Tender-Offer Statement — Issuer Tender Offer — Schedule 13E-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13E4 Tender-Offer Statement -- Issuer Tender Offer 4± 14K
2: EX-12 Statement re: Computation of Ratios 1 6K
3: EX-13 Annual or Quarterly Report to Security Holders 70± 194K
4: EX-14 Material Foreign Patent 60± 174K
CONFORMED COPY
$250,000,000
CREDIT AGREEMENT
dated as of
February 7, 1994
among
Rite Aid Corporation,
The Banks from time to time
parties hereto
and
Morgan Guaranty Trust Company of New York,
as Agent
TABLE OF CONTENTS
1
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations 14
1.03 Basis for Ratings . . . . . . . . . 14
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend . . . . . . . . 15
2.02 Method of Borrowing . . . . . . . . 15
2.03 Notes . . . . . . . . . . . . . . . 16
2.04 Maturity of Loans . . . . . . . . . 17
2.05 Interest Rates . . . . . . . . . . . 17
2.06 Fees . . . . . . . . . . . . . . . . 21
2.07 Termination or Reduction
of Commitments . . . . . . . . . . 22
2.08 Optional Prepayments . . . . . . . . 23
2.09 General Provisions as to Payments . 23
2.10 Funding Losses . . . . . . . . . . . 24
2.11 Computation of Interest and Fees . . 24
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness . . . . . . . . . . . 25
3.02 Borrowings . . . . . . . . . . . . . 26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power . . . 26
4.02 Corporate and Governmental
Authorization; No Contravention . 27
4.03 Binding Effect . . . . . . . . . . . 27
4.04 Financial Information . . . . . . . 27
4.05 Full Disclosure . . . . . . . . . . 28
4.06 Litigation . . . . . . . . . . . . . 28
4.07 Compliance with ERISA . . . . . . . 28
4.08 Taxes . . . . . . . . . . . . . . . 29
4.09 Subsidiaries . . . . . . . . . . . . 29
4.10 Environmental Matters . . . . . . . 29
ARTICLE V
COVENANTS
SECTION 5.01 Information . . . . . . . . . . . . 30
5.02 Payment of Obligations . . . . . . . 32
5.03 Maintenance of Property; Insurance . 33
1 The Table of Contents is not a part of this
Agreement.
5.04 Conduct of Business and
Maintenance of Existence . . . . . 33
5.05 Compliance with Laws . . . . . . . . 33
5.06 Inspection of Property,
Books and Records . . . . . . . . 34
5.07 Restriction on Debt of
Subsidiaries . . . . . . . . . . . 34
5.08 Restriction on Sales with Leases
Back . . . . . . . . . . . . . . . 34
5.09 Restriction on Liens . . . . . . . . 35
5.10 Leverage Ratio . . . . . . . . . . . 36
5.11 Interest Coverage . . . . . . . . . 37
5.12 Limitation on Minority Investments . 37
5.13 Consolidations, Mergers and
Sales of Assets . . . . . . . . . 37
5.14 Use of Proceeds . . . . . . . . . . 37
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default . . . . . . . . . 38
6.02 Notice of Default . . . . . . . . . 40
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization . . . 41
7.02 Agent and Affiliates . . . . . . . . 41
7.03 Action by Agent . . . . . . . . . . 41
7.04 Consultation with Experts . . . . . 41
7.05 Liability of Agent . . . . . . . . . 41
7.06 Indemnification . . . . . . . . . . 42
7.07 Credit Decision . . . . . . . . . . 42
7.08 Successor Agent . . . . . . . . . . 42
7.09 Agent's Fee . . . . . . . . . . . . 43
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair . . . . 43
8.02 Illegality . . . . . . . . . . . . . 43
8.03 Increased Cost and Reduced Return . 44
8.04 Taxes . . . . . . . . . . . . . . . 46
8.05 Base Rate Loans Substituted for
Affected Fixed Rate Loans . . . . 48
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices . . . . . . . . . . . . . . 48
9.02 No Waivers . . . . . . . . . . . . . 49
9.03 Expenses; Indemnification . . . . . 49
9.04 Sharing of Set-Offs . . . . . . . . 49
9.05 Amendments and Waivers . . . . . . . 50
9.06 Successors and Assigns . . . . . . . 50
9.07 Collateral . . . . . . . . . . . . . 52
9.08 Governing Law; Submission to Juris-
diction . . . . . . . . . . . . . 52
9.09 Counterparts; Integration . . . . . 52
9.10 WAIVER OF JURY TRIAL . . . . . . . . 53
Exhibit A - Note
Exhibit B - Opinion of Counsel for the Borrower
Exhibit C - Opinion of Davis Polk & Wardwell, Special
Counsel for the Agent
Exhibit D - Assignment and Assumption Agreement
CREDIT AGREEMENT
AGREEMENT dated as of February 7, 1994 among RITE
AID CORPORATION, the BANKS from time to time parties hereto
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms,
as used herein, have the following meanings:
"Adjusted CD Rate" has the meaning set forth in
Section 2.05(b).
"Adjusted London Interbank Offered Rate" has the
meaning set forth in Section 2.05(c).
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a
copy to the Borrower) duly completed by such Bank.
"Agent" means Morgan Guaranty Trust Company of New
York in its capacity as agent for the Banks hereunder, and
its successors in such capacity.
"Applicable Lending Office" means, with respect to
any Bank, (i) in the case of its Domestic Loans, its
Domestic Lending Office, (ii) in the case of its Euro-Dollar
Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" has the meaning set forth in
Section 2.05(g).
"Assessment Rate" has the meaning set forth in
Section 2.05(b).
"Assignee" has the meaning set forth in Section
9.06(c).
"Attributable Debt" means, as to any particular
Sale and Leaseback Transaction under which the Borrower or
any Subsidiary is at the time liable, at any date as of
which the amount thereof is to be determined (i) in the case
of any such transaction involving a Capital Lease, the
amount on such date of the Capital Lease Obligation
thereunder, or (ii) in the case of any other Sale and
Leaseback Transaction, the then present value of the
minimum rental obligations under such Sale and Leaseback
Transaction during the remaining term thereof (after giving
effect to any extensions at the option of the lessor)
computed by discounting the respective rental payments at
the actual interest factor included in such payments or, if
such interest factor cannot be readily determined, at the
rate of 14% per annum. The amount of any rental payment
required to be made under any such Sale and Leaseback
Transaction not involving a Capital Lease may exclude
amounts required to be paid by the lessee on account of
maintenance and repairs, insurance, taxes, assessments,
utilities, operating and labor costs and similar charges.
"Bank" means each bank listed on the signature
pages hereof, each Assignee which becomes a Bank pursuant
to Section 9.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for
such day.
"Base Rate Loan" means a Loan to be made by a
Bank as a Base Rate Loan in accordance with the applicable
Notice of Borrowing or pursuant to Article VIII.
"Benefit Arrangement" means at any time an
employee benefit plan within the meaning of Section 3(3) of
ERISA which is not a Plan or a Multiemployer Plan and which
is maintained or otherwise contributed to by any member of
the ERISA Group.
"Borrower" means Rite Aid Corporation, a Delaware
corporation, and its successors.
"Borrower's 1993 Form 10-K" means the Borrower's
annual report on Form 10-K for 1993, as filed with the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.
"Borrowing" means a borrowing hereunder consisting
of Loans made to the Borrower at the same time by the Banks
pursuant to Article II. A Borrowing is a "Domestic
Borrowing" if such Loans are Domestic Loans or a "Euro-
Dollar Borrowing" if such Loans are Euro-Dollar Loans. A
Domestic Borrowing is a "CD Borrowing" if such Domestic
Loans are CD Loans or a "Base Rate Borrowing" if such
Domestic Loans are Base Rate Loans.
"Capital Lease" means any lease of property which,
in accordance with generally accepted accounting principles,
should be capitalized on the lessee's balance sheet; and
"Capital Lease Obligation" means the amount of the liability
so capitalized in respect of a Capital Lease.
"CD Base Rate" has the meaning set forth in
Section 2.05(b).
"CD Loan" means a Loan to be made by a Bank as a
CD Loan in accordance with the applicable Notice of
Borrowing.
"CD Reference Banks" means Morgan Guaranty Trust
Company of New York and such other Banks, if any, as the
Agent and the Borrower shall mutually agree.
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the
signature pages hereof, as such amount may be reduced from
time to time pursuant to Section 2.07.
"Consolidated Debt" means at any date the Debt of
the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis as of such date.
"Consolidated EBIT" means, for any period,
Consolidated Net Income for such period plus, to the extent
deducted in determining Consolidated Net Income for such
period, the aggregate amount of (i) Consolidated Interest
Charges and (ii) provision for income taxes.
"Consolidated Interest Charges" means, for any
period, the aggregate amount of interest charges, whether
expensed or capitalized, incurred or accrued by the Borrower
and its Consolidated Subsidiaries during such period.
"Consolidated Net Income" means, for any period,
the net income (or loss) of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated
basis for such period.
"Consolidated Net Tangible Assets" means the total
amount of assets (less applicable reserves and other
properly deductible items) which under generally accepted
accounting principles would be included on a consolidated
balance sheet of the Borrower and its Consolidated
Subsidiaries after deducting therefrom (i) all liabilities
and liability items, including amounts in respect of
obligations or guarantees of obligations under leases, which
under generally accepted accounting principles would be
included on such balance sheet, except Funded Debt, capital
stock and surplus, surplus reserves and provisions for
deferred income taxes, and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense
and other like intangibles, which in each case under
generally accepted accounting principles would be included
on such consolidated balance sheet.
