" shall have the meaning provided in the first WHEREAS
clause of this Agreement.
"Cash Collateral Account" shall mean a non-interest bearing
cash collateral account maintained with, and in the sole dominion and control
of, the Collateral Agent for the benefit of the Secured Parties.
"Chattel Paper", with respect to the Assignor, shall have the
meaning provided in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Class" shall have the meaning provided in Section 11.2 of
this Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a)
of this Agreement.
"Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Contract Rights", with respect to any Assignor, shall mean
all rights of the Assignor (including, without limitation, all rights to
payment) under each Contract to which it is a party or under which it is
entitled to any benefits.
"Contracts", with respect to the Assignor, shall mean all
contracts between the Assignor and one or more additional parties.
"Copyrights", with respect to the Assignor, shall mean any
United States copyright which the Assignor now or hereafter has registered with
the United States Copyright Office, as well as any application for a United
States copyright registration now or hereafter made with the United States
Copyright Office by the Assignor.
"Credit Agreement" shall have the meaning provided in the
first WHEREAS clause of this Agreement.
263
EXHIBIT G-1
Page 31
"Credit Agreement Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.
"Documents", with respect to the Assignor, shall have the
meaning provided in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Equipment", with respect to the Assignor, shall mean any
"equipment," as such term is defined in the Uniform Commercial Code as in effect
on the date hereof in the State of New York, now or hereafter owned by the
Assignor and, in any event, shall include, but shall not be limited to, all
machinery, equipment, furnishings, movable trade fixtures and vehicles now or
hereafter owned by the Assignor and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto.
"Event of Default" shall mean any Event of Default under, and
as defined in, the Credit Agreement, and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles", with respect to the Assignor, shall
have the meaning provided in the Uniform Commercial Code as in effect on the
date hereof in the State of New York and shall in any event include all of the
Assignor's claims, rights, powers, privileges, authority, options, security
interests, liens and remedies under any partnership agreement to which the
Assignor is a party or with respect to any partnership of which the Assignor is
a partner.
"Goods", with respect to the Assignor, shall have the meaning
provided in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
264
EXHIBIT G-1
Page 32
"Indemnitee" shall have the meaning provided in Section 8.1 of
this Agreement.
"Instrument" shall have the meaning provided in Article 9 of
the Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Interest Rate Protection Agreements" shall have the meaning
provided in the first paragraph of this Agreement.
"Interest Rate Protection Creditors" shall have the meaning
provided in the first paragraph of this Agreement.
"Interest Rate Protection Obligations" shall have the meaning
provided in the definition of "Obligations" in this Article IX.
"Inventory", with respect to the Assignor, shall mean
merchandise, inventory and goods, and all additions, substitutions and
replacements thereof, wherever located, together with all goods, supplies,
incidentals, packaging materials, labels, materials and any other items used or
usable in manufacturing, processing, packaging or shipping same; in all stages
of production -- from raw materials through work-in-process to finished goods --
and all products and proceeds of whatever sort and wherever located and any
portion thereof which may be returned, rejected, reclaimed or repossessed by the
Collateral Agent from the Assignor's customers, and shall specifically include
all "inventory" as such term is defined in the Uniform Commercial Code as in
effect on the date hereof in the State of New York, now or hereafter owned by
the Assignor.
"Marks", with respect to the Assignor, shall mean any
trademarks and service marks now held or hereafter acquired by the Assignor,
which are registered in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any
political subdivision thereof and any application for such trademarks and
service marks, as well as any unregistered marks used by the Assignor in the
United States and trade dress including logos, designs, trade names, company
names, business names, fictitious business names and other business
265
EXHIBIT G-1
Page 33
identifiers in connection with which any of these registered or unregistered
marks are used.
"Notified Acceleration Event" shall mean any Acceleration
Event with respect to which the Required Banks have given written notice to the
Collateral Agent that a "Notified Acceleration Event" exists, provided that such
written notice may only be given if such Acceleration Event is continuing and,
provided further that any such Notified Acceleration Event shall cease to exist
once there is no longer any Acceleration Event in existence.
"Obligations", with respect to the Assignor, shall mean (i)
(x) the principal of and interest on the Notes issued by, and Loans made to, the
Assignor under the Credit Agreement, and all reimbursement obligations and
Unpaid Drawings with respect to the Letters of Credit issued for the benefit of
the Assignor under the Credit Agreement and (y) all other obligations and
indebtedness (including, without limitation, indemnities, Fees and interest
thereon and obligations pursuant to the Guaranties) of the Assignor to the Bank
Creditors now existing or hereafter incurred under, arising out of, or in
connection with the Credit Agreement and the due performance and compliance by
the Assignor with all of the terms, conditions and agreements contained in the
Credit Agreement (all such principal, interest, obligations and liabilities,
except to the extent relating to Interest Rate Protection Agreements, the
"Credit Agreement Obligations"); (ii) all obligations and liabilities owing by
the Assignor to the Interest Rate Protection Creditors under, or with respect
to, any Interest Rate Protection Agreement, whether such Interest Rate
Protection Agreement is now in existence or hereafter arising, and the due
performance and compliance by the Assignor with all of the terms, conditions and
agreements contained therein (all such obligations and liabilities described in
this clause (ii), the "Interest Rate Protection Obligations"); (iii) any and all
sums advanced by the Collateral Agent in order to preserve the Collateral or
preserve its security interest in the Collateral; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness, obligations,
or liabilities of the Assignor referred to in clauses (i), (ii) and (iii), after
an Event of Default shall have occurred and be continuing, the reasonable
expenses of re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the
266
EXHIBIT G-1
Page 34
Collateral, or of any exercise by the Collateral Agent of its rights hereunder,
together with reasonable attorneys' fees and court costs; and (v) all amounts
paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 8.1 of this Agreement. It is acknowledged and agreed
that the "Obligations" shall include extensions of credit of the types described
above, whether outstanding on the date of this Agreement or extended from time
to time after the date of this Agreement.
"Patents", with respect to the Assignor, shall mean any United
States patent to which the Assignor now or hereafter has title or license to
use, as well as any application for a United States patent now or hereafter made
by the Assignor.
"Permitted Filings" shall have the meaning provided in Section
2.1 of this Agreement.
"Pledged Securities" shall have the meaning provided in the
Borrower Pledge Agreement.
"Primary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Proceeds", with respect to the Assignor, shall have the
meaning provided in the Uniform Commercial Code as in effect in the State of New
York on the date hereof or under other relevant law and, in any event, shall
include, but not be limited to, (i) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Collateral Agent or the Assignor
from time to time with respect to any of the Collateral, (ii) any and all
payments (in any form whatsoever) made or due and payable to the Assignor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any governmental
authority (or any person acting under color of governmental authority) and (iii)
any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
267
EXHIBIT G-1
Page 35
"Receivables", with respect to the Assignor, shall mean any
"account" as such term is defined in the Uniform Commercial Code as in effect on
the date hereof, now or hereafter owned by the Assignor and, in any event, shall
include, but shall not be limited to, all of the Assignor's rights to payment
for goods sold or leased or services performed by the Assignor, whether now in
existence or arising from time to time hereafter, including, without limitation,
rights evidenced by an account, note, contract, security agreement, chattel
paper, or other evidence of indebtedness or security, together with (a) all
security pledged, assigned, hypothecated or granted to or held by the Assignor
to secure the foregoing, (b) all of the Assignor's right, title and interest in
and to any goods, the sale of which gave rise thereto, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (d) all
powers of attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith, (e) all books, records, ledger cards,
and invoices relating thereto, (f) all evidences of the filing of financing
statements and other statements and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(g) all credit information, reports and memoranda relating thereto, and (h) all
other writings related in any way to the foregoing; provided that "Receivables"
shall not include any Pledged Security or promissory note not required to be
pledged pursuant to the Borrower Pledge Agreement.
"Representative" shall mean (x) for the Bank Creditors, the
Administrative Agent under the Credit Agreement and (y) for the Interest Rate
Protection Creditors, the Representative for the Interest Rate Protection
Creditors or, in the absence of such a Representative, the Interest Rate
Protection Creditors.
"Required Creditors" shall mean the requisite percentage of
Secured Parties which are needed to take actions with respect to a given Class
of Obligations, i.e., whether the Required Banks or the Required Interest Rate
Protection Creditors.
"Required Interest Rate Protection Creditors" shall mean the
holders of 51% of all Obligations outstanding from
268
EXHIBIT G-1
Page 36
time to time under the Interest Rate Protection Agreements, determined in such
reasonable fashion as is acceptable to the Collateral Agent.
"Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Secured Parties" shall have the meaning provided in the first
paragraph of this Agreement.
"Termination Date" shall have the meaning provided in Section
11.9 of this Agreement.
ARTICLE X
THE COLLATERAL AGENT
10.1. Appointment. The Secured Parties, by their acceptance of
the benefits of this Agreement hereby irrevocably designate The Bank of Nova
Scotia, as Collateral Agent, to act as specified herein. Each Secured Party
hereby irrevocably authorizes, and each holder of any Note by the acceptance of
such Note and by the acceptance of the benefits of this Agreement shall be
deemed irrevocably to authorize, the Collateral Agent to take such action on its
behalf under the provisions of this Agreement and any other instruments and
agreements referred to herein and to exercise such powers and to perform such
duties hereunder as are specifically delegated to or required of the Collateral
Agent by the terms hereof and such other powers as are reasonably incidental
thereto. The Collateral Agent may perform any of its duties hereunder or
thereunder by or through its authorized agents or employees.
10.2. Nature of Duties. (a) The Collateral Agent shall have no
duties or responsibilities except those expressly set forth in this Agreement.
The duties of the Collateral Agent shall be mechanical and administrative in
nature; the Collateral Agent shall not have by reason of this Agreement, any
other Credit Document, or any Interest Rate Protection Agreement a fiduciary
relationship in respect of any Secured Party; and nothing in this Agreement, any
other Credit Document, or any Interest Rate Protection Agreement, expressed or
implied, is intended to or shall be so construed
269
EXHIBIT G-1
Page 37
as to impose upon the Collateral Agent any obligations in respect of this
Agreement except as expressly set forth herein.
(b) The Collateral Agent shall not be responsible for insuring
the Collateral or for the payment of taxes, charges or assessments or
discharging of liens upon the Collateral or otherwise as to the maintenance of
the Collateral.
(c) The Collateral Agent shall not be required to ascertain or
inquire as to the performance by any Assignor of any of the covenants or
agreements contained in this Agreement, any other Credit Document or any
Interest Rate Protection Agreement.
(d) The Collateral Agent shall be under no obligation or duty
to take any action under this Agreement or any Credit Document if taking such
action (i) would subject the Collateral Agent to a tax in any jurisdiction where
it is not then subject to a tax or (ii) would require the Collateral Agent to
qualify to do business in any jurisdiction where it is not then so qualified,
unless the Collateral Agent receives security or indemnity satisfactory to it
against such tax (or equivalent liability), or any liability resulting from such
qualification, in each case as results from the taking of such action under this
Agreement or (iii) would subject the Collateral Agent to in personam
jurisdiction in any locations where it is not then so subject.
(e) Notwithstanding any other provision of this Agreement,
neither the Collateral Agent nor any of its officers, directors, employees,
affiliates or agents shall, in its individual capacity, be personally liable for
any action taken or omitted to be taken by it in accordance with this Agreement
except for its own gross negligence or willful misconduct.
