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$3,500,000,000
LOAN AGREEMENT
dated as of
March 11, 1998
among
XXXX XXXXX, INC.,
as Borrower
and
The Lenders Party Hereto
BANKERS TRUST COMPANY,
as Administrative Agent
and
THE CHASE MANHATTAN BANK,
as Syndication Agent
---------------------------
CHASE SECURITIES INC. and BT ALEX. XXXXX,
as Arrangers
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
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SECTION 1.1. Defined Terms................................................. 1
SECTION 1.2. Classification of Loans and Borrowings........................20
SECTION 1.3. Terms Generally...............................................20
SECTION 1.4. Accounting Terms; GAAP........................................20
ARTICLE II
The Credits
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SECTION 2.1. Term Loans....................................................21
SECTION 2.2. Revolving Loans...............................................21
SECTION 2.3 Loans and Borrowings..........................................21
SECTION 2.4. Requests for Borrowings.......................................22
SECTION 2.5. Letters of Credit.............................................23
SECTION 2.6. Funding of Borrowings.........................................28
SECTION 2.7 Notes.........................................................29
SECTION 2.8. Interest Elections............................................29
SECTION 2.9. Termination and Reduction of Commitments......................31
SECTION 2.10. Repayment of Loans; Evidence of Debt..........................31
SECTION 2.11. Optional Prepayment of Loans..................................32
SECTION 2.12. Fees..........................................................32
SECTION 2.13. Interest......................................................33
SECTION 2.14. Alternate Rate of Interest....................................34
SECTION 2.15. Increased Costs...............................................34
SECTION 2.16. Break Funding Payments........................................36
SECTION 2.17. Taxes.........................................................36
SECTION 2.18. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs...........................................38
SECTION 2.19. Mitigation Obligations; Replacement
of Lenders....................................................40
SECTION 2.20. Mandatory Prepayment..........................................41
i
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.1. Organization; Powers......................................... 42
SECTION 3.2. Authorization; Enforceability................................ 42
SECTION 3.3. Governmental Approvals; No Conflicts......................... 43
SECTION 3.4. Financial Condition; No Material
Adverse Change............................................... 43
SECTION 3.5. Properties................................................... 44
SECTION 3.6. Litigation and Environmental Matters......................... 44
SECTION 3.7. Compliance with Laws and Agreements.......................... 44
SECTION 3.8. Investment and Holding Company Status........................ 45
SECTION 3.9. Taxes........................................................ 45
SECTION 3.10. ERISA........................................................ 45
SECTION 3.11. Disclosure................................................... 45
SECTION 3.12. Solvency..................................................... 45
SECTION 3.13. Use of Proceeds; Margin Regulations.......................... 45
SECTION 3.14. No Default................................................... 46
SECTION 3.15. Subsidiaries..................................................46
SECTION 3.16 Employee Benefit Plans........................................46
SECTION 3.17 Security Interests............................................47
ARTICLE IV
Conditions
----------
SECTION 4.1. Effective Date............................................... 47
SECTION 4.2. Each Credit Event.............................................49
ARTICLE V
Affirmative Covenants
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SECTION 5.1. Financial Statements and Other Information................... 50
SECTION 5.2. Notices of Material Events................................... 50
SECTION 5.3. Existence; Conduct of Business............................... 52
SECTION 5.4. Payment of Obligations....................................... 52
SECTION 5.5. Maintenance of Properties; Insurance......................... 52
SECTION 5.6. Books and Records; Inspection Rights......................... 52
SECTION 5.7. Compliance with Laws......................................... 52
SECTION 5.8. Use of Proceeds and Letters of Credit........................ 53
SECTION 5.9. Subsidiary Guaranties........................................ 53
ii
SECTION 5.10 Further Assurances............................................ 53
ARTICLE VI
Negative Covenants
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SECTION 6.1. Subsidiary Debt.............................................. 54
SECTION 6.2. Liens........................................................ 55
SECTION 6.3. Modifications of Merger Documents............................ 55
SECTION 6.4. Fundamental Changes.......................................... 56
SECTION 6.5. Investments, Loans, Advances, Suretyship
Liabilities and Acquisitions................................. 56
SECTION 6.6. Hedging Agreements........................................... 57
SECTION 6.7. Restricted Payments.......................................... 57
SECTION 6.8. Transactions with Affiliates................................. 58
SECTION 6.9. Restrictive Agreements....................................... 58
SECTION 6.10. Financial Covenants.......................................... 58
SECTION 6.11. Unconditional Purchase Obligations........................... 59
SECTION 6.12. Fiscal Year; Fiscal Quarter.................................. 59
ARTICLE VII
Events of Default.......................... 59
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ARTICLE VIII
The Administrative Agent
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SECTION 8.1. Appointment.................................................. 62
SECTION 8.2. Delegation of Duties......................................... 63
SECTION 8.3. Exculpatory Provisions....................................... 63
SECTION 8.4. Reliance by Administrative Agent............................. 63
SECTION 8.5. Notice of Default............................................ 63
SECTION 8.6. Non-Reliance on Administrative Agent and Other Lenders....... 64
SECTION 8.7. Indemnification ............................................. 64
SECTION 8.8. Administrative Agent in Its Individual Capacity ............. 65
SECTION 8.9. Successor Administrative Agent............................... 65
SECTION 8.10. Syndication Agent............................................ 65
iii
ARTICLE IX
Miscellaneous
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SECTION 9.1. Notices....................................................... 66
SECTION 9.2. Waivers; Amendments........................................... 67
SECTION 9.3. Expenses; Indemnity; Damage Waiver............................ 68
SECTION 9.4. Successors and Assigns........................................ 69
SECTION 9.5. Survival...................................................... 72
SECTION 9.6. Counterparts; Integration; Effectiveness...................... 72
SECTION 9.7 Marshalling; Recapture........................................ 73
SECTION 9.8. Severability.................................................. 73
SECTION 9.9. Right of Setoff............................................... 73
SECTION 9.10. Governing Law; Jurisdiction; Consent
to Service of Process......................................... 74
SECTION 9.11. WAIVER OF JURY TRIAL.......................................... 74
SECTION 9.12. Headings...................................................... 75
SECTION 9.13. Confidentiality............................................... 75
SECTION 9.14. OREGON LEGAL NOTICE........................................... 75
SCHEDULES AND EXHIBITS
Schedule 2.1 Lenders and Commitments
Schedule 2.5 Existing Letters of Credit
Schedule 2.20(a) Store Property Acquired in Mergers and Distribution Center
Schedule 2.20(e) Tendered Bonds
Schedule 3.6 Disclosed Matters
Schedule 3.15 Subsidiaries
Schedule 4.1 Refinancing of Existing Debt
Schedule 6.1 Debt
Schedule 6.2 Liens
Schedule 6.5 Investments
Schedule 6.9 Restrictive Agreements
Schedule A Term Loan Amortization
Exhibit A Assignment and Acceptance
Exhibit B Note
Exhibit C Opinion of Stoel Rives, Counsel to the Borrower
Exhibit D Subsidiary Guarantee
Exhibit E Guarantee Language
iv
LOAN AGREEMENT dated as of March 11, 1998, among XXXX XXXXX, INC., as
Borrower, the LENDERS party hereto, BANKERS TRUST COMPANY, as Administrative
Agent, THE CHASE MANHATTAN BANK, as Syndication Agent, and NATIONSBANK OF TEXAS,
N.A., a national banking association, and SALOMON BROTHERS HOLDING CO INC. as
Co-Documentation Agents.
The parties hereto agree as follows:
ARTICLE I
Definitions
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Section 1.1 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR" means, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof, "Prime Rate" means the rate of interest
per annum publicly announced from time to time by the Administrative Agent as
its prime rate in effect at its principal office in New York City (the Prime
Rate not being intended to be the lowest rate of interest charged by the
Administrative Agent in connection with extensions of credit to debtors); each
change in the Prime Rate shall be effective on the date such change is publicly
announced as effective. "Federal Funds Effective Rate" means, for any day, the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized national
standing selected by it. If for any reason the Administrative Agent shall have
determined that it is unable to ascertain the Federal Funds Effective Rate,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the ABR shall be
determined without regard to clause (b) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the ABR due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans" means Loans made and/or being maintained at a rate of
interest based upon the ABR.
LOAN AGREEMENT
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means Bankers Trust Company, in its capacity as
administrative agent for the Lenders hereunder.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agents" means the Administrative Agent, the Co-Documentation Agents
and the Syndication Agent.
"Agreement" means this $3,500,000,000 Loan Agreement dated as of March
__, 1998 among the Borrower, the Lenders, the Administrative Agent and the
Syndication Agent.
"Applicable Level" means the level determined with reference to the
following chart:
Level Leverage Ratio Rating
----- -------------- ------
I greater than or equal to 3.0x less than or equal to BBB+ or Baa1
II less than 3.0x BBB or Baa2
III less than 3.5x BBB- or Baa3
IV less than 4.0x BB+ or Ba1
V less than 4.5x greater than or equal to BB or Ba2
For purposes of the foregoing, (i) prior to the Compliance Certificate Date, the
Applicable Level shall be Level IV; (ii) except as provided in (i) above, at any
time of determination, the Applicable Level shall be the Level corresponding to
the Leverage Ratio as set forth in the most recently delivered Compliance
Certificate (it being understood and agreed that if the Borrower shall not have
delivered the most recently due Compliance Certificate within the time period
specified in Section 5.1(c), the Applicable Level shall be Level V until such
Compliance Certificate is delivered) and the senior unsecured long term debt
rating of the Borrower from S&P and Xxxxx'x (for purposes of this definition,
the "Rating"); (iii) in the event the Leverage Ratio and the Rating do not fall
within the same Level, the Applicable Level shall be the higher (Level I being
the highest) of the two Levels; and (iv) in the event the rating from S&P and
the rating from Xxxxx'x do not fall within the same Level, the
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LOAN AGREEMENT
applicable Rating will be based upon the higher (Level I being the highest) of
the two ratings, except that, in the event one of the two ratings is two or more
Levels higher than the other, the applicable Rating shall be determined by
reference to the Level next lower than the higher of the two ratings. If any
rating established or deemed to be established by Xxxxx'x or S&P shall be
changed (other than as a result of a change in the rating system of Xxxxx'x or
S&P), such change shall be effective as of the date on which such change is
first announced by the rating agency making such change. Each such change shall
take effect on the effective date of such change and shall end on the date
immediately preceding the effective date of the next such change. If the rating
system of S&P or Xxxxx'x shall change prior to the Maturity Date, the Borrower
and the Lenders shall negotiate in good faith to amend the references to
specific ratings in this definition to reflect such changed rating system, and
pending agreement on another Applicable Level the Rating shall be determined by
reference to the rating provided by the non-changing rating agency. If the
Borrower does not have a senior long term unsecured debt rating or implied
rating from either Xxxxx'x or S&P, the Applicable Level shall be determined by
reference to the Leverage Ratio only.
"Applicable Margin" means, with respect to any Commitment Fee or
Eurodollar Loan, the applicable number of basis points per annum as set forth
below based on the Applicable Level:
Applicable Margin for
Applicable Level Commitment Fee Eurodollar Loans
---------------- -------------- ---------------------
I 20.0 62.5
II 25.0 75.0
III 25.0 87.5
IV 30.0 100.0
V 37.5 125.0
The Applicable Margin for ABR Loans shall be 0 at any time during which the
Applicable Level is Level IV or above. At any time during which the Applicable
Level of the Borrower is Level V, the Applicable Margin for ABR Loans shall be
25 basis points.
"Applicable Percentage" means, at any time and with respect to any
Lender, the percentage of the total Commitments represented by such Lender's
Commitment (or after the termination thereof, the percentage of the total
outstanding Credit Exposure represented by such Lender's outstanding Credit
Exposure at such time).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.4), and accepted by the Administrative Agent,
substantially in the form of Exhibit A.
3
LOAN AGREEMENT
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means Xxxx Xxxxx, Inc., a Delaware corporation.
"Borrowing" means Loans of the same Type, made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.4.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the New York interbank market.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 33 1/3% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower; or (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Borrower by Persons who were neither (i) nominated by the board
of directors of the Borrower nor (ii) appointed by directors so nominated.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or Issuing Bank
(or, for purposes of Section 2.15(b), by any
4
LOAN AGREEMENT
lending office of such Lender or by such Lender's or the Issuing Bank's holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the date of
this Agreement.
"Closing Date" means March 11, 1998, or such later date as the parties
hereto shall mutually agree in writing.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Co-Documentation Agents" means NationsBank of Texas, N.A. and Salomon
Brothers Holding Co Inc.
"Collateral" means the capital stock of each Subsidiary pledged under
the Pledge Agreement.
"Collateral Agent" has the meaning given thereto under the
Intercreditor Agreement.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Loans and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum aggregate amount of
such Lender's Credit Exposure hereunder, as such commitment may be (a) reduced
from time to time pursuant to Section 2.9 and (b) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section 9.4.
The initial amount of each Lender's Commitment is set forth on Schedule 2.1, or
in the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Commitment, as applicable. The initial aggregate amount of the
Lenders' Commitments is $3,500,000,000.
"Commitment Fee" means (i) prior to the Compliance Certificate Date,
an amount equal to 0.30% per annum, and (ii) from and after the Compliance
Certificate Date, a percentage per annum determined in accordance with the
definition of "Applicable Margin," in either case payable quarterly in arrears
on the last Business Day of each March, June, September and December and
calculated based on a year of 360 days by the Borrower to the Administrative
Agent on the average daily unused portion of the aggregate Commitments from and
including the Closing Date to but excluding the Maturity Date.
"Compliance Certificate" means a certificate signed by a Responsible
Officer of the Borrower certifying as to the matters set forth in Section
5.1(c).
5
LOAN AGREEMENT
"Compliance Certificate Date" means the date upon which the
Administrative Agent receives the Compliance Certificate for the second full
fiscal quarter following the Closing Date.
"Consolidated EBITDA" of the Borrower and its Subsidiaries means "A"
minus "B"; where:
"A" equals the sum of consolidated net income plus, to the extent deducted
in determining consolidated net income, without duplication, (i)
extraordinary losses, (ii) interest expenses, including the interest
component of rent expense under all Synthetic Lease Facilities for
which the Borrower or any of its Subsidiaries has Suretyship
Liability, (iii) amortization, (iv) depreciation, (v) income taxes,
(vi) non-cash LIFO reserve charges and (vii) expenses incurred in
connection with the Mergers, including costs relating to the sale of
facilities to be disposed of in connection with the Mergers, name
change costs attributable to Xxxxxx Markets, and severance costs; and
"B" equals, to the extent included in determining consolidated pre-tax
income, extraordinary gains.
"Consolidated EBITDAR" of the Borrower and its Subsidiaries means "A"
minus "B"; where:
"A" equals the sum of consolidated net income plus, to the extent deducted
in determining consolidated net income, without duplication, (i)
extraordinary losses, (ii) interest expense, (iii) amortization, (iv)
depreciation, (v) income taxes, (vi) non-cash LIFO reserve charges,
(vii) consolidated rental expense on operating leases (including rent
paid pursuant to any Synthetic Lease Facility) and (vii) expenses
incurred in connection with the Mergers, including costs relating to
the sale of facilities to be disposed of in connection with the
Mergers, name change costs attributable to Xxxxxx Markets, and
severance costs; and
"B" equals, to the extent included in determining consolidated pre-tax
income, extraordinary gains.
"Consolidated Interest Expense" means the consolidated interest
expense of the Borrower, including the interest component of rent expense under
all Synthetic Lease Facilities for which the Borrower or any of its Subsidiaries
has Suretyship Liability.
6
LOAN AGREEMENT
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Exposure" means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender's Loans and its LC
Exposure at such time.
"Current Synthetic Lease Facility" means the transactions contemplated
by the Participation Agreement, dated the date hereof, among the Borrower,
Wilmington Trust Company, as owner trustee, FMS Trust 1997-1, as lessor, the
investors named therein, the Administrative Agent, the Syndication Agent, and
the lenders named therein.
"Debt" of any Person means, without duplication, (a) all obligations
of such Person for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments, (b) all Capital Lease Obligations of
such Person, (c) all obligations of such Person to pay the deferred purchase
price of property or services (other than current accounts payable in the
ordinary course of business), (d) all indebtedness secured by a Lien on the
property of such Person, whether or not such indebtedness shall have been
assumed by such Person (it being understood that if such Person has not assumed
or otherwise become personally liable for any such indebtedness, the amount of
the Debt of such Person in connection therewith shall be limited to the lesser
of the face amount of such indebtedness or the fair market value of all property
of such Person securing such indebtedness), (e) all obligations, contingent or
otherwise, with respect to the face amount of all letters of credit (whether or
not drawn) and banker's acceptances issued for the account of such Person, (f)
all obligations of such Person in respect of Hedging Agreements, (g) all
Suretyship Liabilities of such Person, (h) all other obligations of such Person
upon which interest charges are customarily paid (other than current accounts
payable in the ordinary course of business), (i) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person and (j) all Debt (as defined above) of any partnership
in which such Person is a general partner (except to the extent such Debt is not
recourse to such Person). The amount of the Debt of any Person in respect of
Hedging Agreements shall be deemed to be the unrealized net loss position of
such Person thereunder (determined for each counterparty individually, but
netted for all Hedging Agreements maintained with such counterparty).
"Debt for Borrowed Money" of any Person means all Debt of such Person
described in (without duplication) clauses (a), (b), (c), (d), (h) and, to the
extent constituting a Suretyship Liability in respect of Debt for Borrowed Money
of another Person, (g), of the definition of Debt. A Suretyship Liability
arising under a Synthetic Lease Facility shall be deemed to be a Debt for
Borrowed Money.
7
LOAN AGREEMENT
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Defaulting Lenders" has the meaning set forth in Section 2.6(b).
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.6.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 4.1 are satisfied (or waived in accordance with Section 9.2).
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA maintained or contributed to by any of the
Borrower or any ERISA Affiliate, other than a Multiemployer Plan.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
8
LOAN AGREEMENT
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excess Cash Flow" means, with respect to each fiscal year of the
Borrower, a positive number, if any, equal to (i) consolidated net income for
such fiscal year, plus (ii) depreciation and amortization expense to the extent
deducted in determining consolidated net income for such fiscal year, plus (iii)
any other non-cash expenses (except that, with respect to reserve items, only to
the extent of any increase of such items) to the extent deducted in determining
consolidated net income for such fiscal year, plus (or minus) (iv) any
extraordinary gains (losses), plus (or minus) (v) decreases (or increases) in
the consolidated working capital of the Borrower and its Subsidiaries from the
last day of the preceding fiscal year to the last day of such fiscal year, minus
(vi) the aggregate amount actually paid in cash by the Borrower and its
Subsidiaries during such fiscal year for capital expenditures, minus (vii) all
principal repayments and prepayments of the Loans made during such fiscal year,
provided that repayments or prepayments of Revolving Loans other than pursuant
to Section 2.20(g) shall not be included in the computation of Excess Cash Flow,
minus (viii) all regularly scheduled principal payments made during such fiscal
year in respect of other Debt to the extent such Indebtedness and payments are
permitted to be incurred and made hereunder.
9
LOAN AGREEMENT
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.17(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a).
