-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KbPTkrTek4VeAeEZUM59vvEGk7+WjlTGeMUh1+A5FwdiQXFVvwjPJsqXSVnZ77yU UXciNybgBZ0Rr/oIns5wdA== 0000950134-02-007567.txt : 20020625 0000950134-02-007567.hdr.sgml : 20020625 20020624204218 ACCESSION NUMBER: 0000950134-02-007567 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20020618 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEMING COMPANIES INC /OK/ CENTRAL INDEX KEY: 0000352949 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & GENERAL LINE [5141] IRS NUMBER: 480222760 STATE OF INCORPORATION: OK FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08140 FILM NUMBER: 02685894 BUSINESS ADDRESS: STREET 1: 1945 LAKEPOINTE DRIVE CITY: LEWISVILLE STATE: TX ZIP: 73126 BUSINESS PHONE: 4058407200 MAIL ADDRESS: STREET 1: 1945 LAKEPOINT DRIVE CITY: LEWISVILLE STATE: TX ZIP: 75057 8-K 1 d97911e8vk.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): June 18, 2002 FLEMING COMPANIES, INC. ----------------------------------------- (Exact Name of Registrant as Specified in Charter) Oklahoma 1-8140 48-0222760 (State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.) Incorporation)
1945 Lakepointe Drive, Lewisville, Texas 75057 ----------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (972) 906-8000 ----------------------------------------------------- (Registrant's telephone number, including area code) N/A ----------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On June 18, 2002, Fleming Companies, Inc. (the "Company"), through its wholly-owned subsidiary Platform Corporation ("Platform") completed its acquisition of 100% of the outstanding equity interests of Core-Mark International, Inc. ("Core-Mark") for $295,000,000 in cash (less transaction fees) and the assumption of Core-Mark's debt. The acquisition occurred pursuant to the terms of an Agreement and Plan of Merger dated April 23, 2002 (the "Merger Agreement") by and among the Company, Platform, Core-Mark and the stockholders of Core-Mark, following the satisfaction or waiver of various customary closing conditions including satisfaction of requirements under domestic and foreign antitrust regulatory schemes and the receipt of certain third-party consents. Pursuant to the Merger Agreement, $15,000,000 of the stockholders' proceeds were put into escrow to satisfy any indemnification claims that may be brought by the Company and $10,655,607 of the proceeds were used to cash-out Core-Mark optionholders. The amount of consideration paid to each stockholder and each optionholder in exchange for Core-Mark's stock and options was the product of arm's-length negotiations between the parties. The acquisition was funded out of the proceeds from the sale of debt and equity by the Company and out of the funds drawn from the Company's new credit facility as described in Item 5 of this Report. 2 ITEM 5. OTHER EVENTS. On June 18, 2002, in connection with the completion of the acquisition described in Item 2 of this Report, Fleming Companies, Inc. (the "Company") entered into a new $975 million Credit Agreement with Deutsche Bank Trust Company Americas, as Administrative Agent, and also completed the sale of $200 million aggregate principal amount of its new 9.25% Senior Notes due 2010 and 9,200,000 shares of its Common Stock. In connection with the consummation of these transactions, the Company repaid all borrowings outstanding under its $850 million Credit Agreement dated as of July 25, 1997, as amended, which agreement ceased to be in effect as of June 18, 2002. The Underwriting Agreements for the Senior Notes and Common Stock offerings are set forth in Exhibits 1.1 and 1.2 hereto, respectively, and are incorporated in this Report as if fully set forth herein. The Indenture and Supplemental Indenture pursuant to which the Senior Notes were issued and the form of the Senior Note and the accompanying guarantee thereof are set forth in Exhibits 4.1, 4.2 and 4.3 hereto, respectively, and are incorporated in this Report as if fully set forth herein. The new Credit Agreement and the related Security Agreement, Guarantee Agreement and Pledge Agreement are set forth in Exhibits 10.1, 10.2, 10.3 and 10.4 hereto, respectively, and are incorporated in this Report as if fully set forth herein. The full text of the press release announcing the completion of the Core-Mark acquisition and the related financing transactions is set forth in Exhibit 99.1 hereto and is incorporated in this Report as if fully set forth herein. 3 ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits The following exhibits are filed as part of this Report:
No. Exhibit --- ------- 1.1 Underwriting Agreement dated June 13, 2002 by and among the Company, the Guarantors party thereto and Deutsche Bank Securities Inc., Lehman Brothers Inc., First Union Securities, Inc., J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated, as Representatives of the several Underwriters. 1.2 Underwriting Agreement dated June 13, 2002 by and among the Company and Lehman Brothers Inc., Deutsche Bank Securities Inc., First Union Securities, Inc. and Morgan Stanley & Co. Incorporated, as Representatives of the several Underwriters. 4.1 Indenture dated as of June 18, 2002 by and between the Company and Manufacturers and Traders Trust Company, as Trustee. 4.2 First Supplemental Indenture dated as of June 18, 2002 by and among the Company, the Subsidiary Guarantors party thereto and Manufacturers and Traders Trust Company, as Trustee. 4.3 Form of 9.25% Senior Note due 2010 and Notation of Guarantee. 10.1 Credit Agreement dated as of June 18, 2002 by and among the Company, the lenders from time to time party thereto, Deutsche Bank Trust Company Americas, as Administrative Agent, JPMorgan Chase Bank and Citicorp North America, Inc., as Syndication Agents, Lehman Commercial Paper Inc. and Wachovia Bank, National Association, as Documentation Agents, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as Joint Book Managers, and Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as Joint Lead Arrangers. 10.2 Security Agreement dated as of June 18, 2002 by and among the Company, the Grantors party thereto and Deutsche Bank Trust Company Americas, as Collateral Agent. 10.3 Guarantee Agreement dated as of June 18, 2002 by and among the Guarantors party thereto and Deutsche Bank Trust Company Americas, as Administrative Agent. 10.4 Pledge Agreement dated as of June 18, 2002 by and among the Company, the Pledgors party thereto and Deutsche Bank Trust Company Americas, as Collateral Agent. 99.1 Press Release dated June 18, 2002 regarding completion of Core-Mark acquisition and the related financing transactions.
4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FLEMING COMPANIES, INC. By: /s/ MATTHEW H. HILDRETH ---------------------------------- Matthew H. Hildreth Senior Vice President, Finance and Treasurer Date: June 24, 2002 EXHIBIT INDEX
No. Exhibit - --- ------- 1.1 Underwriting Agreement dated June 13, 2002 by and among the Company, the Guarantors party thereto and Deutsche Bank Securities Inc., Lehman Brothers Inc., First Union Securities, Inc., J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated, as Representatives of the several Underwriters. 1.2 Underwriting Agreement dated June 13, 2002 by and among the Company and Lehman Brothers Inc., Deutsche Bank Securities Inc., First Union Securities, Inc. and Morgan Stanley & Co. Incorporated, as Representatives of the several Underwriters. 4.1 Indenture dated as of June 18, 2002 by and between the Company and Manufacturers and Traders Trust Company, as Trustee. 4.2 First Supplemental Indenture dated as of June 18, 2002 by and among the Company, the Subsidiary Guarantors party thereto and Manufacturers and Traders Trust Company, as Trustee. 4.3 Form of 9.25% Senior Note due 2010 and Notation of Guarantee. 10.1 Credit Agreement dated as of June 18, 2002 by and among the Company, the lenders from time to time party thereto, Deutsche Bank Trust Company Americas, as Administrative Agent, JPMorgan Chase Bank and Citicorp North America, Inc., as Syndication Agents, Lehman Commercial Paper Inc. and Wachovia Bank, National Association, as Documentation Agents, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as Joint Book Managers, and Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as Joint Lead Arrangers. 10.2 Security Agreement dated as of June 18, 2002 by and among the Company, the Grantors party thereto and Deutsche Bank Trust Company Americas, as Collateral Agent. 10.3 Guarantee Agreement dated as of June 18, 2002 by and among the Guarantors party thereto and Deutsche Bank Trust Company Americas, as Administrative Agent. 10.4 Pledge Agreement dated as of June 18, 2002 by and among the Company, the Pledgors party thereto and Deutsche Bank Trust Company Americas, as Collateral Agent. 99.1 Press Release dated June 18, 2002 regarding completion of Core-Mark acquisition and the related financing transactions.
EX-1.1 3 d97911exv1w1.txt UNDERWRITING AGREEMENT EXHIBIT 1.1 FLEMING COMPANIES, INC. $200,000,000 9 1/4% SENIOR NOTES DUE 2010 UNDERWRITING AGREEMENT June 13, 2002 Deutsche Bank Securities Inc. Lehman Brothers Inc. First Union Securities, Inc. J.P. Morgan Securities Inc. Morgan Stanley & Co. Incorporated, as Representatives of the several Underwriters set forth on Schedule 1 hereto c/o Deutsche Bank Securities Inc. 31 West 52nd Street New York, New York 10019 Ladies and Gentlemen: Fleming Companies, Inc., an Oklahoma corporation (the "Company"), and the subsidiary guarantors listed on the signature page hereto (the "Guarantors" and, together with the Company, the "Issuers") hereby confirm their agreement with you (the "Representatives") of the several underwriters set forth on Schedule 1 hereto (the "Underwriters"), as set forth below. 1. The Securities. Subject to the terms and conditions herein contained, the Company proposes to issue and sell to the Underwriters $200,000,000 aggregate principal amount of its 9 1/4% Senior Notes due 2010 (the "Notes"). The Notes will be unconditionally guaranteed (the "Guarantees" and together with the Notes, the "Securities") on a joint and several basis by each Guarantor. The Securities are to be issued under an indenture (the "Base Indenture") dated as of June 18, 2002, between the Company and Manufacturers and Traders Trust Company, as trustee (the "Trustee"), as supplemented by a supplemental in- -2- denture (the "Supplemental Indenture" and together with the Base Indenture as supplemented thereby, the "Indenture") to be dated as of the Closing Date (as defined below), by and among the Company, the Guarantors and the Trustee. The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (File No. 333-86816), including a prospectus, relating to debt securities including the Securities, and the Company's common stock and the offering thereof from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended (the "Act"). Such registration statement has been declared effective by the Commission. As provided in Section 5(a) hereof, a prospectus supplement reflecting the terms of the offering of the Securities and the other matters set forth therein has been prepared and will be filed pursuant to Rule 424(b) under the Act. Such prospectus supplement, in the form to be filed as contemplated by Section 5(a) hereof, is herein referred to as the "Final Prospectus Supplement" and together with the Prospectus (as defined below) in the form filed therewith, is herein referred to as the "Final Prospectus," and the prospectus supplement prepared and filed after the Effective Time, but containing a "Subject to Completion" legend comparable to that contained in paragraph (b)(10) of Item 501 under Regulation S-K of the rules and regulations of the Commission thereunder (the "Rules and Regulations") is herein referred to as the "Preliminary Prospectus Supplement" and together with the Prospectus in the form filed therewith, is herein referred to as the "Preliminary Prospectus." The Preliminary Prospectus Supplement and the Final Prospectus Supplement are collectively referred to as the "Prospectus Supplements." Such registration statement, as amended to the date of this Agreement, including the exhibits thereto and the documents incorporated by reference therein, is herein called the "Registration Statement," and the basic prospectus included therein relating to all offerings of securities under the Registration Statement, as amended or supplemented to the date of filing of the Prospectus Supplements filed therewith, is herein called the "Prospectus," including the reports filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference therein. As used