10.3. Lack of Reliance on the Collateral Agent. Independently
and without reliance upon the Collateral Agent, each Secured Party, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Assignor
and its Subsidiaries in connection with the making and the continuance of the
Obligations and the taking or not
270
EXHIBIT G-1
Page 38
taking of any action in connection therewith, and (ii) its own appraisal of the
creditworthiness of the Assignor and its Subsidiaries, and the Collateral Agent
shall have no duty or responsibility, either initially or on a continuing basis,
to provide any Secured Party with any credit or other information with respect
thereto, whether coming into its possession before the extension of any
Obligations or the purchase of any Notes or at any time or times thereafter. The
Collateral Agent shall not be responsible in any manner whatsoever to any
Secured Party for the correctness of any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or the security interests granted hereunder or the
financial condition of the Assignor or any Subsidiary of the Assignor or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement, or the financial
condition of the Assignor or any Subsidiary of the Assignor, or the existence or
possible existence of any Default or Event of Default. The Collateral Agent
makes no representations as to the value or condition of the Collateral or any
part thereof, or as to the title of the Assignor thereto or as to the security
afforded by this Agreement.
10.4. Certain Rights of the Collateral Agent. (a) No Secured
Party shall have the right to cause the Collateral Agent to take any action with
respect to the Collateral, with only the Required Banks having the right to
direct the Collateral Agent to take any such action. If the Collateral Agent
shall request instructions from the Required Banks, with respect to any act or
action (including failure to act) in connection with this Agreement, the
Collateral Agent shall be entitled to refrain from such act or taking such
action unless and until it shall have received instructions from the Required
Banks and to the extent requested, appropriate indemnification in respect of
actions to be taken, and the Collateral Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Secured
Party shall have any right of action whatsoever against the Collateral Agent as
a result of the Collateral Agent acting or refraining from acting here-
271
EXHIBIT G-1
Page 39
under in accordance with the instructions of the Required Banks.
(b) The Collateral Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at the
request or direction of any of the Secured Parties, unless such Secured Parties
shall have offered to the Collateral Agent reasonable security or indemnity
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction.
10.5. Reliance. The Collateral Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by the proper Person or entity, and, with respect to all
legal matters pertaining to this Agreement and the other Security Documents and
its duties thereunder and hereunder, upon advice of counsel selected by it.
10.6. Indemnification. (a) To the extent the Collateral Agent
is not reimbursed and indemnified by the Assignor under this Agreement, the
Secured Parties will reimburse and indemnify the Collateral Agent, in proportion
to their respective outstanding principal amounts (including, for this purpose,
the stated amount of outstanding Letters of Credit and any unreimbursed drawings
in respect of Letters of Credit, as well as any unpaid Primary Obligations in
respect of Interest Rate Protection Agreements, as outstanding principal) of
Obligations, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Collateral Agent in performing its duties hereunder, or in
any way relating to or arising out of its actions as Collateral Agent in respect
of this Agreement except for those resulting solely from the Collateral Agent's
own gross negligence or willful misconduct. The indemnities set forth in this
Article X shall survive the repayment of all Obligations, with the respective
indemnification at such time to be based upon the outstanding principal amounts
(determined as described above) of Obligations at the time of the respective
occurrence upon which the claim against the
272
EXHIBIT G-1
Page 40
Collateral Agent is based or, if same is not reasonably determinable, based upon
the outstanding principal amounts (determined as described above) of Obligations
as in effect immediately prior to the termination of this Agreement. The
indemnities set forth in this Article X are in addition to any indemnities
provided by the Banks to the Collateral Agent pursuant to the Credit Agreement,
with the effect being that the Banks shall be responsible for indemnifying the
Collateral Agent to the extent the Collateral Agent does not receive payments
pursuant to this Section 10.6 from the Secured Parties (although in such event,
and upon the payment in full of all such amounts owing to the Collateral Agent,
the respective Banks who paid same shall be subrogated to the rights of the
Collateral Agent to receive payment from the Secured Parties).
10.7. The Collateral Agent in its Individual Capacity. With
respect to its obligations as a Bank under the Credit Agreement and any other
Credit Documents to which the Collateral Agent is a party, and to act as agent
under one or more of such Credit Documents, the Collateral Agent shall have the
rights and powers specified therein and herein for a "Bank" or an
"Administrative Agent", and may exercise the same rights and powers as though it
were not performing the duties specified herein; and the terms "Banks", "holders
of Notes", or any similar terms shall, unless the context clearly otherwise
indicates, include the Collateral Agent in its individual capacity. The
Collateral Agent may accept deposits from, lend money to, and generally engage
in any kind of banking, trust or other business with the Assignor or any
Affiliate or Subsidiary of the Assignor as if it were not performing the duties
specified herein or in the other Credit Documents, and may accept fees and other
consideration from the Assignor for services in connection with the Credit
Agreement, the other Credit Documents and otherwise without having to account
for the same to the Secured Parties.
10.8. Holders. The Collateral Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Collateral Agent. Any request, authority
or consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be final and
273
EXHIBIT G-1
Page 41
conclusive and binding on any subsequent holder, transferee, assignee or
endorsee, as the case may be, of such Note or Notes issued in exchange therefor.
10.9. Resignation by the Collateral Agent. (a) The Collateral
Agent may resign from the performance of all of its functions and duties under
this Agreement at any time by giving 20 Business Days' prior written notice to
the Assignor and the Secured Parties. Such resignation shall take effect upon
the appointment of a successor Collateral Agent pursuant to clause (b), (c) or
(d) below.
(b) If a successor Collateral Agent shall not have been
appointed within said 20 Business Day period by the Required Banks, the
Collateral Agent, with the consent of the Assignor, which consent shall not be
unreasonably withheld, shall then appoint a successor Collateral Agent who shall
serve as Collateral Agent hereunder or thereunder until such time, if any, as
the Required Banks appoint a successor Collateral Agent as provided above.
(c) If no successor Collateral Agent has been appointed
pursuant to clause (b) above by the 20th Business Day after the date of such
notice of resignation was given by the Collateral Agent, as a result of a
failure by the Assignor to consent to the appointment of such a successor
Collateral Agent, the Required Banks shall then appoint a successor Collateral
Agent who shall serve as Collateral Agent hereunder or thereunder until such
time, if any, as the Required Banks appoint a successor Collateral Agent as
provided above.
(d) If no successor Collateral Agent is appointed pursuant to
clauses (b) and (c) above within said 20 Business Day period, the resignation of
the Collateral Agent shall become effective and the duties of the Collateral
Agent shall be performed by the Required Banks.
10.10. Fees and Expenses of Collateral Agent. (a) The Assignor
(by its execution and delivery hereof) hereby agrees that it shall pay to The
Bank of Nova Scotia as the Collateral Agent, such fees as have been separately
agreed to in writing with The Bank of Nova Scotia for acting as Administrative
Agent and as Collateral Agent hereunder. In the event a successor Collateral
Agent is at any time
274
EXHIBIT G-1
Page 42
appointed pursuant to the preceding Section 10.9, the Assignor hereby agrees to
pay such successor Collateral Agent such fees for acting as such as would
customarily be charged by such Collateral Agent for acting in such capacity in
similar situations.
(b) In addition, the Assignor agrees to pay all reasonable
out-of-pocket costs and expenses of the Collateral Agent in connection with this
Agreement and any actions taken by the Collateral Agent hereunder, and agrees to
pay all costs and expenses of the Collateral Agent in connection with the
enforcement of this Agreement and the documents and instruments referred to
herein (including, without limitation, reasonable fees and disbursements of
counsel for the Collateral Agent).
ARTICLE XI
MISCELLANEOUS
11.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered to
the party to which such notice, request, demand or other communication is
required or permitted to be given or made under this Agreement, addressed as
follows:
(a) if to Pueblo International, Inc.:
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Chief Financial Officer
275
EXHIBIT G-1
Page 43
(b) if to the Collateral Agent:
The Bank of Nova Scotia
Suite 2700
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
(c) if to any Bank Creditor, either (x) to the Administrative
Agent, at the address of the Administrative Agent specified in the
Credit Agreement or (y) at such address as such Bank Creditor shall
have specified in the Credit Agreement;
(d) if to any Interest Rate Protection Creditor, either (x) to
the Representative for the Interest Rate Protection Creditors, at such
address as such Representative may have provided to the Assignor and
the Collateral Agent from time to time, or (y) directly to the Interest
Rate Protection Creditors at such address as the Interest Rate
Protection Creditors shall have specified in writing to the Assignor
and the Collateral Agent.
11.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the Assignor and the Collateral
Agent with the consent of the Required Banks (or all of the Banks if required
pursuant to Section 12.11 of the Credit Agreement), provided, however, that no
modifications shall be made to Section 7.4(a) of this Agreement without the
consent of each Secured Party adversely affected thereby; and provided further
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class (as defined below) of Secured Parties (and not all
Secured Parties in a like or similar manner) shall require the written consent
of the Required Creditors of such affected Class. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Parties, i.e.,
whether (x) the Bank Creditors as holders of the Credit Agreement
276
EXHIBIT G-1
Page 44
Obligations or (y) the Interest Rate Protection Creditors as the holders of the
Interest Rate Protection Obligations.
11.3. Obligations Absolute. The obligations of the Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of the Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection Agreement except as specifically set forth in a
waiver granted pursuant to Section 11.2 hereof; or (c) any amendment to or
modification of any Credit Document or any Interest Rate Protection Agreement or
any security for any of the Obligations; whether or not the Assignor shall have
notice or knowledge of any of the foregoing.
11.4. Successors and Assigns. This Agreement shall be binding
upon the Assignor and its successors and assigns and shall inure to the benefit
of the Collateral Agent and each Secured Party and their respective successors
and assigns, provided that the Assignor may not transfer nor assign any or all
of its rights or obligations hereunder without the written consent of the
Required Banks. All agreements, statements, representations and warranties made
by the Assignor herein or in any certificate or other instrument delivered by
the Assignor or on its behalf under this Agreement shall be considered to have
been relied upon by the Secured Parties and shall survive the execution and
delivery of this Agreement, the other Credit Documents and the Interest Rate
Protection Agreements regardless of any investigation made by the Secured
Parties or on their behalf.
11.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
11.6. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
277
EXHIBIT G-1
Page 45
render unenforceable such provision in any other jurisdiction.
11.7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
11.8. Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that the Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of the Assignor under or with
respect to any Collateral.
11.9. Termination; Release. (a) After the Termination Date,
this Agreement shall terminate and the Collateral Agent, at the request and
expense of the Assignor, will execute and deliver to the Assignor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to the Assignor (without
recourse and without any representation or warranty) such of the Collateral of
the Assignor as may be in the possession of the Collateral Agent and as has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement. As used in this Agreement, "Termination Date" shall mean the date
upon which the Total Revolving Commitment has been terminated, no Note remains
outstanding, all Letters of Credit have been terminated and all Credit Agreement
Obligations then owing by the Assignor have been paid in full.
(b) It is expressly acknowledged and agreed that all or a
portion of the Collateral shall be released from the Liens and security
interests created hereunder upon any sale thereof from time to time to the
extent permitted by, and in accordance with the terms of, the Credit Agreement.
In addition, it is expressly acknowledged and agreed that, any or all of the
Collateral may be released by the Collateral Agent acting at the direction of
the Required Banks (or all of the Banks to the extent required pursuant to
Section 12.11
278
EXHIBIT G-1
Page 46
of the Credit Agreement). Upon any sale of the type described in the second
preceding sentence or release of any such Collateral as provided in the
immediately preceding sentence, the Collateral Agent shall, at the request and
expense of the Assignor, and without the further consent of, or liability to,
any Secured Party, release such Collateral and execute and deliver to the
Assignor a proper instrument or instruments acknowledging the release of such
Collateral from this Agreement, and will duly assign, transfer and deliver to
the Assignor (without recourse and without any representation or warranty) the
Collateral being sold or released as described above.