"Existing Letters of Credit" means the letters of credit issued
pursuant to Section 2.5(l) and set forth on Schedule 2.5 which will, as of the
Closing Date, be deemed outstanding as Letters of Credit issued pursuant to
Section 2.5.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Fixed Charge Coverage Ratio" means the ratio of (a) Consolidated
EBITDAR to (b) the sum of (i) the Borrower's Consolidated Interest Expense plus
(ii) except as included in Consolidated Interest Expense, the Borrower's
consolidated rental expense on operating leases, computed as of the last day of
a fiscal quarter for the period consisting of such fiscal quarter and the
immediately preceding three fiscal quarters (or such lesser number of preceding
full fiscal quarters as shall have ended following the Closing Date).
"FFL" means Food 4 Less.
"FMI" means Xxxx Xxxxx, Inc. and its successors and assigns.
"Foreign Lender" has the meaning provided in Section 2.17(e).
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any
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LOAN AGREEMENT
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guaranteed Pension Plan" means any employee pension benefit plan
within the meaning of Section 3(2) of ERISA that is maintained or contributed to
by any of the Borrower or any ERISA Affiliate or that was so maintained or
contributed to and in respect of which the Borrower or any ERISA Affiliate could
have liability under Section 4064 or 4069 of ERISA in the event that such plan
has been or were to be terminated, the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning provided in Section 9.3(b).
"Information" has the meaning provided in Section 9.13.
"Insignificant Subsidiary" means any inactive or otherwise immaterial
direct or indirect Subsidiaries of the Borrower; provided that the assets and
pre-tax income of, and the Borrower's net investment in, such Insignificant
Subsidiaries on an individual and a combined basis will not exceed three percent
(3%) of the Borrower's consolidated pre-tax income or assets, as applicable; and
provided further that any Subsidiary which owns the stock of another Subsidiary
(other than an Insignificant Subsidiary) shall not be deemed to be an
"Insignificant Subsidiary."
"Intercreditor Agreement" means the Intercreditor and Collateral
Agency Agreement dated the date hereof, among FMI, the Subsidiaries party to the
Pledge Agreement, the Administrative Agent, the Collateral Agent and Bankers
Trust Company, as Administrative Agent under the Other Corporate Loan Documents.
11
LOAN AGREEMENT
"Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.8.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Borrowing, thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
"Issuing Bank" means Bankers Trust Company, in its capacity as the
issuer of Letters of Credit hereunder and its successors in such capacity as
provided in Section 2.5(i). In addition, the Borrower and the Issuing Banks may
from time to time agree (which agreement shall not be unreasonably withheld or
delayed) that one or more Lenders shall issue Letters of Credit, in which case
the term "Issuing Bank" shall include any such Lenders. Any Issuing Bank may, in
its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of such Issuing Bank, in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
"LC Deposit" has the meaning set forth in Section 2.5(j).
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all
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LOAN AGREEMENT
LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.1 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Leverage Ratio" means the ratio of Debt for Borrowed Money of the
Borrower and its Subsidiaries determined on a consolidated basis to Consolidated
EBITDA (for the most recent four consecutive fiscal quarters; provided that for
the periods ended on the Compliance Certificate Date and the last day of the
next succeeding fiscal quarter, the Leverage Ratio shall be calculated by
reference to pro forma financial information provided by the Borrower (in form
and substance satisfactory to the Administrative Agent) with respect to the
fiscal quarters ended prior to the Closing Date).
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the offered quotation to first-class banks in the New York
interbank eurodollar market by the Administrative Agent for dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the applicable Eurodollar Loan, with maturities comparable to the
Interest Period applicable to such Eurodollar Loan commencing two Business Days
prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Notes, the Subsidiary
Guarantees, the Pledge Agreement and the Intercreditor Agreement.
"Loans" means the Term Loans and the Revolving Loans.
"Margin Stock" shall have the meaning provided such term in Regulation
U and Regulation G of the Federal Reserve Board.
13
LOAN AGREEMENT
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform any of its obligations under this Agreement or (c) the
rights of or benefits available to the Lenders under this Agreement.
"Material Subsidiary" means a Subsidiary which either (a) has assets
which constitute 5% or more of the consolidated assets of the Borrower and its
Subsidiaries or (b) has revenues as of the end of the Borrower's most
recently-ended fiscal year which constitute more than 5% of the consolidated
revenues of the Borrower and its Subsidiaries during the Borrower's most
recently ended fiscal year.
"Maturity Date" means February 28, 2003.
"Mergers" means the mergers of (i) FMI and Quality Food Centers, Inc.
and (ii) FMI and Food 4 Less as contemplated by the Merger Documents.
"Merger Documents" means (i) that certain Agreement and Plan of
Merger, dated as of November 6, 1997, among QFC, FMI and Q-Acquisition Corp.,
and (ii) that certain Agreement and Plan of Merger, dated as of November 6,
1997, among FFL, FMI and FFL Acquisition Corp.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Cash Proceeds" means all cash proceeds of each Debt issuance or
sale or other disposition of assets by the Borrower or a Subsidiary, in each
case net of (if applicable) (i) reasonable expenses incurred or reasonably
expected to be incurred in connection with such sale or disposition, (ii) any
income, franchise, transfer or other tax payable by the Borrower or a Subsidiary
in connection with such sale or disposition and (iii) any Debt secured by a Lien
on such property or assets and required to be repaid as a result of such sale or
other disposition.
"Non-Defaulting Lender" has the meaning specified in Section 2.6(b).
"Notes" means each Revolving Note and each Term Note.
"Obligations" means all obligations, liabilities and indebtedness of
every nature of the Borrower and the Subsidiaries from time to time owing to the
Administrative Agent or
14
LOAN AGREEMENT
any Lender under or in connection with any Loan Documents or any Other Corporate
Loan Document.
"Other Corporate Loan Documents" means all of the documents
contemplated to be executed in connection with the Current Synthetic Lease
Facility, as such documents are amended, supplemented or otherwise modified from
time to time.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"Participant" has the meaning provided in Section 9.4(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.4;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.4;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business; and
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary;
15
LOAN AGREEMENT
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Debt for Borrowed Money.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition, the two
highest credit ratings obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause (c)
above.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" means the Pledge Agreement, dated as of the Closing
Date, by the Borrower and its Subsidiaries in favor of the Lenders and the
lenders under the Other Corporate Loan Documents, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
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LOAN AGREEMENT
"Public Notes" means senior unsecured notes of the Borrower, described
in the Preliminary Prospectus Supplement dated February 17, 1998, and the
Prospectus, dated February 4, 1998.
"QFC" means Quality Food Centers, Inc.
"Register" has the meaning set forth in Section 9.4.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Replacement Lender" has the meaning provided in Section 2.19(b).
"Required Lenders" means, at any time, Non-Defaulting Lenders the sum
of whose Commitments (or after the termination thereof, outstanding Loans and LC
Exposures at such time) represents an amount greater than 50% of the sum of (i)
the aggregate Commitments of all Lenders less (ii) the aggregate Commitments of
all Defaulting Lenders (or after the termination thereof, the sum of the then
total outstanding Loans and LC Exposures of Defaulting Lenders at such time).
"Responsible Officer" means the Chairman or Vice Chairman of the Board
of Directors, the Chairman or Vice Chairman of the Executive Committee of the
Board of Directors, the President, any Senior Vice President or Executive Vice
President, the Chief Financial Officer, the Chief Operating Officers, the Chief
Accounting Officer, the Vice President/Treasurer or any Assistant Treasurer
responsible for compliance with this Agreement.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of the Borrower
or any option, warrant or other right to acquire any such shares of capital
stock of the Borrower.
"Revolving Loan Commitment" means at any time, for any Lender, the
amount set forth opposite such Lender's name on Schedule 2.1 hereto under the
heading "Revolving Loan Commitment," as such amount may be reduced from time to
time pursuant to Sections 2.9 or 9.4(b).
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LOAN AGREEMENT
"Revolving Loans" has the meaning provided in Section 2.2(a).
"Revolving Notes" has the meaning provided in Section 2.7(a).
"Xxxxx'x" means Xxxxx'x Food and Drug Centers Inc.
"Solvent" as to any Person means (i) the sum of the assets of such
Person, both at a fair valuation and at present fair salable value, will exceed
its liabilities, including contingent liabilities, (ii) such Person will have
sufficient capital with which to conduct its business as presently conducted and
(iii) such Person has not incurred debts, and does not intend to incur debts,
beyond its ability to pay such debts as they mature. For purposes of this
definition, "debt" means any liability on a claim, and "claim" means (x) a right
to payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (y) a 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. With respect to
any contingent liabilities, such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.
"S&P" means Standard & Poor's Corporation.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which are required to be consolidated with those of
the parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as,
with respect to any Person, any Person of which such Person and/or its
18
LOAN AGREEMENT
subsidiaries own, directly or indirectly, such number of outstanding shares (or
similar equity interest) as have more than 50% of the ordinary voting power for
the election of directors.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantee" shall have the meaning set forth in Section
4.1(h).
"Surety Instruments" means all letters of credit (including standby
and commercial), banker's acceptances, guaranties, shipside bonds, surety bonds
and similar instruments under which Suretyship Liabilities arise.
"Suretyship Liability" means any agreement, undertaking or other
contractual arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect agreement,
contingent or otherwise, to provide funds for payment, to supply funds to or
otherwise to invest in a debtor, or otherwise to assure a creditor against loss)
any indebtedness, obligation or other liability (including accounts payable) of
any other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person. Suretyship Liability shall include any liability
or contingent liability of a Person under or in connection with a Synthetic
Lease Facility. The amount of any Person's obligation under any Suretyship
Liability shall (subject to any limitation set forth therein) be deemed to be
the principal amount of the indebtedness, obligation or other liability
guaranteed thereby. As of any date, the amount of any Person's obligations under
any Synthetic Lease Facility shall be equal to the amount which such Person
would be obligated to pay if such Synthetic Lease Facility was accelerated on
such date (disregarding accrued scheduled lease payments which would be
characterized as interest if such Synthetic Lease Facility were treated as a
capital lease under GAAP).
"Syndication Agent" means The Chase Manhattan Bank.
"Synthetic Lease Facility" means any synthetic lease, tax ownership
operating lease, tax retention operating lease, off balance sheet lease or
similar lease transaction where the lessee is treated as owner of the leased
property for U.S. federal income tax purposes while the lease is accounted for
on the financial statements of the lessee, prepared in accordance with GAAP, as
an operating lease, including the Current Synthetic Lease Facility.
"Tangible Net Assets" means the total consolidated assets of the
Borrower and its Subsidiaries minus any amount included therein in respect of
goodwill, as shown on the most recent consolidated balance sheet of the Borrower
and its Subsidiaries referred to in Section 3.4 or delivered to the
Administrative Agent and each Lender pursuant to Section 5.1.
19
LOAN AGREEMENT
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Tendered Bonds" has the meaning provided in Section 2.20(e).
"Term Loan" has the meaning provided in Section 2.1.
"Term Loan Commitment" means at any time, for any Lender, the amount
set forth opposite such Lender's name in Schedule 2.1 hereto under the heading
"Term Loan Commitment".
"Term Note" has the meaning provided in Section 2.7(a).
"Total Commitment" means, at any time, the sum of the Commitments of
all of the Lenders at such time.
"Total Revolving Loan Commitment" has the meaning provided in Section
2.2(a).
"Total Term Loan Commitment" has the meaning provided in Section 2.1.
"Transactions" means the execution, delivery and performance by the
Borrower of this Agreement, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the ABR.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.2 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan"). Borrowings also may be classified and referred to by Type
(e.g., a "Eurodollar Borrowing").
Section 1.3 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase
20
LOAN AGREEMENT
"without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
Section 1.4 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided that
for purposes of determining compliance with any covenant set forth in Article
VI, such terms shall be construed in accordance with GAAP as in effect on the
date of this Agreement applied on a basis consistent with the application used
in preparing the Borrower's audited financial statements referred to in Section
5.1. If any change in accounting principles from those used in the preparation
of the audited financial statements referred to in Section 5.1 hereafter
occasioned by the promulgation of any rule, regulation, pronouncement or opinion
by or required by the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants (or successors thereto or agencies
with similar functions) would result in a change in the method of calculation of
financial covenants, standards or terms found in Article I or Article VI, the
parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such changes with the desired result that
the criteria for evaluating the Borrower's financial condition shall be the same
after such change as if such change had not been made.
ARTICLE II
The Credits
-----------
Section 2.1 Term Loans. Subject to the terms and conditions set forth
herein, each Lender severally and not jointly agrees to make a single loan to
the Borrower on the Closing Date of a sum not to exceed the Term Loan Commitment
of such Lender (each such loan, a "Term Loan"). The aggregate principal amount
of the Term Loan Commitments shall not exceed $1,625,000,000 (the "Total Term
Loan Commitment"). The Term Loan
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LOAN AGREEMENT
Commitments shall expire on April 10, 1998 if not utilized on or prior to such
date. All unutilized Term Loan Commitments shall expire simultaneously with the
making of the Term Loans on the Closing Date. Once repaid, Term Loans may not be
reborrowed. The Term Loans shall mature on the Maturity Date and shall be
repaid, without premium or penalty, by the Borrower, on the dates and in the
amounts set forth on Schedule A hereto.
Section 2.2 Revolving Loans. (a) Subject to the terms and conditions
set forth herein, each Lender severally and not jointly agrees to make revolving
loans (collectively, "Revolving Loans") to the Borrower from time to time during
the Availability Period, which Revolving Loans (when added to the LC Exposure of
such Lender) shall not exceed in aggregate principal amount at any time
outstanding the Revolving Loan Commitment of such Lender at such time. The sum
of the Revolving Loan Commitments of all of the Lenders (the "Total Revolving
Loan Commitment") on the Closing Date shall be $1,875,000,000. The Revolving
Loan Commitments shall expire on April 10, 1998 if the Closing Date has not
occurred on or prior to such date.
(b) Revolving Loans may be voluntarily prepaid pursuant to
Section 2.11, and, subject to the other provisions of this Agreement, any
amounts so prepaid may be reborrowed. Each Lender's Revolving Loan Commitment
shall expire, and each Revolving Loan shall mature on, the Maturity Date,
without further action on the part of the Lenders or the Administrative Agent.
Section 2.3 Loans and Borrowings. (a) Each Loan shall be made as part
of a Borrowing consisting of Loans made by the Lenders ratably in accordance
with their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Subject to Section 2.13, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $10,000,000. At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $10,000,000; provided
that an ABR Borrowing may be in an aggregate amount
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LOAN AGREEMENT
that is equal to the entire unused balance of the Total Commitment or that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.5(e). Borrowings of more than one Type may be outstanding at the same
time; provided that there shall not at any time be more than a total of 8
Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
Section 2.4 Requests for Borrowings. To request a Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 12:00 p.m. (noon), New
York City time, three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 12:00 p.m. (noon), New York
City time, on the day of the proposed Borrowing; provided that any such notice
of an ABR Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.5(e) shall be given not later than 10:00 a.m., New
York City time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.3:
(i) the aggregate amount of the requested Borrowing;
(ii) whether such Borrowing shall be a Term Loan or a
Revolving Loan;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.6.
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LOAN AGREEMENT
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
Section 2.5 Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account, in dollars and on a sight basis and in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time during the Availability Period (but in no event later
than 30 days prior to the Maturity Date). In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment or extension of
an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy
(or transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended or extended, the date of
issuance, amendment or extension, the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend or extend such Letter
of Credit. A Letter of Credit shall be issued, amended or extended only if (and
upon issuance, amendment or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment or extension (i) the LC Exposure shall not exceed
$200,000,000 and (ii) the total Credit Exposures shall not exceed the Total
Commitment.
(c) Expiration Date. Each standby Letter of Credit shall have an
expiry date occurring not later than one year from the date of issuance,
provided that any standby Letter of Credit may be extended for successive
periods of up to one year, so long as no such period ends later than five
Business Days prior to the Maturity Date, on terms acceptable to the Issuing
Bank. Each trade Letter of Credit shall have an expiry date occurring not later
than the earlier of (i) 180 days from the date of issuance and (ii) the date
which is 30 days prior to the Maturity Date.
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LOAN AGREEMENT
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
the Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the Issuing Bank, such Lender's
Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the Borrower
for any reason. Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Issuing Bank (with notice to the Administrative
Agent) an amount equal to such LC Disbursement not later than 12:00 noon, local
time (with respect to such Issuing Bank), on the date that such LC Disbursement
is made, if the Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., local time (with respect to such Issuing Bank), on such
date, or, if such notice has not been received by the Borrower prior to such
time on such date, then not later than 12:00 noon, local time (with respect to
such Issuing Bank), on the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt; provided that the Borrower may, subject to the conditions
to borrowing set forth herein, request in accordance with Section 2.4 that such
payment be financed with an ABR Borrowing in an equivalent amount and, to the
extent so financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Borrowing. If the Borrower fails to
make such payment when due, the Administrative Agent shall notify each Lender of
the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lender's Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.6 with respect to Loans made by such
Lender (and Section 2.6 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
25
LOAN AGREEMENT
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the funding of ABR Loans as contemplated above) shall not constitute
a Loan and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or wilful misconduct on the part of the
Issuing Bank, (as finally determined by a court of competent jurisdiction) the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
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LOAN AGREEMENT
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(i) Replacement or Removal of the Issuing Bank. (A) Any Issuing
Bank (other than Bankers Trust Company) may be removed as an Issuing Bank at any
time by written agreement among the Borrower, the Administrative Agent and the
Issuing Bank, subject to clause (C) below.
(B) Bankers Trust Company (or any successor to Bankers Trust
Company as Issuing Bank) may be replaced as Issuing Bank at any time by written
agreement among the Borrower, the Administrative Agent, Bankers Trust Company
and the successor Issuing Bank. From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the removed Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to include such successor or such previous
Issuing Bank, or such successor and all previous Issuing Banks, as the context
shall require.
(C) The Administrative Agent shall notify the Lenders of any
removal or replacement of an Issuing Bank under clause (A) or (B) above. At the
time any such removal or replacement shall become effective, the Borrower shall
pay all unpaid fees accrued for the account of the removed Issuing Bank pursuant
to Section 2.12(b). After the removal of an Issuing Bank hereunder, the removed
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement with
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LOAN AGREEMENT
respect to Letters of Credit issued by it prior to such removal, but shall not
be required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that the Borrower receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Lenders with LC Exposure representing greater than
50% of the total LC Exposure) demanding the deposit of cash collateral pursuant
to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon (the "LC Deposit"); provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in clause (h) or (i) of Article VII. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Banks for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.
(k) Reporting of Outstanding LC Exposure. The Issuing Bank
(unless the Issuing Bank is also serving as Administrative Agent) shall provide
written notice to the Administrative Agent: (i) promptly after the issuance of
or amendment to any standby Letter of Credit, of such issuance or amendment,
which notice shall be accompanied by a copy of such standby Letter of Credit or
amendment thereof; (ii) if any trade Letters of Credit are outstanding, on the
first Business Day of each week, by facsimile, a report of the aggregate daily
amount available to be drawn under such trade Letters of Credit during the
previous week; (iii) on or before the fifth Business Day of each month, a report
setting forth, for each type of Letter of Credit outstanding, the daily
aggregate outstanding amounts for the previous month; and (iv) the
Administrative Agent shall deliver to each Lender, on the last Business
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LOAN AGREEMENT
Day of each calendar month and upon each Letter of Credit fee payment, a report
setting forth for such period the daily aggregate amount available to be drawn
under the Letters of Credit issued by each Issuing Bank during such period.