"Consolidated Net Worth" means at any date the
consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries determined as of such date.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Borrower in its consolidated
financial statements if such statements were prepared as of
such date.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized
in accordance with generally accepted accounting principles,
(v) all Debt secured by a Lien on any asset of such Person,
whether or not such Debt is otherwise an obligation of such
Person, and (vi) all Debt of others Guaranteed by such
Person.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank,
its office located at its address set forth in its
Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Bank may hereafter
designate as its Domestic Lending Office by notice to the
Borrower and the Agent; provided that any Bank may so
designate separate Domestic Lending Offices for its Base
Rate Loans, on the one hand, and its CD Loans, on the other
hand, in which case all references herein to the Domestic
Lending Office of such Bank shall be deemed to refer to
either or both of such offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans
or both.
"Domestic Reserve Percentage" has the meaning set
forth in Section 2.05(b).
"Effective Date" means the date this Agreement
becomes effective in accordance with Section 3.01.
"Environmental Laws" means any and all federal,
state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment
or to emissions, discharges or releases of pollutants,
contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating
to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products,
chemicals or industrial, toxic or hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary
and all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section
414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic
Business Day on which commercial banks are open for
international business (including dealings in dollar
deposits) in London.
"Euro-Dollar Lending Office" means, as to each
Bank, its office, branch or affiliate located at its address
set forth in its Administrative Questionnaire (or identified
in its Administrative Questionnaire as its Euro-Dollar
Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar
Lending Office by notice to the Borrower and the Agent.
"Euro-Dollar Loan" means a Loan to be made by a
Bank as a Euro-Dollar Loan in accordance with the applicable
Notice of Borrowing.
"Euro-Dollar Reference Banks" means the principal
London offices of Morgan Guaranty Trust Company of New York
and of such other Banks, if any, as the Agent and the
Borrower shall mutually agree.
"Euro-Dollar Reserve Percentage" has the meaning
set forth in Section 2.05(c).
"Event of Default" has the meaning set forth in
Section 6.01.
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New
York on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions
as determined by the Agent.
"Fixed Rate Borrowing" means a Borrowing comprised
of Fixed Rate Loans.
"Fixed Rate Loans" means CD Loans or Euro-Dollar
Loans or both.
"Funded Debt" means any Debt maturing more than
one year after the date of determination thereof and any
Debt, regardless of its term, renewable pursuant to the
terms thereof or of a revolving credit or similar agreement
effective for more than one year after the date of the
creation of such Debt, which would, in accordance with
generally accepted accounting practice, be classified as
funded debt but shall not include:
(a) any Debt for the payment, redemption or
satisfaction of which money (or evidences of
indebtedness, if permitted under the instrument
creating such indebtedness) in the necessary
amount shall have been deposited in trust with a
trustee or proper depository either at or before
maturity or redemption date thereof; or
(b) guarantees arising in connection with
the sale, discount, guarantee or pledge of notes,
chattel mortgages, leases, accounts receivable,
trade acceptances and other paper arising, in the
ordinary course of business, out of instalment or
conditional sales to or by, or transactions
involving title retention with, distributors,
dealers or other customers of merchandise,
equipment or services or guarantees other than
guarantees of indebtedness for borrowed money.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or
indirectly guaranteeing any Debt of any other Person;
provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has
a corresponding meaning.
"Indemnitee" has the meaning set forth in Section
9.03(b).
"Interest Coverage Ratio" means, at any date, the
ratio of Consolidated EBIT to Consolidated Interest Charges,
in each case for the period of four consecutive fiscal
quarters most recently ended on or prior to such date.
"Interest Period" means: (1) with respect to each
Euro-Dollar Borrowing, the period commencing on the date of
such Borrowing and ending one, two, three or six months
thereafter, as the Borrower may elect in the applicable
Notice of Borrowing; provided that:
(a) any Interest Period which would
otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall
end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the
last Euro-Dollar Business Day of a calendar month
(or on a day for which there is no numerically
corresponding day in the calendar month at the
end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Dollar
Business Day of a calendar month; and
(c) any Interest Period which would
otherwise end after the Termination Date shall end
on the Termination Date.
(2) with respect to each CD Borrowing, the period
commencing on the date of such Borrowing and ending (subject
to Section 2.05 (b)) 30, 60, 90 or 180 days thereafter, as
the Borrower may elect in the applicable Notice of
Borrowing; provided that:
(a) any Interest Period which would
otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would
otherwise end after the Termination Date shall end
on the Termination Date.
(3) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending 30 days
thereafter; provided that:
(a) any Interest Period which would
otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would
otherwise end after the Termination Date shall end
on the Termination Date.
"Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended, or any successor statute.
"Investment" means any investment in any Person,
whether by means of share purchase, capital contribution,
loan, time deposit or otherwise. Any repurchase by the
Borrower of its own capital stock shall not constitute an
Investment for purposes of this Agreement.
"Level I Status" exists at any date if, at such
date, the Borrower's long-term debt is rated A+ or higher by
S&P and A1 or higher by Moody's.
"Level II Status" exists at any date if, at such
date, (i) the Borrower's long-term debt is rated A or higher
by S&P and A2 or higher by Moody's and (ii) Level I Status
does not exist.
"Level III Status" exists at any date if, at such
date, (i) the Borrower's long-term debt is rated A- or
higher by S&P and A3 or higher by Moody's and (ii) neither
Level I Status nor Level II Status exists.
"Level IV Status" exists at any date if, at such
date, (i) the Borrower's long-term debt is rated BBB+ or
higher by S&P and Baa1 or higher by Moody's and (ii) none of
Level I Status, Level II Status or Level III Status exists.
"Level V Status" exists at any date if, at such
date, (i) the Borrower's long-term debt is rated BBB or
higher by S&P and Baa2 or higher by Moody's and (ii) none of
Level I Status, Level II Status, Level III Status or Level
IV Status exists. Level V Status also exists at any date
if, at such date, the rating of the Borrower's long-term
debt by either S&P or Moody's in effect as of December 31,
1993 has been neither changed nor confirmed by S&P or
Moody's, as the case may be, subsequent to such date.
"Level VI Status" exists at any date if, at such
date, no other Status Level exists. Level VI Status also
exists at any date if, at such date, either S&P or Moody's
does not rate the Borrower's long-term debt.
"Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease
or other title retention agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-Dollar
Loan and "Loans" means Domestic Loans or Euro-Dollar Loans
or both.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.05(c).
"Material Debt" means Debt (other than the Notes)
of the Borrower and/or one or more of its Subsidiaries,
arising in one or more related or unrelated transactions, in
an aggregate principal amount exceeding $25,000,000.
"Material Plan" means at any time a Plan or Plans
having aggregate Unfunded Liabilities in excess of
$25,000,000.
"Moody's" means Moody's Investor Service, Inc.
"Multiemployer Plan" means at any time an
employee pension benefit plan within the meaning of Section
4001(a)(3) of ERISA to which any member of the ERISA Group
is then making or accruing an obligation to make
contributions or has within the preceding five plan years
made contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during such
five year period.
"Net Cash Proceeds" means, with respect to any
Reduction Transaction, an amount equal to the cash proceeds
received by the Borrower or any of its Subsidiaries from or
in respect of such Reduction Transaction (including any cash
proceeds received as income or other proceeds of any noncash
proceeds of any sale of Specialty Retailing Assets), less
(x) any expenses reasonably incurred by such Person in
respect of such Reduction Transaction, (y) the amount of any
Debt secured by a Lien on, and discharged from the proceeds
of any sale of, Specialty Retailing Assets and (z) any taxes
paid or payable by such Person (as estimated by a senior
financial officer) in respect of any sale of Specialty
Retailing Assets.
"1993 Credit Agreements" means the $300,000,000
Credit Agreement and the $100,000,000 Credit Agreement, each
dated as of November 19, 1993 among Rite Aid Corporation,
the banks listed therein and Morgan Guaranty Trust Company
of New York, as agent thereunder.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing
the obligation of the Borrower to repay the Loans, and
"Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" has the meaning set forth in
Section 2.02.
"Parent" means, with respect to any Bank, any
Person controlling such Bank.
"Participant" has the meaning set forth in
Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension
benefit plan (other than a Multiemployer Plan) which is
covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by
any member of the ERISA Group for employees of any member
of the ERISA Group or (ii) has at any time within the
preceding five years been maintained, or contributed to, by
any Person which was at such time a member of the ERISA
Group for employees of any Person which was at such time a
member of the ERISA Group.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in
New York City from time to time as its Prime Rate.
"Quarterly Date" means the last day of each
Quarterly Period.
"Quarterly Period" means a three-month period
consisting of (i) February, March and April, (ii) May, June
and July, (iii) August, September and October or (iv)
November, December and January.
"Reduction Transaction" means (i) any sale
(outside the ordinary course of business) of Specialty
Retailing Assets or (ii) the issuance of any Securities by
the Borrower or any of its Subsidiaries (other than (A)
Securities issued to the Borrower or any of its
Subsidiaries, (B) Securities issued to employees of the
Borrower or any of its Subsidiaries in the ordinary course
of business pursuant to employee compensation or benefit
arrangements and (C) Funded Debt secured by Liens permitted
by Section 5.09(a)). The description of any transaction as
falling within the above definition does not affect any
limitation on such transaction imposed by Article V of this
Agreement.
"Reference Banks" means the CD Reference Banks or
the Euro-Dollar Reference Banks, as the context may require,
and "Reference Bank" means any one of such Reference Banks.