(c) At any time that the Assignor desires that the Collateral
Agent take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 11.9(a) or (b), it shall deliver to the
Collateral Agent a certificate signed by its chief financial officer stating
that the release of the respective Collateral is permitted pursuant to the
foregoing Section 11.9(a) or (b). If requested by the Collateral Agent (although
the Collateral Agent shall have no obligation to make any such request), the
Assignor shall furnish appropriate legal opinions (from counsel acceptable to
the Collateral Agent) to the effect set forth in the immediately preceding
sentence. The Collateral Agent shall have no liability whatsoever to any Secured
Party as the result of any release of Collateral by it as permitted by this
Section 11.9. Upon any release of Collateral pursuant to the foregoing Section
11.9(a) or (b), none of the Secured Parties shall have any continuing right or
interest in such Collateral, or the proceeds thereof.
11.10. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Assignor and the Collateral Agent.
279
EXHIBIT G-1
Page 47
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
PUEBLO INTERNATIONAL, INC.,
as Assignor
By_________________________
Title:
THE BANK OF NOVA SCOTIA,
as Collateral Agent
By_________________________
Title:
280
ANNEX A
to
EXHIBIT G-1
Schedule of Permitted Filings
-----------------------------
Type Equipment
Filed With Debtor Secured Party of UCC Date File Number Summary
---------- ------ ------------- ------ ----- ----------- ---------
Filed
-----
Dade County Xtra Super Food Mutual Benefit UCC-3
Centers, Inc. Life Insurance
Company
281
EXHIBIT G-2
[FORM OF SUBSIDIARY SECURITY AGREEMENT]
among
XTRA SUPER FOOD CENTERS, INC.,
EACH OF THE OTHER SUBSIDIARIES
PARTY HERETO,
and
THE BANK OF NOVA SCOTIA,
as Collateral Agent
Dated as of April __, 1997
282
EXHIBIT G-2
TABLE OF CONTENTS
Page
----
ARTICLE I SECURITY INTERESTS................................ 3
1.1. Grant of Security Interests............................. 3
1.2. Power of Attorney....................................... 4
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES
AND COVENANTS
2.1. Necessary Filings....................................... 5
2.2. No Liens................................................ 5
2.3. Other Financing Statements.............................. 6
2.4. Chief Executive Office; Records......................... 6
2.5. Location of Inventory and Equipment..................... 7
2.6. Recourse................................................ 8
2.7. Trade Names; Change of Name............................. 8
ARTICLE III SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS;
INSTRUMENTS..................................... 9
3.1. Additional Representations and Warranties............... 9
3.2. Maintenance of Records.................................. 9
3.3. Direction to Account Debtors; Contracting
Parties; etc...................................... 10
3.4. Modification of Terms; etc.............................. 11
3.5. Collection.............................................. 11
3.6. Instruments............................................. 12
3.7. Further Actions......................................... 12
ARTICLE IV SPECIAL PROVISIONS CONCERNING MARKS............... 12
4.1. Additional Representations and Warranties............... 12
4.2. Licenses and Assignments................................ 13
4.3. Infringements........................................... 13
4.4. Preservation of Marks................................... 13
4.5. Maintenance of Registration............................. 13
4.6. Future Registered Marks................................. 14
4.7. Remedies................................................ 14
ARTICLE V SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS...................... 15
5.1. Additional Representations and Warranties............... 15
5.2. Licenses and Assignments................................ 15
5.3. Infringements........................................... 15
5.4. Maintenance of Patents.................................. 16
5.5. Prosecution of Patent Application....................... 16
(i)
283
EXHIBIT G-2
Page
5.6. Other Patents and Copyrights............................ 16
5.7. Remedies................................................ 16
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL.............. 17
6.1. Protection of Collateral Agent's Security............... 17
6.2. Warehouse Receipts Non-negotiable....................... 18
6.3. Further Actions......................................... 18
6.4. Financing Statements.................................... 18
ARTICLE VII REMEDIES UPON OCCURRENCE OF SPECIFIED
EVENTS.......................................... 19
7.1. Remedies; Obtaining the Collateral Upon
Default.............................................. 19
7.2. Remedies; Disposition of the Collateral................. 20
7.3. Waiver of Claims........................................ 22
7.4. Application of Proceeds................................. 23
7.5. Remedies Cumulative..................................... 23
7.6. Discontinuance of Proceedings........................... 23
ARTICLE VIII INDEMNITY......................................... 24
8.1. Indemnity............................................... 24
8.2. Indemnity Obligations Secured by
Collateral; Survival................................. 26
ARTICLE IX DEFINITIONS....................................... 26
ARTICLE X THE COLLATERAL AGENT.............................. 33
ARTICLE XI MISCELLANEOUS..................................... 33
11.1. Notices................................................ 33
11.2. Waiver; Amendment...................................... 34
11.3. Obligations Absolute................................... 35
11.4. Successors and Assigns................................. 35
11.5. Headings Descriptive................................... 35
11.6. Severability........................................... 35
11.7. GOVERNING LAW.......................................... 36
11.8. Assignors' Duties...................................... 36
11.9. Termination; Release................................... 36
11.10. Counterparts......................................... 37
ANNEX A Schedule of Permitted Filings
ANNEX B Schedule of Record Locations
ANNEX C Schedule of Inventory and Equipment Locations
(ii)
284
EXHIBIT G-2
Page
----
ANNEX D Schedule of Trade, Fictitious and Other Names ANNEX E Schedule of Marks
ANNEX F Schedule of License Agreements and Assignments ANNEX G Schedule of
Patents and Applications ANNEX H Schedule of Copyrights and Applications
(iii)
285
EXHIBIT G-2
[FORM OF SUBSIDIARY SECURITY AGREEMENT]
AMENDMENT AND RESTATEMENT, dated as of April __, 1997, to SECURITY
AGREEMENT (as amended, modified, supplemented or restated from time to time,
this "Agreement"), dated as of July 28, 1993, among each Subsidiary of PXI
(other than the Borrower) listed on the signature pages hereto (each an
"Assignor" and collectively, the "Assignors") and THE BANK OF NOVA SCOTIA, as
Collateral Agent (the "Collateral Agent"), for the benefit of (x) the Banks, the
Syndication Agent and the Administrative Agent from time to time party to the
Credit Agreement hereinafter referred to (such Banks, the Syndication Agent and
the Administrative Agent, the "Bank Creditors"), and (y) any Bank that enters
into an interest rate protection agreement which is or becomes entitled to the
benefits of the Subsidiary Guaranty or the Credit Agreement Guaranty defined
below (including, without limitation, interest rate swaps, caps, floors, collars
and similar agreements, collectively, the "Interest Rate Protection Agreements")
with the Borrower as permitted by Section 8.03(c) of the Credit Agreement, even
if any such Bank subsequently ceases to be a Bank under the Credit Agreement for
any reason and for so long as any such Bank participates in the extension of any
such Interest Rate Protection Agreements, and any subsequent assignee,
(collectively, the "Interest Rate Protection Creditors" and, together with the
Bank Creditors, the "Secured Parties"). All capitalized terms used herein shall
have the meanings provided in Article IX of this Agreement and, if not so
defined herein, capitalized terms used herein and defined in the Credit
Agreement shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, Pueblo Xtra International, Inc., Pueblo International,
Inc., Xtra Super Food Centers, Inc., the various Banks from time to time party
thereto, The Bank of Nova Scotia, as Administrative Agent, and NationsBank, N.A.
(South), as Syndication Agent, have entered into an Amendment and Restatement,
dated April __, 1997, to Credit Agreement, dated as of July 21, 1993, providing
for the making of Loans and the issuance of, and participation in, Letters of
Credit as contemplated therein (as used herein, the term "Credit
286
EXHIBIT G-2
Page 2
Agreement" means the Credit Agreement described above in this paragraph, as the
same may be amended, modified, extended, renewed, restated or supplemented from
time to time, and including any agreement extending the maturity of, or
restructuring (including, but not limited to, the inclusion of additional
borrowers or any increase in the amount borrowed) all or any portion of the
Indebtedness under such agreement or any successor agreements;
WHEREAS, the Borrower may at any time and from time to time enter
into one or more Interest Rate Protection Agreements with one or more Interest
Rate Protection Creditors in compliance with the provisions of the Credit
Agreement;
WHEREAS, each Assignor guaranteed the obligations of the Borrowers
under the Credit Agreement pursuant to the Subsidiary Guaranty, or in the case
of Xtra pursuant to Section 13 of the Credit Agreement (the "Credit Agreement
Guaranty");
WHEREAS, it is a condition precedent to each of the above-described
extensions of credit to the Borrower that the Assignors shall have executed and
delivered to the Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute and deliver this Agreement
to satisfy the conditions described in the preceding paragraph.
NOW, THEREFORE, in consideration of the extensions of credit made
and to be made to the Borrower and other benefits accruing to the Assignors, the
receipt and sufficiency of which are hereby acknowledged, each Assignor hereby
makes the following representations and warranties to the Collateral Agent for
the benefit of the Secured Parties and hereby covenants and agrees with the
Collateral Agent for the benefit of the Secured Parties as follows:
287
EXHIBIT G-2
Page 3
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the full and
prompt payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all of the Obligations, each Assignor does hereby
sell, assign and transfer unto the Collateral Agent, and does hereby grant to
the Collateral Agent for the benefit of the Secured Parties, a continuing
security interest of first priority (subject to Liens evidenced by Permitted
Filings and other Liens permitted under Section 8.02 of the Credit Agreement and
existing on the Restatement Effective Date) in, all of the right, title and
interest of such Assignor in, to and under all of the following, whether now
existing or hereafter from time to time acquired (all of the following, with
respect to any single Assignor, collectively, the "Collateral"): (i) each and
every Receivable, (ii) all Contracts, together with all Contract Rights arising
there-under, (iii) all Inventory, (iv) the Cash Collateral Account established
for the Assignor and all monies, securities and instruments deposited or
required to be deposited in such Cash Collateral Account, (v) all Equipment,
(vi) all Marks, together with the registrations and right to all renewals
thereof, and the goodwill of the business of the Assignor symbolized by the
Marks, (vii) all Patents and Copyrights, and all reissues, renewals or
extensions thereof, (viii) all computer programs of the Assignor and all
intellectual property rights therein and all other proprietary information of
the Assignor, including, but not limited to, trade secrets, (ix) all other
Goods, General Intangibles, Chattel Paper, Documents and Instruments (other than
the Pledged Securities and any other capital stock or promissory notes not
required to be pledged pursuant to the Xtra Pledge Agreement), and (x) all
Proceeds and products of any and all Collateral referred to in clauses (i)
through (ix) above and this clause (x); provided, however, that to the extent
that any Contract may be terminated (in accordance with the terms thereof after
giving effect to any applicable laws) in the event of the granting of a security
interest therein, or in the event the granting of a security interest in any
Contract shall violate applicable law, then the security interest granted hereby
shall be limited to the extent necessary so that such Con-
288
EXHIBIT G-2
Page 4
tract may not be so terminated or no such violation of law shall exist, as the
case may be.
(b) The security interests of the Collateral Agent under this
Agreement extend to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
(c) If (i) a Bankruptcy Default or Notified Acceleration Event has
occurred and is continuing or (ii) any other Event of Default or Acceleration
Event has occurred and is continuing, but in the case of this clause (ii) only
if, and to the extent that, the Collateral Agent (acting at the direction of the
Required Banks) has given notice to any Assignor to take the actions specified
below in this sentence, then in either such case all cash Proceeds of, and cash
payments received in respect of, Collateral shall be paid by such Assignor (or
the respective payor) directly to the Cash Collateral Account or as otherwise
directed by the Collateral Agent. At any time while the circumstances described
in the immediately preceding sentence do not exist, all cash payments received
in respect of the Collateral (including, without limitation, all payments
received in respect of Receivables and Contracts, or in payment for sales of
Inventory, but excluding cash Proceeds of sales of other Collateral unless the
respective sale and release of Collateral is permitted pursuant to this
Agreement and the Credit Agreement) shall be paid to the respective Assignor for
application in accordance with (and to the extent provided by) the Credit
Agreement.