(l) Existing Letters of Credit. Notwithstanding anything to the
contrary contained herein, as of the Closing Date, all of the Existing Letters
of Credit shall be deemed to be Letters of Credit issued hereunder and shall be
subject to all of the terms and provisions of this Agreement, including all
terms and provisions applicable to Letters of Credit hereunder. Each Lender
agrees that its obligations with respect to Letters of Credit pursuant to
Section 2.5(d) shall include the Existing Letters of Credit as of the Closing
Date. With respect to each Existing Letter of Credit, for the period commencing
on the Closing Date to and including the expiration date of any such Existing
Letter of Credit, the Borrower shall pay all fees and commissions set forth in
Section 2.12(b) at the times and in the manner set forth therein.
Section 2.6 Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request;
provided that ABR Loans made to finance the reimbursement of an LC Disbursement
as provided in Section 2.5(e) shall be remitted by the Administrative Agent to
the Issuing Bank.
(b) The failure of any Lender (such Lender, a "Defaulting
Lender") to make any Loan to be made by it on the date specified therefor shall
not relieve any other Lender (each such other Lender, a "Non-Defaulting Lender")
of its obligation to make its Loans on such date, but neither any Non-Defaulting
Lender nor the Administrative Agent shall be responsible for the failure of any
Defaulting Lender to make a Loan to be made by such Defaulting Lender, and no
Defaulting Lender shall have any obligation to the Administrative Agent or any
Non-Defaulting Lender (without prejudicing the rights of the Borrower against
such Defaulting Lender). Notwithstanding anything set forth herein to the
contrary, so long as a Lender remains a Defaulting Lender, such Lender shall not
have any voting or consent rights under or with respect to this Agreement or
constitute a "Lender" (or be included in the calculation of "Required Lenders"
hereunder) for any voting or consent rights under or with respect to this
Agreement.
(c) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent
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LOAN AGREEMENT
may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender is a Defaulting Lender, then such Defaulting Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower but excluding the date of
payment to the Administrative Agent, at (i) in the case of such Defaulting
Lender, the greater of the Federal Funds Effective Rate and a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Defaulting Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender's Loan included in such
Borrowing and such Lender shall cease to be a Defaulting Lender.
Section 2.7 Notes. (a) Any Lender may request that Loans made by it be
evidenced by a promissory note (with respect to a Revolving Loan, a "Revolving
Note" and with respect to a Term Loan, a "Term Note"). In such event, the
Borrower shall prepare, execute and deliver to such Lender a Revolving Note or
Term Note, as applicable, payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in the form of
Exhibit B. Thereafter, the Loans evidenced by such Notes and interest thereon
shall at all times (including after assignment pursuant to Section 9.4) be
represented by one or more Notes in such form payable to the order of the payee
named therein (or, if a Note is a registered note, to such payee and its
registered assigns). Each Note issued to a Lender shall be dated the Closing
Date and mature on the Maturity Date.
(b) Each Lender is hereby authorized, at its option, either (i)
to endorse on the schedule attached to its Revolving Note (or on a continuation
of such schedule attached to such Note and made a part thereof) an appropriate
notation evidencing the date and amount of each Revolving Loan evidenced thereby
and the date and amount of each principal and interest payment in respect
thereof, or (ii) to record such Revolving Loans and such payments in its books
and records. Such schedule or such books and records, as the case may be, shall
constitute prima facie evidence of the accuracy of the information contained
therein; provided that any errors with respect to such schedule, books or
records shall not affect the Borrower's obligation to repay amounts owing
hereunder.
Section 2.8 Interest Elections. (a) Each Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion
30
LOAN AGREEMENT
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.4 if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.3:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant
to clauses (iv) and (v) below shall be specified for each resulting
Borrowing);
(ii) whether such Borrowing is a Term Loan or a Revolving
Loan;
(iii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(iv) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(v) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
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LOAN AGREEMENT
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
Section 2.9 Termination and Reduction of Commitments. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Total Revolving Loan Commitment; provided that (i) each reduction of
the Total Revolving Loan Commitment shall be in an amount that is an integral
multiple of $1,000,000 and not less than $10,000,000 and (ii) the Borrower shall
not terminate or reduce the Total Revolving Loan Commitment if, after giving
effect to any concurrent prepayment of the Loans in accordance with Section
2.11, the Credit Exposures would exceed the Total Commitment.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Total Revolving Loan Commitment under
paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Total Revolving Loan Commitment
delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date). Any termination or reduction of the Total
Revolving Loan Commitment shall be permanent. Each reduction of the Total
Revolving Loan Commitment shall be made ratably among the Lenders in accordance
with their respective Revolving Loan Commitments.
Section 2.10 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender thereof the then unpaid principal amount of each Loan on
the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting
32
LOAN AGREEMENT
from each Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
Section 2.11 Optional Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to prior notice in accordance with paragraph (b) of this
Section and any break funding payments under Section 2.16.
(b) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 12:00 p.m. (noon), New York
City time, three Business Days before the date of prepayment or (ii) in the case
of prepayment of an ABR Borrowing, not later than 12:00 p.m. (noon), New York
City time, one Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date, the Type of
Borrowing and the principal amount of each Borrowing or portion thereof to be
prepaid; provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Total Revolving Loan Commitment as
contemplated by Section 2.9, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.9. Promptly
following receipt of any such notice relating to a Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof. Each partial prepayment
of any Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.3. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.13.
Section 2.12 Fees. (a) The Borrower agrees to pay the Commitment Fee
to the Administrative Agent for the account of each Lender.
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LOAN AGREEMENT
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at a rate equal to (i)
with respect to any import Letters of Credit, one half (50%) of the Applicable
Margin on Eurodollar Loans, and (ii) with respect to any other Letters of
Credit, the Applicable Margin on Eurodollar Loans, in each case based on the
daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Revolving Loan Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee, which shall accrue at a rate to be agreed by the Borrower and the Issuing
Bank on the daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Total Revolving Loan Commitment and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank's standard fees (other
than the fronting fee described above) with respect to the issuance, amendment
or extension of any Letter of Credit or payment of drawings thereunder.
Participation fees and fronting fees accrued through and including the last
Business Day of March, June, September and December of each year shall be
payable on such day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Total Revolving Loan Commitment terminates and any such fees accruing
after the date on which the Total Revolving Loan Commitment terminates shall be
payable on demand. Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day of the period covered).
(c) The Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to The Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees, to the Lenders. Fees paid shall not be refundable under any
circumstances.
Section 2.13 Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the ABR plus the Applicable Margin.
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LOAN AGREEMENT
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, the greater of (A) 2% plus the rate otherwise applicable to such Loan
as provided in the preceding paragraphs of this Section and (B) 2% plus the rate
applicable to ABR Loans or (ii) in the case of any other amount, 2% plus the
rate applicable to ABR Loans.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Loans, upon
termination of the Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan
prior to the end of the Availability Period), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the ABR at times
when the ABR is based on the Prime Rate shall be computed on the basis of a year
of 365 days (or 366 days in a leap year), and in each case shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day). The applicable ABR, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
Section 2.14 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period will not
35
LOAN AGREEMENT
adequately and fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing; provided that if the circumstances
giving rise to such notice affect only one Type of Borrowing, then the other
Type of Borrowings shall be permitted.
Section 2.15 Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Bank hereunder (whether of principal, interest or otherwise), then the Borrower
will pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of
36
LOAN AGREEMENT
such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth
the basis of the calculations and the amount or amounts necessary to compensate
such Lender or the Issuing Bank or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender or the Issuing Bank, as the case may be, the amount shown as due on
any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
Section 2.16 Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.11(b) and is revoked in accordance therewith) or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.19, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event (excluding loss of Applicable Margin
after the date of such event). In the case of a Eurodollar Loan, such loss, cost
or expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate (excluding loss of Applicable Margin) that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such
37
LOAN AGREEMENT
period at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
Section 2.17 Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) to the Administrative Agent, Lender
or Issuing Bank (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. The Borrower shall also
indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10
days after written demand therefor, for the full amount of Excluded Taxes as the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, shall
determine are payable in respect of amounts paid to or on behalf of the
Administrative Agent, such Lender or the Issuing Bank, as the case may be,
pursuant to this Section 2.17. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the
38
LOAN AGREEMENT
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Lender that is not incorporated under the United States
of America or a state thereof (each a "Foreign Lender") shall:
(i) on the date it becomes a Lender, deliver to the
Administrative Agent (A) two completed copies of United States Internal
Revenue Service Form 1001 or 4224, or successor applicable form, as the
case may be, and shall certify that it is entitled to receive payments
under this Agreement without deduction or withholding (or at a reduced rate
of deduction or withholding) of any United States Federal income taxes and
(B) an Internal Revenue Services Form W-8 or W-9, or successor applicable
form, as the case may be and shall certify that it is entitled to an
exemption from United States backup withholding tax;
(ii) deliver to the Administrative Agent two further copies
of any such form or certification on or before the date that any such
certification described above expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered to it; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Administrative Agent;
except that the forms and certificates described in clauses (ii) and (iii) above
shall not be required if any Change in Law has occurred prior to the date on
which any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Administrative Agent.
Section 2.18 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at
39
LOAN AGREEMENT
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, except payments to be made
directly to the Issuing Bank as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.3 shall be made directly to
the Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such
40
LOAN AGREEMENT
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the Issuing Bank, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or the Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.5(d) or (e), 2.6(a) or 2.18(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
Section 2.19 Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If (i) any Lender requests compensation under Section 2.15,
or (ii) the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section
2.17, or (iii) any Lender defaults in its obligation to fund Loans hereunder, or
(iv) any Lender refuses to consent to certain proposed changes, waivers,
discharges or termination with respect to this Agreement which require the
consent of all Lenders and have been approved by the Required Lenders as (and to
41
LOAN AGREEMENT
the extent) provided in Section 9.2(b), then the Borrower may, at its sole
expense and effort, if no Default then exists (or, in the case of preceding
clause (iv), no Default will exist immediately upon giving effect to such
replacement), upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.4), all its interests, rights
and obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment) (such Assignee a "Replacement Lender"); provided that (x) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Commitment is being assigned, the Issuing Bank), which consent
shall not unreasonably be withheld, (y) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the Replacement Lender (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (z) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
Section 2.20 Mandatory Prepayment. Subject to the terms of Section
2.20(g) below, the Borrower shall prepay the outstanding Loans as follows:
(a) Subject to Section 2.20(f), in an amount equal to 100% of the
Net Cash Proceeds in excess of $150,000,000 received by the Borrower or its
Subsidiaries from the conveyance, sale, transfer or other disposition of its
property or assets during the term of this Agreement; provided that such
prepayment obligation shall not be incurred in connection with the conveyance,
sale, transfer or other disposal of (i) property or assets in the case of sales
of inventory in the ordinary course of business, (ii) sales of equipment which
is uneconomic, obsolete or no longer useful in its business, or (iii) stores and
related property acquired pursuant to the Mergers, and certain distribution
center, in each case set forth on Schedule 2.20(a).
(b) Subject to Section 2.20(f), in an amount equal to 100% of the
Net Cash Proceeds of the fair market value received by the Borrower or any of
its Subsidiaries in excess of $50,000,000 in any one year period from any
transaction in which the Borrower or any of its Subsidiaries becomes liable,
directly or indirectly, with respect to any lease, whether an operating lease or
a capital lease, of any property (whether real or personal or mixed) whether now
owned or hereafter acquired, (i) which the Borrower or such Subsidiary has sold
or transferred or is to sell or transfer to any other Person, or (ii) which the
Borrower or such
42
LOAN AGREEMENT
Subsidiary intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by the Borrower or such
Subsidiary to any other Person in connection with such lease.
(c) In an amount equal to 50% of the Borrower's Excess Cash Flow
for any fiscal year, within 100 days after the end of such fiscal year.
(d) Subject to Section 2.20(e), in an amount equal to 100% of the
Net Cash Proceeds received by the Borrower or its Subsidiaries from the issuance
of any Debt described in (without duplication) clauses (a), (d) and, to the
extent constituting a Suretyship Liability in respect of such Debt for Borrowed
Money of another Person, clause (g) of the definition of Debt) (other than (i)
commercial paper issued by the Borrower in the ordinary course of business, (ii)
Debt with a maturity of less than one year (regardless of how it is accounted
for by the Borrower), (iii) the Public Notes, (iv) any Synthetic Lease Facility
and (v) any Debt issued to refinance Debt (other than the Public Notes)
outstanding as of the date hereof.
(e) In the event any tender for bonds or similar debt instruments
of the Borrower or its Subsidiaries in connection with the Mergers ("Tendered
Bonds", as set forth on Schedule 2.20(e)) results in more than $25,000,000 of
such Tendered Bonds remaining outstanding, in an amount equal to the face amount
of such Tendered Bonds remaining outstanding after the consummation of such
offer.
(f) Any Net Cash Proceeds received by the Borrower or any of its
Subsidiaries under clauses (a) or (b) of this Section 2.20 which are reinvested
by the Borrower or any of its Subsidiaries within 270 days of the receipt
thereof shall be excluded from the prepayment obligations set forth in such
clauses and shall not be counted in calculating such $150,000,000 or $50,000,000
amounts.
(g) Notwithstanding the foregoing, any Net Cash Proceeds
otherwise required to be paid to the Lenders under this Section 2.20 shall be
applied first, to prepay the Term Loans until such Term Loans shall have been
repaid in full, together with accrued and unpaid interest thereon, second, to
prepay the Revolving Loans until such Revolving Loans shall have been repaid,
together with accrued and unpaid interest thereon, and third, to all other
outstanding Obligations. All prepayments of the Loans required by this Section
2.20 shall be made in accordance with Section 2.11(b) and shall be applied on a
pro rata basis among the Lenders to prepay the Loans until such Loans have been
repaid in full, together with accrued and unpaid interest thereon. Prepayments
of the Term Loans shall reduce the quarterly payments required under Section
2.1, pro rata. Simultaneously with any prepayment of the principal amount of the
Loans pursuant to the preceding sentence, each Lender's Commitment shall be
permanently reduced by such Lender's Applicable Percentage of such prepayment.
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LOAN AGREEMENT
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
Section 3.1 Organization; Powers. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
Section 3.2 Authorization; Enforceability. The Transactions are within
the Borrower's corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action, and the use of proceeds of the
Loans will be, in each instance, within the Borrower's corporate powers and will
have been duly authorized by all necessary corporate and, if required,
stockholder action, as of the time of such use. Each Loan Document to which it
is a party has been duly executed and delivered by the Borrower and constitutes
a legal, valid and binding obligation of the Borrower, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
Section 3.3 Governmental Approvals; No Conflicts. The Transactions (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
the Borrower or any of its Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or any of their respective assets, or give rise to a right
thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries, and (d) will not result in the creation or imposition of any Lien
on any asset of the Borrower or any of its Subsidiaries.
Section 3.4 Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders consolidated balance sheets and
statements of income, stockholders equity and cash flows for (i) FMI and its
subsidiaries, as of and for the fiscal year ended February 1, 1997, reported on
by Deloitte & Touche, independent public accountants of FMI, and the fiscal
quarter and the portion of the fiscal year ended November
44
LOAN AGREEMENT
8, 1997, certified by the chief financial officer of FMI, (ii) Xxxxx'x and its
subsidiaries, as of and for the fiscal year ended December 28, 1996, reported on
by Deloitte & Touche, independent public accountants of Xxxxx'x, certified by
the chief financial officer of Xxxxx'x, (iii) QFC and its subsidiaries, as of
and for the fiscal year ended December 28, 1996, reported on by Deloitte &
Touche, independent public accountants of QFC, and the fiscal quarter and the
portion of the fiscal year ended September 6, 1997, certified by the chief
financial officer of QFC and (iv) FFL and its subsidiaries, as of and for the
fiscal year ended February 2, 1997, reported on by Xxxxxx Xxxxxxxx, independent
public accountants of FFL, and the fiscal quarter and the portion of the fiscal
year ended October 12, 1997, certified by the chief financial officer of FFL.
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of FMI, Xxxxx'x,
QFC, FFL and their respective subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements for the fiscal quarters.
(b) There has been no material adverse change in the business,
assets, operations, prospects or condition, financial or otherwise, of (i) FMI
and its subsidiaries, taken as a whole, since February 1, 1997, (ii) Xxxxx'x and
its subsidiaries, taken as a whole, since December 28, 1996, (iii) QFC and its
subsidiaries, taken as a whole, since December 28, 1996 or (iv) FFL and its
subsidiaries, taken as a whole, since February 2, 1997.
Section 3.5 Properties. (a) Each of the Borrower and its Subsidiaries
has good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes, subject to no Lien of any
kind except Liens permitted hereby.
(b) Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
Section 3.6 Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.
45
LOAN AGREEMENT
(b) Except for the Disclosed Matters and except with respect to
any other matters that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, neither the Borrower nor any
of its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
Section 3.7 Compliance with Laws and Agreements. Each of the Borrower
and its Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
Section 3.8 Investment and Holding Company Status. Neither the
Borrower nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
Section 3.9 Taxes. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
Section 3.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.
Section 3.11 Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the
46
LOAN AGREEMENT
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
Section 3.12 Solvency. On the Closing Date and after giving effect to
the Transactions, the Borrower and each of its Material Subsidiaries will be
Solvent.
Section 3.13 Use of Proceeds; Margin Regulations. All proceeds of each
of the Loans will be used by the Borrower only in accordance with the provisions
of Section 5.8. No part of the proceeds of any of the Loans will be used by the
Borrower to purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock. Neither the making of
any of the Loans nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulations G, T, U or X of the Federal
Reserve Board.
Section 3.14 No Default. The Borrower is not in default under or with
respect to any agreement, instrument or undertaking to which it is a party or by
which it or any of its property is bound in any respect which could result in a
Material Adverse Effect. No Default or Event of Default exists.
Section 3.15 Subsidiaries. After giving effect to the Mergers, the
Persons listed on Schedule 3.15 are the only Subsidiaries of the Borrower.
Schedule 3.15 correctly sets forth, after giving effect to the Mergers, the
percentage ownership (direct and indirect) of the Borrower in each class of
capital stock of each of its Subsidiaries and also identifies the direct owner
thereof and identifies each Material Subsidiary as of the Closing Date.
Section 3.16 Employee Benefit Plans. (a) Each Employee Benefit Plan
and each Plan has been maintained and operated in compliance in all material
respects with the provisions of ERISA and, to the extent applicable, the Code,
including the provisions thereunder respecting prohibited transactions. The
Borrower has made all required contributions to each Employee Benefit Plan and
each Multiemployer Plan. To the extent applicable, the Borrower has heretofore
delivered to the Administrative Agent the most recently completed annual report,
Form 5500, with all required attachments, and actuarial statement required to be
submitted under Section 103(d) of ERISA, with respect to each Guaranteed Pension
Plan.
47
LOAN AGREEMENT
(b) The Borrower or an ERISA Affiliate, as appropriate, may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of any of
the Borrower or such ERISA Affiliate without liability to any Person.
(c) Each contribution required to be made to a Guaranteed Pension
Plan, whether required to be made to avoid the incurrence of an accumulated
funding deficiency, the notice or lien provisions of Section 302(f) of ERISA, or
otherwise, has been timely made. No waiver of minimum funding standards or
extension of amortization periods has been requested or received with respect to
any Guaranteed Pension Plan. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by the
Borrower or any ERISA Affiliate with respect to any Guaranteed Pension Plan and
there has not been any ERISA Event, or any other event or condition that
presents a material risk of termination of any Guaranteed Pension Plan by the
PBGC. Neither the Borrower nor any ERISA Affiliate has instituted or intends to
institute proceedings to terminate a Guaranteed Pension Plan. No event requiring
notice to the PBGC under Section 302(f)(4)(A) of ERISA has occurred with respect
to any Guaranteed Pension Plan and no amendment with respect to which security
is required under Section 307 of ERISA has been made or is reasonably expected
to be made to any Guaranteed Pension Plan.