"Refunding Borrowing" means a Borrowing which,
after application of the proceeds thereof, results in no net
increase in the outstanding principal amount of Loans made
by any Bank.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Required Banks" means at any time Banks having at
least 66 2/3% of the aggregate amount of the Commitments or,
if the Commitments shall have been terminated, holding Notes
evidencing at least 66 2/3% of the aggregate unpaid
principal amount of the Loans.
"Revolving Credit Period" means the period from
and including the Effective Date to and including the
Termination Date.
"Sale and Leaseback Transaction" has the meaning
set forth in Section 5.08.
"Secured Debt" means Debt which is secured by a
Lien on property of the Borrower or any Subsidiary, but
shall not include guarantees arising in connection with the
sale, discount, guarantee or pledge of notes, chattel
mortgages, leases, accounts receivable, trade acceptances
and other papers arising, in the ordinary course of
business, out of instalment or conditional sales to or by,
or transactions involving title retention with,
distributors, dealers or other customers, of merchandise,
equipment or services.
"Security" means (i) any capital stock or other
equity security, (ii) any Funded Debt or (iii) any warrant
or other right to purchase any of the foregoing.
"Significant Subsidiary" means at any time any
Subsidiary or any group of Subsidiaries having consolidated
assets, individually or in the aggregate, equal to or
greater than 8% of the consolidated assets of the Borrower
and its Consolidated Subsidiaries at such time.
"S&P" means Standard & Poor's Corporation.
"Specialty Retailing Assets" means the assets of
ADAP, Inc., Concord Custom Cleaners, Pen Encore Inc., and
Sera-Tec Biologicals, Inc.
"Status Level" means Level I Status, Level II
Status, Level III Status, Level IV Status, Level V Status or
Level VI Status, whichever is in effect at the end of the
applicable day (New York City time).
"Subsidiary" means any corporation or other entity
of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are
at the time directly or indirectly owned by the Borrower.
"Temporary Cash Investment" means any Investment
in (i) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or
any agency thereof, (ii) commercial paper rated at least A-1
by S&P and P-1 by Moody's, (iii) time deposits with,
including certificates of deposit issued by, any office
located in the United States of any bank or trust company
which is organized under the laws of the United States or
any state thereof and has capital, surplus and undivided
profits aggregating at least $500,000,000 or (iv) repurchase
agreements with respect to securities described in clause
(i) above entered into with an office of a bank or trust
company meeting the criteria specified in clause (iii)
above, provided in each case that such Investment matures
within one year from the date of acquisition thereof by the
Borrower or a Subsidiary.
"Termination Date" means February 6, 1995, or, if
such day is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day.
"Total Capital" means, at any date, the sum of
Consolidated Debt and Consolidated Net Worth, each
determined as of such date.
"Unfunded Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the value
of all benefit liabilities under such Plan, determined on a
plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii)
the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued
but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of
a member of the ERISA Group to the PBGC or any other Person
under Title IV of ERISA.
"United States" means the United States of
America, including the States and the District of Columbia,
but excluding its territories and possessions.
"Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock
or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly
owned by the Borrower.
SECTION 1.02. Accounting Terms and
Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time,
applied on a basis consistent (except for changes concurred
in by the Borrower's independent public accountants) with
the most recent audited consolidated financial statements of
the Borrower and its Consolidated Subsidiaries delivered to
the Banks; provided that, if the Borrower notifies the Agent
that the Borrower wishes to amend any covenant in Article V
to eliminate the effect of any change in generally accepted
accounting principles on the operation of such covenant (or
if the Agent notifies the Borrower that the Required Banks
wish to amend Article V for such purpose), then the
Borrower's compliance with such covenant shall be determined
on the basis of generally accepted accounting principles in
effect immediately before the relevant change in generally
accepted accounting principles became effective, until
either such notice is withdrawn or such covenant is amended
in a manner satisfactory to the Borrower and the Required
Banks.
SECTION 1.03. Basis for Ratings. The credit
ratings to be utilized for purposes of determining rates of
interest and fees hereunder are those assigned to the senior
unsecured long-term debt securities of the Borrower without
third-party credit enhancement, and any rating assigned to
any other debt security of the Borrower shall be
disregarded.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. During the
Revolving Credit Period each Bank severally agrees, on the
terms and conditions set forth in this Agreement, to make
loans to the Borrower pursuant to this Section from time to
time in amounts requested by the Borrower in accordance with
the terms of this Agreement, provided that the aggregate
principal amount of Loans by such Bank at any one time
outstanding shall not exceed the amount of its Commitment.
Each Borrowing under this Section shall be in an aggregate
principal amount of $10,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the
aggregate amount available in accordance with Section
3.02(b)) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this
Section, repay, or to the extent permitted by Section 2.08,
prepay Loans and reborrow at any time during the Revolving
Credit Period under this Section.
SECTION 2.02. Method of Borrowing. (a) The
Borrower shall give the Agent notice (a "Notice of
Borrowing") not later than 10:00 A.M. (New York City time)
on (x) the date of each Base Rate Borrowing, (y) the
Domestic Business Day next preceding each CD Borrowing and
(z) the third Euro-Dollar Business Day before each
Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall
be a Domestic Business Day in the case of a
Domestic Borrowing or a Euro-Dollar Business Day
in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such
Borrowing are to be CD Loans, Base Rate Loans or
Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing,
the duration of the Interest Period applicable
thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the
Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such Borrowing
and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(c) Not later than 12:00 Noon (New York City
time) on the date of each Borrowing, each Bank shall (except
as provided in subsection (d) of this Section) make
available its ratable share of such Borrowing, in Federal or
other funds immediately available in New York City, to the
Agent at its address referred to in Section 9.01. Unless
the Agent determines that any applicable condition specified
in Article III has not been satisfied, the Agent will make
the funds so received from the Banks available to the
Borrower at the Agent's aforesaid address.
(d) If any Bank makes a new Loan hereunder on a
day on which the Borrower is to repay all or any part of an
outstanding Loan from such Bank, such Bank shall apply the
proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be made
available by such Bank to the Agent as provided in
subsection (c), or remitted by the Borrower to the Agent as
provided in Section 2.09, as the case may be.
(e) Unless the Agent shall have received notice
from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Agent such Bank's share
of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such
Borrowing in accordance with subsections (c) and (d) of this
Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank
shall not have so made such share available to the Agent,
such Bank and the Borrower severally agree to repay to the
Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such
amount is repaid to the Agent, at (i) in the case of the
Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.05 and (ii) in the case of such Bank,
the Federal Funds Rate. If such Bank shall repay to the
Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan included in such Borrowing for
purposes of this Agreement.
SECTION 2.03. Notes. (a) The Loans of each
Bank shall be evidenced by a single Note payable to the
order of such Bank for the account of its Applicable Lending
Office in an amount equal to the aggregate unpaid principal
amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and
the Agent, request that its Loans of a particular type be
evidenced by a separate Note in an amount equal to the
aggregate unpaid principal amount of such Loans. Each such
Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant type. Each
reference in this Agreement to the "Note" of such Bank shall
be deemed to refer to and include any or all of such Notes,
as the context may require.
(c) Upon receipt of each Bank's Note pursuant to
Section 3.01(b), the Agent shall forward such Note to such
Bank. Each Bank shall record the date, amount, type and
maturity of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect
thereto, and may, if such Bank so elects in connection with
any transfer or enforcement of its Note, endorse on the
schedule forming a part thereof appropriate notations to
evidence the foregoing information with respect to each
such Loan then outstanding; provided that the failure of
any Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or
under the Notes. Each Bank is hereby irrevocably authorized
by the Borrower so to endorse its Note and to attach to and
make a part of its Note a continuation of any such schedule
as and when required.
SECTION 2.04. Maturity of Loans. Each Loan
included in any Borrowing shall mature, and the principal
amount thereof shall be due and payable, on the last day of
the Interest Period applicable to such Borrowing.
SECTION 2.05. Interest Rates. (a) Each Base
Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is
made until it becomes due, at a rate per annum equal to the
Base Rate for such day. Such interest shall be payable for
each Interest Period on the last day thereof. Any overdue
principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each day during
the Interest Period applicable thereto, at a rate per annum
equal to the sum of the Applicable Margin for such day plus
the applicable Adjusted CD Rate for such Interest Period;
provided that if any CD Loan or any portion thereof shall,
as a result of clause (2)(b) of the definition of Interest
Period, have an Interest Period of less than 30 days, such
portion shall bear interest during such Interest Period at
the rate applicable to Base Rate Loans during such period;
and provided further that so long as there is only one Bank
party to this Agreement, such Bank and the Borrower may
agree to fix the interest rate on CD Loans at such rates and
for such Interest Periods not to exceed 30 days as they may
mutually agree from time to time. Such interest shall be
payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than 90 days, at
intervals of 90 days after the first day thereof. Any
overdue principal of or interest on any CD Loan shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 2% plus the higher of (i)
the sum of the Applicable Margin for such day plus the
Adjusted CD Rate applicable to such Loan and (ii) the rate
applicable to Base Rate Loans for such day.
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
_____________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to
be the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing rates per annum bid
at 10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by
two or more New York certificate of deposit dealers of
recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an
amount comparable to the principal amount of the CD Loan of
such CD Reference Bank to which such Interest Period applies
and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System in New York
City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York
City having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more. The Adjusted
CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve
Percentage.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within
the meaning of 12 C.F.R. SECTION 327.3(d) (or any successor
provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change
in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each day
during the Interest Period applicable thereto, at a rate per
annum equal to the sum of the Applicable Margin for such day
plus the applicable Adjusted London Interbank Offered Rate
for such Interest Period. Such interest shall be payable
for each Interest Period on the last day thereof and, if
such Interest Period is longer than three months, at
intervals of three months after the first day thereof.