(d) The parties further agree, that as of the effective date of the
Puerto Rico Commercial Transactions Act (Act no. 241 enacted on September 19,
1996), the security interests of the Collateral Agent under this Agreement shall
extend to all Collateral now or hereafter located in the Commonwealth of Puerto
Rico.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of the Assignor or otherwise), in the Collateral Agent's
discretion, to take any action and to execute any
289
EXHIBIT G-2
Page 5
instrument which the Collateral Agent may reasonably deem necessary or advisable
to accomplish the purposes of this Agreement, which appointment as attorney is
coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and recordings
necessary or appropriate to create, preserve, protect and perfect the security
interest granted by such Assignor to the Collateral Agent hereby in respect of
the Collateral have been or shall have been accomplished and the security
interest granted to the Collateral Agent pursuant to this Agreement in and to
the Collateral constitutes or shall constitute a perfected security interest
therein prior to the rights of all other Persons therein and subject to no other
Liens (except that the Collateral may be subject to the security interests
evidenced by the financing statements disclosed on Annex A hereto, but only to
the respective date, if any, set forth on Annex A (the "Permitted Filings") and
to any other Liens permitted under Section 8.02 of the Credit Agreement and
existing on the Restatement Effective Date) and is or shall be entitled to all
the rights, priorities and benefits afforded by the Uniform Commercial Code or
other relevant law as enacted in any relevant jurisdiction to perfected security
interests.
2.2. No Liens. Each Assignor is, and as to Collateral acquired by it
from time to time after the date hereof each Assignor will be, the owner of all
Collateral free from any Lien, security interest, encumbrance or other right,
title or interest of any Person (other than Liens created hereby, Liens
permitted under Section 8.02 of the Credit Agreement or evidenced by the
Permitted Filings), and each Assignor shall defend the Collateral against all
claims and demands of all Persons at any time claiming the same or any interest
therein adverse to the Collateral Agent.
290
EXHIBIT G-2
Page 6
2.3. Other Financing Statements. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) on file or of record in any relevant jurisdiction
covering or purporting to cover any interest of any kind in the Collateral
except as disclosed in Annex A hereto and so long as the Termination Date has
not occurred or any of the Credit Agreement Obligations remain unpaid, the
Assignors will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by the Assignors and to the extent permitted
to be granted by the Assignors pursuant to Section 8.02 of the Credit Agreement.
2.4. Chief Executive Office; Records. The chief executive office of
each Assignor is as set forth on the signature pages hereto. No Assignor will
move its chief executive office except to such new locations as such Assignor
may establish in accordance with the last sentence of this Section 2.4. The
originals of all documents evidencing all Receivables and Contract Rights of
each Assignor and the only original books of account and records of each
Assignor relating thereto are, and will continue to be, kept at such chief
executive office, at such other locations shown on Annex B hereto or at such new
locations as the Assignors may establish in accordance with the last sentence of
this Section 2.4, provided that, so long as (x) true and correct copies of all
documents evidencing such Receivables and Contract Rights and copies of such
books and records are kept at such chief executive office or at such other
locations shown on Annex B hereto, and (y) the failure to maintain any original
copies of the foregoing at such locations could not have an adverse effect upon
the validity, perfection or priority of any security interest granted hereunder,
each Assignor shall be permitted to keep original copies of the foregoing at
other locations to be determined in a manner consistent with its past practices.
All Receivables and Contract Rights of each Assignor are, and will continue to
be, maintained at, and controlled and directed (including, without limitation,
for general accounting purposes) from, the office locations described above. No
Assignor shall establish new locations for such offices until (i) it shall
291
EXHIBIT G-2
Page 7
have given to the Collateral Agent not less than 45 days' prior written notice
of its intention so to do, clearly describing such new location and providing
such other information in connection therewith as the Collateral Agent may
reasonably request, (ii) with respect to such new location, it shall have taken
all action to maintain the security interest of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect and (iii) at the request of the Collateral Agent, it shall
have furnished an opinion of counsel reasonably acceptable to the Collateral
Agent to the effect that all financing or continuation statements and amendments
or supplements thereto have been filed in the appropriate filing office or
offices, and all other actions (including, without limitation, the payment of
all filing fees and taxes, if any, payable in connection with such filings) have
been taken, in order to perfect (and maintain the perfection and priority of)
the security interest granted hereby.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex C hereto. Each Assignor agrees that all Inventory and
all Equipment now held or subsequently acquired by it shall be kept at (or shall
be in transport to) any one of the locations shown on Annex C hereto, or such
new location as the Assignor may establish in accordance with the last sentence
of this Section 2.5. Each Assignor may establish a new location for Inventory
and Equipment only if (i) it shall give to the Collateral Agent written notice
of such new location as promptly as practicable and in no event later than 60
days after the establishment thereof, clearly describing such new location and
providing such other information in connection therewith as the Collateral Agent
may reasonably request, (ii) with respect to such new location, as promptly as
practicable and in no event later than 75 days after the establishment thereof,
it shall have taken all action to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect and (iii) at the request of the
Collateral Agent, it shall have furnished an opinion of counsel reasonably
acceptable to the Collateral Agent to the effect that all financing or
continuation statements and amendments or supplements thereto have been filed in
the appropriate filing office or offices, and all other actions
292
EXHIBIT G-2
Page 8
(including, without limitation, the payment of all filing fees and taxes, if
any, payable in connection with such filings) have been taken, in order to
perfect (and maintain the perfection and priority of) the security interest
granted hereby.
2.6. Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations,
covenants, and agreements on the part of such Assignor contained herein, in the
other Credit Documents, in the Interest Rate Protection Agreements and otherwise
in writing in connection herewith or therewith.
2.7. Trade Names; Change of Name. No Assignor has or operates in any
jurisdiction under, or in the preceding 12 months has had or has operated in any
jurisdiction under, any trade names, fictitious names or other names (including,
without limitation, any names of divisions or operations) except its legal name
and such other trade, fictitious or other names as are listed on Annex D hereto.
No Assignor shall change its legal name or assume or operate in any jurisdiction
under any trade, fictitious or other name except those names listed on Annex D
hereto and new names (including, without limitation, any names of divisions or
operations) established in accordance with the last sentence of this Section
2.7. No Assignors shall assume or operate in any jurisdiction under any new
trade, fictitious or other name until (i) it shall have given to the Collateral
Agent not less than 30 days' prior written notice of its intention so to do,
clearly describing such new name and the jurisdictions in which such new name
shall be used and providing such other information in connection therewith as
the Collateral Agent may reasonably request, (ii) with respect to such new name,
such Assignor shall have taken all action to maintain the security interest of
the Collateral Agent in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect and (iii) at the request of
the Collateral Agent, such Assignor shall have furnished an opinion of counsel
reasonably acceptable to the Collateral Agent to the effect that all financing
or continuation statements and amendments or supplements thereto have been filed
in the appropriate filing office or offices, and all other actions (including,
without limitation, the payment of all filing fees and taxes, if any, payable in
connection with such filings) have been taken, in order to
293
EXHIBIT G-2
Page 9
perfect (and maintain the perfection and priority of) the security interest
granted hereby.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time when
each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that (x) such Receivable, and all records, papers and
documents relating thereto (if any) are genuine and in all respects what they
purport to be, and that all papers and documents (if any) relating thereto (i)
will represent the obligation of the account debtor evidencing indebtedness
unpaid and owed by the respective account debtor arising out of the performance
of labor or services or the sale or lease and delivery of the merchandise listed
therein, or both, (ii) will be the only original writings evidencing and
embodying such obligation of the account debtor named therein (other than copies
created for general accounting purposes), and (iii) will be in compliance and
will conform in all material respects with all applicable federal, state and
local laws and applicable laws of any relevant foreign jurisdiction and (y)
there is no fact or circumstance known to Assignor which would suggest that any
such Receivable (i) will not represent the genuine, legal, valid and binding
obligation of such account debtor or (ii) will not evidence true and valid
obligations, enforceable in accordance with their respective terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws generally
affecting creditors' rights and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
3.2. Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense satisfactory and complete records of its Receivables
and Contracts, including, but not limited to, the originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such
294
EXHIBIT G-2
Page 10
Assignor will make the same available on such Assignor's premises to the
Collateral Agent for inspection, at such Assignor's own cost and expense, at any
and all reasonable times upon demand. Upon the occurrence and during the
continuance of any of the conditions specified in the first sentence of Section
1.1(c) of this Agreement, and upon the request of the Collateral Agent, each
Assignor shall, at its own cost and expense, deliver all tangible evidence of
its Receivables and Contract Rights (including, without limitation, all
documents evidencing the Receivables and all Contracts) and such books and
records to the Collateral Agent or to its representatives (copies of which
evidence and books and records may be retained by such Assignor). If the
Collateral Agent so directs, each Assignor shall legend, in form and manner
reasonably satisfactory to the Collateral Agent, the Receivables and the
Contracts, as well as books, records and documents of the Assignor evidencing or
pertaining to such Receivables and Contracts with an appropriate reference to
the fact that such Receivables and Contracts have been assigned to the
Collateral Agent and that the Collateral Agent has a security interest therein.
3.3. Direction to Account Debtors; Contracting Parties; etc. Upon
the occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all
payments on account of the Receivables and Contracts to be made directly to the
Cash Collateral Account (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in preceding clause
(x) and (z) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent that such Assignor
might have done. Without notice to or assent by any Assignor, the Collateral
Agent may apply any or all amounts then in, or thereafter deposited in, the Cash
Collateral Account in the manner provided in Section 7.4 of this Agreement. The
reasonable costs and expenses (including attorneys' fees) of collection, whether
incurred by any Assignor or the Collateral Agent, shall be borne by such
Assignor.
295
EXHIBIT G-2
Page 11
3.4. Modification of Terms; etc. No Assignor shall rescind or cancel
any indebtedness evidenced by any Receivable or under any Contract, or modify
any term thereof or make any adjustment with respect thereto, or extend or renew
the same, or compromise or settle any material dispute, claim, suit or legal
proceeding relating thereto, or sell any Receivable or Contract, or interest
therein, without the prior written consent of the Collateral Agent, except as
permitted by Section 3.5 hereof and except, so long as none of the conditions
described in the first sentence of Section 1.1(c) of this Agreement shall occur
and be continuing, such modifications, adjustments and sales effected by such
Assignor in the ordinary course of business consistent with past practice. Each
Assignor will duly fulfill all obligations on its part to be fulfilled under or
in connection with the Receivables and Contracts and will do nothing to impair
the rights of the Collateral Agent in the Receivables or Contracts.
3.5. Collection. Each Assignor shall endeavor to cause to be
collected from the account debtor named in each of its Receivables or the
obligor under any Contract, as and when due (including, without limitation,
amounts which are delinquent, such amounts to be collected in accordance with
generally accepted lawful collection procedures) any and all amounts owing under
or on account of such Receivable or Contract, and apply forthwith upon receipt
thereof all such amounts as are so collected to the outstanding balance of such
Receivable or under such Contract, except that, at any time when payments in
respect of Receivables and Contracts may be made to such Assignor in accordance
with the second sentence of Section 1.1(c) of this Agreement, such Assignor may
allow in the ordinary course of business as adjustments to amounts owing under
its Receivables and Contracts (i) an extension or renewal of the time or times
of payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with sound business judgment and (ii) a
refund or credit due as a result of returned or damaged merchandise or
improperly performed services. The reasonable costs and expenses (including,
without limitation, attorneys' fees) of collection, whether incurred by any
Assignor or the Collateral Agent, shall be borne by such Assignor.