herein, "Effective Time" means the date and the time as of which such registration statement, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission; "Effective Date" means the date of the Effective Time. 2. Representations and Warranties of the Issuers. The Company and each Guarantor represents and warrants to and agrees with the Underwriters that: (a) The Company meets the requirements under the Rules and Regulations for use of Form S-3 under the Act. The Registration Statement and the Prospectus conform, and the Final Prospectus contemplated by Section 5(a) hereof and any further amendments or supplements to the Registration Statement or the Final Prospectus will, -3- when they become effective or are filed with the Commission, as the case may be, conform, in each case, in all material respects to the requirements of the Act and the Rules and Regulations and do not and will not, as of the applicable Effective Date (as to the Registration Statement and any amendment thereto) and as of the applicable filing date (as to the Preliminary Prospectus and the Final Prospectus and any additional amendment or supplement to the Final Prospectus), contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that no representation or warranty is made as to information contained in or omitted from the Registration Statement, the Preliminary Prospectus or the Final Prospectus relating to the Underwriters in reliance upon and in conformity with written information furnished to the Company by Deutsche Bank Securities Inc. specifically for inclusion therein. (b) The reports incorporated by reference or deemed to be incorporated in the Final Prospectus pursuant to Item 12 of Form S-3 under the Act, at the time they were or hereafter are filed with the Commission, complied or will comply in all material respects with the requirements of the Exchange Act, and the rules and regulations of the Commission thereunder (the "Exchange Act Regulations"). (c) All of the subsidiaries of the Company are listed in Schedule 2 attached hereto (each, a "Subsidiary" and collectively, the "Subsidiaries"); all of the outstanding equity interests of the Company and the Subsidiaries have been, and as of the Closing Date will be, duly authorized and validly issued, fully paid and nonassessable and were not issued in violation of any preemptive or similar rights; except as set forth in the Final Prospectus, all of the outstanding equity interests of each of the Subsidiaries that are owned by the Company will be free and clear of all liens, encumbrances, equities and claims or restrictions on transferability (other than those imposed by the Act and the securities or "Blue Sky" laws of certain jurisdictions) or voting; except (i) in de minimis amounts, (ii) for Investee Stores (as defined in the Final Prospectus), (iii) as set forth on Schedule 3 hereto, or (iv) as disclosed in the Final Prospectus, the Company does not own, directly or indirectly, any long-term debt securities or any equity interest in any firm, partnership, joint venture or other entity. (d) The Company has the long-term debt and shareholders' equity as set forth in the Final Prospectus. Each of the Company and the Subsidiaries is duly organized or formed, validly existing and in good standing under the laws of its respective jurisdiction of organization or formation and has all requisite corporate or organizational power and authority to own its properties and conduct its business as now conducted and as described in the Final Prospectus; each of the Company and the Subsidiaries is -4- duly qualified to do business as a foreign corporation or organization in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the business, financial condition, prospects or results of operations of the Company and the Subsidiaries taken as a whole (any such event, a "Material Adverse Effect"). (e) Except as set forth in the Final Prospectus, each Issuer has all requisite corporate or organizational power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby (including, without limitation, the issuance and sale of the Securities). This Agreement has been duly authorized, executed and delivered by each Issuer. (f) The Base Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended, and the rules and regulations thereunder (the "TIA"). The Base Indenture has been duly authorized, executed and delivered by the Company and (assuming the due authorization, execution and delivery of the Indenture by the Trustee) constitutes a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding is brought (regardless of whether such enforcement is considered in a proceeding in equity or at law). (g) Except as set forth in the Final Prospectus, each Issuer has all requisite corporate or organizational power and authority to execute, deliver and perform its obligations under the Indenture. Except as set forth in the Final Prospectus, the Indenture has been duly authorized by each Issuer and when executed and delivered by each Issuer (assuming the due authorization, execution and delivery of the Indenture by the Trustee) will constitute a valid and legally binding agreement of each Issuer, enforceable against each Issuer in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding is brought (regardless of whether such enforcement is considered in a proceeding in equity or at law). The Supplemental Indenture when executed and delivered (assuming due authorization, execution and delivery of the Supplemental Indenture by the Trustee) will be in the form contemplated by the Indenture. -5- (h) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under the Notes. The Notes, when executed and delivered, will be in the form contemplated by the Indenture. Except as set forth in the Final Prospectus, the Notes have been duly authorized by the Company and when executed and delivered by the Company and authenticated by the Trustee and paid for by the Underwriters in accordance with the terms of this Agreement will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding is brought (regardless of whether such enforcement is considered in a proceeding in equity or at law). (i) Each Guarantor has all requisite corporate or organizational power and authority to execute, deliver and perform its obligations under the Guarantees. The Guarantees, when executed and delivered, will be in the form contemplated by the Indenture. Except as set forth in the Final Prospectus, the Guarantees have been duly authorized by each Guarantor and when executed and delivered by each Guarantor in accordance with the provisions of the Indenture will constitute the valid and legally binding agreements of each Guarantor, enforceable against each Guarantor in accordance with their terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and (ii) general principles of equity and the discretion of the court before which any proceeding is brought (regardless of whether such enforcement is considered in a proceeding in equity or at law). (j) No consent, approval, authorization or order of any court or governmental agency or body, or third party is required for the issuance and sale of the Securities or the consummation by the Issuers of the other transactions contemplated hereby, except such as have been obtained, such as will become effective at or prior to the issuance of the Securities and such as may be required under state securities or "Blue Sky" laws in connection with the sale of the Securities by the Underwriters. None of the Issuers is (i) in violation of its certificate of incorporation or bylaws (or similar organizational document), (ii) to the Issuers' knowledge, in breach or violation of any statute, judgment, decree, order, rule or regulation applicable to any of them or any of their respective properties or assets, or (iii) in breach of or in default under (nor has any event occurred that, with notice or passage of time or both, would constitute a default under) or in violation of any of the terms or provisions of any instrument pertaining to indebtedness, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement or permit to which any of them is a party or to which any of them or -6- their respective properties or assets is subject (collectively, "Contracts"), except in the case of clauses (ii) and (iii) for any such breach, default, violation or event that would not, individually or in the aggregate, have a Material Adverse Effect. (k) Except as set forth in the Final Prospectus, the execution, delivery and performance by each Issuer of the Indenture and the consummation by the Issuers of the transactions contemplated hereby (including, without limitation, the issuance and sale of the Securities to the Underwriters) will not conflict with or constitute or result in a breach of or a default under (or an event that with notice or passage of time or both would constitute a default under) or violation of any of (i) the terms or provisions of any Contract (except for the Company's existing Credit Agreement, which Credit Agreement will be repaid upon consummation of the transactions contemplated hereby), (ii) the certificate of incorporation or bylaws (or similar organizational document) of any of the Issuers or (iii) (assuming compliance with all applicable state securities or "Blue Sky" laws by the Underwriters) any statute, judgment, decree, order, rule or regulation applicable to any of the Issuers or any of their respective properties or assets, except in the case of clauses (i) and (iii) for any such conflict, breach or violation that would not, individually or in the aggregate, have a Material Adverse Effect. (l) The consolidated financial statements of the Company (including the notes thereto) included or incorporated by reference in the Final Prospectus present fairly in all material respects the financial position, results of operations and cash flows of the Company and the Subsidiaries at the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis ("GAAP"), except as otherwise stated therein. The summary and selected financial data in the Final Prospectus present fairly in all material respects the information shown therein and have been prepared and compiled on a basis consistent with the audited financial statements included therein. Except as otherwise stated therein, the pro forma financial statements included or incorporated by reference in the Final Prospectus comply as to form in all material respects with the applicable requirements of Regulation S-X under the Exchange Act. The assumptions used in preparing the pro forma financial statements included or incorporated by reference in the Final Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts. Notwithstanding anything to the contrary contained herein, no representation or warranty is made under this clause (l) with respect to EBITDA, Adjusted EBITDA or any ratio based thereon or derived therefrom. -7- (m) Deloitte & Touche LLP (the "Independent Accountants") is an independent public accounting firm with respect to the Company within the meaning of the Act and the Rules and Regulations. (n) Except as set forth in the Final Prospectus, there is not pending or, to the knowledge of the Issuers, threatened any action, suit, proceeding, inquiry or investigation to which the Company or any of the Subsidiaries is a party, or to which the property or assets of the Company or any of the Subsidiaries are subject, before or brought by any court, arbitrator or governmental agency or body that, if determined adversely to the Company or any of the Subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect or that seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Securities or the consummation of the other transactions described in the Final Prospectus. (o) Each of the Company and the Subsidiaries possesses all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, presently required or necessary to own or lease, as the case may be, and to operate its respective properties and to carry on its respective businesses as now or proposed to be conducted as set forth in the Final Prospectus ("Permits") (except, with respect to Permits which the Company and the Subsidiaries do not presently possess which would be necessary solely for future business proposed to be conducted by the Company and the Subsidiaries ("Future Permits"), which Future Permits the Company and the Subsidiaries reasonably believe will be obtained), except where the failure to obtain such Permits would not, individually or in the aggregate, have a Material Adverse Effect; each of the Company and the Subsidiaries has fulfilled and performed all of its obligations with respect to such Permits or in the case of the