The "Adjusted London Interbank Offered Rate"
applicable to any Interest Period means a rate per annum
equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i)
the applicable London Interbank Offered Rate by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to
any Interest Period means the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which deposits in dollars are offered to
each of the Euro-Dollar Reference Banks in the London inter-
bank market at approximately 11:00 A.M. (London time) two
Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Euro-Dollar
Reference Bank to which such Interest Period is to apply and
for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which
the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to
United States residents). The Adjusted London Interbank
Offered Rate shall be adjusted automatically on and as of
the effective date of any change in the Euro-Dollar Reserve
Percentage.
(d) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for
each day from and including the date payment thereof was due
to but excluding the date of actual payment, at a rate per
annum equal to the sum of 2% plus the higher of (i) the sum
of the Applicable Margin for such day plus the Adjusted
London Interbank Offered Rate applicable to such Loan and
(ii) the Applicable Margin for such day plus the quotient
obtained (rounded upward, if necessary, to the next higher
1/100 of 1%) by dividing (x) the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective
rates per annum at which one day (or, if such amount due
remains unpaid more than three Euro-Dollar Business Days,
then for such other period of time not longer than six
months as the Agent may select) deposits in dollars in an
amount approximately equal to such overdue payment due to
each of the Euro-Dollar Reference Banks are offered to such
Euro-Dollar Reference Bank in the London interbank market
for the applicable period determined as provided above by
(y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if
the circumstances described in clause (a) or (b) of Section
8.01 shall exist, at a rate per annum equal to the sum of 2%
plus the rate applicable to Base Rate Loans for such day).
(e) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give
prompt notice to the Borrower and the Banks of each rate of
interest so determined, and its determination thereof shall
be conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent as contemplated
by this Section. If any Reference Bank does not furnish a
timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Banks or, if
none of such quotations is available on a timely basis, the
provisions of Section 8.01 shall apply.
(g) The "Applicable Margin" with respect to any
CD Loan or Euro-Dollar Loan at any date is the applicable
percentage amount set forth in the table below based on the
Status Level for such date:
Level I Level II Level III Level IV Level V Level VI
Status Status Status Status Status Status
Euro-Dollar .2700% .2850% .3250% .4000% .4500% .5500%
Loans
CD Loans .3950% .4100% .4500% .5250% .5750% .6750%
SECTION 2.06. Fees.
(a) Facility Fee. The Borrower shall pay to the
Agent for the account of the Banks ratably in proportion to
their respective Commitments a facility fee at the Facility
Fee Rate. Such facility fee shall accrue (i) from and
including the Effective Date to but excluding the
Termination Date, on the daily aggregate amount of the
Commitments (whether used or unused) and (ii) from and
including the Termination Date to but excluding the date the
Loans shall be repaid in their entirety, on the daily
average aggregate outstanding principal amount of the Loans.
For this purpose, the "Facility Fee Rate" is a
rate per annum equal to (i) 0.0800% for any day on which
Level I Status exists, (ii) 0.0900% for any day on which
Level II Status exists, (iii) 0.1000% for any day on which
Level III Status exists, (iv) 0.1250% for any day on which
Level IV Status exists, (v) 0.1500% for any day on which
Level V Status exists and (vi) 0.2000% for any other day.
(b) Excess Utilization Fee. The Borrower shall
pay to the Agent for the account of the Banks ratably in
proportion to their Commitments a fee at the rate of .0625%
per annum on the daily average amount by which the aggregate
outstanding principal amount of the Loans exceeds 50% of the
aggregate amount of the Commitments.
(c) Payments. Accrued fees under this Section
shall be payable quarterly on each Quarterly Date and upon
the date of termination of the Commitments in their entirety
(and, if later, the date the Loans shall be repaid in their
entirety).
SECTION 2.07. Termination or Reduction of
Commitments.
(a) Optional Termination or Reduction. The
Borrower may, upon at least three Domestic Business Days'
notice to the Agent, (i) terminate the Commitments at any
time, if no Loans are outstanding at such time or (ii)
ratably reduce from time to time by an aggregate amount of
$10,000,000 or any larger multiple thereof, the aggregate
amount of the Commitments in excess of the aggregate
outstanding principal amount of the Loans.
(b) Mandatory Termination of Commitments. The
Commitments shall terminate on the Termination Date, and any
Loans then outstanding (together with accrued interest
thereon) shall be due and payable on such date.
(c) Reduction Transactions. In the event that,
subsequent to the Effective Date and prior to the
Termination Date, the Borrower or any of its Subsidiaries
shall at any time, or from time to time, receive any Net
Cash Proceeds of any Reduction Transaction, the Commitments
shall be reduced by an aggregate amount equal to the amount
of such Net Cash Proceeds. The reductions required by this
subsection (c) shall be effective forthwith upon receipt by
the Borrower or any of its Subsidiaries of the Net Cash
Proceeds of the Reduction Transaction; provided that if the
Net Cash Proceeds of any Reduction Transaction aggregate
less than $1,000,000, such reduction shall be effective upon
receipt of Net Cash Proceeds which, together with all other
Net Cash Proceeds from Reduction Transactions not previously
applied, are equal to at least $1,000,000; provided further
that, if after giving effect to any such reduction, the
aggregate outstanding principal amount of the Loans would
exceed the aggregate amount of the Commitments as then
reduced, the Borrower shall prepay on the date of such
reduction a principal amount of the Loans equal to the
amount of such excess (such prepayment to be made together
with accrued interest thereon to the date of prepayment and
to be applied ratably to the Loans of the several Banks);
and provided further that to the extent that any such
reduction in the Commitments would otherwise require
prepayment of Euro-Dollar Loans or CD Loans or portions
thereof prior to the last day of the related Interest
Period, such reduction shall, unless the Agent otherwise
notifies the Borrower upon the instructions of the Required
Banks, be deferred to such last day. The Borrower shall
give the Agent at least five Euro-Dollar Business Days'
notice of each reduction in the Commitments pursuant to this
subsection (c).
SECTION 2.08. Optional Prepayments. (a) The
Borrower may (i) upon at least three Domestic Business Days'
notice to the Agent, prepay any Domestic Borrowing or (ii)
upon at least three Euro-Business Days' notice to the Agent,
prepay any Euro-Dollar Borrowing, in whole at any time, or
from time to time in part in amounts aggregating $10,000,000
or any larger multiple of $1,000,000, by paying the
principal amount to be prepaid together with accrued
interest thereon to the date of prepayment. Each such
optional prepayment shall be applied to prepay ratably the
Loans of the several Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable
share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.09. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of,
and interest on, the Loans and of fees hereunder, not later
than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
9.01. The Agent will promptly distribute to each Bank its
ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal
of, or interest on, the Domestic Loans or of fees shall be
due on a day which is not a Domestic Business Day, the date
for payment thereof shall be extended to the next succeeding
Domestic Business Day. Whenever any payment of principal
of, or interest on, the Euro-Dollar Loans shall be due on a
day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar
Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
(b) Unless the Agent shall have received notice
from the Borrower prior to the date on which any payment is
due to the Banks hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower
has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to
the amount then due such Bank. If and to the extent that the
Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for
each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.10. Funding Losses. If the Borrower
makes any payment of principal with respect to any Fixed
Rate Loan (pursuant to Article II, VI or VIII or otherwise)
on any day other than the last day of the Interest Period
applicable thereto, or the end of an applicable period fixed
pursuant to Section 2.05(d), or if the Borrower fails to
borrow or prepay any Fixed Rate Loans after notice has been
given to any Bank in accordance with Section 2.02(b) or
2.08(b), the Borrower shall reimburse each Bank within 15
days after demand for any resulting loss or expense incurred
by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the
period after any such payment or failure to borrow or
prepay, provided that such Bank shall have delivered to the
Borrower a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the
absence of clearly demonstrable error.
SECTION 2.11. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed
on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All
other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last
day).
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. This Agreement
shall become effective on the date that each of the
following conditions shall have been satisfied (or waived in
accordance with Section 9.05):
(a) receipt by the Agent of counterparts
hereof signed by each of the parties hereto (or,
in the case of any party as to which an executed
counterpart shall not have been received, receipt
by the Agent in form satisfactory to it of
telegraphic, telex or other written confirmation
from such party of execution of a counterpart
hereof by such party);
(b) receipt by the Agent for the account of
each Bank of a duly executed Note dated on or
before the Effective Date complying with the
provisions of Section 2.03;
(c) receipt by the Agent of an opinion of
Franklin C. Brown, Esq., Senior Vice President of
and Chief Counsel for the Borrower, substantially
in the form of Exhibit B hereto;
(d) receipt by the Agent of an opinion of
Davis Polk & Wardwell, special counsel for the
Agent, substantially in the form of Exhibit C
hereto and covering such additional matters
relating to the transactions contemplated hereby
as the Required Banks may reasonably request;
(e) receipt by the Agent of all documents it
may reasonably request relating to the existence
of the Borrower, the corporate authority for and
the validity of this Agreement and the Notes, and
any other matters relevant hereto, all in form and
substance satisfactory to the Agent;
(f) receipt by the Agent of evidence
satisfactory to it of the payment of all amounts
payable under the 1993 Credit Agreements and the
termination of the commitments thereunder;
Provided that this Agreement shall not become effective or
be binding on any party hereto unless all of the foregoing
conditions are satisfied not later than February 18, 1994.