296
EXHIBIT G-2
Page 12
3.6. Instruments. If any Assignor owns or acquires any Instrument
constituting Collateral in an amount equal to or greater than $250,000, such
Assignor will within ten days notify the Collateral Agent thereof, and upon
request by the Collateral Agent will promptly deliver such Instrument to the
Collateral Agent appropriately endorsed to the order of the Collateral Agent as
further security hereunder.
3.7. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of the
Marks listed in Annex E hereto and that said listed Marks include all the United
States federal registrations or applications registered in the United States
Patent and Trademark Office that such Assignor now owns in connection with its
business. Each Assignor represents and warrants that it owns or is licensed to
use all Marks that it uses. Each Assignor further warrants that it is aware of
no third party claim that any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any xxxx. Each Assignor
represents and warrants that it is the owner of record of all United States
Trademark registrations and applications listed in Annex D hereto and that said
registrations are valid, subsisting, have not been cancelled and that such
Assignor is not aware of any third-party claim that any of said registrations is
invalid or unenforceable. Each Assignor hereby grants to the Collateral Agent an
absolute power of attorney to sign, upon the occurrence and during the
continuance of
297
EXHIBIT G-2
Page 13
(i) a Bankruptcy Default or Notified Acceleration Event or (ii) any other Event
of Default or Acceleration Event, but in the case of this clause (ii) only to
the extent the Required Banks have so directed, any document which may be
required by the United States Patent and Trademark Office in order to effect an
absolute assignment of all right, title and interest in each Xxxx, and record
the same.
4.2. Licenses and Assignments. Other than the license agreements
listed on Annex F hereto and any extensions or renewals thereof, each Assignor
hereby agrees not to divest itself of any right under any Xxxx absent prior
written approval of the Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who, in any material respect, may be infringing or otherwise violating
any of such Assignor's rights in and to any significant Xxxx, or with respect to
any party claiming that the Assignor's use of any significant Xxxx violates in
any material respect any property right of that party. Each Assignor further
agrees, unless otherwise agreed by the Collateral Agent, diligently to prosecute
any Person infringing, in any material respect, any significant Xxxx.
4.4. Preservation of Marks. Each Assignor agrees to use its
significant Marks in interstate or foreign commerce during the time in which
this Agreement is in effect, sufficiently to preserve such Marks as trademarks
or service marks registered under the laws of the United States.
4.5. Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. SectionSection 1051 et seq. to maintain trademark registration,
including but not limited to affidavits of use and applications for renewals of
registration in the United States Patent and Trademark Office for all of its
significant Marks pursuant to 15 U.S.C. SectionSection 1058(a), 1059 and 1065,
and shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the Col-
298
EXHIBIT G-2
Page 14
lateral Agent. Each Assignor agrees to notify the Collateral Agent six (6)
months prior to the dates on which the affidavits of use or the applications for
renewal registration are due with respect to any significant Xxxx that the
affidavits of use or the renewal is being processed.
4.6. Future Registered Marks. If any Xxxx registration issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within thirty (30)
days of receipt of such certificate such Assignor shall deliver a copy of such
certificate, and a grant of security in such xxxx to the Collateral Agent,
confirming the grant thereof hereunder, the form of such confirmatory grant to
be substantially the same as the form hereof.
4.7. Remedies. If there shall occur and be continuing an Event of
Default, the Collateral Agent may, by written notice to any Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks, together with all
trademark rights and rights of protection to the same, vested, in which event
such rights, title and interest shall immediately vest, in the Collateral Agent
for the benefit of the Secured Parties, in which case the Collateral Agent shall
be entitled to exercise the power of attorney referred to in Section 4.1 hereof
to execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency; (ii) take and use or sell the Marks and
the goodwill of such Assignor's business symbolized by the Marks and the right
to carry on the business and use the assets of such Assignor in connection with
which the Marks have been used; and (iii) direct such Assignor to refrain, in
which event such Assignor shall refrain, from using the Marks in any manner
whatsoever, directly or indirectly, and, if requested by the Collateral Agent,
change such Assignor's corporate name to eliminate therefrom any use of any Xxxx
and execute such other and further documents that the Collateral Agent may
request to further confirm this and to transfer ownership of the Marks and
registrations and any pending trademark application in the United States Patent
and Trademark Office to the Collateral Agent.
299
EXHIBIT G-2
Page 15
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful exclusive owner of all
rights in the Patents listed in Annex G hereto and in the Copyrights listed in
Annex H hereto, that said Patents include all the United States patents and
applications for United States patents that such Assignor now owns and that said
Copyrights constitute all the United States copyrights registered with the
United States Copyright Office and applications for United States copyrights
that such Assignor now owns. Each Assignor represents and warrants that it owns
or is licensed to practice under all Patents and Copyrights that it now uses or
practices under. Each Assignor further warrants that it is aware of no third
party claim that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any patent or any copyright. The Assignor
hereby grants to the Collateral Agent an absolute power of attorney to sign,
upon the occurrence and during the continuance of (i) a Bankruptcy Default or
Notified Acceleration Event or (ii) any other Event of Default or Acceleration
Event, but in the case of this clause (ii) only to the extent the Required Banks
have so directed, any document which may be required by the United States Patent
and Trademark Office or the United States Copyright Office in order to effect an
absolute assignment of all right, title and interest in each Patent and
Copyright, and record the same.
5.2. Licenses and Assignments. Other than the license agreements
listed on Annex F hereto and any extensions or renewals thereof, each Assignor
hereby agrees not to divest itself of any right under any Patent or Copyright
absent prior written approval of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to the Assignor with respect to any material infringement
or other material violation of the Assignor's rights in any significant Patent
or Copyright, or with respect to any claim that practice of any significant
Patent or Copyright materially
300
EXHIBIT G-2
Page 16
violates any property right of that party. Each Assignor further agrees, absent
direction of the Collateral Agent to the contrary, diligently to prosecute any
Person infringing, in any material respect, any significant Patent or Copyright.
5.4. Maintenance of Patents. At its own expense, each Assignor shall
make timely payment of all post-issuance fees required pursuant to 35 U.S.C.
Section 41 to maintain in force rights under each Patent.
5.5. Prosecution of Patent Application. At its own expense, each
Assignor shall diligently prosecute all applications for United States patents
listed in Annex F hereto and shall not abandon any such application prior to
exhaustion of all administrative and judicial remedies, absent written consent
of the Collateral Agent.
5.6. Other Patents and Copyrights. Within 30 days of acquisition of
a United States Patent or Copyright by or on behalf of any Assignor, or of the
filing of an application for a United States Patent or Copyright by or on behalf
of any Assignor, such Assignor shall deliver to the Collateral Agent a copy of
said Patent or Copyright or such application, as the case may be, with a grant
of security as to such Patent or Copyright, as the case may be, confirming the
grant thereof hereunder, the form of such confirmatory grant to be substantially
the same as the form hereof.
5.7. Remedies. If there shall occur and be continuing an Event of
Default, the Collateral Agent may by written notice to any Assignor, take any or
all of the following actions: (i) declare the entire right, title, and interest
of such Assignor in each of the Patents and Copyrights vested, in which event
such right, title, and interest shall immediately vest in the Collateral Agent
for the benefit of the Secured Parties, in which case the Collateral Agent shall
be entitled to exercise the power of attorney referred to in Section 5.1 hereof
to execute, cause to be acknowledged and notarized and record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event the Assignor shall refrain, from practicing the Patents and Copyrights
directly or indirectly, and the Assignor shall execute such other and further
documents as the Collateral Agent may request further
301
EXHIBIT G-2
Page 17
to confirm this and to transfer ownership of the Patents and Copyrights to the
Collateral Agent for the benefit of the Secured Parties.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. No Assignor will do
anything to impair the rights of the Collateral Agent in the Collateral. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at the Assignor's own expense to the extent and in the
manner provided in the Credit Agreement; all policies or certificates (or
certified copies thereof) with respect to such insurance (and any other
insurance maintained by the Assignor) (i) shall be endorsed to the Collateral
Agent's satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee), (ii) shall state that
such insurance policies shall not be cancelled or revised without 30 days' prior
written notice thereof by the insurer to the Collateral Agent (but only 10 days'
prior written notice of cancellation for failure to make payments under such
policies), (iii) shall provide that the respective insurers irrevocably waive
any and all rights of subrogation with respect to the Collateral Agent and the
Secured Parties and (iv) shall be deposited with the Collateral Agent. If any
Assignor shall fail to insure its Inventory and Equipment in accordance with the
preceding sentence, or if any Assignor shall fail to so endorse and deposit all
policies or certificates with respect thereto, the Collateral Agent shall have
the right (but shall be under no obligation) to procure such insurance and such
Assignor agrees to reimburse the Collateral Agent for all costs and expenses of
procuring such insurance. The Collateral Agent may apply any proceeds of such
insurance in accordance with Section 7.4 hereof. Each Assignor assumes all
liability and responsibility in connection with the Collateral acquired by it
and the liability of such Assignor to pay the Obligations shall in no way be
affected or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to the
Assignor.
302
EXHIBIT G-2
Page 18
6.2. Warehouse Receipts Non-negotiable. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in Section 7-104
of the Uniform Commercial Code as in effect in any relevant jurisdiction or
under other relevant law).
6.3. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form acceptable to
the Collateral Agent, as the Collateral Agent may from time to time reasonably
request or as are necessary or desirable in the opinion of the Collateral Agent
to establish and maintain a valid, enforceable, first priority perfected
security interest in the Collateral as provided herein and the other rights and
security contemplated hereby all in accordance with the Uniform Commercial Code
as enacted in any and all relevant jurisdictions or any other relevant law. Each
Assignor will pay any applicable filing fees, recordation taxes and related
expenses. Each Assignor authorizes the Collateral Agent to file any such
financing statements without the signature of the Assignor where permitted by
law. The Assignor further constitutes and appoints the Collateral Agent its true
and lawful attorney, irrevocably and with full power, which appointment is
coupled with an interest, to execute on behalf of the Assignor and file any
financing statements necessary to perfect the security interests granted
hereunder with respect to all Collateral now or hereafter situated in the
Commonwealth of
303
EXHIBIT X-0
Xxxx 00
Xxxxxx Xxxx, as of the effective date of the Puerto Rico Commercial Transactions
Act and at all times thereafter.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF SPECIFIED EVENTS
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if there shall have occurred and be continuing an Event of Default,
then and in every such case, subject to any mandatory requirements of applicable
law then in effect, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions and may
also:
(a) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor; and
(b) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent and may exercise any and all remedies of such Assignor in
respect of such Collateral; and
(c) withdraw all monies, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4 hereof; and
(d) sell, assign or otherwise liquidate, or direct such Assignor to
sell, assign or otherwise liquidate, any or all of the Collateral or any
part thereof, and
304
EXHIBIT G-2
Page 20
take possession of the proceeds of any such sale or liquidation; and
(e) take possession of the Collateral or any part thereof, by
directing such Assignor in writing to deliver the same to the Collateral
Agent at any place or places designated by the Collateral Agent, in which
event such Assignor shall at its own expense:
(i) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered to
the Collateral Agent, and
(ii) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by
the Collateral Agent as provided in Section 7.2 hereof, and
(iii) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good
condition; and
(f) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for
such term and on such conditions and in such manner as the Collateral
Agent shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and
305
EXHIBIT G-2
Page 21
in general in such manner, at such time or times, at such place or places and on
such terms as the Collateral Agent may, in compliance with any mandatory
requirements of applicable law, determine to be commercially reasonable. Any of
the Collateral may be sold, leased or otherwise disposed of, in the condition in
which the same existed when taken by the Collateral Agent or after any overhaul
or repair which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the respective Assignor specifying the time at which
such disposition is to be made and the intended sale price or other
consideration therefor, and shall be subject, for the 10 days after the giving
of such notice, to the right of such Assignor or any nominee of such Assignor to
acquire the Collateral involved at a price or for such other consideration at
least equal to the intended sale price or other consideration so specified. Any
such disposition which shall be a public sale permitted by such requirements
shall be made upon not less than 10 days' written notice to the respective
Assignor specifying the time and place of such sale and, in the absence of
applicable requirements of law, shall be by public auction (which may, at the
Collateral Agent's option, be subject to reserve), after publication of notice
of such auction not less than 10 days prior thereto in two newspapers in general
circulation in the City of New York. To the extent permitted by any such
requirement of law, the Collateral Agent and the Secured Parties may bid for and
become the purchaser of the Collateral or any item thereof, offered for sale in
accordance with this Section without accountability to the respective Assignor.