Future Permits, the Company and the Subsidiaries intend to use their reasonable best efforts to obtain such Future Permits, except where the failure to do so would not, individually or in the aggregate, have a Material Adverse Effect; no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or result in any other material impairment of the rights of the holder of any such Permit except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect; and to each Issuer's knowledge, none of the Company and the Subsidiaries has received any notice of any proceeding relating to revocation or modification of any such Permit, except as described in the Final Prospectus and except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect. -8- (p) Since the date of the most recent financial statements included or incorporated by reference in the Final Prospectus, except as described therein or in the Final Prospectus, (i) none of the Company or the Subsidiaries has incurred any liabilities or obligations, direct or contingent, or entered into or agreed to enter into any transactions not in the ordinary course of business, which liabilities, obligations or transactions would, individually or in the aggregate, be material to the business, financial condition, prospects or results of operations of the Company and its Subsidiaries, taken as a whole, (ii) none of the Company or the Subsidiaries has purchased any of its outstanding equity interests, nor declared, paid or otherwise made any dividend or distribution of any kind on its equity interests (other than regular quarterly dividends declared or paid on the Company's common stock and other than with respect to any of such Subsidiaries, the purchase of, or dividend or distribution on, equity interests owned by the Company) and (iii) there has not been any material change in the equity interests or long-term indebtedness of the Company or the Subsidiaries. (q) The Company and each of the Subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns, except where the failure to so file such returns would not, individually or in the aggregate, have a Material Adverse Effect, and has paid all taxes shown as due thereon other than those being contested in good faith or those owed but not yet due to be paid. (r) None of the Company, the Subsidiaries or any agent acting on their behalf has taken or intends to take any action that might cause this Agreement or the sale of the Securities to violate Regulation T, U or X of the Board of Governors of the Federal Reserve System, in each case as in effect, or as the same may hereafter be in effect, on the Closing Date. (s) The Company and each of the Subsidiaries have good and marketable title to all real property and good title to all personal property described in the Final Prospectus as being owned by it and good and marketable title to a leasehold estate in the real and personal property described in the Final Prospectus as being leased by it free and clear of all liens, charges, encumbrances or restrictions, except as described in the Final Prospectus or to the extent the failure to have such title or the existence of such liens, charges, encumbrances or restrictions would not, individually or in the aggregate, have a Material Adverse Effect. All leases and material contracts and agreements to which the Company or any of the Subsidiaries is a party or by which any of them is bound are valid and enforceable against the Company or such Subsidiary, and are in full force and effect with only such exceptions as would not, individually or in the aggregate, have a Material Adverse Effect. The Company and the Subsidiaries own or possess adequate licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights and know-how necessary to conduct the businesses now or proposed to be operated by them as described in the Final Prospectus, and to the Company's knowledge, none of the Company or the Subsidiaries has received any notice of infringement of or conflict with (or knows of any such infringement of or conflict with) asserted rights of others with respect to any patents, trademarks, service -9- marks, trade names, copyrights or know-how that, if such assertion of infringement or conflict were sustained, would have a Material Adverse Effect. (t) There are no legal or governmental proceedings involving or affecting the Company or any Subsidiary or any of their respective properties or assets required to be described in the Final Prospectus pursuant to the Act that are not described in the Final Prospectus. (u) Except as described in the Final Prospectus or except as would not, individually or in the aggregate, have a Material Adverse Effect (A) each of the Company and the Subsidiaries is in compliance with and not subject to liability under applicable Environmental Laws (as defined below), (B) there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter or request for information pending or, to the knowledge of the Company or any of the Subsidiaries, threatened against the Company or any of the Subsidiaries under any Environmental Law, (C) no lien, charge, encumbrance or restriction has been recorded under any Environmental Law with respect to any assets, facility or property owned, operated, leased or controlled by the Company or any of the Subsidiaries, (D) none of the Company or the Subsidiaries has received notice that it has been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), or any comparable state law and (E) no property or facility of the Company or any of the Subsidiaries is (i) listed or, to the Company's knowledge proposed for listing on the National Priorities List under CERCLA or is (ii) to their knowledge, listed in the Comprehensive Environmental Response, Compensation, Liability Information System List promulgated pursuant to CERCLA, or on any comparable list maintained by any state or local governmental authority. For purposes of this Agreement, "Environmental Laws" means the common law and all applicable federal, state and local laws or regulations, codes, orders, decrees, judgments or injunctions issued, promulgated, approved or entered thereunder, relating to pollution or protection of public or employee health and safety or the environment, including, without limitation, laws relating to (i) emissions, discharges, releases or threatened releases of hazardous materials into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsur- -10- face strata), (ii) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of hazardous materials and (iii) underground and above ground storage tanks and related piping, and emissions, discharges, releases or threatened releases therefrom. (v) There is no strike, material labor dispute, slowdown or work stoppage with the employees of the Company or any of the Subsidiaries that is pending or, to the knowledge of the Issuers, threatened. (w) The Company carries insurance in such amounts and covering such risks as is adequate for the conduct of its and the Subsidiaries' respective businesses and the value of its and the Subsidiaries' respective properties and as is customary for comparable companies engaged in similar industries. (x) The Company (i) makes and keeps accurate books and records and (ii) maintains internal accounting controls that provide reasonable assurance that (A) transactions are executed in accordance with management's general or specific authorization, (B) transactions are recorded as necessary to permit preparation of its financial statements and to maintain accountability for its and the Subsidiaries' assets, (C) access to its and its Subsidiaries' assets is permitted only in accordance with management's general or specific authorization and (D) the reported accountability for its and its Subsidiaries' assets is compared with existing assets at reasonable intervals. (y) None of the Company or the Subsidiaries is or will be after application of the net proceeds from the sale of the Securities as described in the Final Prospectus an "investment company", as such term is defined in the Investment Company Act of 1940, as amended, and the rules and regulations thereunder. (z) The Indenture and the Securities will conform in all material respects to the description thereof contained in the Final Prospectus. (aa) None of the Company or any of its Affiliates has taken, nor will any of them take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Securities. (bb) Except as disclosed in the Final Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to include any securities of the Company -11- owned or to be owned by such person in the securities registered pursuant to the Registration Statement. (cc) Except for this Agreement, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder's fee or other like payment in connection with the offering of the Securities. (dd) The statistical and market-related data included in the Final Prospectus and the Registration Statement are based on or derived from sources which the Company believes to be reliable and accurate. 3. Purchase, Sale and Delivery of the Securities. On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Underwriters, and the Underwriters severally agree to purchase from the Company, at 97.500% of their aggregate principal amount, $200,000,000 aggregate principal amount of the Securities. Certificates in definitive form for the Securities that the Underwriters have agreed to purchase hereunder, and in such denomination or denominations and registered in such name or names as the Representatives request upon notice to the Company at least 48 hours prior to the Closing Date, shall be delivered by or on behalf of the Company to the Underwriters, against payment by or on behalf of the Underwriters of the purchase price therefor by wire transfer of immediately available funds to the account specified by the Company at least two business days prior to the Closing Date. Such delivery of and payment for the Securities shall be made at the offices of White & Case LLP, 1155 Avenue of the Americas, New York, New York, at 10:00 A.M., New York time, on June 18, 2002, or at such other place, time or date as the Representatives and the Company may agree upon, such time and date of delivery against payment being herein referred to as the "Closing Date." The Company will make such certificate or certificates for the Securities available for checking and packaging by the Representatives at the offices of Deutsche Bank Securities Inc. in New York, New York, or at such other place as the Representatives may designate at least 24 hours prior to the Closing Date. 4. Offering by the Underwriters. The Underwriters propose to offer for sale to the public the Securities at the price and upon the terms set forth in the Final Prospectus. 5. Covenants of the Issuers. Each of the Issuers covenants and agrees with the Underwriters that: -12- (a) The Company will file the Final Prospectus and any amendment or supplement thereto with the Commission in the manner and within the time period required by Rule 424(b) under the Act. During any time when a prospectus relating to the Securities is required to be delivered under the Act, (i) the Company will comply with all requirements imposed upon it by the Act, the Rules and Regulations, the Exchange Act Regulations and the TIA to the extent necessary to permit the continuance of sales of or dealings in the Securities in accordance with the provisions hereof and of the Final Prospectus, as then amended or supplemented, and (ii) the Company will not file with the Commission the Final Prospectus or any amendment or supplement to the Final Prospectus or any amendment to the Registration Statement of which the Representatives shall not previously have been advised and furnished a copy for a reasonable period of time prior to the proposed filing and as to which filing the Representatives shall not have consented, which consent shall not be unreasonably withheld. The Company will prepare and file with the Commission, in accordance with the Act, the Rules and Regulations, the Exchange Act Regulations and the TIA, promptly upon the reasonable request by the Representatives or counsel for the Underwriters, any amendments to the Registration Statement or amendments or supplements to the Final Prospectus that may be necessary or advisable in connection with the distribution of the Securities by the Underwriters, and will use its best efforts to cause any such amendment to the Registration Statement to be declared effective by the Commission promptly. The Company will advise the Representatives, promptly after it receives notice thereof, of the time when the Registration Statement or any amendment thereto