The Agent shall promptly notify the Borrower and the Banks
of the Effective Date, and such notice shall be conclusive
and binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any
Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of
Borrowing as required by Section 2.02;
(b) the fact that, immediately after such
Borrowing, the aggregate outstanding principal
amount of the Loans will not exceed the aggregate
amount of the Commitments;
(c) the fact that, immediately after such
Borrowing, no Default shall have occurred and be
continuing; and
(d) the fact that the representations and
warranties of the Borrower contained in this
Agreement (except, in the case of a Refunding
Borrowing, the representations and warranties set
forth in Sections 4.04(c) and 4.06 as to any
matter which has theretofore been disclosed in
writing by the Borrower to the Banks) shall be
true in all material respects on and as of the
date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing as to the facts specified in clauses (b), (c)
and (d) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, and has all corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. The execution, delivery
and performance by the Borrower of this Agreement and the
Notes are within the Borrower's corporate powers, have been
duly authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any agreement or instrument
evidencing or governing Debt of the Borrower or any
Subsidiary or any other material agreement, instrument,
judgment, injunction, order or decree binding upon the
Borrower or any Subsidiary or result in the creation or
imposition of any Lien on any asset of the Borrower or any
Subsidiary pursuant to any such agreement, instrument,
judgment, injunction, order or decree.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Borrower
and the Notes, when executed and delivered in accordance
with this Agreement, will constitute valid and binding
obligations of the Borrower.
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of February
27, 1993 and the related consolidated statements of income
and cash flows for the fiscal year then ended, reported on
by KPMG Peat Marwick and set forth in the Borrower's 1993
Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted
accounting principles, the consolidated financial position
of the Borrower and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash
flows for such fiscal year.
(b) The unaudited consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of
November 27, 1993 and the related unaudited consolidated
statements of income and cash flows for the nine months then
ended, set forth in the Borrower's quarterly report for the
fiscal quarter ended November 27, 1993 as filed with the
Securities and Exchange Commission on Form 10-Q, a copy of
which has been delivered to each of the Banks, fairly
present, in conformity with generally accepted accounting
principles applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section,
the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
nine-month period (subject to normal year-end adjustments).
(c) Since November 27, 1993, there has been no
material adverse change in the business, financial position,
results of operations or prospects of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Full Disclosure. All financial
statements and other documents furnished by the Borrower to
the Banks in connection with this Agreement do not and will
not contain any untrue statement of material fact or omit to
state a material fact necessary in order to make the
statements contained therein not misleading. The Borrower
has disclosed to the Banks in writing any and all facts
which materially and adversely affect the business,
operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries or the Borrower's ability to
perform its obligations under this Agreement.
SECTION 4.06. Litigation. There is no action,
suit or proceeding pending against, or to the knowledge of
the Borrower threatened against or affecting, the Borrower
or any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official in which there is
a reasonable possibility of an adverse decision which could
materially adversely affect the business, consolidated
financial position or consolidated results of operations of
the Borrower and its Consolidated Subsidiaries or which in
any manner draws into question the validity of this
Agreement or the Notes.
SECTION 4.07. Compliance with ERISA. Each member
of the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Internal Revenue
Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code with respect to each
Plan. No member of the ERISA Group has (i) sought a waiver
of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement,
or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA
or the Internal Revenue Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC
for premiums under Section 4007 of ERISA.
SECTION 4.08. Taxes. United States Federal
income tax returns of the Borrower and its Subsidiaries have
been examined and closed through the fiscal year ended
February 28, 1987. The Borrower and its Subsidiaries have
filed all United States Federal income tax returns, and the
Borrower and its Significant Subsidiaries have filed all
other material tax returns, which are required to be filed
by them and have paid all taxes due pursuant to such returns
or pursuant to any assessment received by the Borrower or
any Significant Subsidiary except where the payment of any
such taxes is being contested in good faith by appropriate
proceedings. The charges, accruals and reserves on the
books of the Borrower and its Consolidated Subsidiaries in
respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.
SECTION 4.09. Subsidiaries. Each of the
Borrower's corporate Significant Subsidiaries is a
corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
SECTION 4.10. Environmental Matters. In the
ordinary course of its business, the Borrower conducts an
ongoing review of the effect of Environmental Laws on the
business, operations and properties of the Borrower and its
Subsidiaries, in the course of which it identifies and
evaluates associated liabilities and costs (including,
without limitation, any capital or operating expenditures
required for clean-up or closure of properties presently or
previously owned, any capital or operating expenditures
required to achieve or maintain compliance with
environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related
constraints on operating activities, including any periodic
or permanent shutdown of any facility or reduction in the
level of or change in the nature of operations conducted
thereat, any costs or liabilities in connection with
off-site disposal of wastes or hazardous substances, and any
actual or potential liabilities to third parties, including
employees, and any related costs and expenses). On the basis
of this review, the Borrower has reasonably concluded that
such associated liabilities and costs, including the costs
of compliance with Environmental Laws, are unlikely to have
a material adverse effect on the business, financial
condition, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a
whole.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has
any Commitment hereunder or any amount payable under any
Note remains unpaid:
SECTION 5.01. Information. The Borrower will
deliver to each of the Banks:
(a) as soon as available and in any event
within 90 days after the end of each fiscal year
of the Borrower, a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as
of the end of such fiscal year and the related
consolidated statements of income and cash flows
for such fiscal year, setting forth in each case
in comparative form the figures for the previous
fiscal year, all reported on in a manner
acceptable to the Securities and Exchange
Commission by KPMG Peat Marwick or other
independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event
within 45 days after the end of each of the first
three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of
the end of such quarter and the related
consolidated statements of income and cash flows
for such quarter and for the portion of the
Borrower's fiscal year ended at the end of such
quarter, setting forth in each case in comparative
form the figures for the corresponding quarter and
the corresponding portion of the Borrower's
previous fiscal year, all certified (subject to
normal year-end adjustments) as to fairness of
presentation, generally accepted accounting
principles and consistency by the chief financial
officer or the chief accounting officer of the
Borrower;
(c) simultaneously with the delivery of each
set of financial statements referred to in clauses
(a) and (b) above, a certificate of the chief
financial officer or the chief accounting officer
of the Borrower (i) setting forth in reasonable
detail the calculations required to establish
whether the Borrower was in compliance with the
requirements of Sections 5.07 to 5.12, inclusive,
on the date of such financial statements and (ii)
stating whether any Default exists on the date of
such certificate and, if any Default then exists,
setting forth the details thereof and the action
which the Borrower is taking or proposes to take
with respect thereto;
(d) simultaneously with the delivery of each
set of financial statements referred to in clause
(a) above, a statement of the firm of independent
public accountants which reported on such
statements (i) whether anything has come to their
attention to cause them to believe that any
Default existed on the date of such statements and
(ii) confirming the calculations set forth in the
officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;
(e) within five days after any officer of
the Borrower obtains knowledge of any Default, if
such Default is then continuing, a certificate of
the chief financial officer or the chief
accounting officer of the Borrower setting forth
the details thereof and the action which the
Borrower is taking or proposes to take with
respect thereto;
(f) promptly upon the mailing thereof to the
shareholders of the Borrower generally, copies of
all financial statements, reports and proxy
statements so mailed;
(g) promptly upon the filing thereof, copies
of all registration statements (other than the
exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on
Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the
Securities and Exchange Commission;
(h) promptly upon any change in Status
Level, notice thereof;
(i) if and when any member of the ERISA
Group (i) gives or is required to give notice to
the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given
or is required to give notice of any such
reportable event, a copy of the notice of such
reportable event given or required to be given to
the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives
notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) or
appoint a trustee to administer any Plan, a copy
of such notice; (iv) applies for a waiver of the
minimum funding standard under Section 412 of the
Internal Revenue Code, a copy of such application;
(v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC;
(vi) gives notice of withdrawal from any Plan
pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or
in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which
has resulted or could result in the imposition of
a Lien or the posting of a bond or other security,
a certificate of the chief financial officer or
the chief accounting officer of the Borrower
setting forth details as to such occurrence and
action, if any, which the Borrower or applicable
member of the ERISA Group is required or proposes
to take; and
(j) from time to time such additional
information regarding the financial position or
business of the Borrower and its Subsidiaries as
the Agent, at the request of any Bank, may
reasonably request.
SECTION 5.02. Payment of Obligations. The
Borrower will, and will cause each of its Subsidiaries to,
pay and discharge, as the same shall become due and payable,
(i) all material claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like
Persons prior to the time such claims or demands give rise
to a Lien upon any of its property or assets, and (ii) all
material taxes, assessments and governmental charges or
levies upon it or its property or assets, except where any
of the items in clause (i) or (ii) above may be contested in
good faith by appropriate proceedings, and the Borrower or
such Subsidiary, as the case may be, shall have set aside on
its books, in accordance with generally accepted accounting
principles, appropriate reserves, if any, for the accrual of
any such items.
SECTION 5.03. Maintenance of Property; Insurance.
(a) The Borrower will keep, and will cause each Subsidiary
to keep, all property useful and necessary in its business
in good working order and condition, ordinary wear and tear
excepted.
(b) The Borrower will, and will cause each of its
Subsidiaries to, maintain (either in the name of the
Borrower or in such Subsidiary's own name) with financially
sound and responsible insurance companies, insurance on all
their respective properties in at least such amounts and
against at least such risks (and with such risk retention)
as are usually insured against in the same general area by
companies of established repute engaged in the same or a
similar business; and will furnish to the Banks, upon
request from the Agent, information presented in reasonable
detail as to the insurance so carried.