If, under mandatory requirements of applicable law, the Collateral Agent shall
be required to make disposition of the Collateral within a period of time which
does not permit the giving of notice to the respective Assignor as hereinabove
specified, the Collateral Agent need give such Assignor only such notice of
disposition as shall be reasonably practicable in view of such mandatory
requirements of applicable law. Each Assignor agrees to do or cause to be done
all such other acts and things as may be reasonably necessary to make such sale
or sales of all or any portion of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or
306
EXHIBIT G-2
Page 22
foreign, having jurisdiction over any such sale or sales, all at such Assignor's
expense.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH ASSIGNOR WOULD
OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF
ANY STATE, and each Assignor hereby further waives, to the extent permitted by
law:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(b) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the respective Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
307
EXHIBIT G-2
Page 23
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent upon any sale or other disposition of the Collateral, together
with all other moneys received by the Collateral Agent hereunder, shall be
applied in accordance with Section 7.4 of the Borrower Security Agreement.
(b) It is understood and agreed that each Assignor shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral hereunder and the aggregate amount of the Obligations.
7.5. Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, the
Interest Rate Protection Agreements or the other Credit Documents or now or
hereafter existing at law or in equity, or by statute and each and every right,
power and remedy whether specifically herein given or otherwise existing may be
exercised from time to time or simultaneously and as often and in such order as
may be deemed expedient by the Collateral Agent. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of exercise of
one shall not be deemed a waiver of the right to exercise of any other or
others. No delay or omission of the Collateral Agent in the exercise of any such
right, power or remedy and no renewal or extension of any of the Obligations
shall impair any such right, power or remedy or shall be construed to be a
waiver of any Default or Event of Default or an acquiescence therein. No notice
to or demand on any Assignor in any case shall entitle it to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of any of the rights of the Collateral Agent to any other or further
action in any circumstances without notice or demand. In the event that the
Collateral Agent shall bring any suit to enforce any of its rights hereunder and
shall be entitled to judgment, then in such suit the Collateral Agent may
recover reasonable expenses, including attorneys' fees, and the amounts thereof
shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
308
EXHIBIT G-2
Page 24
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case each
Assignor, the Collateral Agent and each holder of any of the Obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Collateral Agent shall continue as if no
such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor agrees to indemnify, reimburse and
hold the Collateral Agent, each Secured Party and their respective successors,
assigns, employees, agents and servants (hereinafter in this Section 8.1
referred to individually as "Indemnitee," and collectively as "Indemnitees")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable attorneys' fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement, any Interest Rate Protection Agreement, any other Credit Document, or
any other document executed in connection herewith and therewith or in any other
way connected with the administration of the transactions contemplated hereby
and thereby or the enforcement of any of the terms of, or the preservation of
any rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership, ordering, purchase, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition, or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), any contract claim or, to the
maximum extent permitted under applicable law, the violation of the laws of any
country, state or other governmental body or unit, or any tort (including,
without limitation, claims arising or imposed under the doctrine of strict
liability, or for or on account of injury to or the death of
309
EXHIBIT G-2
Page 25
any Person (including any Indemnitee), or property damage); provided that no
Indemnitee shall be indemnified pursuant to this Section 8.1(a) for expenses to
the extent caused by the gross negligence or willful misconduct of such
Indemnitee. Each Assignor agrees that upon written notice by any Indemnitee of
the assertion of such a liability, obligation, damage, injury, penalty, claim,
demand, action, suit or judgment, such Assignor shall assume full responsibility
for the defense thereof. Each Indemnitee agrees to use its best efforts to
promptly notify the respective Assignor of any such assertion to which such
Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof, each
Assignor agrees to pay, or reimburse the Collateral Agent for (if the Collateral
Agent shall have incurred fees, costs or expenses because such Assignor shall
have failed to comply with its obligations under this Agreement, any other
Credit Document or any Interest Rate Protection Agreement), any and all fees,
costs and expenses of whatever kind or nature incurred in connection with the
creation, preservation or protection of the Collateral Agent's Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Collateral, premiums for insurance with respect to the
Collateral and all other fees, costs and expenses in connection with protecting,
maintaining or preserving the Collateral and the Collateral Agent's interest
therein, whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions, suits or proceedings arising out of or relating to the
Collateral.
(c) Without limiting the application of Section 8.1(a) or (b), each
Assignor agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, costs, damages and expenses which such Indemnitee may suffer,
expend or incur in consequence of or growing out of any misrepresentation by
such Assignor in this Agreement, any Interest Rate Protection Agreement, any
other Credit Document or in any writing contemplated by or made or delivered
pursuant to or in connection with this Agreement, any Interest Rate Protection
Agreement or any other Credit Document.
310
EXHIBIT G-2
Page 26
(d) If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, the respective Assignor
hereby agrees to make the maximum contribution to the payment and satisfaction
of such obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement or the termination of all Interest Rate
Protection Agreements and the payment of all other Obligations and
notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Acceleration Event" shall mean the acceleration prior to the stated
final maturity, or the failure to pay at the stated final maturity, of
Obligations representing principal of, or interest on, extensions of credit
(including without limitation all Bank L/C Outstandings) pursuant to the Credit
Agreement, or any Interest Rate Protection Agreement, provided that in each
case, any such Acceleration Event shall cease to exist upon payment in full of
the Obligations so accelerated or not paid.
"Administrative Agent" shall have the meaning provided in the first
WHEREAS clause of this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
311
EXHIBIT G-2
Page 27
"Bankruptcy Default" shall mean any Default or Event of Default with
respect to any Assignor pursuant to Section 9.05 of the Credit Agreement.
"Bank Creditor" shall have the meaning provided in the first
paragraph of this Agreement.
"Banks" shall have the meaning provided in the first WHEREAS clause
of this Agreement.
"Cash Collateral Account" shall mean a non-interest bearing cash
collateral account maintained with, and in the sole dominion and control of, the
Collateral Agent for the benefit of the Secured Parties.
"Chattel Paper", with respect to any Assignor, shall have the
meaning provided in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Class" shall have the meaning provided in Section 11.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights", with respect to any Assignor, shall mean all
rights of such Assignor (including, without limitation, all rights to payment)
under each Contract to which it is a party or under which it is entitled to any
benefits.
"Contracts", with respect to any Assignor, shall mean all contracts
between such Assignor and one or more additional parties.
"Copyrights", with respect to any Assignor, shall mean any United
States copyright which such Assignor now or hereafter has registered with the
United States Copyright Office, as well as any application for a United States
copyright registration now or hereafter made with the United States Copyright
Office by such Assignor.
312
EXHIBIT G-2
Page 28
"Credit Agreement" shall have the meaning provided in the first
WHEREAS clause of this Agreement.
"Credit Agreement Obligations" shall have the meaning provided in
the definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time,
or both, would constitute an Event of Default.
"Documents", with respect to any Assignor, shall have the meaning
provided in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Equipment", with respect to any Assignor, shall mean any
"equipment," as such term is defined in the Uniform Commercial Code as in effect
on the date hereof in the State of New York, now or hereafter owned by such
Assignor and, in any event, shall include, but shall not be limited to, all
machinery, equipment, furnishings, movable trade fixtures and vehicles now or
hereafter owned by such Assignor and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement, and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles", with respect to any Assignor, shall have the
meaning provided in the Uniform Commercial Code as in effect on the date hereof
in the State of New York and shall in any event include all of such Assignor's
claims, rights, powers, privileges, authority, options, security interests,
liens and remedies under any partnership agreement to which such Assignor is a
party or with respect to any partnership of which the Assignor is a partner.
313
EXHIBIT G-2
Page 29
"Goods", with respect to any Assignor, shall have the meaning
provided in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in Article 9 of the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Interest Rate Protection Agreements" shall have the meaning
provided in the first paragraph of this Agreement.
"Interest Rate Protection Creditors" shall have the meaning provided
in the first paragraph of this Agreement.
"Interest Rate Protection Obligations" shall have the meaning
provided in the definition of "Obligations" in this Article IX.
"Inventory", with respect to any Assignor, shall mean merchandise,
inventory and goods, and all additions, substitutions and replacements thereof,
wherever located, together with all goods, supplies, incidentals, packaging
materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same; in all stages of
production -- from raw materials through work-in-process to finished goods --
and all products and proceeds of whatever sort and wherever located and any
portion thereof which may be returned, rejected, reclaimed or repossessed by the
Collateral Agent from the Assignor's customers, and shall specifically include
all "inventory" as such term is defined in the Uniform Commercial Code as in
effect on the date hereof in the State of New York, now or hereafter owned by
such Assignor.
"Marks", with respect to any Assignor, shall mean any trademarks and
service marks now held or hereafter acquired by such Assignor, which are
registered in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any political
subdivision thereof and any application for such trademarks and service marks,
as well as any unregistered
314
EXHIBIT G-2
Page 30
marks used by such Assignor in the United States and trade dress including
logos, designs, trade names, company names, business names, fictitious business
names and other business identifiers in connection with which any of these
registered or unregistered marks are used.
"Notified Acceleration Event" shall mean any Acceleration Event with
respect to which the Required Banks have given written notice to the Collateral
Agent that a "Notified Acceleration Event" exists, provided that such written
notice may only be given if such Acceleration Event is continuing and, provided
further that any such Notified Acceleration Event shall cease to exist once
there is no longer any Acceleration Event in existence.
"Obligations" shall mean, with respect to each Assignor, (i) all
obligations and liabilities of such Assignor whether now existing or hereafter
incurred under, arising out of, or in connection with the Subsidiary Guaranty
(or in the case of Xtra, the Credit Agreement Guaranty) and the due performance
and compliance by such Assignor with all of the terms, conditions and agreements
contained in the Subsidiary Guaranty (or in the case of Xtra, the Credit
Agreement Guaranty) (to the extent relating to obligations owing to Bank
Creditors, the "Credit Agreement Obligations," and to the extent owing to
Interest Rate Protection Creditors, the "Interest Rate Protection Obligations");
(ii) any and all sums advanced by the Collateral Agent in order to preserve the
Collateral or preserve its security interest in the Collateral in accordance
with the terms hereof; (iii) in the event of any proceeding for the collection
or enforcement of any indebtedness, obligations, or liabilities of such Assignor
referred to in clause (i), after an Event of Default shall have occurred and be
continuing, the reasonable expenses of the Collateral Agent of re-taking,
holding, preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise with reasonable attorneys' fees
of counsel to the Collateral Agent and court costs; and (iv) all amounts paid by
any Indemnitee as to which such Indemnitee has the right to reimbursement under
Section 8.1 of this Agreement. It is acknowledged and agreed that the
"Obligations" shall include extensions of credit of the types described above,
whether outstanding on the date of this Agreement or extended from time to time
after the date of this Agreement.