has been filed or declared effective or the Final Prospectus or any amendment or supplement to the Final Prospectus has been filed and will provide evidence satisfactory to the Representatives of each such filing or effectiveness. (b) The Company will advise the Representatives, promptly after receiving notice or obtaining knowledge thereof, of (i) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any portion thereof or any amendment thereto or any order preventing or suspending the use of the Final Prospectus or any amendment or supplement thereto, (ii) the suspension of the qualification of the Securities for offering or sale in any jurisdiction, (iii) the institution, threatening or contemplation of any proceeding for any such purpose or (iv) any request made by the Commission for amending the Registration Statement, for amending or supplementing the Final Prospectus or for additional information. The Company will use its best efforts to prevent the issuance of any such stop order and, if any such stop order is issued, to obtain the withdrawal thereof as promptly as possible. (c) The Company will cooperate with the Representatives in arranging for the qualification of the Securities for offering and sale under the securities or "Blue Sky" -13- laws of such jurisdictions as the Representatives may designate and will continue such qualifications in effect for as long as may be necessary to complete the distribution of the Securities; provided that in connection therewith the Company shall not be required to qualify as a foreign corporation, to execute a general consent to service of process or subject itself to taxation in any jurisdiction. (d) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event occurs as a result of which the Final Prospectus as then amended or supplemented would include any untrue statement of a material fact, or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it is necessary at any time to amend or supplement the Final Prospectus to comply with the Act or the Rules and Regulations, the Company will promptly notify the Representatives thereof and, subject to Section 5(a) hereof, will prepare and file with the Commission, at the Company's expense, an amendment to the Registration Statement or an amendment or supplement to the Final Prospectus that corrects such statement or omission or effects such compliance. (e) The Company will, without charge, provide (i) to the Underwriters and to counsel for the Underwriters a conformed copy of the Registration Statement and each amendment thereto (in each case including exhibits thereto) and (ii) so long as a prospectus relating to the Securities is required to be delivered under the Act, as many copies of the Final Prospectus and any amendment or supplement thereto as the Underwriters may reasonably request. (f) The Company, as soon as practicable, will make generally available to holders of the Securities and to the Underwriters consolidated earnings statements of the Company and its subsidiaries (which need not be certified by an independent public accountant) that satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder. (g) The Company will apply the net proceeds from the sale of the Securities as set forth under "Use of Proceeds" in the Final Prospectus. (h) For so long as any Securities remain outstanding, the Company will furnish to the Underwriters through Deutsche Bank Securities Inc. copies of all reports and other communications (financial or otherwise) furnished by the Company to the Trustee or the holders of the Securities and, as soon as available, copies of any reports or financial statements furnished to or filed by the Company with the Commission or -14- any national securities exchange on which any class of securities of the Company may be listed. 6. Expenses. The Company agrees to pay all costs and expenses incident to the performance of its obligations under this Agreement, whether or not the transactions contemplated herein are consummated or this Agreement is terminated pursuant to Section 10 hereof, including all costs and expenses incident to (i) the printing, word processing or other production of documents with respect to the transactions contemplated hereby, including any costs of printing the Registration Statement and any amendment thereto, the Preliminary Prospectus and any amendment or supplement thereto, the Final Prospectus and any amendment or supplement thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating to the delivery to the Underwriters of copies of the foregoing documents, (iii) the fees and disbursements of the counsel, the accountants and any other experts or advisors retained by the Company, (iv) preparation (including printing), issuance and delivery to the Underwriters of the Securities, including trustee's fees, (v) the qualification of the Securities under state securities and "Blue Sky" laws, including filing fees and fees and disbursements of counsel for the Underwriters relating thereto, (vi) the filing fees of the Commission relating to the Securities, (vii) the costs and expenses of the Company relating to investor presentations on any "road show undertaken in connection with the marketing of the offering of the Securities, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show, (viii) fees and expenses of the Trustee, including fees and expenses of counsel and (ix) any fees charged by investment rating agencies for the rating of the Securities. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 7 hereof is not satisfied, because this Agreement is terminated pursuant to clauses (i) or (v) of Section 10(a) hereof or because of any failure, refusal or inability on the part of the Company to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder (other than solely by reason of a default or breach by the Underwriters of their obligations hereunder after all conditions hereunder have been satisfied in accordance herewith), the Company will reimburse the Representatives upon demand (accompanied by documentation) for all out-of-pocket expenses (including fees, disbursements and charges of Cahill Gordon & Reindel, counsel for the Underwriters) that shall have been incurred by the Representatives in connection with the proposed purchase and sale of the Securities. 7. Conditions of the Underwriters' Obligations. The obligation of the Underwriters to purchase and pay for the Securities shall, in the sole discretion of the Representatives, be subject to satisfaction or waiver of the following conditions: -15- (a) The Final Prospectus shall have been timely filed with the Commission in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and any request of the Commission for inclusion of additional information in the Registration Statement or the Final Prospectus or otherwise shall have been complied with. (b) On the Closing Date, the Representatives shall have received the opinions, dated as of the Closing Date and addressed to the Underwriters, of each of Latham & Watkins and McAfee & Taft with respect to the matters provided for in Exhibit A, in the case of the opinion of Latham & Watkins, and Exhibit B, in the case of the opinion of McAfee & Taft. (c) On the Closing Date, the Representatives shall have received the opinion, in form and substance satisfactory to the Representatives, dated as of the Closing Date and addressed to the Underwriters, of Cahill Gordon & Reindel, counsel for the Underwriters, with respect to certain legal matters relating to this Agreement and such other related matters as the Representatives may reasonably require. In rendering such opinion, Cahill Gordon & Reindel shall have received and may rely upon such certificates and other documents and information as it may reasonably request to pass upon such matters. (d) The Underwriters shall have received from the Independent Accountants a comfort letter or letters dated as of the date hereof and dated as of the Closing Date with respect to financial information of the Company and Core-Mark International, Inc. ("Core-Mark") included or incorporated by reference in the Registration Statement and Final Prospectus, in form and substance satisfactory to counsel for the Underwriters. (e) The representations and warranties of the Issuers contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date; the statements of the Company's officers made pursuant to any certificate delivered in accordance with the provisions hereof shall be true and correct on and as of the date made and on and as of the Closing Date; the Company shall have performed all covenants and agreements, in all material respects, and satisfied all conditions, in all material respects, on their part to be performed or satisfied hereunder at or prior to the Closing Date; and, except as described in the Final Prospectus (exclusive of any amendment or supplement thereto after the date of the filing of the Final Prospectus as contemplated by Section 5(a) hereof), subsequent to the date of the most recent financial statements in such Final -16- Prospectus, there shall have been no event or development, and no information shall have become known, that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect. (f) The sale of the Securities hereunder shall not be enjoined (temporarily or permanently) on the Closing Date. (g) The Representatives shall have received a certificate of the Company, dated the Closing Date, signed on behalf of the Company by its Chairman of the Board, President or any Senior Vice President and the Chief Financial Officer, to the effect that: (i) The representations and warranties of the Issuers contained in this Agreement are true and correct on and as of the Closing Date, and the Company and the Guarantors have performed all covenants and agreements, in all material respects, and satisfied all conditions, in all material respects, on its part to be performed or satisfied hereunder at or prior to the Closing Date; (ii) At the Closing Date, since the date hereof or since the date of the most recent financial statements in the Final Prospectus (exclusive of any amendment or supplement thereto after the date of the filing of the Final Prospectus as contemplated by Section 5(a) hereof), no event or development has occurred, and no information has become known, that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect; and (iii) To such officer's knowledge, the sale of the Securities hereunder has not been enjoined (temporarily or permanently). (h) The following transactions shall close substantially concurrently with the Closing under this Agreement: (i) the acquisition of Core-Mark by the Company on terms not materially different from those set forth in the agreement filed as an exhibit to the Company's Form 8-K filed with the Commission on April 24, 2002; (ii) the new credit agreement of the Company described in the Final Prospectus; and (iii) the concurrent offering of the Company's common stock described in the Final Prospectus. -17- On or before the Closing Date, the Representatives and counsel for the Underwriters shall have received such further documents, opinions, certificates, letters and schedules or instruments relating to the business, corporate, legal and financial affairs of the Company and the Subsidiaries as they shall have heretofore reasonably requested from the Issuers. All such documents, opinions, certificates, letters, schedules or instruments delivered pursuant to this Agreement will comply with the provisions hereof only if they are reasonably satisfactory in all material respects to the Representatives and counsel for the Underwriters. The Issuers shall furnish to the Representatives such conformed copies of such documents, opinions, certificates, letters, schedules and instruments in such quantities as the Representatives shall reasonably request. 