SECTION 5.04. Conduct of Business and Maintenance
of Existence. Except as otherwise permitted in this
Agreement, the Borrower will continue, and will cause each
Significant Subsidiary to continue, to engage in business of
the same general type as now conducted by the Borrower and
its Significant Subsidiaries, and will preserve, renew and
keep in full force and effect, and will cause each
Significant Subsidiary (except where such Significant
Subsidiary merges into the Borrower or any other Subsidiary)
to preserve, renew and keep in full force and effect their
respective corporate existence and their respective rights,
privileges and franchises necessary or desirable in the
normal conduct of business.
SECTION 5.05. Compliance with Laws. The Borrower
will comply, and cause each Subsidiary to comply, in all
material respects with all applicable laws, ordinances,
rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental
Laws and ERISA and the rules and regulations thereunder)
except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings or where
the failure to comply would not have a material adverse
effect on the business, financial position or results of
operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole.
SECTION 5.06. Inspection of Property, Books and
Records. The Borrower will keep, and will cause each
Subsidiary to keep, proper books of record and account in
which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and
activities; and will permit, and will cause each Subsidiary
to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective
affairs, finances and accounts with their respective
officers, employees and independent public accountants, all
at such reasonable times and as often as may reasonably be
desired.
SECTION 5.07. Restriction on Debt of
Subsidiaries. The Borrower will not permit any Subsidiary
to create, issue, incur, assume, or in any other way become
liable for any unsecured Debt unless immediately prior
thereto the Borrower would be entitled under subsection (d)
of Section 5.09 to create Secured Debt not specifically
permitted under Section 5.09 but for subsection (d) thereof
in an amount equal to such Debt; provided that the foregoing
restriction shall not prevent (i) any Subsidiary from
becoming liable to the Borrower or to a Wholly-Owned
Consolidated Subsidiary for Debt or (ii) the extension,
renewal or refunding of any Debt of any Subsidiary so long
as Consolidated Debt is not thereby increased.
SECTION 5.08. Restriction on Sales with Leases
Back. Except for a sale or transfer by a Subsidiary to the
Borrower or a Wholly-Owned Consolidated Subsidiary, the
Borrower will not, and will not permit any Subsidiary to,
sell or transfer any manufacturing plant, warehouse, retail
store or equipment now or hereafter owned and operated by
the Borrower or a Subsidiary, with the intention that the
Borrower or any Subsidiary take back a lease thereof, except
a lease for a period, including renewals, not exceeding 24
months, by the end of which period it is intended that the
use of such property or equipment by the lessee will be
discontinued (any such transaction being herein referred to
as a "Sale and Leaseback Transaction"); provided that,
notwithstanding the foregoing, the Borrower or any
Subsidiary may enter into a Sale and Leaseback Transaction
if the Borrower or a Subsidiary would be entitled under
subsection (d) of Section 5.09 to create Secured Debt not
specifically permitted under Section 5.09 but for subsection
(d) thereof in an amount equal to the Attributable Debt
respecting such Sale and Leaseback Transaction; provided
further that, notwithstanding the foregoing, the Borrower or
any Subsidiary may enter into a Sale and Leaseback
Transaction if entered into in respect of property acquired
by the Borrower or a Subsidiary if such Sale and Leaseback
Transaction is entered into within 24 months from the date
of such acquisition; and provided still further that,
notwithstanding the foregoing, the Borrower or any
Subsidiary may enter into a Sale and Leaseback Transaction
if the Borrower, within 120 days before or after the sale or
transfer shall have been made by the Borrower or by any
Subsidiary, applied or applies an amount equal to the
greater of (i) the net proceeds of the sale of the property
sold and leased back pursuant to such arrangement or (ii)
the fair market value of the property so sold and leased
back at the time of entering into such arrangement (as
determined by any two of the following: the Chairman of the
Board of the Borrower, its Chief Executive Officer, its
President, any Vice President of the Borrower, its Treasurer
and its Controller) to the retirement of Secured Debt of the
Borrower other than at maturity or pursuant to any mandatory
sinking fund payment or any mandatory prepayment provision.
SECTION 5.09. Restriction on Liens. The Borrower
will not, and will not permit any Subsidiary to, create,
issue, incur, assume or guarantee any Secured Debt without
making effective provision (and the Borrower covenants that
in such case it will make or cause to be made effective
provision) whereby the Loans (and any other Debt of the
Borrower or such Subsidiary then entitled thereto) shall be
secured by the same Lien equally and ratably with (or prior
to) any and all other obligations and Debt thereby secured
for so long as any such other obligations and Debt shall be
so secured; provided that the foregoing covenant shall not
apply to the following:
(a)(i) Any Lien on any property acquired or
constructed by the Borrower or a Subsidiary and
created contemporaneously with, or within 24
months after, such acquisition or the completion
of such construction and commencement of full
operation of such property, whichever is later, to
secure or provide for the payment of any part of
the purchase or construction price of such
property, or (ii) the acquisition by the Borrower
or a Subsidiary of property subject to any Lien
upon such property existing at the time of
acquisition thereof, whether or not assumed by the
Borrower or such Subsidiary, or (iii) any
conditional sales agreement or other title
retention agreement with respect to any property
hereafter acquired; provided that the Lien does
not spread to other property except unimproved
real property previously owned upon which any new
construction has taken place and subsequent
additions to such acquired or constructed
property;
(b) Any Lien created for the sole purpose of
extending, renewing or refunding, in whole or
part, any Lien permitted by this Section 5.09 or
any Lien securing the Debt of the Borrower or of
any Subsidiary on the date of this Agreement or of
a corporation at the time such corporation becomes
a Subsidiary, or any extensions, renewals or
refundings of any such Lien; provided that the
principal amount of Debt secured thereby shall not
exceed the principal amount of Debt so secured at
the time of such extension, renewal or refunding
and that such extension, renewal or refunding Lien
shall be limited to all or that part of the same
property which secured the Debt so extended,
renewed or refunded;
(c) Any Secured Debt of a Subsidiary owing
to the Borrower or a Wholly-Owned Consolidated
Subsidiary;
(d) Secured Debt of the Borrower and its
Subsidiaries which would otherwise be prohibited
by the foregoing restrictions (not including
Secured Debt permitted to be secured under
subsections (a) through (c) above) so long as the
sum of any such Secured Debt hereafter incurred
and outstanding at the time plus Attributable Debt
of the Borrower and any Subsidiaries in respect of
Sale and Leaseback Transactions hereafter entered
into and outstanding at the time (excluding
Attributable Debt incurred in respect of any Sale
and Leaseback Transaction entered into in respect
of property acquired by the Borrower or a
Subsidiary not more than 24 months prior to the
date such Sale and Leaseback Transaction is
entered into) plus unsecured Debt of any
Subsidiary hereafter incurred and outstanding at
the time (excluding unsecured Debt incurred
through the extension, renewal or refunding of
Debt of such Subsidiary where Consolidated Debt
was not thereby increased and excluding any Debt
owed to the Borrower or a Wholly-Owned
Consolidated Subsidiary) does not at the time
exceed 5% of Consolidated Net Tangible Assets.
SECTION 5.10. Leverage Ratio. Consolidated Debt
will at no time exceed 66% of Total Capital.
SECTION 5.11. Interest Coverage. The Interest
Coverage Ratio will at no time be less than 340%.
SECTION 5.12. Limitation on Minority Investments.
Neither the Borrower nor any Consolidated Subsidiary will
make or acquire any Investment in any Person other than:
(a) Investments in Consolidated
Subsidiaries;
(b) Temporary Cash Investments;
(c) Investments constituting consideration for
sales of Specialty Retailing Assets; and
(d) any Investment not otherwise permitted by
the foregoing clauses of this Section if,
immediately after such Investment is made or
acquired, the aggregate net book value of all
Investments permitted by this clause (d) does not
exceed 15% of Consolidated Net Worth.
SECTION 5.13. Consolidations, Mergers and Sales
of Assets. The Borrower will not (i) consolidate or merge
with or into any other Person or (ii) sell, lease or
otherwise transfer, directly or indirectly, all or any
substantial part (other than Specialty Retailing Assets) of
the assets of the Borrower and its Subsidiaries, taken as a
whole, to any other Person; provided that the Borrower may
merge with another Person if (A) the Borrower is the
corporation surviving such merger and (B) immediately after
giving effect to such merger, no Default shall have occurred
and be continuing.