315
EXHIBIT G-2
Page 31
"Patents", with respect to any Assignor, shall mean any United
States patent to which such Assignor now or hereafter has title or license to
use, as well as any application for a United States patent now or hereafter made
by such Assignor.
"Permitted Filings" shall have the meaning provided in Section 2.1
of this Agreement.
"Pledged Securities" shall have the meaning provided in the Xtra
Pledge Agreement.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b)
of this Agreement.
"Proceeds", with respect to any Assignor, shall have the meaning
provided in the Uniform Commercial Code as in effect in the State of New York on
the date hereof or under other relevant law and, in any event, shall include,
but not be limited to, (i) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to the Collateral Agent or such Assignor from time
to time with respect to any of the Collateral, (ii) any and all payments (in any
form whatsoever) made or due and payable to such Assignor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any person acting under color of governmental authority) and (iii) any and
all other amounts from time to time paid or payable under or in connection with
any of the Collateral.
"Receivables", with respect to any Assignor, shall mean any
"account" as such term is defined in the Uniform Commercial Code as in effect on
the date hereof, now or hereafter owned by such Assignor and, in any event,
shall include, but shall not be limited to, all of such Assignor's rights to
payment for goods sold or leased or services performed by such Assignor, whether
now in existence or arising from time to time hereafter, including, without
limitation, rights evidenced by an account, note, contract, security agreement,
chattel paper, or other evidence of indebtedness
316
EXHIBIT G-2
Page 32
or security, together with (a) all security pledged, assigned, hypothecated or
granted to or held by such Assignor to secure the foregoing, (b) all of such
Assignor's right, title and interest in and to any goods, the sale of which gave
rise thereto, (c) all guarantees, endorsements and indemnifications on, or of,
any of the foregoing, (d) all powers of attorney for the execution of any
evidence of indebtedness or security or other writing in connection therewith,
(e) all books, records, ledger cards, and invoices relating thereto, (f) all
evidences of the filing of financing statements and other statements and the
registration of other instruments in connection therewith and amendments
thereto, notices to other creditors or secured parties, and certificates from
filing or other registration officers, (g) all credit information, reports and
memoranda relating thereto, and (h) all other writings related in any way to the
foregoing; provided that "Receivables" shall not include any Pledged Security or
promissory note not required to be pledged pursuant to the Borrower Pledge
Agreement.
"Representative" shall mean (x) for the Bank Creditors, the
Administrative Agent under the Credit Agreement and (y) for the Interest Rate
Protection Creditors, the Representative for the Interest Rate Protection
Creditors or, in the absence of such a Representative, the Interest Rate
Protection Creditors.
"Required Creditors" shall mean the requisite percentage of Secured
Parties which are needed to take actions with respect to a given Class of
Obligations, i.e., whether the Required Banks or the Required Interest Rate
Protection
Creditors.
"Required Interest Rate Protection Creditors" shall mean the holders
of 51% of all Obligations outstanding from time to time under the Interest Rate
Protection Agreements, determined in such reasonable fashion as is acceptable to
the Collateral Agent.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Secured Parties" shall have the meaning provided in the first
paragraph of this Agreement.
317
EXHIBIT G-2
Page 33
"Termination Date" shall have the meaning provided in Section 11.9
of this Agreement.
ARTICLE X
THE COLLATERAL AGENT
It is expressly understood and agreed that the obligations of the
Collateral Agent as holder of the Collateral and interests therein and with
respect to the disposition thereof, and otherwise under this Agreement, are only
those expressly set forth in this Agreement and in Article X of the Borrower
Security Agreement. By accepting the benefits hereof, each Secured Party shall
be deemed to have agreed to the terms and conditions set forth in Article X of
the Borrower Security Agreement, as the same may be amended, supplemented or
otherwise modified from time to time, which is incorporated herein by reference
in its entirety; provided that all references therein to "this Agreement" shall
be a reference to this Agreement, provided further that all references therein
to each "Assignor" shall be a reference to each Assignor, and provided further
that all references therein to the "Collateral Agent" shall be a reference to
the Collateral Agent. The Collateral Agent shall act hereunder on the terms and
conditions set forth in Article X of the Borrower Security Agreement and the
rights of each Secured Party shall be enforceable solely by the Collateral Agent
in accordance with Article X of the Borrower Security Agreement.
ARTICLE XI
MISCELLANEOUS
11.1. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which such notice, request, demand or other communication is required
or permitted to be given or made under this Agreement, addressed as follows:
318
EXHIBIT G-2
Page 34
(a) if to any Assignor, to the address set forth
opposite such Assignor's name on the
signature pages hereof.
(b) if to the Collateral Agent:
The Bank of Nova Scotia
Suite 2700
000 Xxxxxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
(c) if to any Bank Creditor, either (x) to the Administrative Agent,
at the address of the Administrative Agent specified in the Credit
Agreement or (y) at such address as such Bank Creditor shall have
specified in the Credit Agreement;
(d) if to any Interest Rate Protection Creditor, either (x) to the
Representative for the Interest Rate Protection Creditors, at such address
as such Representative may have provided to the Assignors and the
Collateral Agent from time to time, or (y) directly to the Interest Rate
Protection Creditors at such address as the Interest Rate Protection
Creditors shall have specified in writing to the Assignors and the
Collateral Agent.
11.2. Waiver; Amendment. None of the terms and conditions of this
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor and the Collateral Agent with the
consent of the Required Banks (or all of the Banks if required pursuant to
Section 12.11 of the Credit Agreement), provided, however, that no modifications
shall be made to Section 7.4(a) of this Agreement without the consent of each
Secured Party adversely affected thereby; and provided further that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Secured Parties (and not all Secured Parties in a
like or similar manner) shall require the written consent of the Required
Creditors of such affected
319
EXHIBIT G-2
Page 35
Class. For the purpose of this Agreement, the term "Class" shall mean each class
of Secured Parties, i.e., whether (x) the Bank Creditors as holders of the
Credit Agreement Obligations or (y) the Interest Rate Protection Creditors as
the holders of the Interest Rate Protection Obligations.
11.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, any other Credit Document or
any Interest Rate Protection Agreement except as specifically set forth in a
waiver granted pursuant to Section 11.2 hereof; or (c) any amendment to or
modification of any Credit Document or any Interest Rate Protection Agreement or
any security for any of the Obligations; whether or not any Assignor shall have
notice or knowledge of any of the foregoing.
11.4. Successors and Assigns. This Agreement shall be binding upon
each Assignor and its successors and assigns and shall inure to the benefit of
the Collateral Agent and each Secured Party and their respective successors and
assigns, provided that no Assignor may transfer or assign any or all of its
rights or obligations hereunder without the written consent of the Required
Banks. All agreements, statements, representations and warranties made by any
Assignor herein or in any certificate or other instrument delivered by any
Assignor or on its behalf under this Agreement shall be considered to have been
relied upon by the Secured Parties and shall survive the execution and delivery
of this Agreement, the other Credit Documents and the Interest Rate Protection
Agreements regardless of any investigation made by the Secured Parties or on
their behalf.
11.5. Headings Descriptive. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
11.6. Severability. Any provision of this Agree- ment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent
320
EXHIBIT G-2
Page 36
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11.7. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
11.8. Assignors' Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral.
11.9. Termination; Release. (a) After the Termination Date, this
Agreement shall terminate and the Collateral Agent, at the request and expense
of the respective Assignor, will execute and deliver to such Assignor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral of
such Assignor as may be in the possession of the Collateral Agent and as has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement. As used in this Agreement, "Termination Date" shall mean the date
upon which the Total Revolving Commitment has been terminated, no Note remains
outstanding, all Letters of Credit have been terminated and all Credit Agreement
Obligations then owing by any Assignor have been paid in full.
(b) It is expressly acknowledged and agreed that all or a portion of
the Collateral shall be released from the Liens and security interests created
hereunder upon any sale thereof from time to time to the extent permitted by,
and in accordance with the terms of, the Credit Agreement. In addition, it is
expressly acknowledged and agreed that, any
321
EXHIBIT G-2
Page 37
or all of the Collateral may be released by the Collateral Agent acting at the
direction of the Required Banks (or all of the Banks to the extent required
under Section 12.11 of the Credit Agreement). Upon any sale of the type
described in the second preceding sentence or release of any such Collateral as
provided in the immediately preceding sentence, the Collateral Agent shall, at
the request and expense of the respective Assignor, and without the further
consent of, or liability to, any Secured Party, release such Collateral and
execute and deliver to such Assignor a proper instrument or instruments
acknowledging the release of such Collateral from this Agreement, and will duly
assign, transfer and deliver to such Assignor (without recourse and without any
representation or warranty) the Collateral being sold or released as described
above.
(c) At any time that any Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 11.9(a) or (b), it shall deliver to the
Collateral Agent a certificate signed by its chief financial officer stating
that the release of the respective Collateral is permitted pursuant to the
foregoing Section 11.9(a) or (b). If requested by the Collateral Agent (although
the Collateral Agent shall have no obligation to make any such request), such
Assignor shall furnish appropriate legal opinions (from counsel acceptable to
the Collateral Agent) to the effect set forth in the immediately preceding
sentence. The Collateral Agent shall have no liability whatsoever to any Secured
Party as the result of any release of Collateral by it as permitted by this
Section 11.9. Upon any release of Collateral pursuant to the foregoing Section
11.9(a) or (b), none of the Secured Parties shall have any continuing right or
interest in such Collateral, or the proceeds thereof.
11.10. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with each Assignor and the
Collateral Agent.
322
EXHIBIT G-2
Page 38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
0000 X.X. 00xx Xxxxxx PUEBLO MARKETS, INC.,
Xxxxxxx Xxxxx, XX 00000 as Assignor
Tel: (000) 000-0000
Fax: (000) 000-0000 By ____________________
Attn: Chief Financial Officer Title:
0000 X.X. 00xx Xxxxxx PUEBLO SUPER VIDEOS, INC.,
Xxxxxxx Xxxxx, XX 00000 as Assignor
Tel: (000) 000-0000
Fax: (000) 000-0000 By ____________________
Attn: Chief Financial Officer Title:
0000 X.X. 00xx Xxxxxx XTRA SUPER FOOD CENTERS, INC.,
Xxxxxxx Xxxxx, XX 00000 as Assignor
Tel: (000) 000-0000
Fax: (000) 000-0000 By ____________________
Attn: Chief Financial Officer Title:
0000 X.X. 00xx Xxxxxx ALL TRUCK, INC.,
Xxxxxxx Xxxxx, XX 00000 as Assignor
Tel: (000) 000-0000
Fax: (000) 000-0000 By ____________________
Attn: Chief Financial Officer Title:
0000 X.X. 00xx Xxxxxx XTRA DRUGSTORE, INC.,
Xxxxxxx Xxxxx, XX 00000 as Assignor
Tel: (000) 000-0000
Fax: (000) 000-0000 By ____________________
Attn: Chief Financial Officer Title:
0000 X.X. 00xx Xxxxxx PUEBLO CARIBBEAN VIDEOS, INC.,
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 By ____________________
Attn: Chief Financial Officer Title:
323
EXHIBIT G-2
Page 00
XXX XXXX XX XXXX XXXXXX,
as Collateral Agent
By ____________________
Title:
324
ANNEX A
to
EXHIBIT G-2
Schedule of Permitted Filings
===============================================================================================================
Type Equipment
Filed With Debtor Secured Party of UCC Date File Number Summary
---------- ------ ------------- ------ ---- ----------- -------
Filed
-----
---------------------------------------------------------------------------------------------------------------
Dade County Xtra Super Food Mutual Benefit UCC-3 5/20/91 91R166414 Movables,
Centers, Inc. Life Insurance (Continuation) 15030PG1019 Fixtures,
Company Equipment
---------------------------------------------------------------------------------------------------------------
Dade County Xtra Super Food Mutual Benefit UCC-3 5/20/91 91R166445 Movables,
Centers, Inc. Life Insurance (Continuation) 15030PG1065 Fixtures,
Company Equipment
---------------------------------------------------------------------------------------------------------------
Secretary of Xtra Super Food Mutual Benefit UCC-1 6/13/86 001860086293 Movables,
State Centers, Inc. Life Insurance Equipment and
Company Fixtures
---------------------------------------------------------------------------------------------------------------
Secretary of Xtra Super Food Mutual Benefit UCC-3 5/17/91 910000108457 Movables,
State Centers, Inc. Life Insurance (Continuation) Equipment and
Company Fixtures
---------------------------------------------------------------------------------------------------------------
Secretary of Xtra Super Food Mutual Benefit UCC-3 5/17/91 910000108498 Movables,
State Centers, Inc. Life Insurance (Continuation) Fixtures,
Company Equipment
---------------------------------------------------------------------------------------------------------------
Palm Beach Pueblo New England UCC-3 12/9/92 92-376265 Fixtures
County International, Xxx.Xxxxxxx (Continuation) 7508 PG 1581
Xtra Super Food Corporation
Centers, Inc.