8. Indemnification and Contribution. (a) The Issuers, jointly and severally, agree to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which any Underwriter or such controlling person may become subject under the Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement and any amendment thereto, the Preliminary Prospectus and any amendment or supplement thereto and the Final Prospectus and any amendment or supplement thereto; or (ii) the omission or alleged omission to state, in the Registration Statement and any amendment thereto, the Preliminary Prospectus and any amendment or supplement thereto and the Final Prospectus and any amendment or supplement thereto, a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse, as incurred, the Underwriters and each such controlling person for any legal or other expenses incurred by the Underwriters or such controlling person in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided that the Issuers will not be liable in any such case to the extent that any such loss, claim, damage, or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement and any amendment thereto, the Preliminary Prospectus and any amendment or supplement and the Final Prospectus and any amendment or supplement thereto in reliance upon and in conformity with written information concerning the Un- -18- derwriters furnished to the Company by the Underwriters through Deutsche Bank Securities Inc. specifically for use therein; provided further that the Company shall not be liable to any Underwriter under the indemnity agreement in this Section 8(a) to the extent, but only to the extent, that (i) such loss, claim, damage, or liability of such Underwriter results from an untrue statement of a material fact or an omission of a material fact contained in the Preliminary Prospectus, which untrue statement or omission was completely corrected in the Final Prospectus and (ii) the Company sustains the burden of proving that such Underwriter sold shares of Securities to the person alleging such loss, claim, liability, expense or damage without sending or giving, at or prior to written confirmation of such sale, a copy of the Final Prospectus and (iii) the Company had previously furnished sufficient quantities of the Final Prospectus to the Underwriters within a reasonable amount of time prior to such sale or such confirmation, and (iv) such Underwriter failed to deliver the Final Prospectus (excluding the documents incorporated by reference therein), if required by law to have so delivered it, and such delivery would have been a complete defense against the loss, claim, liability, expense or damage asserted by such person. The indemnity provided for in this Section 8 will be in addition to any liability that the Issuers may otherwise have to the indemnified parties. The Issuers shall not be liable under this Section 8 for any settlement of any claim or action effected without its prior written consent, which shall not be unreasonably withheld. (b) Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Issuers, their directors and officers and each person, if any, who controls such Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which the Issuers or any such director, officer or controlling person may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement and any amendment thereto, the Preliminary Prospectus and any amendment or supplement thereto and the Final Prospectus and any amendment or supplement thereto, or (ii) the omission or the alleged omission to state therein a material fact required to be stated in the Registration Statement and any amendment thereto, the Preliminary Prospectus and any amendment thereto and the Final Prospectus and any amendment or supplement thereto, or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Underwriter, furnished to the Company by the Underwriters through Deutsche Bank Securities Inc. specifically for use therein; and subject to the limitation set forth immediately preceding this clause, will reimburse, as incurred, any legal or other expenses incurred by the Issuers or any such director, officer or controlling person in connection with investigating or defending against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action in respect thereof. The indemnity -19- provided for in this Section 8 will be in addition to any liability that the Underwriters may otherwise have to the indemnified parties. The Underwriters shall not be liable under this Section 8 for any settlement of any claim or action effected without their consent, which shall not be unreasonably withheld. The Company shall not, without the prior written consent of the Underwriters, effect any settlement or compromise of any pending or threatened proceeding in respect of which any Underwriter is or could have been a party, or indemnity could have been sought hereunder by any Underwriter, unless such settlement (A) includes an unconditional written release of the Underwriters, in form and substance reasonably satisfactory to the Underwriters, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of any Underwriter. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action for which such indemnified party is entitled to indemnification under this Section 8, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party of the commencement thereof in writing; but the omission to so notify the indemnifying party (i) will not relieve it from any liability under paragraph (a) or (b) above unless and to the extent such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraphs (a) and (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided that if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have been advised by counsel that there may be one or more legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, or (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after receipt by the indemnifying party of notice of the institution of such action, then, in each such case, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or -20- other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Underwriters in the case of paragraph (a) of this Section 8 or the Issuers in the case of paragraph (b) of this Section 8, representing the indemnified parties under such paragraph (a) or paragraph (b), as the case may be, who are parties to such action or actions) or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party. All fees and expenses reimbursed pursuant to this paragraph (c) shall be reimbursed as they are incurred. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld), unless such indemnified party waived in writing its rights under this Section 8, in which case the indemnified party may effect such a settlement without such consent. (d) In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 8 is unavailable to, or insufficient to hold harmless, an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the offering of the Securities or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof). The relative benefits received by the Issuers on the one hand and any Underwriter on the other shall be deemed to be in the same proportion as the total proceeds from the offering (before deducting expenses) received by the Issuers bear to the total discounts and commissions received by such Underwriter. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers on the one hand, or such Underwriter on the other, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement or omission, and any other equitable consid- -21- erations appropriate in the circumstances. The Issuers and the Underwriters agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this paragraph (d). Notwithstanding any other provision of this paragraph (d), no Underwriter shall be obligated to make contributions hereunder that in the aggregate exceed the total discounts, commissions and other compensation received by such Underwriter under this Agreement, less the aggregate amount of any damages that such Underwriter has otherwise been required to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material fact, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls an Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Underwriters, and each director of the Issuers, each officer of the Issuers and each person, if any, who controls such Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Issuers. 9. Survival Clause. The respective representations, warranties, agreements, covenants, indemnities and other statements of the Issuers, their officers and the Underwriters set forth in this Agreement or made by or on behalf of them pursuant to this Agreement shall remain in full force and effect, regardless of (i) any investigation made by or on behalf of the Issuers, any of its officers or directors, the Underwriters or any controlling person referred to in Section 8 hereof and (ii) delivery of and payment for the Securities. The respective agreements, covenants, indemnities and other statements set forth in Sections 6, 8, 9 and 14 hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement. 10. Termination. (a) This Agreement may be terminated in the sole discretion of the Representatives by notice to the Issuers given prior to the Closing Date in the event that the Issuers shall have failed, refused or been unable to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder at or prior thereto or, if at or prior to the Closing Date: (i) any of the Company or the Subsidiaries shall have sustained any loss or interference with respect to its businesses or properties from fire, flood, hurricane, accident or other calamity, whether or not covered by insurance, or from any strike, labor dispute, slow down or work stoppage or any legal or governmental proceeding, which loss or interference, in the sole judgment of the Repre- -22- sentatives, has had or has a Material Adverse Effect, or there shall have been, in the sole judgment of the Representatives, any event or development that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect (including without limitation a change in control of the Company or the Subsidiaries), except in each case as described in the Final Prospectus contemplated by Section 5(a) hereof (exclusive of any amendment or supplement thereto); (ii) trading in securities of the Company or in securities generally on the New York Stock Exchange or the NASDAQ National Market shall have been suspended or materially limited or minimum or maximum prices shall have been established on any such exchange or market; (iii) a banking moratorium shall have been declared by New York or United States authorities or a material disruption occurs in securities settlement or clearance services in the United States; (iv) there shall have been (A) an outbreak or escalation of hostilities between the United States and any foreign power, or (B) an outbreak or escalation of any other insurrection or armed conflict involving the United States or any other national or international calamity or emergency, or (C) any material change in the financial markets of the United States which, in the case of (A), (B) or (C) above and in the sole judgment of the Representatives, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities as contemplated by the Final Prospectus; or (v) any securities of the Company shall have been downgraded or placed on any "watch list" for possible downgrading by any nationally recognized statistical rating organization. (b) Termination of this Agreement pursuant to this Section 11 shall be without liability of any party to any other party except as provided in Section 10 hereof. 11. Information Supplied by the Underwriters. The statements set forth in the third paragraph, the second sentence of the fourth paragraph, the sixth, seventh and eighth paragraphs under the heading "Underwriting" in the Final Prospectus (to the extent such statements relate to the Underwriters) constitute the only information furnished by the Underwriters to the Company for purposes of Sections 2(a) and 8 hereof. 12. Notices. All communications hereunder shall be in writing and, if sent to the Representatives, shall be mailed or delivered to (i) Deutsche Bank Securities Inc., 31 West 52nd Street, New York, New York 10019, Attention: Corporate Finance Department; -23- with a copy to Cahill Gordon & Reindel, 80 Pine Street, New York, NY 10005, Attention: John Tripodoro; if sent to the Issuers, shall be mailed or delivered to the Company at 1945 Lakepointe Drive, Lewisville, Texas 75057, Attention: Chief Financial Officer; with a copy to Latham & Watkins, 505 Montgomery Street, Suite 1900, San Francisco, California 94111-2562, Attention: Tracy Edmonson, Esq. All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; and one business day after being timely delivered to a next-day air courier. 13. Successors. This Agreement shall inure to the benefit of and be binding upon the Underwriters, Issuers and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person except that (i) the indemnities of the Issuers contained in Section 8 of this Agreement shall also be for the benefit of any person or persons who control the Underwriters within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters contained in Section 8 of this Agreement shall also be for the benefit of the directors of the Issuers, their officers and any person or persons who control such Issuers within the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of Securities from the Underwriters will be deemed a successor because of such purchase. 14. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW. 15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. -24- If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company, the Guarantors and the Underwriters. Very truly yours, FLEMING COMPANIES, INC., as Issuer By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Senior Vice President, General Counsel and Secretary ABCO FOOD GROUP, INC., as Guarantor By: /s/ James R. Vaughan ------------------------------------- Name: James R. Vaughan Title: President ABCO MARKETS, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary ABCO REALTY CORP., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary -25- AG, L.L.C., as Guarantor, by Fleming Companies, Inc. as its sole member By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary AMERICAN LOGISTICS GROUP, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary BAKER'S FOOD GROUP, INC., as Guarantor By: /s/ James R. Vaughan ------------------------------------- Name: James R. Vaughan Title: President CARDINAL WHOLESALE, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary DUNIGAN FUELS, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary -26- FAVAR CONCEPTS, LTD., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING FOODS MANAGEMENT CO., L.L.C., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING FOODS OF TEXAS, L.P., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING INTERNATIONAL LTD., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING SUPERMARKETS OF FLORIDA, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary -27- FLEMING TRANSPORTATION SERVICE, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING WHOLESALE, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary FOOD 4 LESS BEVERAGE COMPANY, INC., as Guarantor By: /s/ Charles Hall ------------------------------------- Name: Charles Hall Title: President FUELSERV, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary GATEWAY INSURANCE AGENCY, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary -28- HEAD DISTRIBUTING COMPANY, as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary LAS, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary MINTER-WEISMAN CO., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary PIGGLY WIGGLY COMPANY, as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary PROGRESSIVE REALTY, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary -29- RAINBOW FOOD GROUP, INC., as Guarantor By: /s/ James R. Vaughan ------------------------------------- Name: James R. Vaughan Title: President RETAIL INVESTMENTS, INC., as Guarantor By: /s/ James R. Vaughan ------------------------------------- Name: James R. Vaughan Title: President RETAIL SUPERMARKETS, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary RFS MARKETING SERVICES, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary RICHMAR FOODS, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary -30- SCRIVNER TRANSPORTATION, INC., as Guarantor By: /s/ Carlos M. Hernandez ------------------------------------- Name: Carlos M. Hernandez Title: Secretary -31- The foregoing Agreement is hereby confirmed and accepted as of the date first above written. DEUTSCHE BANK SECURITIES INC. LEHMAN BROTHERS INC. FIRST UNION SECURITIES, INC. J.P. MORGAN SECURITIES INC. MORGAN STANLEY & CO. INCORPORATED DEUTSCHE BANK SECURITIES INC. By: /s/ William Frauen ------------------------------- Name: William Frauen Title: Director By: /s/ Carl Mayer ------------------------------- Name: Carl Mayer Title: Managing Director EX-1.2 4 d97911exv1w2.txt UNDERWRITING AGREEMENT EXHIBIT 1.2 8,000,000 SHARES FLEMING COMPANIES, INC. COMMON STOCK UNDERWRITING AGREEMENT June 13, 2002 Lehman Brothers Inc. Deutsche Bank Securities Inc. First Union Securities, Inc. Morgan Stanley & Co. Incorporated As Representatives of the several Underwriters named in Schedule 1 hereto c/o Lehman Brothers Inc. 745 Seventh Avenue New York, NY 10019 Ladies and Gentlemen: Fleming Companies, Inc., an Oklahoma corporation (the "COMPANY"), proposes to sell 8,000,000 shares (the "FIRM STOCK") of the Company's common stock, par value $2.50 per share (the "COMMON STOCK"). In addition, the Company proposes to grant to the Underwriters named in Schedule 1 hereto (the "UNDERWRITERS") an option to purchase up to an additional 1,200,000 shares of the Common Stock on the terms and for the purposes set forth in Section 3 (the "OPTION STOCK"). The Firm Stock and the Option Stock, if purchased, are hereinafter collectively called the "STOCK." This is to confirm the agreement concerning the purchase of the Stock from the Company by the Underwriters. The Company has prepared and filed with the Securities and Exchange Commission (the "COMMISSION") a registration statement on Form S-3 (File No. 333-86816), including a prospectus relating to, debt securities and Common Stock including the Stock, and the offering thereof from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended (the "ACT"). Such registration statement has been declared effective by the Commission. As provided in Section 5(a), a prospectus supplement reflecting the terms of the offering of the Stock and the other matters set forth therein has been prepared and will be filed pursuant to Rule 424(b) under the Act. Such prospectus supplement, in the form to be filed as contemplated by Section 5(a) hereof, is herein referred to as the "FINAL PROSPECTUS SUPPLEMENT" and together with the Prospectus (as defined below) in the form filed therewith, is herein referred to as the "FINAL PROSPECTUS" and the prospectus supplement prepared and filed after the Effective Time (as defined below), but containing a "Subject to Completion" legend comparable to that contained in paragraph (b)(10) of Item 501 under Regulation S-K of the rules and regulations of the Commission under the Act (the "RULES AND REGULATIONS") is referred to as a "PRELIMINARY PROSPECTUS SUPPLEMENT" and, together with the Prospectus in the form filed therewith, is herein referred to as the "PRELIMINARY PROSPECTUS." The Preliminary Prospectus Supplement and the Final Prospectus Supplement are collectively referred to as the "PROSPECTUS SUPPLEMENTS." Such registration statement, as amended to the date of this Agreement, including the exhibits thereto and the documents incorporated by reference therein, is herein called the "REGISTRATION STATEMENT," and the basic prospectus included therein relating to all offerings of securities under the Registration Statement, as amended or supplemented to the date of the filing of the Prospectus Supplement filed therewith, is herein called the "PROSPECTUS," including the documents filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), that are incorporated by reference therein. As used herein, "EFFECTIVE TIME" means the date and the time as of which such registration statement, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission; "EFFECTIVE DATE" means the date of the Effective Time. Section 1. Representations, Warranties and Agreements of the Company. The Company represents, warrants to, and agrees with the Underwriters that: (a) The Company meets the requirements under the Rules and Regulations for use of Form S-3 under the Act. The Registration Statement and the Prospectus conform, and the Final Prospectus contemplated by Section 5(a) hereof and any further amendments or supplements to the Registration Statement or the Final Prospectus will, when they become effective or are filed with the Commission, as the case may be, conform, in each case, in all material respects to the requirements of the Act and the Rules and Regulations and do not and will not, as of the applicable Effective Date (as to the Registration Statement and any amendment thereto) and as of the applicable filing date (as to the Preliminary Prospectus and the Final Prospectus and any additional amendment or supplement to the Final Prospectus), contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that no representation or warranty is made as to information contained in or omitted from the Registration Statement, the Preliminary Prospectus or the Final Prospectus relating to the Underwriters in reliance upon and in conformity with written information furnished to the Company through Lehman Brothers Inc. by or on behalf of the Underwriters specifically for inclusion therein. (b) The reports incorporated by reference or deemed to be incorporated in the Final Prospectus pursuant to Item 12 of Form S-3 under the Act, at the time they were or hereafter are filed with the Commission, complied or will comply in all material respects with the requirements of the Exchange Act, and the rules and regulations of the Commission thereunder (the "EXCHANGE ACT REGULATIONS"). -2- (c) All of the subsidiaries of the Company are listed in Schedule 2 attached hereto (each, a "SUBSIDIARY" and collectively, the "SUBSIDIARIES"); all of the outstanding equity interests of the Company and the Subsidiaries have been, and as of the relevant Delivery Date (as defined below) will be, duly authorized and validly issued, fully paid and nonassessable and were not issued in violation of any preemptive or similar rights; except as set forth in the Final Prospectus, all of the outstanding equity interests of each of the Subsidiaries that are owned by the Company will be free and clear of all liens, encumbrances, equities and claims or restrictions on transferability (other than those imposed by the Act and the securities or "Blue Sky" laws of certain jurisdictions) or voting; except (i) in de minimis amounts, (ii) for firms, partnerships, joint ventures or other entities (each, a "PERSON") in which the Company or any Subsidiary has invested equity capital, made loans to or guaranteed loans for in accordance with the business practices of the Company or such Subsidiary for the purpose of assisting such Person in acquiring, remodeling, refurbishing, expanding or operating one or more retail grocery stores, (iii) as set forth on Schedule 3 hereto, or (iv) as disclosed in the Final Prospectus, the Company does not own, directly or indirectly, any long-term debt securities or equity interests in any Person. (d) The Company has the long-term debt and shareholders' equity as set forth in the Final Prospectus. Each of the Company and the Subsidiaries is duly organized or formed, validly existing and in good standing under the laws of its respective jurisdiction of organization or formation and has all requisite corporate or organizational power and authority to own its properties and conduct its business as now conducted and as described in the Final Prospectus; each of the Company and the Subsidiaries is duly qualified to do business as a foreign corporation or organization in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the business, financial condition, prospects or results of operations of the Company and the Subsidiaries, taken as a whole (any such event, a "MATERIAL ADVERSE EFFECT"). (e) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby (including, without limitation, the issuance and sale of the Stock by the Company). This Agreement has been duly authorized, executed and delivered by the Company. (f) No consent, approval, authorization or order of any court or governmental agency or body, or third party is required for the issuance and sale of the Stock by the Company or the consummation by the Company of the other transactions contemplated hereby, except such as have been obtained, such as will become effective at or prior to the issuance of the Stock and such as may be required under state securities or "Blue Sky" laws in connection with the sale of the Stock by the Underwriters. None of the Company or the Subsidiaries is (i) in violation of its certificate of incorporation or bylaws (or similar organizational docu- -3- ment), (ii) to the Company's knowledge, in breach or violation of any statute, judgment, decree, order, rule or regulation applicable to any of them or any of their respective properties or assets, or (iii) in breach of or in default under (nor has any event occurred that, with notice or passage of time or both, would constitute a default under) or in violation of any of the terms or provisions of any instrument pertaining to indebtedness, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement or permit to which any of them is a party or to which any of them or their respective properties or assets is subject (collectively, "CONTRACTS"), except in the case of clauses (ii) and (iii) for any such breach, default, violation or event that would not, individually or in the aggregate, have a Material Adverse