(d) Neither the Borrower nor any ERISA Affiliate has incurred or
expects to incur any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under Section 4201 of ERISA or as a result of a sale of
assets described in Section 4204 of ERISA. Neither the Borrower nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of Section 4241 or Section 4245 of ERISA
or that any Multiemployer Plan intends to terminate or has been terminated under
Section 4041A of ERISA.
Section 3.17 Security Interests. The security interests granted under
the Pledge Agreement constitute valid, binding and continuing duly perfected
first-priority Liens in and to the Collateral (except for Permitted Encumbrances
that have priority under applicable law) in favor of the Collateral Agent, for
the benefit of the Administrative Agents and the Lenders, as well as the lenders
under the Other Corporate Loan Documents.
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LOAN AGREEMENT
ARTICLE IV
Conditions
----------
Section 4.1 Effective Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.2):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto (A) either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement and
(B) such other documents, in form and substance satisfactory to the
Administrative agent, as the Administrative Agent may reasonably request.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders and dated
the Effective Date) of Stoel Rives LLP, counsel for the Borrower, substantially
in the form of Exhibit C, and covering such other matters relating to the
Borrower, this Agreement or the Transactions as the Required Lenders shall
reasonably request. The Borrower hereby requests such counsel to deliver such
opinion.
(c) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of the
Borrower, the authorization of the Transactions and any other legal matters
relating to the Borrower, this Agreement or the Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the conditions set
forth in paragraphs (b) and (c) of Section 4.2.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
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LOAN AGREEMENT
(f) The Mergers shall have been completed in accordance with the
Merger Documents, or on other terms reasonably satisfactory to the Lenders.
(g) The Loan Documents and the Other Corporate Loan Documents
shall have been executed and delivered and shall be in full force and effect.
(h) Each Subsidiary (other than Insignificant Subsidiaries) shall
have executed and delivered to the Administrative Agent a guarantee
substantially in the form set forth as Exhibit D (each such guarantee, as
amended, supplemented or otherwise modified, a "Subsidiary Guarantee").
(i) The Administrative Agent shall have received evidence
satisfactory to it of prior or simultaneous repayment or refinancing of the Debt
of the Borrower and its Subsidiaries set forth on Schedule 4.1 hereto (except as
otherwise agreed to the satisfaction of the Agents).
(j) The Administrative Agent shall have received evidence
satisfactory to it of the prior or simultaneous receipt of not less than
$1,500,000,000 (net of underwriting and other expenses in connection with such
issuance) by FMI from the issuance of senior unsecured bonds on terms
satisfactory to the Lenders.
(k) The Administrative Agent shall have received the financial
information required under Section 3.4(a), including a pro forma balance sheet
giving effect to the Mergers, in form and substance satisfactory to the
Administrative Agent.
(l) The Administrative Agent shall have received financial
projections prepared by FMI demonstrating the projected consolidated financial
condition and results of operations of FMI and its Subsidiaries after giving
effect to the Mergers, for the period commencing on the Closing Date and ending
on the Maturity Date.
(m) The Administrative Agent shall have received acknowledgment
copies (or other evidence of filing) of each filed UCC-1 financing statement
signed by the Borrower as debtor naming the Administrative Agent as secured
party.
(n) The Administrative Agent shall have received the original
stock certificates evidencing the stock pledged pursuant to the Pledge
Agreement, together with undated stock powers duly executed in blank in
connection therewith.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall
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LOAN AGREEMENT
not become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 9.2) at or prior to 3:00 p.m., New York City time, on
April 10, 1998 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
Section 4.2 Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:
(a) The Administrative Agent shall have received a fully executed
Borrowing Request in respect of the Loans to be made on such date.
(b) The representations and warranties of the Borrower set forth
in this Agreement (other than the representations and warranties set forth in
Section 3.4) shall be true and correct on and as of the date of such Borrowing
or the date of issuance, amendment, renewal or extension of such Letter of
Credit, as applicable.
(c) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (b) and
(c) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
Section 5.1 Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) within 100 days after the end of each fiscal year of the
Borrower, its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative
51
LOAN AGREEMENT
form the figures for the previous fiscal year, all reported on by Deloitte &
Touche LLP or other independent public accountants of recognized national
standing (without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP.
(b) within 55 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, its consolidated balance
sheet and related statements of operations, stockholders' equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a Compliance Certificate (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations (x) demonstrating compliance with
Section 6.10(a) and (b) and (y) establishing the Applicable Margin, and (iii)
stating whether any change in GAAP or in the application thereof has occurred
since the date of the audited financial statements referred to in Section 3.4
and, if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(e) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed by
the Borrower or any Subsidiary with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and
52
LOAN AGREEMENT
(f) promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Borrower or any Subsidiary, or compliance with the terms of this
Agreement, as the Administrative Agent or any Lender may reasonably request.
Section 5.2 Notices of Material Events. The Borrower will furnish to
the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default upon actual knowledge of a
Responsible Officer of the Borrower;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in material liability of the Borrower and its Subsidiaries; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
Section 5.3 Existence; Conduct of Business. The Borrower will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.5.
Section 5.4 Payment of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves
53
LOAN AGREEMENT
with respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
Section 5.5 Maintenance of Properties; Insurance. The Borrower will,
and will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
(and having such deductibles and self-insurance) as are customarily maintained
by companies engaged in the same or similar businesses operating in the same or
similar locations.
Section 5.6 Books and Records; Inspection Rights. The Borrower will,
and will cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
Section 5.7 Compliance with Laws. The Borrower will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property, including
without limitation ERISA and all Environmental Laws, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
Section 5.8 Use of Proceeds and Letters of Credit. The proceeds of the
Loans will be used only to finance certain costs and expenses associated with
the Mergers, refinance existing indebtedness (including related prepayment
premiums) and for general corporate purposes. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations G, U
and X. Standby Letters of Credit will be issued only to support on a standby
basis, liabilities relating to worker's compensation, judgments pending appeal,
construction or similar liabilities in the ordinary course of business, and
trade Letters of Credit will be issued only to support liabilities for the
purchase of goods upon delivery or against invoice.
Section 5.9 Subsidiary Guarantees and Pledge. (a) The Borrower shall
cause each Person which becomes a Subsidiary after the Closing Date (other than
Insignificant Subsidiaries) to execute and deliver to the Administrative Agent a
Subsidiary Guarantee together with such officer's certificates, resolutions and
other assurances related thereto as the
54
LOAN AGREEMENT
Administrative Agent shall reasonably request within 10 days of such Person
becoming a Subsidiary. Furthermore, the Borrower shall within such 10 day period
deliver to the Collateral Agent the stock certificates or other evidence of
ownership interest in such Subsidiary, together with stock powers duly executed
in blank, and execute such other documents in connection therewith as the
Collateral Agent may reasonably request.
(b) The Borrower shall cause each Subsidiary and each Person
which becomes a Subsidiary after the Closing Date (other than Insignificant
Subsidiaries) to include in any guarantee issued to any lender or creditor other
than the parties to this Agreement and the Other Corporate Loan Documents the
language in substantially the form attached as Exhibit E.
Section 5.10 Further Assurances. The Borrower shall, and cause each of
its Subsidiaries to, cooperate with the Lenders and the Administrative Agent and
shall execute and pay for the filing of all such further instruments and
documents, including UCC financing statements and other security documents, as
the Required Lenders or the Administrative Agent shall reasonably deem
appropriate in order to effectuate the grant of the Liens and security interests
to the Collateral Agent contemplated by the Intercreditor Agreement, this
Agreement and the Other Corporate Loan Documents and to carry out to their
satisfaction the transactions contemplated by such agreements.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
Section 6.1 Subsidiary Debt. The Borrower will not permit any
Subsidiary to create, incur, assume or permit to exist any Debt, except:
(a) Debt owed to the Borrower or to another Subsidiary;
(b) Debt existing on the date hereof; provided that to the extent
any item of such Debt exceeds $5,000,000, or the aggregate of all such Debt
exceeds $25,000,000, such Debt shall be identified in Schedule 6.1;
(c) Debt secured by Permitted Encumbrances;
(d) Capital Lease Obligations not to exceed $100,000,000;
55
LOAN AGREEMENT
(e) Debt outstanding when a Person becomes a Subsidiary or is
merged or consolidated with another Subsidiary, provided that such Debt exists
at the time such Person becomes a Subsidiary and is not created in contemplation
of or in connection with such Person becoming a Subsidiary;
(f) Debt in respect of letters of credit issued to support the
purchase of goods by the applicable Subsidiary in the ordinary course of
business;
(g) Debt in respect of commercial letters of credit issued to
support liabilities of a Subsidiary relating to worker's compensation, judgments
pending appeal (and as to which there is no Event of Default under clause (k) of
Article VII), construction or similar liabilities in the ordinary course of
business;
(h) Suretyship Liabilities constituting guarantees of the
Borrower's unsecured Debt; provided that such Debt is not senior to the
obligations of the Borrower hereunder and such guarantees contain language in
substantially the form attached as Exhibit E; and Suretyship Liabilities
constituting guarantees of the Borrower's Synthetic Lease Facilities; provided
that such guarantees contain language in substantially the form attached as
Exhibit E; and
(i) Debt not otherwise permitted by the foregoing clauses of this
Section 6.1 so long as the sum, without duplication, of (x) all such Debt and
(y) all Debt secured by Liens permitted solely by clause (f) of Section 6.2 does
not exceed 5.0% of Tangible Net Assets.
Section 6.2 Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof (including Liens created pursuant to the
Other Corporate Loan Documents and the Pledge Agreement) and set forth in
Schedule 6.2; provided that (i) such Lien shall not apply to any other property
or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only
those obligations which it secures on the date hereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date hereof
prior to the time such Person becomes a
56
LOAN AGREEMENT
Subsidiary; provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary, as the
case may be, (ii) such Lien shall not apply to any other property or assets of
the Borrower or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be;
(d) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (i) such security
interests and the Indebtedness secured thereby are incurred prior to or within
180 days after such acquisition or the completion of such construction or
improvement, (ii) the Debt secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital assets and (iii) such
security interests shall not apply to any other property or assets of the
Borrower or any Subsidiary;
(e) Liens on assets acquired after the date hereof under
Synthetic Lease Facilities; and
(f) Liens not otherwise permitted by the foregoing clauses of
this Section 6.2, securing Debt of the Borrower or its Subsidiaries, so long as
the sum, without duplication, of (i) all such Debt and (ii) all Debt permitted
solely by clause (i) of Section 6.1 does not exceed 5.0% of Tangible Net Assets.
Section 6.3 Modifications of Merger Documents. The Borrower shall not,
and shall not permit any of its Subsidiaries to amend, modify or waive, or
permit the amendment, modification or waiver of, any provision of the Merger
Documents.
Section 6.4 Fundamental Changes. (a) The Borrower will not, and will
not permit any Material Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of transactions) all or any substantial part of its assets, or all or
substantially all of the stock of any of its Material Subsidiaries (in each
case, whether now owned or hereafter acquired), or liquidate or dissolve, except
that, if at the time thereof and immediately after giving effect thereto no
Default shall have occurred and be continuing (i) any Subsidiary may merge into
the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction
in which the surviving entity is a Subsidiary, (iii) any Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary and (iv) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders.
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LOAN AGREEMENT
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
Section 6.5 Investments, Loans, Advances, Suretyship Liabilities and
Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, incur Suretyship Liabilities in respect of any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:
(a) Permitted Investments;
(b) investments by the Borrower and its Subsidiaries in its
Subsidiaries including Persons which, as a result of such investment, become
Subsidiaries;
(c) loans or advances made, or Suretyship Liabilities incurred,
by the Borrower to or in respect of any Subsidiary and made or incurred by any
Subsidiary to or in respect of the Borrower or any other Subsidiary;
(d) Suretyship Liabilities with respect to Hedging Agreements
permitted by Section 6.6;
(e) Suretyship Liabilities constituting Debt permitted by Section
6.1 which are (i) in respect of commercial paper, or (ii) Suretyship Liabilities
other than in respect of commercial paper in aggregate amount not to exceed
$200,000,000 at any one time;
(f) Suretyship Liabilities created under the Other Corporate Loan
Documents;
(g) Suretyship Liabilities with respect to Surety Instruments
incurred in the ordinary course of business;
(h) investments existing on the date hereof; provided that to the
extent any such investment exceeds $5,000,000, or the aggregate of all such
investments exceeds $25,000,000, such investments shall be identified in
Schedule 6.5; and
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LOAN AGREEMENT
(i) investments by the Borrower and its Subsidiaries not
otherwise permitted by the foregoing clauses of this Section 6.5, so long as
such additional investments made in reliance on this clause (i) do not exceed
$200,000,000 in the aggregate at any time.
Section 6.6 Hedging Agreements. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities.
Section 6.7 Restricted Payments. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except that, so long as no Event
of Default has occurred and is continuing, (a) the Borrower may declare and pay
dividends with respect to its capital stock payable solely in additional shares
of its common stock, (b) the Borrower may make Restricted Payments pursuant to
and in accordance with stock option plans or other benefit plans for management
or employees of the Borrower and its Subsidiaries, (c) any Subsidiary may
declare and pay Restricted Payments to the Borrower or any other Subsidiary, and
(d) the Borrower and its Subsidiaries may pay cash dividends and repurchase
their respective stock from any Person which is not the Borrower or another
Subsidiary so long as on the date of payment or repurchase (i) such cash
dividends and stock repurchases do not exceed $150,000,000 in any single fiscal
year, and (ii) the total of such cash dividends and stock repurchases during the
term of this Agreement do not exceed an aggregate amount of $200,000,000 plus
40% of the Borrower's and its Subsidiaries' aggregate net income earned
commencing with the fiscal year ending January 31, 1999, and each fiscal year
thereafter; provided that a payment in connection with the repurchasing of
certain warrants from the shareholders of FFL in an amount not to exceed
$20,000,000 shall not be counted against the amounts set forth in clauses (i)
and (ii) above.
Section 6.8 Transactions with Affiliates. Except during the
continuance of an Event of Default, the Borrower will not, and will not permit
any of its Subsidiaries to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties, (b) transactions between or among the Borrower and its
wholly owned Subsidiaries not involving any other Affiliate and (c) any
Restricted Payment permitted by Section 6.7.
Section 6.9 Restrictive Agreements. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon the
59
LOAN AGREEMENT
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Subsidiary or to incur Suretyship Liabilities in respect
of Debt of the Borrower or any other Subsidiary; provided that (i) the foregoing
shall not apply to restrictions and conditions imposed by law or by this
Agreement, (ii) the foregoing shall not apply to restrictions and conditions (x)
contained in the Other Corporate Loan Documents or (y) existing on the date
hereof and identified on Schedule 6.9 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition) and (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided that such restrictions and conditions
apply only to the Subsidiary that is to be sold and such sale is permitted
hereunder and provided further that such restrictions and conditions cannot be
imposed at any time that a Default has occurred and is continuing.
Section 6.10 Financial Covenants.
(a) Leverage Ratio. The Borrower shall not permit its Leverage
Ratio to exceed, at the end of any fiscal quarter ending on or during any period
listed below, the ratio set forth opposite such period; provided that there
shall be added to Consolidated EBITDA for purposes of determining the Leverage
Ratio the following amounts: (i) with respect to the two fiscal quarters ended
August 15, 1998, $25,000,000 and (ii) in addition to clause (i) above, with
respect to the fiscal quarter ended November 7, 1998, $12,500,000:
Period Ratio
------ -----
From and including August 15, 1998 5:00 to 1.00
to and including January 29, 1999
From and including January 30, 1999 4.50 to 1.00
to and including January 28, 2000
From and including January 29, 2000 4.00 to 1.00
and therafter
(b) Fixed Charge Coverage Ratio. The Borrower shall not permit
the Fixed Charge Coverage Ratio to be less than, at the end of any fiscal
quarter ending on or during any period listed below, the ratio set forth
opposite such period:
Period Ratio
------ -----
From and including August 15, 1998 1.75 to 1.00
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LOAN AGREEMENT
to and including January 29, 1999
From and including January 30, 1999 2.00 to 1.00
to and including February 2, 2001
From and including February 3, 2001 2.25 to 1.00
and thereafter
Section 6.11 Unconditional Purchase Obligations. The Borrower shall
not, and shall not permit any Subsidiary to, enter into or be a party to any
contract for the purchase of materials, supplies or other property or services,
if such contract requires that payments be made by it regardless of whether or
not delivery is ever made of such materials, supplies or other property or
services.
Section 6.12 Fiscal Year; Fiscal Quarter. The Borrower shall not, and
shall not permit any of its Subsidiaries to, change its fiscal year or any of
its fiscal quarters.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise; or
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement, when and as the same shall become
due and payable, and such failure shall continue unremedied for a period of
three (3) Business Days; or
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Subsidiary in or in connection with this Agreement
or any amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect in any material respect when made
or deemed made; or
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LOAN AGREEMENT
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Sections 5.2(a), 5.3 (with respect to the
Borrower's existence) or 5.8 or in Sections 6.1, 6.2, 6.4, 6.5, 6.6, 6.7, 6.9,
6.10, 6.11 or 6.12; or
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clauses (a), (b), (c) or (d) of this Article), and such failure shall
continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower (which notice will be given at the request
of any Lender); or
(f) the Borrower or any Material Subsidiary shall default in any
obligation (payment or otherwise) that results in any Debt of $10,000,000 or
more in the aggregate becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Debt of $10,000,000 or more in the aggregate
or any trustee or agent on its or their behalf to cause any such Debt to become
due, or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; or
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower or any Material Subsidiary or their
respective debts, or of a substantial part of their respective assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Material Subsidiary or for a substantial part of their respective assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered; or
(h) the Borrower or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (g) of this Article, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Material Subsidiary or
for a substantial part of their respective assets, (iv) file an answer admitting
the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing; or
(i) the Borrower or any Material Subsidiary shall become unable,
admit in writing or fail generally to pay its debts as they become due; or
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LOAN AGREEMENT
(j) one or more judgments for the payment of money in an
aggregate amount in excess of $10,000,000 shall be rendered against the
Borrower, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Borrower or any Subsidiary to
enforce any such judgment; or
(k) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Borrower
and its Subsidiaries in an aggregate amount exceeding $10,000,000; or
(l) a Change in Control shall occur; or
(m) any Subsidiary Guarantee shall cease to be in full force and
effect (other than in accordance with its terms), or any guarantor under any
Subsidiary Guarantee or any Person acting by or on behalf of such guarantor
shall deny or disaffirm all or any portion of the guarantor's obligation under
such Subsidiary Guarantee; or
(n) the Pledge Agreement shall for any reason cease to be in full
force and effect (other than in accordance with its terms), or shall cease to
give the Collateral Agent the Liens, rights, powers and privileges purported to
be created thereby including, without limitation, a perfected first priority
security interest in, and Lien on, all of the Collateral in accordance with the
terms thereof;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent shall, at the
request of the Required Lenders, by notice to the Borrower, take any or all of
the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii)
terminate any Letter of Credit that may be terminated under its terms, (iii)
direct the Borrower to make (and the Borrower agrees that upon receipt of such
notice it will make) the LC Deposit and (iv) declare the Loans then outstanding
to be due and payable in whole or in part (in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (g) or (h) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon, the LC Deposit and all fees
and other
63
LOAN AGREEMENT
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
------------------------
Section 8.1 Appointment. Each Lender hereby irrevocably designates and
appoints Bankers Trust Company as the Administrative Agent and Collateral Agent
of such Lender under the Loan Documents, and each such Lender irrevocably
authorizes Bankers Trust Company as the Administrative Agent and Collateral
Agent for such Lender, to enter into the Loan Documents and take such action on
its behalf under the provisions of the Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent and the Collateral Agent by the terms of the Loan Documents, respectively,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in the Loan Documents,
the Administrative Agent and Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Administrative Agent or Collateral Agent shall be read into the Loan Documents
or otherwise exist against the Administrative Agent or Collateral Agent. The
provisions of this Article VIII are solely for the benefit of the Administrative
Agent and Collateral Agent, and the Lenders and the Borrower shall have no
rights as a third party beneficiary or otherwise under any of the provisions in
the Loan Documents. In performing its functions and duties under the Loan
Documents, the Administrative Agent and Collateral Agent shall act solely as the
agent of the Lenders and does not assume nor shall be deemed to have assumed any
obligation or relationship of trust or agency with or for the Borrower or any of
its successors and assigns.