SECTION 5.14. Use of Proceeds. The proceeds of
the Loans made under this Agreement will be used by the
Borrower (i) to refinance certain indebtedness, (ii) to
finance the repurchase by the Borrower of up to 22 million
shares of the Borrower's common stock and related
transaction expenses and (iii) for the Borrower's other
general corporate purposes. No such use of proceeds for
general corporate purposes will be, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate,
of buying or carrying any "margin stock" within the meaning
of Regulation U.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more
of the following events ("Events of Default") shall have
occurred and be continuing:
(a) the Borrower shall fail to pay when due
any principal of any Loan, or shall fail to pay
within five days of the due date thereof any
interest, fees or other amount payable hereunder;
(b) the Borrower shall fail to observe or
perform any covenant contained in Sections 5.07 to
5.14, inclusive;
(c) the Borrower shall fail to observe or
perform any covenant or agreement contained in
this Agreement (other than those covered by clause
(a) or (b) above) for 30 days after written notice
thereof has been given to the Borrower by the
Agent at the request of any Bank;
(d) any material representation, warranty,
certification or statement made by the Borrower in
this Agreement or in any certificate, financial
statement or other document delivered pursuant to
this Agreement shall prove to have been incorrect
in any material respect when made (or deemed
made);
(e) the Borrower or any Subsidiary shall
fail to make any payment in respect of any
Material Debt when due or within any applicable
grace period;
(f) any event or condition shall occur which
results in the acceleration of the maturity of any
Material Debt or enables (or, if such event or
condition does not otherwise give rise to a
Default hereunder, which with the giving of notice
or lapse of time or both would enable) the holder
of such Debt or any Person acting on such holder's
behalf to accelerate the maturity thereof;
(g) the Borrower or any Significant
Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation,
reorganization or other relief with respect to
itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar
official of it or any substantial part of its
property, or shall consent to any such relief or
to the appointment of or taking possession by any
such official in an involuntary case or other
proceeding commenced against it, or shall make a
general assignment for the benefit of creditors,
or shall fail generally to pay its debts as they
become due, or shall take any corporate action to
authorize any of the foregoing;
(h) an involuntary case or other proceeding
shall be commenced against the Borrower or any
Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of
it or any substantial part of its property, and
such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered
against the Borrower or any Significant Subsidiary
under the federal bankruptcy laws as now or
hereafter in effect;
(i) any member of the ERISA Group shall fail
to pay when due an amount or amounts aggregating
in excess of $5,000,000 which it shall have become
liable to pay under Title IV of ERISA; or notice
of intent to terminate a Material Plan shall be
filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect
of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any
Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a
default, within the meaning of Section 4219(c)(5)
of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more
members of the ERISA Group to incur a current
payment obligation in excess of $25,000,000;
(j) a judgment or order for the payment of
money in excess of $25,000,000 shall be rendered
against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied and
unstayed for a period of 30 days; or
(k) any person or group of persons (within
the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of 20% or more
of the outstanding shares of common stock of the
Borrower; or, during any period of 12 consecutive
calendar months, individuals who were directors of
the Borrower on the first day of such period shall
cease to constitute a majority of the board of
directors of the Borrower;
then, and in every such event, the Agent shall (i) if
requested by the Required Banks, by notice to the Borrower
terminate the Commitments and they shall thereupon
terminate, and (ii) if requested by Banks holding Notes
evidencing more than 66 2/3% in aggregate principal amount
of the Loans, by notice to the Borrower declare the Notes
(together with accrued interest thereon) to be, and the
Notes shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower;
provided that in the case of any of the Events of Default
specified in clause (g) or (h) above with respect to the
Borrower, without any notice to the Borrower or any other
act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall
give notice to the Borrower under Section 6.01(c) promptly
upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization.
Each Bank irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement and the Notes as are delegated
to the Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan
Guaranty Trust Company of New York shall have the same
rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though
it were not the Agent, and Morgan Guaranty Trust Company of
New York and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower
as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations
of the Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing,
the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in
Article VI.
SECTION 7.04. Consultation with Experts. The
Agent may consult with legal counsel (who may be counsel for
the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Agent. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for
any action taken or not taken by it or any of them in
connection herewith (i) with the consent or at the request
of the Required Banks or (ii) in the absence of its or their
own gross negligence or willful misconduct. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made
in connection with this Agreement or any borrowing
hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article III,
except receipt of items required to be delivered to the
Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur
any liability by acting in reliance upon any notice,
consent, certificate, statement, or other writing (which may
be a bank wire, telex or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the
Agent, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed
by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitees'
gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action
under this Agreement.
SECTION 7.08. Successor Agent. The Agent may
resign at any time by giving notice thereof to the Banks and
the Borrower. Upon any such resignation, the Required Banks
shall have the right, with the consent of the Borrower, to
appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Banks, and shall have
accepted such appointment, within 30 days after the retiring
Agent gives notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent,
which shall be a commercial bank organized or licensed under
the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at
least $50,000,000. Upon the acceptance of its appointment
as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all
the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this
Article shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Borrower shall
pay to the Agent for its own account fees in the amounts and
at the times previously agreed upon between the Borrower and
the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of
any Interest Period for any Fixed Rate Borrowing:
(a) the Agent is advised by the Reference
Banks that deposits in dollars (in the applicable
amounts) are not being offered to the Reference
Banks in the relevant market for such Interest
Period, or
(b) Banks having 50% or more of the
aggregate amount of the Commitments advise the
Agent that the Adjusted CD Rate or the Adjusted
London Interbank Offered Rate, as the case may be,
as determined by the Agent will not adequately and
fairly reflect the cost to such Banks of funding
their CD Loans or Euro-Dollar Loans, as the case
may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Agent notifies
the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be,
shall be suspended. Unless the Borrower notifies the Agent
at least two Domestic Business Days before the date of any
Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such
date, such Borrowing shall instead be made as a Base Rate
Borrowing.
SECTION 8.02. Illegality. If, on or after the
date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or
its Euro-Dollar Lending Office) to make, maintain or fund
its Euro-Dollar Loans and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant
to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully
continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the
then outstanding principal amount of each such Euro-Dollar
Loan, together with accrued interest thereon. Concurrently
with prepaying each such Euro-Dollar Loan, the Borrower
shall borrow a Base Rate Loan in an equal principal amount
from such Bank (on which interest and principal shall be
payable contemporaneously with the related Euro-Dollar Loans
of the other Banks), and such Bank shall make such a Base
Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return.
(a) If on or after the date hereof, the adoption of any
applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed
by the Board of Governors of the Federal Reserve System, but
excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve
Percentage and (ii) with respect to any Euro-Dollar Loan any
such requirement included in an applicable Euro-Dollar
Reserve Percentage), special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or
its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans and the
result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or to reduce the amount of
any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank
to be material, then, within 15 days after demand by such
Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent),
the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank (or its Parent) for
such reduction.
(c) Each Bank will promptly notify the Borrower
and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this
Section and setting forth the additional amount or amounts
to be paid to it hereunder shall be conclusive in the
absence of clearly demonstrable error. In determining such
amount, such Bank may use any reasonable averaging and
attribution methods.
SECTION 8.04. Taxes. (a) Any and all payments by
the Borrower to or for the account of any Bank or the Agent
hereunder or under any Note shall be made free and clear of
and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
excluding, in the case of each Bank and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by
the jurisdiction under the laws of which such Bank or the
Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Bank, taxes
imposed on its income, and franchise or similar taxes
imposed on it, by the jurisdiction of such Bank's Applicable
Lending Office or any political subdivision thereof (all
such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under any Note to any Bank or
the Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Agent (as the case
may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law and (iv)
the Borrower shall furnish to the Agent, at its address
referred to in Section 9.01, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes and any other
excise or property taxes, or charges or similar levies which
arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect
to, this Agreement or any Note (hereinafter referred to as
"Other Taxes").
(c) The Borrower agrees to indemnify each Bank
and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as
the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 15 days
from the date such Bank or the Agent (as the case may be)
makes demand therefor.
(d) Each Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Bank listed on the signature pages hereof and
on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if
requested in writing by the Borrower (but only so long as
such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Bank is
entitled to benefits under an income tax treaty to which the
United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that
the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or
business in the United States. If the form provided by a
Bank at the time such Bank first becomes a party to this
Agreement indicates a United States interest withholding tax
rate in excess of zero, withholding tax at such rate shall
be considered excluded from "Taxes" as defined in Section
8.04(a).
(e) For any period with respect to which a Bank
has failed to provide the Borrower with the appropriate form
pursuant to Section 8.04(d) (unless such failure is due to a
change in treaty, law or regulation occurring subsequent to
the date on which a form originally was required to be
provided), such Bank shall not be entitled to
indemnification under Section 8.04(a) with respect to Taxes
imposed by the United States; provided, however, that should
a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes
because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such
Taxes.
(f) If the Borrower is required to pay additional
amounts to or for the account of any Bank pursuant to this
Section 8.04, then such Bank will change the jurisdiction of
its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if
such change, in the judgment of such Bank, is not otherwise
disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant
to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03 or 8.04 with respect to its CD Loans or
Euro-Dollar Loans and the Borrower shall, by at least five
Euro-Dollar Business Days' prior notice to such Bank through
the Agent, have elected that the provisions of this Section
shall apply to such Bank, then, unless and until such Bank
notifies the Borrower that the circumstances giving rise to
such suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made
by such Bank as CD Loans or Euro-Dollar Loans, as
the case may be, shall be made instead as Base
Rate Loans (on which interest and principal shall
be payable contemporaneously with the related
Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or
Euro-Dollar Loans, as the case may be, has been
repaid, all payments of principal which would
otherwise be applied to repay such Fixed Rate
Loans shall be applied to repay its Base Rate
Loans instead.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and
other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission
or similar writing) and shall be given to such party: (x) in
the case of the Borrower or the Agent, at its address or
telex number set forth on the signature pages hereof, (y) in
the case of any Bank, at its address or telex number set
forth in its Administrative Questionnaire or (z) in the case
of any party, such other address or telex number as such
party may hereafter specify for the purpose by notice to the
Agent and the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in
this Section and the appropriate answerback is received,
(ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section;
provided that notices to the Agent under Article II or
Article VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by
the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses
of the Agent, including fees and disbursements of special
counsel for the Agent, in connection with the preparation
and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged
Default hereunder and (ii) if an Event of Default occurs,
all out-of-pocket expenses incurred by the Agent and each
Bank, including fees and disbursements of counsel, in
connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings
resulting therefrom.