Effect. (g) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby (including, without limitation, the issuance and sale of the Stock to the Underwriters) will not conflict with or constitute or result in a breach of or a default under (or an event that with notice or passage of time or both would constitute a default under) or violation of any of (i) the terms or provisions of any Contract (except for the Company's existing Credit Agreement, which Credit Agreement will be repaid upon consummation of the transactions contemplated hereby), (ii) the certificate of incorporation or bylaws (or similar organizational document) of the Company or any of the Subsidiaries or (iii) (assuming compliance with all applicable state securities or "Blue Sky" laws by the Underwriters) any statute, judgment, decree, order, rule or regulation applicable to the Company or any of the Subsidiaries or any of their respective properties or assets, except in the case of clauses (i) and (iii) for any such conflict, breach or violation that would not, individually or in the aggregate, have a Material Adverse Effect. (h) The consolidated financial statements of the Company (including the notes thereto) included or incorporated by reference in the Final Prospectus present fairly in all material respects the financial position, results of operations and cash flows of the Company and the Subsidiaries at the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a consistent basis ("GAAP"), except as otherwise stated therein. The summary and selected financial data in the Final Prospectus present fairly in all material respects the information shown therein and have been prepared and compiled on a basis consistent with the audited financial statements included therein. Except as otherwise stated therein, the pro forma financial statements included or incorporated by reference in the Final Prospectus comply as to form in all material respects with the applicable requirements of Regulation S-X under the Exchange Act. The assumptions used in preparing the pro forma financial statements included or incorporated by reference in the Final Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts. Notwithstanding anything to the contrary contained herein, no representation or warranty is made under this clause (h) with respect to EBITDA, Adjusted EBITDA or any ratio based thereon or derived therefrom. -4- (i) Deloitte & Touche LLP (the "INDEPENDENT ACCOUNTANTS") is an independent public accounting firm with respect to the Company within the meaning of the Act and the Rules and Regulations. (j) Except as set forth in the Final Prospectus, there is not pending or, to the knowledge of the Company, threatened any action, suit, proceeding, inquiry or investigation to which the Company or any of the Subsidiaries is a party, or to which the property or assets of the Company or any of the Subsidiaries are subject, before or brought by any court, arbitrator or governmental agency or body that, if determined adversely to the Company or any of the Subsidiaries, would, individually or in the aggregate, have a Material Adverse Effect or that seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Stock or the consummation of the other transactions described in the Final Prospectus. (k) Each of the Company and the Subsidiaries possesses all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, presently required or necessary to own or lease, as the case may be, and to operate its respective properties and to carry on its respective businesses as now or proposed to be conducted as set forth in the Final Prospectus ("PERMITS") (except, with respect to Permits which the Company and the Subsidiaries do not presently possess which would be necessary solely for future business proposed to be conducted by the Company and the Subsidiaries ("FUTURE PERMITS"), which Future Permits the Company reasonably believes will be obtained), except where the failure to obtain such Permits would not, individually or in the aggregate, have a Material Adverse Effect; each of the Company and the Subsidiaries has fulfilled and performed all of its obligations with respect to such Permits or in the case of the Future Permits, the Company and the Subsidiaries intend to use their reasonable best efforts to obtain such Future Permits, except where the failure to do so would not, individually or in the aggregate, have a Material Adverse Effect; no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or result in any other material impairment of the rights of the holder of any such Permit except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect; and to the Company's knowledge, none of the Company or the Subsidiaries has received any notice of any proceeding relating to revocation or modification of any such Permit, except as described in the Final Prospectus and except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect. (l) Since the date of the most recent financial statements included or incorporated by reference in the Final Prospectus, except as described therein or in the Final Prospectus, (i) none of the Company or the Subsidiaries has incurred any liabilities or obligations, direct or contingent, or entered into or agreed to enter into any transactions not in the ordinary course of business, which liabilities, obligations or transactions would, individually or in the aggre- -5- gate, be material to the business, financial condition, prospects or results of operations of the Company and its Subsidiaries, taken as a whole, (ii) none of the Company or the Subsidiaries has purchased any of its outstanding equity interests, nor declared, paid or otherwise made any dividend or distribution of any kind on its equity interests (other than regular quarterly dividends declared or paid on the Common Stock and other than with respect to any of such Subsidiaries, the purchase of, or dividend or distribution on, equity interests owned by the Company) and (iii) there has not been any material change in the equity interests or long-term indebtedness of the Company or the Subsidiaries. (m) The Company and each of the Subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns, except where the failure to so file such returns would not, individually or in the aggregate, have a Material Adverse Effect, and has paid all taxes shown as due thereon other than those being contested in good faith or those owed but not yet due to be paid. (n) None of the Company, the Subsidiaries or any agent acting on their behalf has taken or intends to take any action that might cause this Agreement or the sale of the Stock to violate Regulation T, U or X of the Board of Governors of the Federal Reserve System, in each case as in effect, or as the same may hereafter be in effect, on the Closing Date. (o) The Company and each of the Subsidiaries have good and marketable title to all real property and good title to all personal property described in the Final Prospectus as being owned by it and good and marketable title to a leasehold estate in the real and personal property described in the Final Prospectus as being leased by it free and clear of all liens, charges, encumbrances or restrictions, except as described in the Final Prospectus or to the extent the failure to have such title or the existence of such liens, charges, encumbrances or restrictions would not, individually or in the aggregate, have a Material Adverse Effect. All leases and material contracts and agreements to which the Company or any of the Subsidiaries is a party or by which any of them is bound are valid and enforceable against the Company or such Subsidiary, and are in full force and effect with only such exceptions as would not, individually or in the aggregate, have a Material Adverse Effect. The Company and the Subsidiaries own or possess adequate licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights and know-how necessary to conduct the businesses now or proposed to be operated by them as described in the Final Prospectus, and to the Company's knowledge, none of the Company or the Subsidiaries has received any notice of infringement of or conflict with (or knows of any such infringement of or conflict with) asserted rights of others with respect to any patents, trademarks, service marks, trade names, copyrights or know-how that, if such assertion of infringement or conflict were sustained, would have a Material Adverse Effect. (p) There are no legal or governmental proceedings involving or affecting the Company or any Subsidiary or any of their respective properties or assets required to be described in the Final Prospectus pursuant to the Act that are not described in the Final Prospectus. -6- (q) Except as described in the Final Prospectus or except as would not, individually or in the aggregate, have a Material Adverse Effect (A) each of the Company and the Subsidiaries is in compliance with and not subject to liability under applicable Environmental Laws (as defined below), (B) there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter or request for information pending or, to the knowledge of the Company or any of the Subsidiaries, threatened against the Company or any of the Subsidiaries under any Environmental Law, (C) no lien, charge, encumbrance or restriction has been recorded under any Environmental Law with respect to any assets, facility or property owned, operated, leased or controlled by the Company or any of the Subsidiaries, (D) none of the Company or the Subsidiaries has received notice that it has been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), or any comparable state law and (E) no property or facility of the Company or any of the Subsidiaries is (i) listed or, to the Company's knowledge proposed for listing on the National Priorities List under CERCLA or is (ii) to their knowledge, listed in the Comprehensive Environmental Response, Compensation, Liability Information System List promulgated pursuant to CERCLA, or on any comparable list maintained by any state or local governmental authority. For purposes of this Agreement, "ENVIRONMENTAL LAWS" means the common law and all applicable federal, state and local laws or regulations, codes, orders, decrees, judgments or injunctions issued, promulgated, approved or entered thereunder, relating to pollution or protection of public or employee health and safety or the environment, including, without limitation, laws relating to (i) emissions, discharges, releases or threatened releases of hazardous materials into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), (ii) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of hazardous materials and (iii) underground and above ground storage tanks and related piping, and emissions, discharges, releases or threatened releases therefrom. (r) There is no strike, material labor dispute, slowdown or work stoppage with the employees of the Company or any of the Subsidiaries that is pending or, to the knowledge of the Company, threatened. (s) The Company carries insurance in such amounts and covering such risks as is adequate for the conduct of its and the Subsidiaries' respective businesses and the value of their respective properties and as is customary for comparable companies engaged in similar industries. (t) The Company (i) makes and keeps accurate books and records and (ii) maintains internal accounting controls that provide reasonable assurance that (A) transactions are executed in accordance with management's general or specific authorization, (B) transactions are recorded as necessary to permit preparation of its financial statements and to maintain accountability for its and the Subsidiaries' assets, (C) access to its and its Subsidiaries' assets is -7- permitted only in accordance with management's general or specific authorization and (D) the reported accountability for its and its Subsidiaries' assets is compared with existing assets at reasonable intervals. (u) None of the Company or the Subsidiaries is or will be after application of the net proceeds from the sale of the Stock as described in the Final Prospectus an "investment company", as such term is defined in the Investment Company Act of 1940, as amended, and the rules and regulations thereunder. (v) The Stock to be issued and sold by the Company to the Underwriters hereunder has been duly and validly authorized and, when issued and delivered against payment therefor as provided herein will be duly and validly issued, fully paid and non-assessable and the Stock will conform to the description thereof contained in the Final Prospectus. (w) None of the Company or any of its Affiliates has taken, nor will any of them