Section 8.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct or any agents or attorneys-in-fact selected by it with
reasonable care.
Section 8.3 Exculpatory Provisions. The Administrative Agent shall not
be (i) liable for any action lawfully taken or omitted to be taken by it or any
Person described in Section 8.2 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 Lenders for any recitals,
statements, representations or warranties made by the Borrower
64
LOAN AGREEMENT
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or for any failure of the
Borrower to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrower. This Section is intended solely to govern the relationship between
the Administrative Agent, on the one hand, and the Lenders, on the other.
Section 8.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
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
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in act ing, or in refraining from acting, under
this Agreement in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders.
Section 8.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall promptly give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such
Default as shall be directed by the Required Lenders.
Section 8.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent, nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereafter taken, including, without limitation, any
review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Administrative Agent. Each Lender represents
and warrants to the Administrative Agent that it has, independently and without
reliance upon the
65
LOAN AGREEMENT
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, opera tions, property, prospects, financial and
other conditions and creditworthiness of the Borrower and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, prospects, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required under this Agreement to be furnished to the
Lenders by the Administrative Agent, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, prospects, financial
and other condition or creditworthiness of the Borrower which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 8.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent, the Syndication Agent and each of their respective
officers, directors, employees, representatives and agents (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), ratably according to their Applicable Percentage, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for the Administrative Agent, Syndication Agent or such Person in connection
with any investigative, administrative or judicial proceeding commenced or
threatened, whether or not the Administrative Agent or such Person shall be
designated a party thereto) that may at any time (including, without limitation,
at any time following the payment of the Obligations) be imposed on, incurred by
or asserted against the Administrative Agent, Syndication Agent or such Person
as a result of, or arising out of, or in any way related to or by reason of, any
of the Transactions or the execution, delivery or performance of this Agreement
(but excluding any such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the gross negligence or willful misconduct of the Administrative Agent,
Syndication Agent or such Person as finally determined by a court of competent
jurisdiction).
Section 8.8 Administrative Agent in its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder. With respect
to Loans made or renewed by it, the Administrative Agent shall have the same
rights and powers under this Agreement as any
66
LOAN AGREEMENT
Lender and may exercise the same as though it were not the Administrative Agent,
and the terms "Lender" and "Lenders" shall include the Administrative Agent in
its individual capacity.
Section 8.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Borrower and the
Lenders. If the Administrative Agent shall resign as Administrative Agent under
this Agreement, then the Required Lenders during such 30-day period shall
appoint from among the Lenders a successor agent, whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent and
the term "Administrative Agent" shall mean such successor agent, effective upon
its appointment, and the former Administrative Agent's rights, powers and duties
as Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement. After any retiring Administrative Agent's resignation hereunder
as Administrative Agent, the provisions of this Article VIII and Section 9.3
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 8.10 Syndication Agent. Without limiting any provision
contained in this Article VIII, the Syndication Agent shall not have, except as
to and to the limited extent expressly provided herein, any obligation,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Each Lender acknowledges that it has not relied, and will not
rely, on the Syndication Agent in deciding to enter into this Agreement or in
taking or not taking action hereunder.
Section 8.11 Co-Documentation Agents. Without limiting any provision
contained in this Article VIII, the Co-Documentation Agents shall not have,
except as to and to the limited extent expressly provided herein, any
obligation, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Each Lender acknowledges that it has not
relied, and will not rely, on the Co-Documentation Agents in deciding to enter
into this Agreement or in taking or not taking action hereunder.
ARTICLE IX
Miscellaneous
-------------
Section 9.1 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
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LOAN AGREEMENT
(a) if to the Borrower, to it at:
Xxxx Xxxxx, Inc.
X.X. Xxx 00000
0000 XX 00xx Xxxxxx
Xxxxxxxx, Xxxxxx 00000-0000
Telecopy: (000) 000-0000
Attn: Xx. Xxxxx X. Xxxxxxx;
with a copy of notices pursuant to Article VII to:
Stoel Rives LLP
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000-0000
Telecopy: (000) 000-0000
Attn: Xx. Xxxx X. Xxxxxx
(b) if to the Administrative Agent, to it at:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attn: Deal Administrator
(c) if to any Issuing Bank, to it at the address specified in
writing to the Administrative Agent from time to time by the Issuing Bank;
except that, if to Bankers Trust as Issuing Bank, to it at:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attn: Letter of Credit Unit
(d) if to any other Lender, to it at its address (or telecopy
number) set forth opposite its signature below.
68
LOAN AGREEMENT
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt. It
is understood and agreed that the delivery of copies of notices to counsel as
set forth above is for courtesy purposes only and any failure to deliver such
copy shall not constitute failure with respect to any obligation to provide
notices hereunder.
Section 9.2 Waivers; Amendments. (a) Except as provided in the
Intercreditor Agreement, neither this Agreement nor any terms hereof may be
changed, waived, discharged, or terminated, nor any Collateral released, unless
such change, waiver, discharge, termination or release is in writing signed by
the Required Lenders, provided that no such change, waiver, discharge,
termination or release shall, without the consent of each Lender (other than a
Defaulting Lender), (i) extend the final scheduled maturity of any Loan or
extend the stated expiration date of any Letter of Credit beyond the Maturity
Date, or reduce the rate or extend the time of payment of interest of fees
thereon, or reduce the principal amount thereof (except to the extent repaid in
cash), (ii) amend, modify or waive any provision of this Section 9.2, (iii)
reduce the percentage specified in the definition of Required Lenders, (iv)
release all or a substantial portion of the Collateral, (iv) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (v) release any Subsidiary which is party to a
Subsidiary Guarantee from its obligations under such Subsidiary Guarantee or
amend any Subsidiary Guarantee to materially reduce any Subsidiary's obligations
thereunder; provided further that no such change, waiver, discharge, termination
or release shall (w) increase the Commitment of any Lender without the consent
of such Lender (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or of a mandatory reduction in the aggregate
Commitments shall not constitute an increase of the Commitment of any Lender,
and that an increase in the available portion of any Commitment of any Lender
shall not constitute an increase of the Commitment of such Lender), (x) without
the consent of the Issuing Bank, amend, modify or waive any provision of Section
2.5 or alter its rights or obligations with respect to Letters of Credit, or (y)
without the consent of the Administrative Agent, amend, modify or waive any
provision of Article VIII or any other provision as the same relates to the
Administrative Agent. No failure or delay by the Administrative Agent, the
Issuing Bank or any Lender in exercising any right or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective
69
LOAN AGREEMENT
only in the specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether the Administrative Agent, any Lender or the Issuing Bank may have had
notice or knowledge of such Default at the time.
(b) If, in connection with any proposed change, waiver, discharge
or termination to any of the provisions of this Agreement contemplated by
clauses (i) through (v), inclusive, of the first proviso of Section 9.2(a), the
consent of the Required Lenders is obtained but the consent of one or more of
such other Lenders whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Lenders whose individual
consent is required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Lender or Lenders with one or
more Replacement Lenders pursuant to Section 2.19(b) so long as at the time of
such replacement each such Replacement Lender consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Lender's
Commitment and repay any outstanding Loans of such Lender and cash collateralize
its applicable LC Exposure in accordance with Section 2.5(j), provided that,
unless the Commitment that is terminated and Loans repaid pursuant to preceding
clause (B) are immediately replaced in full at such time through the addition of
new Lenders or the increase of the Commitments and/or outstanding Loans of
existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to preceding clause (B) the Required Lenders
(determined after giving effect to the proposed action) shall specifically
consent thereto, provided further, that in any event the Borrower shall not have
the right to replace a Lender, terminate its Commitment or repay its Loans
solely as a result of the exercise of such Lender's rights (and the withholding
of any required consent by such Lender) pursuant to the second proviso to
Section 9.2(a).
Section 9.3 Expenses; Indemnity; Damage Waiver. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Administrative Agent, the
Issuing Bank or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement after the occurrence of an Event of Default, including its rights
under this Section, or in connection with the Loans made or Letters of Credit
issued
70
LOAN AGREEMENT
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.
(b) The Borrower shall indemnify the Administrative Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds therefrom (including any refusal
by the Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent permitted by applicable law, the Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.
(d) All amounts due under this Section shall be payable not later
than 10 days after written demand therefor.
Section 9.4 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void).
71
LOAN AGREEMENT
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans and a corresponding amount of its LC
Exposure at the time owing to it); provided that (i) except in the case of an
assignment to a Lender or an Affiliate of a Lender, each of the Borrower, the
Administrative Agent and (with respect to Revolving Loans only) the Issuing Bank
must give its prior written consent to such assignment (which consent shall not
be unreasonably withheld), (ii) except in the case of an assignment to a Lender
or an Affiliate of a Lender or an assignment of the entire remaining amount of
the assigning Lender's Commitment, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $10,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent and (iii) the parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500; and provided further that any consent of the Borrower otherwise required
under this paragraph shall not be required if a Default has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.3). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the
72
LOAN AGREEMENT
"Register"). The entries in the Register shall be conclusive (absent manifest
error), and the Borrower, the Administrative Agent, the Issuing Bank and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the processing and
recordation fee referred to in paragraph (b) of this Section and any written
consent to such assignment required by paragraph (b) of this Section, the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; and provided further that no Lender shall
transfer or grant any participation under which the Participants shall have
rights to approve any amendment to or waiver of this Agreement except to the
extent that such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Maturity Date) in which the Participant is
participating, or reduce the rate or extend the time of payment of interest or
fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the Participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default or of a
mandatory reduction in the aggregate Commitments shall not constitute a change
in the terms of such participation and that an increase in any Commitment or
Loan shall be permitted without the consent of any participant if the
Participant's participation is not increased as a result thereof), or (ii)
consent to the assignment by the Borrower of any of its rights and obligations
under this Agreement.
73
LOAN AGREEMENT
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that, subject to the foregoing,
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.17 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
Section 9.5 Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.3 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
Section 9.6 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.1, this Agreement shall become effective when it shall have been
executed by the Administrative
74
LOAN AGREEMENT
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
Section 9.7 Marshalling; Recapture. Neither the Administrative Agent
nor any Lender shall be under any obligation to xxxxxxxx any assets in favor of
the Borrower or the Subsidiaries or any other party or against or in payment of
any or all of the obligations, liabilities and indebtedness of every nature of
the Borrower or any Subsidiary from time to time owing to the Administrative
Agent or any Lender under or in connection with this Agreement, the Other
Corporate Loan Documents or the Loan Documents. To the extent any Lender
receives any payment by or on behalf of the Borrower or the Subsidiaries, which
payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to such Borrower
or Subsidiary or its estate, trustee, receiver, custodian or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of the Borrower or Subsidiary to such Lender as of the date such initial
payment, reduction or satisfaction occurred.
Section 9.8 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Section 9.9 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
75
LOAN AGREEMENT
Section 9.10 Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrower or its properties in
the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.1. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
Section 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER
76
LOAN AGREEMENT
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
Section 9.12 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
Section 9.13 Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) to any participant or prospective participant in or assignee or prospective
assignee of any of the rights and obligations under this Agreement, provided
that such participant, prospective participant, assignee or prospective assignee
agrees to be bound by the confidentiality provisions contained in this Section
9.13, (g) with the consent of the Borrower or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent, the Issuing Bank
or any Lender on a nonconfidential basis from a source other than the Borrower.
For the purposes of this Section, "Information" means all information received
from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by the Borrower;
provided that, in the case of information received from the Borrower after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
Section 9.14 OREGON LEGAL NOTICE. WITHOUT LIMITING THE VALIDITY OF THE
CHOICE OF NEW YORK LAW PROVIDED HEREIN, UNDER OREGON LAW, MOST AGREEMENTS,
PROMISES AND COMMITMENTS MADE BY THE LENDERS AFTER THE RESTATEMENT DATE OF THE
ACT SPECIFIED HEREIN CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
77
LOAN AGREEMENT
BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND
BE SIGNED BY THE LENDERS TO BE ENFORCEABLE. THE ACT SPECIFIED
HEREIN MEANS CHAPTER 967 OREGON LAWS 1989, THE EFFECTIVE DATE OF
WHICH WAS OCTOBER 3, 1989.
78
LOAN AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
XXXX XXXXX, INC.
as Borrower
XXXXX X. XXXXXXX
By: --------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President, Treasurer
S-1
LOAN AGREEMENT
BANKERS TRUST COMPANY,
as Administrative Agent and as a Lender
XXXX X. XXXXXXXX
By: --------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
S-2
LOAN AGREEMENT
THE CHASE MANHATTAN BANK,
as Syndication Agent and as a Lender
XXXXXX X. XXXXXX
By: --------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
S-3
LOAN AGREEMENT
NATIONSBANK OF TEXAS, N.A.,
as Co-Documentation Agent and as a Lender
XXXXXXX X. XXXXXXXX
By: --------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
S-4
LOAN AGREEMENT
SALOMON BROTHERS HOLDING CO INC.,
as Co-Documentation Agent and as a Lender
XXXX X. XXXX
By: --------------------------------
Name: Xxxx X. Xxxx
Title: Managing Director
S-5
LOAN AGREEMENT
ABN AMRO BANK N.V.,
as a Lender
XXXXX XXXXXXXX
By: --------------------------------
Name: Xxxxx XxXxxxxx
Title: Vice President
XXXXX X. XXXX
By: --------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
S-6
LOAN AGREEMENT
MARINE MIDLAND BANK,
as a Lender
XXXX XXXXXXXX
By: --------------------------------
Name: Xxxx Xxxxxxxx
Title: Authorized Signatory
S-7
LOAN AGREEMENT
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
XXXXXXX X. XXXXX
By: --------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
S-8
LOAN AGREEMENT
WACHOVIA BANK, N.A.,
as a Lender
XXXX X. XXXXXXX
By: -----------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
S-9
LOAN AGREEMENT
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as a Lender
XXXXXXX X. XXXXXXXXXX
By: -----------------------
Name: Xxxxxxx X. XxXxxxxxxx
Title: Authorized Signatory
S-10
LOAN AGREEMENT
BANK OF MONTREAL,
as a Lender
X.X. XXXX
By: -----------------------
Name: X.X. Xxxx
Title: Managing Director
S-11
LOAN AGREEMENT
DLJ CAPITAL FUNDING, INC.,
as a Lender
XXXXXXX X. XXXXXX
By: -----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
S-12
LOAN AGREEMENT
SOCIETE GENERALE,
as a Lender
J. XXXXXX XXXXX
By: -----------------------
Name: J. Xxxxxx Xxxxx
Title: Regional Manager
S-13
LOAN AGREEMENT
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as a Lender
XXXXXXX X. XXXXXXXXXX
By: -----------------------
Name: X. XxXxxxxxxx
Title: Principal
S-14
LOAN AGREEMENT
XXXXX FARGO BANK, N.A.,
as a Lender
XXXXXX XXXXX
By: -----------------------
Name: Xxxxxx Xxxxx
Title: Vice President
XXXXXX X. XXXXXXXX, XX.