(b) The Borrower agrees to indemnify the Agent
and each Bank, their respective affiliates and the
respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in
connection with any administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party
thereto) brought or threatened relating to or arising out of
this Agreement or any actual or proposed use of proceeds of
Loans hereunder; provided that no Indemnitee shall have the
right to be indemnified hereunder for such Indemnitee's own
gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal and interest
due with respect to any Note held by it which is greater
than the proportion received by any other Bank in respect of
the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other
Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest
with respect to the Notes held by the Banks shall be shared
by the Banks pro rata; provided that nothing in this Section
shall impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of indebtedness of
the Borrower other than its indebtedness under the Notes.
The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a
participation in a Note acquired pursuant to the foregoing
arrangements may exercise rights of set-off or counterclaim
and other rights with respect to such participation as fully
as if such holder of a participation were a direct creditor
of the Borrower in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any
provision of this Agreement or the Notes may be amended or
waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or
waiver shall, unless signed by all the Banks, (i) increase
or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal
of or rate of interest on any Loan or any fees hereunder,
(iii) postpone the date fixed for any payment of principal
of or interest on any Loan or any fees hereunder or for or
termination of any Commitment or (iv) change the percentage
of the Commitments or of the aggregate unpaid principal
amount of the Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement.
SECTION 9.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in its Commitment or any or all of
its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon
notice to the Borrower and the Agent, such Bank shall remain
responsible for the performance of its obligations
hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that
such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this
Agreement described in clause (i), (ii) or (iii) of Section
9.05 without the consent of the Participant. The Borrower
agrees that each Participant shall, to the extent provided
in its participation agreement, be entitled to the benefits
of Article VIII with respect to its participating interest.
An assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a
participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or
more banks or other institutions (each an "Assignee") all,
or a proportionate part of all, of its rights and
obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant
to an Assignment and Assumption Agreement in substantially
the form of Exhibit D hereto executed by such Assignee and
such transferor Bank, with (and subject to) notice to, and
the subscribed consent of, the Borrower and the Agent (such
consent of the Borrower and the Agent not to be unreasonably
withheld); provided that (i) if an Assignee is an affiliate
of such transferor Bank, such notice shall be given but no
such consent shall be required, (ii) unless the assignment
covers all rights and obligations of such assignor Bank, the
assignment shall cover the equivalent of a Commitment of not
less than $10,000,000 and (iii) the remaining Commitment (if
any) of the assignor Bank after any such assignment is at
least $10,000,000. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, such Assignee shall
be a Bank party to this Agreement and shall have all the
rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by
any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to
the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee
for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall, prior
to the first date on which interest or fees are payable
hereunder for its account, deliver to the Borrower and the
Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in
accordance with Section 8.04.
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Note to a
Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee
of any Bank's rights shall be entitled to receive any
greater payment under Section 8.03 than such Bank would have
been entitled to receive with respect to the rights
transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the
provisions of Section 8.02, 8.03 or 8.04 requiring such Bank
to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to
Jurisdiction. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the
State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New
York State court sitting in New York City for purposes of
all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The
Borrower irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration. This
Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE
BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
RITE AID CORPORATION
By /s/ Martin Grass
Title: President and Chief
Operating Officer
30 Hunter Lane
Camp Hill, PA 17011
Attention: Martin Grass
Frank Bergonzi
Telephone No.: (717) 761-2633
Telecopier No.: (717) 975-5952
Telex number: 705954
Commitments
$250,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Stephen Kenneally
Title: Vice President
__________________
Total Commitments
$250,000,000
==================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Stephen Kenneally
Title: Vice President
60 Wall Street
New York, New York 10260-0060
Attention: Loan Department
Telex number: 177615
EXHIBIT A
NOTE
New York, New York
____________, 1994
For value received, Rite Aid Corporation, a
Delaware corporation (the "Borrower"), promises to pay to
the order of _________________________ (the "Bank"), for the
account of its Applicable Lending Office, the unpaid
principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below
on the last day of the Interest Period relating to such
Loan. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the
rate or rates provided for in the Credit Agreement. All
such payments of principal and interest shall be made in
lawful money of the United States in Federal or other
immediately available funds at the office of Morgan Guaranty
Trust Company of New York, 60 Wall Street, New York, New
York.
All Loans made by the Bank, the respective types
and maturities thereof and all repayments of the principal
thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement
hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding
may be endorsed by the Bank on the schedule attached hereto,
or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Bank to make
any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit
Agreement.
This note is one of the Notes referred to in the
$250,000,000 Credit Agreement dated as of February 7, 1994
among the Borrower, the banks from time to time parties
thereto and Morgan Guaranty Trust Company of New York, as
Agent (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement
are used herein with the same meanings. Reference is made
to the Credit Agreement for provisions for the prepayment
hereof and the acceleration of the maturity hereof.
RITE AID CORPORATION
By _________________________
Title:
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
___________________________________________________________
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
EXHIBIT B
OPINION OF
COUNSEL FOR THE BORROWER
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260-0060
Dear Sirs:
We have acted as counsel for Rite Aid Corporation
(the "Borrower") in connection with the $250,000,000 Credit
Agreement (the "Credit Agreement") dated as of February 7,
1994 among the Borrower, the banks from time to time parties
thereto and Morgan Guaranty Trust Company of New York, as
Agent. Terms defined in the Credit Agreement are used herein
as therein defined. This opinion is being rendered to you
at the request of our client pursuant to Section 3.01(c) of
the Credit Agreement.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
1. The Borrower is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Delaware, and has all corporate
powers and all material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted.
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency
or official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower
or of any agreement or instrument evidencing or governing
Debt of the Borrower or any Subsidiary or any other material
agreement, instrument, judgment, injunction, order or decree
binding upon the Borrower or any Subsidiary or result in the
creation or imposition of any Lien on any asset of the
Borrower or any Subsidiary pursuant to any such agreement,
instrument, judgment, injunction, order or decree.
3. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower.
4. There is no action, suit or proceeding pending
against, or to the best of our knowledge threatened against
or affecting, the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated
results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole or which in any manner
draws into question the validity of the Credit Agreement or
the Notes.
5. Each of the Borrower's corporate Significant
Subsidiaries is a corporation validly existing and in good
standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
Very truly yours,
EXHIBIT C
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260-0060
Dear Sirs:
We have participated in the preparation of the
$250,000,000 Credit Agreement (the "Credit Agreement") dated
as of February 7, 1994 among Rite Aid Corporation, a
Delaware corporation (the "Borrower"), the banks from time
to time parties thereto (the "Banks") and Morgan Guaranty
Trust Company of New York, as Agent (the "Agent"), and have
acted as special counsel for the Agent for the purpose of
rendering this opinion pursuant to Section 3.01(d) of the
Credit Agreement. Terms defined in the Credit Agreement are
used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
1. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate powers and have been duly
authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower.
We are members of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York, the federal laws of the United States of
America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in
connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by
or furnished to any other person without our prior written
consent.
Very truly yours,
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of __________, 19__ among
[ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"),
RITE AID CORPORATION (the "Borrower") and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the $250,000,000 Credit
Agreement dated as of February 7, 1994 among the Borrower,
the Assignor and the other Banks party thereto, as Banks,
and the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement,
the Assignor has a Commitment to make Loans to the Borrower
in an aggregate principal amount at any time outstanding not
to exceed $_________;
WHEREAS, Loans made to the Borrower by the
Assignor under the Credit Agreement in the aggregate
principal amount of $_______ are outstanding at the date
hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment
thereunder in an amount equal to $___________ (the
"Assigned Amount"), together with a corresponding portion
of its outstanding Loans, and the Assignee proposes to
accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms
not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby
assigns and sells to the Assignee all of the rights of the
Assignor under the Credit Agreement to the extent of the
Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the
principal amount of the Loans made by the Assignor
outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Borrower
and the Agent and the payment of the amounts specified in
Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under
the Credit Agreement with a Commitment in an amount equal to
the Assigned Amount, and (ii) the Commitment of the Assignor
shall, as of the date hereof, be reduced by a like amount
and the Assignor released from its obligations under the
Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein
shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in
Federal funds an amount equal to $_______.(*) It is
understood that commitment and/or facility fees accrued to
the date hereof are for the account of the Assignor and such
fees accruing from and including the date hereof are for the
account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under
the Credit Agreement which is for the account of the other
party hereto, it shall receive the same for the account of
such other party to the extent of such other party's
interest therein and shall promptly pay the same to such
other party.
SECTION 4. Consent of the Borrower and the Agent.
This Agreement is conditioned upon the consent of the
Borrower and the Agent pursuant to Section 9.06(c) of the
Credit Agreement. The execution of this Agreement by the
Borrower and the Agent is evidence of this consent.
Pursuant to Section 9.06(c) the Borrower agrees to execute
and deliver a Note payable to the order of the Assignee to
evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The
Assignor makes no representation or warranty in connection
with, and shall have no responsibility with respect to, the
solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it
has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the
business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of New York.
*Amount should combine principal together with accrued
interest and breakage compensation, if any, to be paid by
the Assignee, net of any portion of any upfront fee to be
paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically
or by formula rather than as a fixed sum.
SECTION 7. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By________________________
Title:
[ASSIGNEE]
By________________________
Title:
RITE AID CORPORATION
By________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By________________________
Title:
Dates Referenced Herein and Documents Incorporated by Reference
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