325
ANNEX A
to
EXHIBIT G-2
Page 2
---------------------------------------------------------------------------------------------------------------
Dade County Pueblo Chrysler Capital UCC-3 11/16/92 92R436435 General
International, Corporation (Assignment) 15713PG1118 machinery,
Inc. equipment,
fixtures
---------------------------------------------------------------------------------------------------------------
Secretary of Pueblo General Electric UCC-3 4/13/93 930000077114 All property at
State International Capital (Continuation) 2675 Military
Inc. Corporation Trail, West Palm
Xtra Super Food Beach, FL
Centers Inc.
---------------------------------------------------------------------------------------------------------------
Secretary of Pueblo Chrysler Capital UCC-3 11/19/92 920000237764 All property at
State International, Corporation (Assignment) 2675 Military
Inc. Trail, West Palm
Xtra Super Food Beach, FL
Centers, Inc.
---------------------------------------------------------------------------------------------------------------
Secretary of Pueblo Chrysler Capital UCC-3 12/24/92 920000264684 All property at
State International, Corporation (Assignment) 21401 N.W. 2nd
Inc. Ave., Miami,
Xtra Super Food FL
Centers, Inc.
326
ANNEX A
to
EXHIBIT G-2
Page 3
---------------------------------------------------------------------------------------------------------------
Secretary of Pueblo Southeast Bank UCC-3 1/18/89 890000015823 General
State International, Leasing (Amendment) Equipment
Inc. Company
Xtra Super Food
Centers, Inc.
---------------------------------------------------------------------------------------------------------------
Broward Xtra Super Food GTE Products UCC-1 8/23/90 90343517 GTE Products
County Centers, Inc. Corporation Corp. and
Subsidiaries'
Merchandise
---------------------------------------------------------------------------------------------------------------
Broward Xtra Super Food Complete UCC-1 10/31/90 90516111 3 Sharp Copiers
County Centers, Inc. Business Systems
---------------------------------------------------------------------------------------------------------------
Dade County Pueblo Chrysler Capital UCC-3 11/16/92 00X000000 Fixtures
International, Corporation (Assignment) 15713PG1117
Inc.
Xtra Super Food
Centers, Inc.
---------------------------------------------------------------------------------------------------------------
Secretary of Pueblo Chrysler Capital UCC-3 1/27/93 930000016778 Computer
State International, Corporation (Assignment) Equipment
Inc.
Xtra Super Food
Centers, Inc.
327
ANNEX A
to
EXHIBIT G-2
Page 4
---------------------------------------------------------------------------------------------------------------
Secretary of Pueblo Chrysler Capital UCC-3 2/25/91 910000044042 Computer
State International, Corporation (Amendment) Equipment
Inc.
Xtra Super Food
Centers, Inc.
---------------------------------------------------------------------------------------------------------------
Secretary of Pueblo Chrysler Capital UCC-3 11/12/92 920000231703
State International, Corporation (Assignment)
Inc.
Xtra Super Food
Centers, Inc.
---------------------------------------------------------------------------------------------------------------
Secretary of Xtra Super Food Modern Leasing UCC-1 5/26/92 920000103945 6 SMIII 5880
State Centers, Inc. Inc. of Iowa
---------------------------------------------------------------------------------------------------------------
Secretary of Xtra Super Food Modern Leasing UCC-1 5/26/92 920000103950 4 SMIII 5880
State Centers, Inc. Inc. of Iowa
---------------------------------------------------------------------------------------------------------------
Secretary of Xtra Super Food Modern Leasing UCC-1 5/26/92 920000103951 4 SMIII 5880
State Centers, Inc. Inc. of Iowa
---------------------------------------------------------------------------------------------------------------
Secretary of Xtra Super Food Modern Leasing UCC-1 5/26/92 920000103952 6 SMIII 5880
State Centers, Inc. Inc. of Iowa
---------------------------------------------------------------------------------------------------------------
Secretary of Xtra Super Food Citibank, N.A. UCC-1 5/26/92 920000111977 Cash and
State Centers, Inc. Securities
===============================================================================================================
328
ANNEX B
to
EXHIBIT G-2
329
EXHIBIT K
[FORM OF ASSIGNMENT AGREEMENT]
DATE: ________, ____
Reference is made to the Credit Agreement described in Item 2 of
Annex I annexed hereto (as such agreement may hereafter be amended, modified or
supplemented from time to time, the "Credit Agreement"). Unless defined in Annex
I attached hereto, terms defined in the Credit Agreement are used herein as
therein defined. _____________ (the "Assignor") and ______________ (the
"Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I (the "Assigned Share") of all of the
outstanding rights and obligations under the Credit Agreement relating to the
facilities listed in Item 4 of Annex I, including, without limitation, in the
case of any assignment of all or any portion of the Assignor's Revolving
Commitment, all rights and obligations with respect to the Assigned Share of the
Revolving Loans, Swingline Loans and Letters of Credit. After giving effect to
such sale and assignment, the Assignee's Revolving Commitment will be as set
forth in Item 4 of Annex I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
330
EXHIBIT K
Page 2
Credit Party or the performance or observance by any Credit Party of any of its
obligations under the Credit Agreement or the other Credit Documents or any
other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon the Administrative Agent,
any Agent, the Assignor or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) appoints and authorizes the Administrative Agent and each Agent to take
such action as agent or managing agent, as the case may be, on its behalf and to
exercise such powers under the Credit Agreement and the other Credit Documents
as are delegated to the Administrative Agent or the Agent, as the case may be,
by the terms thereof, together with such powers as are reasonably incidental
thereto; [and] (iv) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement are required
to be performed by it as a Bank[; and (v) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee's
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty].1
4. Following the execution of this Assignment Agreement by the
Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Administrative Agent. The effective date
of this Assignment Agreement shall be the date of execution hereof by the
Assignor and the Assignee and the consent
--------
1 If the Assignee is organized under the laws of a jurisdiction outside the
United States.
331
EXHIBIT K
Page 3
hereof by the Administrative Agent and receipt by the Administrative Agent of
the assignment fee (if applicable) referred to in Section 12.04(b) of the Credit
Agreement, unless otherwise specified in Item 5 of Annex I hereto (the
"Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Bank thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that the Assignee shall be entitled to (x) all
interest on the [Assigned Share] of the Loans at the rates specified in Item 6
of Annex I; (y) all Commitment Commissions (if applicable) on the Assigned Share
of the Revolving Commitment at the rate specified in Item 7 of Annex I; and (z)
all L/C Fees (if applicable) on the Assignee's participation in all Letters of
Credit at the rate specified in Item 8 of Annex I hereto, which, in each case,
accrue on and after the Settlement Date, such interest and, if applicable,
Commitment Commissions and L/C Fees, to be paid by the Administrative Agent
directly to the Assignee. It is further agreed that all payments of principal
made on the Assigned Share of the Loans which occur on and after the Settlement
Date will be paid directly by the Administrative Agent to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the respective Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves on the
Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
332
EXHIBIT K
Page 4
333
EXHIBIT K
Page 5
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written, such execution also being made on Annex I
hereto.
[NAME OF ASSIGNOR],
as Assignor
By____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By____________________________
Title:
Acknowledged and Agreed:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By____________________________
Title:
[NAME OF LETTER OF CREDIT ISSUER],
as Letter of Credit Issuer
By____________________________]2
Title:
--------
2 Insert in connection with any assignment of Revolving Commitments.
334
ANNEX I
ANNEX FOR ASSIGNMENT AND AGREEMENT
ANNEX I
1. The Borrower: Pueblo International, Inc.
2. Name and Date of Credit Agreement:
Amendment and Restatement, dated as of April ___, 1997, amending and
restating the Credit Agreement, dated as of July 21, 1993, among Pueblo
Xtra International, Inc., Pueblo International, Inc., Xtra Super Food
Centers, Inc., the Banks from time to time party thereto, The Bank of Nova
Scotia, as Administrative Agent, and NationsBank, N.A. (South), as
Syndication Agent.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
Revolving
Commitment
a. Aggregate Amount
for all Lending
Banks $________
b. Assigned Share _________%
c. Amount of Assigned
Share $________
5. Settlement Date:
6. Rate of Interest to As set forth in Section 1.08
the Assignee: of the Credit Agreement
(unless otherwise agreed to by
the Assignor and the
Assignee)3
--------
3 The Borrower and the Administrative Agent shall direct the entire amount
of the interest to the Assignee at the rate set forth in Section 1.08 of
the Credit Agreement, with the Assignor and Assignee effecting any agreed
upon sharing of interest through payments by the Assignee to the Assignor.
335
ANNEX I
Page 2
7. Commitment Commission As set forth in Section
3.01(a) of the Credit
Agreement (unless otherwise
agreed to by the Assignor and
the Assignee)4
8. L/C Fee As set forth in Section
3.01(b) of the Credit
Agreement (unless otherwise
agreed to by the Assignor and
the Assignee)5
9. Notice:
ASSIGNOR:
-------------------
-------------------
-------------------
-------------------
Attention:
Telephone:
Telecopier:
Reference:
--------
4 The Borrower and the Administrative Agent shall direct the entire amount
of the Commitment Commission to the Assignee at the rate set forth in
Section 3.01(a) of the Credit Agreement, with the Assignor and the
Assignee effecting any agreed upon sharing of Commitment Commissions
through payment by the Assignee to the Assignor.
5 The Borrower and the Administrative Agent shall direct the entire amount
of the L/C Fees to the Assignee at the rate set forth in Section 3.01(b)
of the Credit Agreement, with the Assignor and the Assignee effecting any
agreed upon sharing of L/C Fees through payment by the Assignee to the
Assignor.
336
ASSIGNEE:
-------------------
-------------------
-------------------
-------------------
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
-------------------
-------------------
-------------------
-------------------
Attention:
Reference:
ASSIGNEE:
-------------------
-------------------
-------------------
-------------------
Attention:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By________________________ By__________________________
________________________ __________________________
(Print Name and Title) (Print Name and Title)