By: -----------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Senior Vice President
S-15
LOAN AGREEMENT
THE FIRST NATIONAL BANK OF CHICAGO,
as a Lender
XXXX X. XXXXX
By: -----------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
S-16
LOAN AGREEMENT
TRANSAMERICA LIFE INSURANCE
AND ANNUITY COMPANY,
as a Lender
XXXX X. XXXXXXXXX
By: -----------------------
Name: Xxxx X. Xxxxxxxxx
Title: Investment Officer
S-17
LOAN AGREEMENT
THE MITSUBISHI TRUST AND BANKING
CORPORATION,
as a Lender
XXXXXXXXX XXXXXXX
By: -----------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Senior Vice President
S-18
LOAN AGREEMENT
ROYAL BANK OF CANADA,
as a Lender
XXXXX XXXXXXXXX
By: -----------------------
Name: Xxxxx Xxxxxxxxx
Title: Senior Manager
S-19
LOAN AGREEMENT
THE SUMITOMO TRUST AND
BANKING CO. LTD., LOS ANGELES AGENCY,
as a Lender
XXXXXXX XXXX
By: -----------------------
Name: Xxxxxxx Xxxx
Title: Manager & Vice President
S-20
LOAN AGREEMENT
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE,
as a Lender
XXXXXXX XXXX
By: -----------------------
Name: Xxxxxxx Xxxx
Title: Vice President
XXXXX X'XXXXX
By: -----------------------
Name: Xxxxx X'Xxxxx
Title: Vice President
S-21
LOAN AGREEMENT
KEYBANK NATIONAL ASSOCIATION,
as a Lender
XXXX X. XXXXX
By: -----------------------
Name: Xxxx X. Xxxxx
Title: Commercial Banking Officer
S-22
LOAN AGREEMENT
FIRST SECURITY BANK, N.A.,
as a Lender
XXXX XXXXXXXXX
By: -----------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
S-23
LOAN AGREEMENT
FIRSTRUST BANK,
as a Lender
XXXXXX X'XXXXXX
By: -----------------------
Name: Xxxxxx X'Xxxxxx
Title: Chief Banking Officer
S-24
LOAN AGREEMENT
US BANK OF OREGON,
as a Lender
XXXXX XXXXXXX
By: -----------------------
Name: Xxxxx Xxxxxxx
Title: Asst. Relationship Manager
S-25
LOAN AGREEMENT
FIRST UNION NATIONAL BANK,
as a Lender
XX XXXX
By: -----------------------
Name: Xx Xxxx
Title: Senior Vice President
S-26
LOAN AGREEMENT
THE BANK OF NEW YORK,
as a Lender
XXXXXXXXX XXXX
By: -----------------------
Name: Xxxxxxxxx Xxxx
Title: Vice president
S-27
LOAN AGREEMENT
ZIONS FIRST NATIONAL BANK,
as a Lender
XXXXXXX X. XXXXXXX
By: -----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
S-28
LOAN AGREEMENT
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Lender
XXXXX XXXXXXX-XXXXXXX
By: ----------------------------
Name: Xxxxx Xxxxxxx-Xxxxxxx
Title: Vice President
S-29
LOAN AGREEMENT
BANQUE PARIBAS,
as a Lender
XXXXX X. XXXXX
By: -----------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
XXX X. XXXXXXX
By: -----------------------
Name: Xxx X. Xxxxxxx
Title: Managing Director
S-30
LOAN AGREEMENT
FIRST HAWAIIAN BANK,
as a Lender
XXXXXX XXXXXXXX
By: -----------------------
Name: Xxxxxx Xxxxxxxx
Title: Corporate Banking Officer
National Corporate Banking
S-32
LOAN AGREEMENT
BANK LEUMI U.S.A.,
as a Lender
XXXXXXX XXXXXXX
By: -----------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
S-33
Schedule 2.1
Lenders and Commitments
Revolving Loan Term Loan
Name and Address of Lender Commitment Commitment
-------------------------- -------------- ----------
Bankers Trust Company $157,114,850.33 $136,166,203.62
One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attn: Deal Administrator
The Chase Manhattan Bank $158,092,848.18 $137,013,801.76
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (212)
Attn:
NationsBank of Texas, N.A. $145,388,958.59 $126,003,764.12
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (213)
Attn:
Salomon Brothers Holding Co Inc. $145,388,958.59 $126,003,764.12
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (212)
Attn:
Xxxxx Fargo Bank $117,628,607.28 $101,944,792.97
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.:
Attn:
DLJ Capital Funding, Inc. $94,102,885.82 $81,555,834.38
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:
Attn:
Bank of America National Trust and $94,102,885.82 $81,555,834.38
Savings Association
000 Xxxxx Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.:
Attn:
The First National Bank of Chicago $94,102,885.82 $81,555,834.38
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.:
Attn:
Xxxxxxx Xxxxx Credit Partners L.P. $94,102,885.82 $81,555,834.38
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:
Attn:
Xxxxxx Xxxxxxx Senior Funding, Inc. $94,102,885.82 $81,555,834.38
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:
Attn.:
Societe Generale $94,102,885.82 $81,555,834.38
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.:
Attn.:
Union Bank of California, N.A. $94,102,885.82 $81,555,834.38
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.:
Attn.:
U.S. Bank of Oregon $94,102,885.82 $81,555,834.38
000 X.X. Xxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx 00000
Telecopier No.:
Attn.:
2
Wachovia $94,102,885.82 $81,555,834.38
000 Xxxxxxxxx Xxxxxx XX, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopier No.:
Attn.:
Marine Midland Bank $58,814,303.64 $50,972,396.49
000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:
Attn.: Xxxx Xxxxxxxx
Bank of Montreal $23,525,721.46 $20,388,958.59
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.:
Attn.:
Compagnie Financier de CIC et de $23,525,721.46 $20,388,958.59
l'Union Europeenne,
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:
Attn.:
First Security Bank, N.A. $23,525,721.46 $20,388,958.59
15 East 000 Xxxxx , 0xx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopier No.:
Attn.:
Banque Paribas $23,525,721.46 $20,388,958.59
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telecopier No.:
Attn.:
Royal Bank of Canada $23,525,721.46 $20,388,958.59
000 Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.:
Attn.:
3
Transamerica Life Insurance and $23,525,721.46 $20,388,958.59
Annuity Company
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.:
Attn.:
Zions First National Bank $14,115,432.87 $12,233,375.16
Xxx Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 8411
Telecopier No.:
Attn.:
ABN Amro North America, Inc. $11,762,860.73 $10,194,479.30
One Union Square
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Telecopier No.:
Attn.:
The Bank of New York $11,762,860.73 $10,194,479.30
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:
Attn.:
First Union National Bank $11,762,860.73 $10,194,479.30
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telecopier No.:
Attn.:
KeyBank National Association $11,762,860.73 $10,194,479.30
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.:
Attn.:
The Mitsubishi Trust and Banking $11,762,860.73 $10,194,479.30
Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:
Attn.:
4
The Sumitomo Trust and Banking Co. $11,762,860.73 $10,194,479.30
Ltd., Los Angeles Agency
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier No.:
Attn.:
Bank Leumi, U.S.A. $7,057,716.44 $6,116,687.58
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telecopier No.:
Attn.:
First Hawaiian Bank $8,035,714.29 $6,964,285.71
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxx 00000
Telecopier No.:
Attn.:
FirstTrust Bank $4,705,144.29 $4,077,791.72
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopier No.:
Attn.:
5
SCHEDULE 2.5 TO
LOAN AGREEMENT
--------------
EXISTING LETTERS OF CREDIT
Union Bank as Issuing Bank:
Letter of Stated
Credit Number Beneficiary Amount Maturity
------------- ----------- ------ --------
Issued under Xxxxxx Market, Inc.
S006588 Reliance Insurance Co. $8,879,626 12/31/98
S008016 City of Los Angeles
Dept. of Transportation $103,000 8/1/98
Issued under Alpha Beta Company
S001078 Xxx Xxxxx & Assoc. $365,000 5/31/98
S068494 Calif. Dept. of Ind. Rel. Self
Ins. Plans
(Workers Comp.) $4,688,363 6/17/98
S068504 Calif. Dept. of Ind. Rel. Self
Ins. Plans
(Workers Comp.) $34,889,886 6/17/98
S230034 Riverside County Waste
Services $12,400 8/7/98
S230713 Amwest Surety Insurance
Company $166,000 7/30/98
Issued under Falleys Inc.
S011828 The Travelers Companies $695,000 4/18/98
1
Bankers Trust Company as Issuing Bank:
Letter of Stated
Credit Number Beneficiary Amount Maturity
------------- ----------- ------ --------
Issued under Ralphs Grocery Company
X00000 X.X. Xxxxx Xx.
xx XX, N.A. $771,057 9/30/98
S11504 American Food and Drug
Inc. (Alpha Beta Promissory
Note) $2,200,000 10/28/98
S11560 CA Dept. of Fish & Game,
Dept. Army, City of Riverside
(Riverside Warehouse) $177,000 10/21/98
2
Bank of America as Issuing Bank:
Letter of Stated
Credit Number Beneficiary Amount Maturity
------------- ----------- ------ --------
Issued Under Ralphs Grocery Company
LASB - 216214 Calif. Dept. of Ind. Rel.
(910091718678LA) Self Ins. Plans
(Workers Comp.) $31,507,241 5/16/98
3
SCHEDULE 2.20(a) TO
LOAN AGREEMENT
-------------------
STORE PROPERTY AND DISTRIBUTION CENTER
ACQUIRED IN MERGERS
1. Xxxxxx Distribution Center (Irwindale, California)
2. Xxxxxx office building (Irwindale, California)
3. Xxxxxx Stores:
a. Santa Clarita (#18)
x. Xxxxxxx Oaks (#7)
c. N. Mission Viejo (#58)
4. Ralphs Stores:
a. Studio City (#150)
b. Devonshire (#45)
c. Northridge (#153)
d. Santa Xxxxxx (#290)
e. University Park (#226)
f. San Marino (#43)
x. X. Xxxxxxxx Valley (#230)
x. Xxxxxxxx Ranch (#204)
x. Xxxxxxxxx (#98)
j. Canoga Park (#122)
x. Xxxx Hills (#640)
l. South Torrance (#259)
m. Laguna Niguel (#222)
n. El Toro (#225)
o. Canyon Country (#184)
p. Triangle Square (#228)
5. Four (4) Stock Market stores
4
SCHEDULE 2.20(e) TO
LOAN AGREEMENT
-------------------
TENDERED BONDS
A. Food 4 Less Holdings, Inc.
1. Indenture dated as of June 1, 1995 among Food 0 Xxxx Xxxxxxxx, Xxx.
xxx Xxxxxx Xxxxxx Trust Company (13.625% Senior Discount Debentures
due 2005) ($193,363,000 at maturity).
2. Indenture dated as of June 1, 1995 among Food 4 Less Holdings, Inc.
and Norwest Bank Minnesota, N.A. (13.625% Senior Subordinated
Pay-in-Kind Debentures due 2007) ($182,889,850).
X. Xxxxxx Grocery Company, Inc.
1. Indenture dated as of June 1, 1995 among Food 4 Less Supermarkets,
Inc. (now Ralphs), Subsidiary Guarantors, and Norwest Bank Minnesota,
N.A. ($520,326,000 10.45% Senior Notes Due 2004).
2. Indenture dated as of June 6, 1996 among Ralphs Grocery Company,
Subsidiary Guarantors and Norwest Bank Minnesota, N.A. ($100,000,000
10.45% Senior Notes Due 2004).
3. Indenture dated as of June 1, 1995 among Food 4 Less Supermarkets,
Inc. (to be merged with and into Ralphs Grocery Company), Subsidiary
Guarantors and United States Trust Company of New York ($524,055,000
11% Senior Subordinated Notes due 2005).
4. Indenture dated as of March 26, 1997 among Ralphs Grocery Company,
Subsidiary Guarantors and United States Trust Company of New York
($155,000,000 11% Senior Subordinated Notes Due 2005).
C. Quality Food Centers, Inc.
1. Indenture dated as of March 19, 1997 among Quality Food Centers, Inc.,
Certain Guarantors and First Trust National Association ($150,000,000
of 8.70% Senior Subordinated Notes due 2007).
5
SCHEDULE 3.6 TO
LOAN AGREEMENT
---------------
DISCLOSED MATTERS
None.
6
SCHEDULE 3.15 TO
LOAN AGREEMENT
----------------
SUBSIDIARIES
Percent
Subsidiary1 Ownership Direct Owner
-----------------------------------------------------------------------------------------
Xxxx Xxxxx Stores, Inc. 100% (direct) Xxxx Xxxxx, Inc.
B&B Stores, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
B&B Pharmacy, Inc.2 100% (indirect) B&B Stores, Inc.
CB&S Advertising Agency, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Distribution Trucking Company 100% (indirect) Xxxx Xxxxx Stores, Inc.
FM Retail Services, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
FM, Inc.2 100% (indirect) Xxxx Xxxxx Stores, Inc.
FM Holding Corporation 100% (indirect) Xxxx Xxxxx Stores, Inc.
Xxxx Xxxxx of Alaska, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Xxxx Xxxxx of California, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Xxxx Xxxxx (HK) Limited3 80% (indirect) Xxxx Xxxxx Stores, Inc.
Xxxx Xxxxx Jewelers, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Xxxx Xxxxx, Inc. a 100% (indirect) Xxxx Xxxxx Stores, Inc.
Washington corporation3
Grand Central, Inc. 100% (indirect) FM Holding Corporation
JH Properties, Inc. 100% (indirect) Roundup Co.
Merksamer Jewelers, Inc. 100% (indirect) Xxxx Xxxxx Jewelers, Inc.
Natur Glo, Inc.3 100% (indirect) Xxxx Xxxxx Stores, Inc.
Roundup Co. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Xxxxx'x Food & Drug Centers, Inc. 100% (direct) Xxxx Xxxxx, Inc.
Compare, Inc. 100% (indirect) Smitty's Super Valu, Inc.
Richie's, Inc. 100% (indirect) Xxxxx'x Food & Drug Centers, Inc.
Saint Xxxxxxxx Holding Company 100% (indirect) Smitty's Super Valu, Inc.
SLHC 2, Inc.3 100% (indirect) Xxxxx'x Food & Drug Centers, Inc.
Xxxxx'x Beverage of Wyoming, Inc. 100% (indirect) Xxxxx'x Food & Drug Centers, Inc.
Smitty's Super Valu, Inc. 100% (indirect) Smitty's Supermarkets, Inc.
Smitty's Equipment Leasing, Inc. 100% (indirect) Smitty's Super Valu, Inc.
Smitty's Supermarkets, Inc. 100% (indirect) Xxxxx'x Food & Drug Centers, Inc.
Treasure Valley Land Company, L.C. 100% (indirect) Xxxxx'x Food & Drug Centers, Inc.
Western Property Investment 100% (indirect) Xxxxx'x Food & Drug Centers, Inc.
Group, Inc.2
Quality Food Centers, Inc. 100% (direct) Xxxx Xxxxx, Inc.
Xxxxxx Markets, Inc. 100% (indirect) Quality Food Centers, Inc.
Xxxxxx Realty, Inc. 100% (indirect) Xxxxxx Markets, Inc.
KU Acquisition Corporation 100% (indirect) Quality Food Centers, Inc.
QFC Sub, Inc.2 100% (indirect) Quality Food Holdings, Inc.
Quality Food, Inc.2 100% (indirect) Quality Food Centers, Inc.
Quality Food Holdings, Inc.2 100% (indirect) Quality Food, Inc.
Second Story, Inc. 100% (indirect) Quality Food Centers, Inc.
7
Food 4 Less Holdings, Inc. 100% (direct) Xxxx Xxxxx, Inc.
Alpha Beta Company 100% (indirect) Food 4 Less of S. California, Inc.
Bay Area Warehouse Stores, Inc. 100% (indirect) Cala Co.
Xxxx Markets, Inc. 100% (indirect) Cala Co.
Cala Co. 100% (indirect) Ralphs Grocery Company
Cala Foods, Inc. 100% (indirect) Cala Co.
Xxxxxxxx Stores, Inc. 100% (indirect) Ralphs Grocery Company
Xxxxxx'x, Inc. 100% (indirect) Ralphs Grocery Company
Food 4 Less of Southern 100% (indirect) Ralphs Grocery Company
California, Inc.
Food 4 Less GM, Inc 100% (indirect) Alpha Beta Company
Food 4 Less Merchandising, Inc. 100% (indirect) Alpha Beta Company
Food 4 Less of California, Inc. 100% (indirect) Alpha Beta Company
Ralphs Grocery Company 100% (indirect) Food 4 Less Holdings, Inc.
----------------------
1 Unless otherwise indicated, each Subsidiary is a Material Subsidiary
and is a party to the Subsidiary Guarantee.
2 Not a Material Subsidiary.
3 Not a Material Subsidiary and not a party to the Subsidiary Guarantee.
8
SCHEDULE 4.1 TO
LOAN AGREEMENT
---------------
REFINANCED DEBT1/
A. Refinanced Debt -- Xxxx Xxxxx:
1. $1,030,000,000 Credit Agreement, dated as of September 9, 1997, among
Xxxx Xxxxx, Bankers Trust Company, as Administrative Agent, The Chase
Manhattan Bank, as Syndication Agent, and the lenders named therein
($820,000,000).
2. $500,000,000 364-Day Credit Agreement, dated as of September 9, 1997,
among Xxxx Xxxxx, Bankers Trust Company, as Administrative Agent, The
Chase Manhattan Bank, as Syndication Agent, and the lenders named
therein (zero).
3. $500,000,000 Bridge Credit Agreement, dated as of September 9, 1997,
among Xxxx Xxxxx, Bankers Trust Company, as Administrative Agent, The
Chase Manhattan Bank, as Syndication Agent, and the lenders named
therein ($500,000,000).
4. Participation Agreement, dated as of September 9, 1997, among Xxxx
Xxxxx Stores, as lessee, FMS Trust 1997-1, as lessor, Wilmington Trust
Company, not individually but solely as the Owner Trustee under the
FMS 1997-1 Trust, Bankers Trust Company, as Administrative Agent, The
Chase Manhattan Bank, as Syndication Agent, and the lenders named
therein ($251,000,000).
5. Participation Agreement, dated as of January 27, 1998, among Xxxx
Xxxxx Stores, as lessee, FMS Trust 1998-1, as lessor, Wilmington Trust
Company, not individually but solely as the Owner Trustee under the
FMS 1998-1 Trust, The Chase Manhattan Bank, as Administrative Agent,
and the lenders named therein ($52,000,000).
-----------------
1/ Estimated payoff amounts at Closing are indicated in parentheses.
9
B. Refinanced Debt -- Food 4 Less:
1. $875,000,000 Amended and Restated Credit Agreement dated as of April
17, 1997 among Ralphs Grocery Company, Food 4 Less Holdings, Inc.,
Various Lenders and Bankers Trust Company ($685,000,000).
2. Indenture dated as of June 1, 1995 among Food 0 Xxxx Xxxxxxxx, Xxx.
xxx Xxxxxx Xxxxxx Trust Company (13.375% Senior Discount Debentures
due 2005), as amended by the First Supplemental Indenture, dated
February 26, 1998.2
3. Indenture dated as of June 1, 1995 among Food 4 Less Holdings, Inc.
and Norwest Bank Minnesota, N.A. (13.375% Senior Subordinated
Pay-in-Kind Debentures due 2007), as amended by the First Supplemental
Indenture, dated February 26, 1998.2
4. Indenture dated as of June 1, 1995 among Food 4 Less Supermarkets,
Inc. (now Ralphs), Subsidiary Guarantors, and Norwest Bank Minnesota,
N.A. ($520,326,000 10.45% Senior Notes due 2004); as amended by First
Supplemental Indenture for 10.45% Senior Notes due 2004, dated as of
June 14, 1995, as amended by the First Supplemental Indenture, dated
February 26, 1998.2
5. Indenture dated as of June 6, 1996 among Ralphs Grocery Company,
Subsidiary Guarantors and Norwest Bank Minnesota, N.A. ($100,000,000
10.45% Senior Notes Due 2004), as amended by the First Supplemental
Indenture, dated February 26, 1998.2
6. Indenture dated as of June 1, 1995 among Food 4 Less Supermarkets,
Inc. (to be merged with and into Ralphs Grocery Company), Subsidiary
Guarantors and United States Trust Company of New York ($524,055,000
11% Senior Subordinated Notes due 2005), as amended by the First
Supplemental Indenture, dated February 26, 1998.2
7. Indenture dated as of March 26, 1997 among Ralphs Grocery Company,
Subsidiary Guarantors and United States Trust Company of New York
($155,000,000 11% Senior Subordinated Notes Due 2005), as amended by
the First Supplemental Indenture, dated February 26, 1998.2
-------------------
2/ Subject of $1,675,583,850 Offer to Purchase and Consent Solicitation
Statement dated January 22, 1998.
10
C. Refinanced Debt -- QFC:
1. Amended and Restated Credit Agreement dated as of March 14, 1997 among
Quality Food Centers, Inc., Quality Food Holdings, Inc., Quality Food,
Inc., Bank of America National Trust and Savings Association and
Various Financial Institutions ($184,000,000).
2. Indenture dated as of March 19, 1997 among Quality Food Centers, Inc.,
Certain Guarantors and First Trust National Association ($150,000,000
of 8.70% Senior Subordinated Notes due 2007), as amended by the First
Supplemental Indenture, dated [ ], 1998.3
--------------
3 Subject of $150,000,000 Offer to Purchase and Consent Solicitation
Statement dated January 26, 1998.
11
SCHEDULE 6.1 TO
LOAN AGREEMENT
---------------
EXISTING DEBT/1
A. Outstanding Debt -- Xxxx Xxxxx:
1. Commercial Paper (unsecured notes; approximately $367,000,000 with
various maturities through 180 days).2
2. Aircraft Lease Agreement, dated as of February 5, 1997, between
NationsBanc Leasing Corporation of North Carolina, as lessor, and Xxxx
Xxxxx, as lessee.
3. Long-term Notes, secured by trust deeds, due through 2012, fixed
interest rates from 9.0% to 9.52% ($40,972,061 as of 2/25/98).
4. Continuing Guaranty, dated October 23, 1996, from Xxxx Xxxxx for the
benefit of Monogram Credit Card Bank of Georgia, relating to Consumer
Credit Card Program Agreement, dated as of October 23, 1996, by and
among Merksamer Jewelers, Inc., Xxxx Xxxxx Jewelers, Inc. and Monogram
Credit Card Bank of Georgia.
5. Indenture dated as of May 23, 1996 by and between Xxxxx'x Food & Drug
Centers, Inc. and Fleet National Bank of Connecticut, as trustee, with
respect to the 11.25% Senior Subordinated Notes due 2007 ($5,045,000
as of 2/25/98).
6. Xxxxx'x Food & Drug Centers, Inc. Full Recourse Notes with Wilmington
Trust Company as Pass Thru Trustee. Series E 8.64% and 9.20% due July
2, 2012 and July 2, 2018; Series F 8.64% and 9.20% due July 2, 2012
and July 2, 2018; and Series H 8.64% and 9.20% due July 2, 2012 and
July 2, 2018 ($24,164,000 as of 2/25/98).
-----------------------
1 Debt of Material Subsidiaries exceeding $5,000,000; aggregate of debt
less than $5,000,000 and not set forth herein does not exceed
$25,000,000. Debt to be refinanced at Closing separately reported on
Schedule 4.1.
2 Xxxx Xxxxx commercial paper issued pursuant to programs in place with
United States National Bank, N.A., Xxxxx Fargo Bank, N.A., and Bank of
America NW, N.A., doing business as SeaFirst Bank (the "Placement
Agents"). Commercial paper of Xxxx Xxxxx is not subject to prepayment
and will be paid as it becomes due.
12
7. Indenture, dated as of July 16, 1986, between Saint Xxxxxxxx Holding
Company and First Interstate Bank of Arizona, N.A., as Trustee, as
supplemented by the First Supplemental Indenture, dated as of July 16,
1986 ($13,000,000 10.5% First Mortgage Sinking Fund Bonds, Series
1986, due July 31, 2016) ($11,579,893 as of 2/25/98).
B. Outstanding Debt -- F4L:
1. Debt identified on Schedule 2.20(e) Sections A and B, to the extent
not tendered pursuant to Offer to Purchase and Consent Solicitation
Statement dated January 22, 1998.
2. Indenture dated as of April 15, 1992 among Food 4 Less Supermarkets,
Inc., the Subsidiary Guarantors and Norwest Bank Minnesota,
N.A.($175,000,000 10.45% Senior Notes due 2000); as amended by the
First Supplemental Indenture for 10.45% Notes due 2000, dated as of
July 24, 1992; as amended by the Second Supplemental Indenture for
10.45% Notes due 2000, dated as of June 14, 1995; as amended by the
Third Supplemental Indenture for 10.45% Notes due 2000, dated as of
June 14, 1995.
3. Indenture Dated as of July 29, 1992 among Ralphs Grocery Company and
United States Trust Company of New York (10.25% Senior Subordinated
Notes due 2002); as amended by the First Supplemental Indenture for
10.25% Senior Subordinated Notes due 2002, dated as of May 30, 1995;
as amended by the Second Supplemental Indenture for 10.25% Senior
Subordinated Notes due 2002, dated as of June 14, 1995.
4. Indenture Dated as of March 30, 1993 among Ralphs Grocery Company and
United States Trust Company of New York (9% Senior Subordinated Notes
due 2003); as amended by the First Supplemental Indenture for 9%
Senior Subordinated Notes due 2003, dated as of June 23, 1993; as
amended by the Second Supplemental Indenture for 9% Senior
Subordinated Notes due 2003, dated as of May 30, 1995; as amended by
the Third Supplemental Indenture for 9% Senior Subordinated Notes due
2003, dated as of June 14, 1995.
5. Long-term notes secured by trust deeds with respect to the Xxxxx and
Vermont Renaissance Plaza and Xxxxxx'x store # 5 in St. Xxxxxx, MO
(approx. $7,200,000 as of 3/11/98).
6. Capital leases with respect to equipment installed at numerous
property locations (approx. $156,000,000 as of 3/11/98).
13
7. Note payable to IBM Credit for mainframe computer system and related
store equipment ($5,631,000).
C. Outstanding Debt -- QFC:
1. Debt identified on Schedule 2.20(e) Section C, to the extent not
tendered pursuant to Offer to Purchase and Consent Solicitation
Statement dated January 26, 1998.
2. Note Purchase Agreements dated as of July 30, 1997 among Santee
Dairies, Inc. and Various Purchasers, as amended by that certain
Waiver, Amendment and Guaranty, dated as of March 6, 1998, among
Santee Dairies, Inc., Xxxxxx Markets, Inc., various Noteholders, Union
Bank of California, as trustee, and Xxxx Xxxxx, Inc. ($80,000,000
Senior Subordinated Notes due 2008).
14
SCHEDULE 6.2 TO
LOAN AGREEMENT
---------------
LIENS
A. Liens - Xxxx Xxxxx:
1. Trust deeds, securing long-term notes, due through 2012, fixed
interest rates from 9.0% to 9.52% (aggregate of $40,972,061 as of
2/25/98):
a. Lien on Auburn, Washington Store, in connection with financing
from Nationwide Life Insurance.
x. Xxxx on Xxxxxx Road Store, Portland, Oregon, in connection with
financing from Nationwide Life Insurance ($10,306,000 remaining
outstanding as of 2/1/97) and Employers Life Insurance.
x. Xxxx on West Fairbanks, Alaska Store, in connection with
financing from Nationwide Life Insurance.
2. Lien on Brigham City Utah Store (Store No. #78), in connection with
IRB financing (approximately $512,000 remaining outstanding as of
2/25/98).
3. Lien on North Ogden, Utah Store (Store No. #79), in connection with
IRB financing (approximately $1,908,000 remaining outstanding as of
2/25/98).
4. Lien on Provo City, Utah Store (Store No. #136), in connection with
IRB financing (approximately $3,262,000 remaining outstanding as of
2/25/98).
5. Lien on Riverside, California Store (Store No. #706), in connection
with promissory note to Xxxxxxx & Xxxxxxx Xxxxx (approximately
$2,700,000 remaining outstanding as of 2/25/98).
6. Lien on Almagordo, New Mexico Store (Store No. #434), in connection
with promissory note to Xxx & Xxx Xxxxx (approximately $39,000
remaining outstanding as of 2/25/98).
7. Lien on Scottsdale, Arizona Store and Mesa, Arizona Store (Store Nos.
#621 and 622), in connection with 10.5% Sinking Fund Bonds
(approximately $11,580,000 remaining outstanding as of 2/25/98).
15
B. Liens - Food 4 Less:
1. Liens on Xxxxxx'x store #5 in St. Xxxxxx, MO in favor of Business
Men's Assurance Company of America; Xxxxxx'x store #989 in Topeka, KS
in favor of Falger's, Inc.; and the Xxxxx and Vermont Renaissance
Plaza (approx. $7,200,000 aggregate).
2. Those Liens on assets of Ralphs Grocery Company in favor of Future
Systems Development, Inc., arising under Sales Agreement dated Dec.
15, 1989 between Future Systems Development Inc. and Ralphs Grocery
Co. and as set forth in UCC-1 financing statement filed December 19,
1989 (file no. 89320805) with the California Secretary of State
(specifically identified accounts, contract rights, chattel paper,
instruments, equipment, proceeds).
3. Those Liens on certain Patronage Refund Certificates issued by
Associated Wholesale Grocers, Inc. to Xxxxxx'x.
4. Those liens on assets of Xxxxx & Vermont Renaissance Plaza in favor of
Tokai Bank of California, as set forth on UCC-1 financing statement
filed May 16, 1996 (file no. 9613860421) with the California Secretary
of State (accounts, equipment, fixtures, chattel paper, general
intangibles, contract rights, and negotiable instruments).
5. Those liens on assets of Xxxxxx'x, Inc. in favor of Associated
Wholesale Grocers, Inc., as set forth on numerous UCC-1 financing
statements filed with the Kansas Secretary of State (all inventory,
equipment and fixtures at specified store sites).
C. Liens - Quality Food Centers:
1. Mechanic's lien in amount of approximately $900,000 as to Store No.
847; QFC is being indemnified by title company with respect to
thereto.
2. Liens on Xxxxxxx Oaks, CA store (Xxxxxx store #2) in favor of Fidelity
Mutual Life Insurance Company and Her-Dek Corporation.
3. Lien on Granada Hills, CA store (Xxxxxx store #4) in favor of
Xxxxxxxxx Xxxxxxx Family Trust.
16
SCHEDULE 6.5 TO
LOAN AGREEMENT
---------------
INVESTMENTS
A. Xxxx Xxxxx:
None.
B. Quality Food Centers:
1. Quality Food Centers, Inc. holds a 22% interest in Associated Grocers,
Inc., with a book value of $14,305,000.
2. Xxxxxx Markets, Inc. holds a 50% interest in Santee Dairies, LLC, with
a book value of $9,295,000.
C. Food 4 Less:
1. Alpha Beta, as successor to The Boys Markets, Inc., owns 12.2% of the
shares of Hawthorne Center Parking Company, which owns the common area
in a shopping center located in Hawthorne, California.
2. Ralphs Grocery Company has loaned an aggregate of $9,300,000 to
developers of the following three stores: Beverwill (store #198),
$2,800,000; Westwood (store #203) $5,000,000; Santa Xxxxxxx (store
#208), $1,500,000.
3. F4L holds interests in the following joint ventures and partnerships:
Xxxxx West Associates, Ltd. 33.3%
Xxxxx West Supermarket Associates, Ltd.
Xxxxx/Vermont Renaissance Plaza, Ltd. 75%
Beverage Partners, LP 18.18%
Cathedral City Marketplace, Ltd. 15%
La Brea Marketplace, LP 33%
Mid Valley Dairy - Turlock 6.66%
Pacoima Plaza Partnership 40%
RGC Partners, LP 5%
Sunnyside Partners 27.92%
Price Enterprise, Inc.
4. Food 4 Less has outstanding investments in suppliers and supplier
cooperatives made in the ordinary course of business and consistent
with past practice,
17
including Certified Grocers of California, Ltd. and Associated
Wholesale Grocers, Inc. (Kansas).
18
SCHEDULE 6.9 TO
LOAN AGREEMENT
---------------
RESTRICTIVE AGREEMENTS
None.
19
Schedule A
Amortization Schedule
The Borrower shall make equal quarterly payments in respect of the
Term Loans and in accordance with Section 2.1 of the Loan Agreement, as follows:
Date Amount
August 15, 1998 $6,250,000.00
November 7, 1998 $6,250,000.00
January 30, 1999 $6,250,000.00
May 22, 1999 $6,250,000.00
August 14, 1999 $37,500,000.00
November 6, 1999 $37,500,000.00
January 29, 2000 $37,500,000.00
May 20, 2000 $37,500,000.00
August 12, 2000 $62,500,000.00
November 4, 2000 $62,500,000.00
February 3, 2001 $62,500,000.00
May 26, 2001 $62,500,000.00
August 18, 2001 $100,000,000.00
November 10, 2001 $100,000,000.00
February 2, 2002 $100,000,000.00
May 25, 2002 $100,000,000.00
August 17, 2002 $125,000,000.00
November 9, 2002 $125,000,000.00
February 1, 2003 $125,000,000.00
Maturity Date Outstanding principal balance
1
EXHIBIT A TO
LOAN AGREEMENT
--------------
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Loan Agreement, dated as of March __, 1998
(as amended, supplemented or otherwise modified from time to time, the "Loan
Agreement"), among Xxxx Xxxxx, Inc. (the "Borrower") the Lenders named therein
(the "Lenders"), Bankers Trust Company, as administrative agent for the Lenders
(in such capacity, the Administrative Agent") and The Chase Manhattan Bank, as
syndication agent. Unless otherwise defined herein, terms defined in the Loan
Agreement and used herein shall have the meanings given to them in the Loan
Agreement.
_________________ (the "Assignor") and _____________(the "Assignee")
agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the As signee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Closing Date (as defined below), an interest (the "Assigned Inter
est"), as specified on SCHEDULE 1, in and to the Assignor's rights and
obligations under the Loan Agreement with respect to those credit facilities
contained in the Loan Agreement as are set forth on SCHEDULE 1 (individually, an
"Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount for each Assigned Facility as set forth on SCHEDULE 1.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or represen tations
made in or in connection with the Loan Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement or any other instrument or document furnished pursuant
thereto, other than that the Assignor has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and clear
of any such adverse claim; and (b) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of Borrower or
any of its
Subsidiaries or any other obligor or the performance or observance by Borrower
or any of its Subsidiaries or any other obligor of any of their respective
obligations under the Loan Agreement or any other instrument or document
furnished pursuant hereto or thereto.
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Loan Agreement, together with copies of the financial
statements delivered pursuant to the Loan Agreement 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 Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Administrative Agent
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Agreement or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the Administra
tive Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Loan Agreement or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the Loan Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to Section
2.17(e) of the Loan Agreement.
4. The effective date of this Assignment and Acceptance shall be the
date set forth on Schedule 1, (the "Effective Date"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Administrative Agent
for acceptance by it and recording by the Administrative Agent pursuant to the
Loan Agreement, effective as of the Effective Date (which shall not, unless
other wise agreed to by the Administrative Agent, be earlier than five Business
Days after the date of such acceptance and recording by the Administrative
Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all
A-2
appropriate adjustments in payments by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Loan Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and shall be
bound by the provisions thereof and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance and the Loan Agreement, relinquish
its rights and be released from its obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
8. This Assignment and Acceptance may be executed by one or more of
the parties to this Assignment and Acceptance on any number of separate
counterparts (including by facsimile transmission), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
A-3
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE 364 LOAN AGREEMENT, DATED AS OF MARCH , 1997,
AMONG
XXXX XXXXX, INC.
THE LENDERS NAMED THEREIN,
BANKERS TRUST COMPANY, AS ADMINISTRATIVE AGENT FOR THE LENDERS (IN SUCH
CAPACITY, THE "ADMINISTRATIVE AGENT")
AND
THE CHASE MANHATTAN BANK, AS SYNDICATION AGENT
-------------------------------------------------------------------------------
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Credit Commitment/Term Loan
Facility Assigned Amount Assigned Commitment Percentage Assigned1/
--------------------- -------------------- --------------------------------
$___________ __.__________%
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By ------------------- By -----------------
Name: Name:
Title: Title:
------------------
1/ Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
S-1
Accepted for Recordation in Consented To:*/
the Register:
Bankers Trust Company, XXXX XXXXX, INC.
as Administrative Agent
By ----------------------
By -------------------- Name:
Name: Title:
Title:
Bankers Trust Company
as Administrative Agent
By ----------------------
Name:
Title:
------------------------
*/ If required.
S-2
EXHIBIT B TO
LOAN AGREEMENT
--------------
TERM NOTE
New York, New York
March _, 1998
$[ ]
FOR VALUE RECEIVED, Xxxx Xxxxx, Inc., a Delaware corporation (the
"Borrower") promises to pay to the order of [LENDER] (the "Payee") or its
registered assigns, (x) the principal sum of [ ] U.S. Dollars [$], less (y) any
principal payments made in accordance with the Loan Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Loan Agreement, dated as of March 11, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Loan Agreement"), the terms defined
therein and not otherwise defined herein being used herein as therein defined,
by and among the Borrower, the financial institutions listed therein as Lenders,
Bankers Trust Company, as Administrative Agent and The Chase Manhattan Bank, as
Syndication Agent.
This Note is one of the promissory notes referred to in Section 2.7(a)
of the Loan Agreement and is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loans evidenced hereby
were made and are to be repaid.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at the
office of the Administrative Agent located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Loan Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Administrative Agent, and the Borrower has
either executed a consent to such assignment (if consent is required under
Section 9.4(b) of the Loan Agreement) or been notified in writing of such
assignment, and recorded in the Register as provided in Section 9.4 of the Loan
Agreement, the Borrower and the Administrative Agent shall be entitled to deem
and treat Payee as the owner and holder of this Note and the Loans evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; provided, however, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of the
Borrower hereunder with respect to payments of principal of or interest on this
Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH , THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Loan Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in Section 9.4 of the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this
Note or the Loan Agreement shall alter or impair the obligations of the
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in the Loan Agreement, incurred in
the collection and enforcement of this Note. The Borrower and any endorsers of
this Note hereby consent to renewals and extensions of time at or after the
maturity hereof, without notice, and hereby waive diligence, presentment,
protest, demand and notice of every kind and, to the full extent permitted by
law, the right to plead any statute of limitations as a defense to any demand
hereunder.
B-2
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
XXXX XXXXX, INC.
By:--------------------------
Name:
Title:
S-1
TRANSACTIONS
ON
NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------------- ------------ --------
EXHIBIT B TO
LOAN AGREEMENT
--------------
REVOLVING NOTE
REVOLVING NOTE
New York, New York
March _, 1998
$[ ]
FOR VALUE RECEIVED, XXXX XXXXX, INC., a Delaware corporation (the
"Borrower") promises to pay to the order of [LENDER] (the "Payee") or its
registered assigns, the lesser of (x) [ ] U.S. Dollars [$] and (y) the unpaid
principal amount of all advances made by Payee to the Borrower as Revolving
Loans under the Loan Agreement referred to below.
The Borrower also promises to pay interest on the unpaid principal
amount hereof, from the date hereof until paid in full, at the rates and at the
times which shall be determined in accordance with the provisions of that
certain Loan Agreement, dated as of March 11, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Loan Agreement"), the terms defined
therein and not otherwise defined herein being used herein as therein defined,
by and among the Borrower, the financial institutions listed therein as Lenders,
Bankers Trust Company, as Administrative Agent and The Chase Manhattan Bank, as
Syndication Agent.
This Note is one of the promissory notes referred to in Section 2.7(a)
of the Loan Agreement and is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loans evidenced hereby
were made and are to be repaid.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at the
office of the Administrative Agent located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, or at such other place as shall be designated in writing for such purpose
in accordance with the terms of the Loan Agreement. Unless and until an
Assignment and Acceptance effecting the assignment or transfer of this Note
shall have been accepted by the Administrative Agent, and the Borrower has
either executed a consent to such assignment (if consent is required under
Section 9.4(b) of the Loan Agreement) or been notified in writing of such
assignment, and recorded in the Register as provided in Section 9.4 of the Loan
Agreement, the Borrower and the Adminis trative Agent shall be entitled to deem
and treat Payee as the owner and holder of this Note and the Loans evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before
B-1
disposing of this Note or any part hereof it will make a notation hereon of all
principal payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a notation of
any payment made on this Note shall not limit or otherwise affect the
obligations of the Borrower hereunder with respect to payments of principal of
or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH , THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Loan Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in Section 9.4 of the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this
Note or the Loan Agreement shall alter or impair the obligations of the
Borrower, which are absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, and in the currency
herein prescribed.
The Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in the Loan Agreement, incurred in
the collection and enforcement of this Note. The Borrower and any endorsers of
this Note hereby consent to renewals and extensions of time at or after the
maturity hereof, without notice, and hereby waive diligence, presentment,
protest, demand and notice of every kind and, to the full extent permitted by
law, the right to plead any statute of limitations as a defense to any demand
hereunder.
B-2
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
XXXX XXXXX, INC.
By:----------------------
Name:
Title:
S-1
TRANSACTIONS
ON
NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------------- ------------ --------
EXHIBIT C TO
LOAN AGREEMENT
--------------
FORM OF OPINION LETTER, STOEL RIVES LLP
March 11, 1998
TO EACH OF THE PARTIES
SET FORTH IN
SCHEDULE I ATTACHED HERETO
Re: $3,500,000,000 Loan Agreement, dated as of March 11, 1998
Dear Administrative Agent, Syndication Agent and Lenders:
We have acted as counsel to Xxxx Xxxxx, Inc., a Delaware corporation
("Borrower"), and the guarantors listed on attached Schedule II ("Guarantors"),
in connection with the Loan Agreement, dated as of March 11, 1998 (the "Loan
Agreement"), among Borrower, Bankers Trust Company, as administrative agent
("Administrative Agent"), The Chase Manhattan Bank, as syndication agent
("Syndication Agent"), and the lenders party thereto ("Lenders"). This opinion
is delivered pursuant to Section 4.1(b) of the Loan Agreement. Unless otherwise
defined in the opinion, all capitalized terms used in this opinion shall have
the meanings assigned to them in the Loan Agreement.
For the purpose of rendering our opinions herein, we have examined (i)
the Loan Agreement, the Notes, the Subsidiary Guaranty, the Pledge Agreement and
the Intercreditor Agreement (such agreements sometimes collectively referred to
as the "Loan Documents"), (ii) certificates of public officials and officers of
Borrower, (iii) certified copies of Borrower's Restated Certificate of
Incorporation and Amended and Restated Bylaws, (iv) Board of Directors'
resolutions of Borrower authorizing Borrower's participation in the transactions
contemplated by the Loan Agreement, (v) certified copies of Articles or
Certificate of Incorporation or other charter documents, as the case may be, and
Bylaws for each Guarantor, (vi) Board of Directors' resolutions of each
Guarantor authorizing such Guarantor's participation in the transactions
contemplated by the Loan Agreement, and (vii) the agreements referred to as
"material agreements" in the Officer's Certificate of Borrower (the "Officer's
Certificate"), attached hereto as Exhibit A.
To Each of the Parties Set
Forth in Schedule I Attached Hereto
Page 2
March 11, 1998
With respect to such examination, we have assumed: (i) the statements
of fact made in all such certificates, documents, and instruments are true,
accurate, and complete; (ii) the due authorization, execution, and delivery of
the Loan Documents by the parties thereto (other than Borrower and Guarantors);
(iii) the genuineness of all signatures (other than the signatures of persons
signing on behalf of Borrower and Guarantors); (iv) the authenticity and
completeness of all documents, certificates, instruments, records, and corporate
records submitted to us as originals, the conformity to the original instruments
of all documents submitted to us as copies, and the authenticity and
completeness of the originals of such copies; (v) that all parties other than
Borrower and Guarantors have all requisite corporate power and authority to
execute, deliver, and perform the Loan Documents; and (vi) the enforceability of
the Loan Documents against all parties thereto other than Borrower and
Guarantors.
Our opinions in paragraph (1) through (3) below as to qualification,
current status and good standing are based solely upon certificates of public
officials. Our opinion in paragraph (3) below as to valid existence is based
solely upon our review of certified copies of the Articles or Certificate of
Incorporation, as the case may be, and Bylaws for each Guarantor and the factual
representations made by Borrower within the Loan Agreement.
In rendering the opinions set forth in paragraphs (3) and (4) below,
we have assumed that the Subsidiary Guaranty executed by each Guarantor may
reasonably be expected to benefit, directly or indirectly, such Guarantor. In
rendering the opinions set forth in paragraph (5) below, we have assumed that
the indebtedness listed as "Refinanced Debt" is being repaid simultaneously with
the closing of the transactions contemplated hereunder.
We have also examined such other documents and records and have made
such investigations of law, as we have deemed necessary to enable us to render
this opinion. As to the accuracy of certain factual matters, we have relied on
certificates and written statements of officers of Borrower and Guarantors and
factual representations made by Borrower within the Loan Agreement.
To Each of the Parties Set
Forth in Schedule I Attached Hereto
Page 3
March 11, 1998
For purposes of this opinion, "actual knowledge" means the conscious
awareness of facts or other information by Xxxx X. Xxxxxx and Xxxx Xxxxxxx,
being the persons at this firm principally involved with the transactions
contemplated by the Loan Agreement, except that in the case of numbered
paragraph (8) herein, "actual knowledge" shall include the above-named persons
and the other persons at our firm who have worked on matters pertaining to
Borrower since February 1, 1997.
Based on the foregoing and subject to the qualifications below, we are
of the opinion that:
(1) Borrower is a corporation duly organized, validly existing, and in
good standing under the laws of the state of Delaware and has all
requisite corporate power and authority (a) to execute, deliver, and
perform its obligations under the Loan Agreement, and (b) to own and
operate its properties and to carry on its business as a holding
company of Xxxx Xxxxx Stores, Inc. ("Xxxx Xxxxx"), Xxxxx'x Food & Drug
Centers, Inc. ("Smiths"), Quality Food Centers, Inc. ("QFC"), Food 4
Less Holdings, Inc. ("FFL"), and their respective subsidiaries, as
described in the "1934 Act Documents" referenced in the Officer's
Certificate.
(2) Borrower is duly qualified as a foreign corporation to do business and
is of current status in the state of Oregon.
(3) Each Guarantor is a corporation (or, in the case of Treasure Valley
Land Company, L.C., a limited liability company) validly existing and
in good standing or of current status, as the case may be, under the
laws of its respective state of incorporation and has all requisite
corporate power and authority (a) to execute, deliver, and perform its
obligations under the Loan Documents to which it is a party, and (b)
to own and operate its properties and to carry on its business as
described in the "1934 Act Documents" referenced in the Officer's
Certificate.
(4) The Loan Documents to which Borrower or any Guarantor, as the case may
be, is a party have been duly authorized by all necessary corporate
action on the part of Borrower or such Guarantor, as the case may be,
and the Loan Documents to which Borrower or such Guarantor, as the
case may be, is a party have been duly executed and delivered by
Borrower or such Guarantor, as the case may be, and constitute legal,
valid, and binding
To Each of the Parties Set
Forth in Schedule I Attached Hereto
Page 4
March 11, 1998
obligations of Borrower or such Guarantor, as the case may be,
enforceable against Borrower or such Guarantor, as the case may be, in
accordance with their respective terms.
(5) Neither the execution and delivery by Borrower or any Guarantor, as
the case may be, of the Loan Documents to which it is a party, the
consummation by Borrower or any Guarantor of the transactions
contemplated by the Loan Documents, nor the compliance by Borrower or
any Guarantor with the terms and conditions of the Loan Documents
conflicts with, results in a breach of, or constitutes a default under
any of the terms, conditions, or provisions of (a) the Restated
Certificate of Incorporation or the Amended and Restated Bylaws of
Borrower, or (b) the Articles or Certificate of Incorporation or other
charter document, as the case may be, or Bylaws of any Guarantor, or
(c) any "material agreement" set forth in the Officer's Certificate
or, to our actual knowledge, any judicial order by which Borrower or
any Guarantor is bound, or, (d) except as specifically contemplated
under the Loan Documents, results in the creation of any Lien on any
of the properties or assets of Borrower or any Guarantor under any
such agreement or, to our actual knowledge, any such order.
(6) Neither the execution and delivery by Borrower or any Guarantor, as
the case may be, of the Loan Documents to which it is a party, the
consummation by Borrower and any Guarantor of the transactions
contemplated by the Loan Documents, nor the compliance by Borrower or
any Guarantor with the terms and conditions of the Loan Documents
conflicts with (a) any present federal or Oregon statute, rule or
regulation binding on Borrower or any Guarantor (including, without
limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System), or (b) any Delaware statute, rule, or
regulation contained in or promulgated under the General Corporation
Law of the state of Delaware binding on Borrower or any Guarantor.
(7) 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 to be obtained by Borrower or
any Guarantor in connection with, (i) the execution, delivery and
performance by Borrower or any Guarantor of any Credit Document to
which it is a party or (ii) the legality, validity,
To Each of the Parties Set
Forth in Schedule I Attached Hereto
Page 5
March 11, 1998
binding effect or enforceability of any such Credit Document against
Borrower or any Guarantor.
(8) To our actual knowledge after due inquiry, except as set forth under
"Legal Proceedings" in the "1934 Act Documents" referenced in the
Officer's Certificate, there are no actions, suits, or proceedings
pending or threatened against Borrower or any Guarantor in any court
or before any Governmental Authority that could reasonably be expected
to result in a Material Adverse Effect.
(9) The provisions in the Loan Documents concerning interest, fees,
prepayment premiums and other similar charges do not violate the usury
laws or other similar laws regulating the use or forbearance of money
of the State of Oregon.
(10) The Lenders are not required under the laws of the State of Oregon to
qualify as a foreign corporation solely as a result of the execution,
delivery and performance of the Loan Documents to which they are a
party.
(11) None of Borrower, Guarantors, or their respective Subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(12) None of Borrower, Guarantors, or their respective Subsidiaries 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.
The opinions set forth in paragraph (4) above are subject to (a) the
effect of bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and other similar laws affecting creditors' rights generally
(including, without limitation, the effectiveness of waivers of defenses and
legal rights), and (b) the application of general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or
equity), including, without limitation, the right to specific performance. A
court might not enforce certain covenants or allow acceleration of the amounts
due from Borrower or any Guarantor under the Loan Documents to which Borrower or
any Guarantor is a party if it concludes that such enforcement or acceleration
would be unreasonable or not undertaken
To Each of the Parties Set
Forth in Schedule I Attached Hereto
Page 6
March 11, 1998
in good faith under the then existing circumstances, but the inclusion of such
remedies does not, in our opinion, affect the validity of the Loan Documents to
which Borrower or any Guarantor is a party. In addition, no opinion is expressed
herein as to Section 9.3 of the Loan Agreement (to the extent indemnification
provided for therein is for the negligence of any Person, any violation of law
or might otherwise be determined as violative of public policy).
The opinion set forth in paragraph (4) above is subject to the further
qualification that the enforceability of any Guarantor's obligations under the
Subsidiary Guaranty may be limited by certain rights and defenses at law and in
equity which are available to a guarantor. In certain circumstances, a guarantor
may be exonerated if the creditor materially alters the original obligation of
the principal without the consent of the guarantor, elects remedies for default
which impair the subrogation rights of the guarantor against the principal, or
otherwise takes any action without notifying the guarantor which materially
prejudices the guarantor. However, there is also authority to the effect that a
guarantor may validly waive such rights if such waivers are expressly set forth
in the guaranty. While we believe that a court should enforce language contained
in the Subsidiary Guaranty waiving notice, limiting subrogation rights of each
Guarantor, and making the obligations of each Guarantor unconditional,
irrespective of any amendment to the obligations guaranteed by such Subsidiary
Guaranty, the issue is not free from doubt and a court might conclude otherwise.
The opinions expressed herein are limited to matters governed by the
laws of the United States of America and the state of Oregon, and, as to the
opinions expressed in paragraphs (1) and (3) through (6) above, the General
Corporation Law of the state of Delaware, in each case as it exists at the date
of this opinion, and we express no opinion as to the law of any other
jurisdiction. The opinion expressed in paragraph (4), above, is given as if the
Loan Documents were governed by the laws of the State of Oregon. Our opinion is
limited to the matters expressly stated herein, and no other opinions may be
implied or inferred. We are not undertaking any duty to advise you of changes
which hereafter may be brought to our attention with respect to the laws covered
by this opinion. In giving the opinions set forth in paragraphs (3), (4) (as to
authorization), (5) and (8), in each case as they pertain to the FFL Companies
listed on attached Schedule II, with your consent we have relied upon the
opinion of Xxxxxx & Xxxxxxx, special counsel to FFL, and the opinion of Clutter,
Xxxxxx & Aadalen, LLP, special Kansas counsel to Xxxxxx'x, Inc., attached hereto
as Exhibits B and C.
To Each of the Parties Set
Forth in Schedule I Attached Hereto
Page 7
March 11, 1998
We express no opinion as to (a) the enforceability under certain
circumstances of any provision imposing penalties, late payment charges or
increases in interest rate upon delinquency in payment or the occurrence of
Events of Default, (b) the enforceability of any choice-of-law provision, (c)
the compliance with certain financial covenants under the "material agreements"
set forth in the Officer's Certificate or (d) the compliance with applicable
federal or state securities laws.
This opinion is rendered only to Administrative Agent, Syndication
Agent and Lenders (and their respective permitted successors and assigns) and is
solely for their benefit in connection with the above transactions. This opinion
may not be relied upon by Administrative Agent, Syndication Agent and Lenders
for any other purpose or quoted to, copies given to or relied upon by any other
person, firm, or corporation for any purpose without our prior written consent,
except that copies may be given or made available to governmental bodies or
regulators in accordance with the ordinary course of business and may be
provided to prospective permitted assigns.
Very truly yours,
STOEL RIVES, LLP
By:------------------------
Xxxx X. Xxxxxx
SCHEDULE I
Addressees
Bankers Trust Company, as Administrative Agent
The Chase Manhattan Bank, as Syndication Agent
The Lenders, party to the Loan Agreement
SCHEDULE II
Guarantors
Percent
Subsidiary Ownership Direct Owner
[Xxxx Xxxxx/Xxxxx'x Companies]
Xxxx Xxxxx Stores, Inc. 100% (indirect) Xxxx Xxxxx, Inc.
Roundup Co. 100% (indirect) Xxxx Xxxxx Stores, Inc.
JH Properties, Inc. 100% (indirect) Roundup Co.
Xxxx Xxxxx of Alaska, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Xxxx Xxxxx of California, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Distribution Trucking Company 100% (indirect) Xxxx Xxxxx Stores, Inc.
B&B Stores, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
B&B Pharmacy, Inc. 100% (indirect) B&B Stores, Inc.
CB&S Advertising Agency, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
FM Holding Corporation 100% (indirect) Xxxx Xxxxx Stores, Inc.
Grand Central, Inc. 100% (indirect) FM Holding Corporation
FM Retail Services, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Xxxx Xxxxx Jewelers, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Merksamer Jewelers, Inc. 100% (indirect) Xxxx Xxxxx Jewelers, Inc.
FM, Inc. 100% (indirect) Xxxx Xxxxx Stores, Inc.
Xxxxx'x Food & Drug Centers, Inc. 100% (direct) Xxxx Xxxxx, Inc.
Xxxxx'x Beverage of Wyoming, Inc. 100% (indirect) Xxxxx'x Food & Drug
Centers, Inc.
Western Property Investment 100% (indirect) Xxxxx'x Food & Drug
Group, Inc.
Centers, Inc.
Smitty's Supermarkets, Inc. 100% (indirect) Xxxxx'x Food & Drug
Centers, Inc.
Smitty's Super Valu, Inc. 100% (indirect) Smitty's Supermarkets, Inc.
Saint Xxxxxxxx Holding Company 100% (indirect) Smitty's Super Valu, Inc.
Smitty's Equipment Leasing, Inc. 100% (indirect) Smitty's Super Valu, Inc.
Compare, Inc. 100% (indirect) Xxxxx'x Food & Drug
Centers, Inc
Richie's, Inc. 100% (indirect) Xxxxx'x Food & Drug
Centers, Inc
Treasure Valley Land 100% (indirect) Xxxxx'x Food & Drug
Company, L.C. Centers, Inc
[QFC Companies]
Quality Food Centers, Inc. 100% (direct) Xxxx Xxxxx, Inc.
Xxxxxx Markets, Inc. 100% (indirect) Quality Food Centers, Inc.
Xxxxxx Realty, Inc. 100% (indirect) Xxxxxx Markets, Inc.
KU Acquisition Corporation 100% (indirect) Quality Food Centers, Inc.
Second Story, Inc. 100% (indirect) Quality Food Centers, Inc.
Quality Food, Inc. 100% (indirect) Quality Food Centers, Inc.
Quality Food Holdings, Inc. 100% (indirect) Quality Food, Inc.
QFC Sub, Inc. 100% (indirect) Quality Food Holdings, Inc.
[FFL Companies]
Food 4 Less Holdings, Inc. 100% (direct) Xxxx Xxxxx, Inc.
Xxxxxx Grocery Company 100% (indirect) Food 4 Less Holdings, Inc.
Xxxxxx'x, Inc. 100% (indirect) Ralphs Grocery Company
Cala Co. 100% (indirect) Ralphs Grocery Company
Bay Area Warehouse Stores, Inc. 100% (indirect) Cala Co.
Cala Foods, Inc. 100% (indirect) Cala Co.
Xxxx Markets, Inc. 100% (indirect) Cala Co.
Food 4 Less of Southern 100% (indirect) Ralphs Grocery Company
California, Inc.
Alpha Beta Company 100% (indirect) Food 4 Less of S. California,
Inc.
Food 4 Less GM, Inc 100% (indirect) Alpha Beta Company
Food 4 Less Merchandising, Inc. 100% (indirect) Alpha Beta Company
Food 4 Less of California, Inc. 100% (indirect) Alpha Beta Company
Xxxxxxxx Stores, Inc. 100% (indirect) Ralphs Grocery Company
EXHIBIT A
OFFICER'S CERTIFICATE
EXHIBIT B
OPINION OF XXXXXX & XXXXXXX
EXHIBIT C
OPINION OF CLUTTER, XXXXXX & AADALEN, LLP
EXHIBIT D TO
LOAN AGREEMENT
--------------
SUBSIDIARY GUARANTEE
See Tab 2.
EXHIBIT E TO
LOAN AGREEMENT
--------------
Guarantee Language
The guarantee language described in that certain Prospectus Supple
ment, dated March 4, 1998, to the Prospectus, dated February 4, 1998
(collectively, the "Prospectus"), for (i) the offering of senior unsecured notes
of the Borrower in the aggregate principal amount of $1,750,000,000 and (ii) any
subsequent offering of such notes under the Indenture described in such
Prospectus.
As to any other Debt, guarantee language in substantially the follow-
ing form:
This Guarantee shall be automatically and unconditionally released and
discharged, without any further action required on the part of the beneficiary
hereof or any other party hereto, upon: (i) the release of the Guarantor from
its Bank Credit Facility Guarantee and its Bank Lease Facility Guarantee (as
defined below); or (ii) any sale or other disposition (by merger or otherwise)
to any Person which is not a subsidiary of Xxxx Xxxxx, Inc. of all of the
Capital Stock in, or all or substan tially all of the assets of, the Guarantor,
provided that such sale or disposition of such Capital Stock or assets is
otherwise in compliance with the terms of the Bank Credit Facility or Bank Lease
Facility, as the case may be. The parties hereto agree that the foregoing is for
the benefit of the lenders party to the Bank Credit Facility and may not be
amended, modified or waived (and no provision inconsistent therewith adopted)
without the consent of such lenders.
Certain Definitions
"Bank Credit Facility" means the transactions contemplated by the
$3,500,000,000 Loan Agreement, dated as of March 11, 1998, among Xxxx Xxxxx
Inc., as borrower, the lenders identified therein, Bankers Trust Company, as
administrative agent, and The Chase Manhattan Bank, as syndication agent, as
such agreement and related agreements may by amended (including any amendment
and restatement), supplemented or modified from time to time, including any
replacement or refinancing thereof in the commercial bank market (including any
such replacement or refinancing that increases the amount thereof).
"Bank Credit Facility Guarantee" means the guarantee of the guarantor,
dated March 11, 1998, in respect of the Bank Credit Facility, as such guarantee
may by amended (including any amendment and restatement), supplemented or
modified from time to time, including any replacement guarantee issued in
connection with the replacement or refinancing of the Bank Credit Facility in
the commercial bank market (including any such replacement or refinancing that
increases the amount thereof).
"Bank Lease Facility" means the transactions contemplated by the
Participation Agreement, dated as of March 11, 1998, among Xxxx Xxxxx, Inc.,
Wilmington Trust Company, FMS Trust 1997-1, the investors named therein, the
lenders identified therein, Bankers Trust Company, as administrative agent, The
Chase Manhattan Bank, as syndication agent, as such agreement and related
agreements may by amended (including any amendment and restatement),
supplemented or modified from time to time, including any replacement or
refinancing thereof in the commercial bank market (including any such
replacement or refinancing that increases the amount thereof).
"Bank Lease Facility Guarantee" means the guarantee of the guarantor,
dated March 11, 1998, in respect of the Bank Lease Facility, as such guarantee
may by amended (including any amendment and restatement), supplemented or
modified from time to time, including any replacement guarantee issued in
connection with the replacement or refinancing of the Bank Lease Facility in the
commercial bank market (including any such replacement or refinancing that
increases the amount thereof).
2