take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Stock. (x) Except as disclosed in the Final Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to include any securities of the Company owned or to be owned by such person in the securities registered pursuant to the Registration Statement. (y) The Stock has been approved for listing on the New York Stock Exchange ("NYSE") subject to official notice of issuance. (z) Except as described in the Final Prospectus, the Company has not and will not have as of any Delivery Date (as hereinafter defined) sold or issued any shares of Common Stock during the six-month period preceding the date of the Final Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or S of, the Act, other than shares issued pursuant to employee benefit plans, qualified stock options plans or other employee compensation plans or pursuant to outstanding options, rights or warrants. (aa) Except for this Agreement, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder's fee or other like payment in connection with the offering of the Stock. Section 2. Purchase of the Stock by the Underwriters. On the basis of the representations and warranties contained in, and subject to the terms and conditions of, this Agreement, the Company agrees to sell 8,000,000 shares of the Firm Stock to the several Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase the number of shares of the Firm Stock set forth opposite that Underwriter's name in Schedule 1 hereto. The respective -8- purchase obligations of the Underwriters with respect to the Firm Stock shall be rounded among the Underwriters to avoid fractional shares, as the Representatives may determine. In addition, the Company grants to the Underwriters an option to purchase up to 1,200,000 shares of Option Stock. Such option is granted for the purpose of covering over-allotments in the sale of Firm Stock and is exercisable as provided in Section 4 hereof. Shares of Option Stock shall be purchased severally for the account of the Underwriters in proportion to the number of shares of Firm Stock set forth opposite the name of such Underwriters in Schedule 1 hereto. The respective purchase obligations of each Underwriter with respect to the Option Stock shall be adjusted by the Representatives so that no Underwriter shall be obligated to purchase Option Stock other than in 100 share amounts. The price to the Underwriters of both the Firm Stock and any Option Stock shall be $18.48 per share. The Company shall not be obligated to deliver any of the Stock to be delivered on any Delivery Date (as hereinafter defined), except upon payment for all the Stock to be purchased on such Delivery Date as provided herein. Section 3. Offering of Stock by the Underwriters. Upon authorization by the Representatives of the release of the Firm Stock, the several Underwriters propose to offer the Firm Stock for sale upon the terms and conditions set forth in the Final Prospectus. Section 4. Delivery of and Payment for the Stock. Delivery of and payment for the Firm Stock shall be made at the offices of White & Case LLP, 1155 Avenue of the Americas, New York, New York, at 10:00 A.M., New York City time, on June 18, 2002 or at such other date or place as shall be determined by agreement between the Representatives and the Company. This date and time are sometimes referred to as the "FIRST DELIVERY DATE." On the First Delivery Date, the Company shall cause delivery of the Firm Stock to be made by credit through full fast transfer to the accounts at the Depository Trust Company designated by the Representatives to the Representatives for the account of each Underwriter against payment to or upon the order of the Company of the purchase price by wire transfer in immediately available funds. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in such names and in such denominations as the Representatives shall request in writing not less than two full business days prior to the First Delivery Date. The option granted in Section 2 will expire 30 days after the date of this Agreement and may be exercised in whole or in part from time to time (but not more than five (5) times) by written notice being given to the Company by the Representatives. Such notice shall set forth the aggregate number of shares of Option Stock as to which the option is being exercised, the names in which the shares of Option Stock are to be registered, the denominations in which the shares of Option Stock are to be issued and the date and time, as determined by -9- the Representatives, when the shares of Option Stock are to be delivered; provided, however, that this date and time shall not be earlier than the First Delivery Date nor earlier than the second business day after the date on which the option shall have been exercised nor later than the fifth business day after the date on which the option shall have been exercised. The date and time the shares of Option Stock are delivered are sometimes referred to as a "SECOND DELIVERY DATE" and the First Delivery Date and any Second Delivery Date are sometimes each referred to as a "DELIVERY DATE". Delivery of and payment for the Option Stock shall be made at the place specified in the first sentence of the first paragraph of this Section 4 (or at such other place as shall be determined by agreement between the Representatives and the Company) at 10:00 A.M., New York City time, on such Second Delivery Date. On such Second Delivery Date, the Company shall cause delivery of the Option Stock to be made by credit through full fast transfer to the accounts at the Depository Trust Company designated by the Representatives against payment to or upon the order of the Company of the purchase price by wire transfer in immediately available funds. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall be registered in such names and in such denominations as the Representatives shall request in the aforesaid written notice. Section 5. Further Agreements of the Company. The Company covenants and agrees: (a) To file the Final Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commission's close of business on the second business day following the execution and delivery of this Agreement; to make no further amendment or any supplement to the Registration Statement or to the Final Prospectus except as permitted herein; to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Final Prospectus or any amended Final Prospectus has been filed and to furnish the Representatives with copies thereof; to advise the Representatives, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Final Prospectus, of the suspension of the qualification of the Stock for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Final Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Final Prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) To furnish promptly to each of the Representatives and to counsel for the Underwriters a conformed copy of the Registration Statement as originally filed with the Commission, and each amendment thereto filed with the Commission, including all consents and exhibits filed therewith; -10- (c) To deliver promptly to the Representatives such number of the following documents as the Representatives shall reasonably request: (i) conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits) and (ii) the Final Prospectus (including any amendment or supplement thereto); and, if the delivery of a prospectus is required at any time after the Effective Time in connection with the offering or sale of the Stock and if at such time any events shall have occurred as a result of which the Final Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when the Final Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary to amend or supplement the Final Prospectus in order to comply with the Securities Act, to notify the Representatives and, upon their request, to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended or supplemented Final Prospectus which will correct such statement or omission or effect such compliance; (d) Prior to filing with the Commission any amendment or supplement to the Registration Statement or the Final Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to the Representatives and counsel for the Underwriters and obtain the consent of the Representatives to the filing, which consent shall not be unreasonably withheld; (e) As soon as practicable after the Effective Date, to make generally available to the Company's security holders and to deliver to the Representatives an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the Rules and Regulations (including, at the option of the Company, Rule 158); (f) For a period of five years following the Effective Date, to furnish or make available to the Representatives copies of all materials furnished by the Company to its shareholders and all public reports and all reports and financial statements furnished by the Company to the principal national securities exchange upon which the Common Stock may be listed pursuant to requirements of or agreements with such exchange or to the Commission pursuant to the Exchange Act or the Exchange Act Regulations; (g) Promptly from time to time to take such action as the Representatives may reasonably request to qualify the Stock for offering and sale under the securities laws of such jurisdictions as the Representatives may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as is necessary to complete the distribution of the Stock; provided that in connection therewith the Company shall not be required to qualify as a foreign corporation, to file a general consent to service of process or subject itself to taxation in any jurisdiction; -11- (h) For a period of 90 days from the date of the Final Prospectus, not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device which is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of Common Stock or securities convertible into or exchangeable for Common Stock (other than the Stock and shares issued pursuant to employee benefit plans, qualified stock option plans or other employee compensation plans existing on the date hereof or pursuant to currently outstanding options, warrants, rights or other securities), or sell or grant options, rights or warrants with respect to any shares of Common Stock or securities convertible into or exchangeable for Common Stock (other than the grant of options pursuant to option plans existing on the date hereof) or (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, in each case without the prior written consent of Lehman Brothers Inc. on behalf of the Underwriters; and to use its best efforts to cause each executive officer and director of the Company listed under the heading "Management" in the Final Prospectus Supplement to furnish to the Representatives, prior to the First Delivery Date, a letter or letters, substantially in the form of Exhibit A hereto; (i) To apply for the listing of the Stock on the New York Stock Exchange and to use its best efforts to effect that listing, subject only to official notice of issuance, prior to the First Delivery Date; and (j) To apply the net proceeds from the sale of the Stock as set forth in the Final Prospectus. Section 6. Expenses. The Company agrees to pay (a) the costs incident to the authorization, issuance, sale and delivery of the Stock to the Underwriters and any issue, transfer or other stamp taxes payable in that connection; (b) the costs incident to the preparation, printing and filing under the Act of the Registration Statement and any amendments and exhibits thereto; (c) the costs of distributing the Registration Statement as originally filed and each amendment thereto and any post-effective amendments thereof (including, in each case, exhibits), the Preliminary Prospectus, the Final Prospectus and any amendment or supplement to thereto, all as provided in this Agreement; (d) any applicable listing or other fees with respect to the Stock; (e) the fees and expenses of qualifying the Stock under the securities laws of the several jurisdictions as provided in Section 5(g) and of preparing, printing and distributing a Blue Sky Memorandum (including related fees and expenses of counsel to the Underwriters); (f) the costs and expenses of the Company relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Stock, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered -12- in connection with the road show; and (g) all other costs and expenses incident to the performance of the obligations of the Company under this Agreement; provided that, except as provided in this Section 6 and in Section 11, the Underwriters shall pay their own costs and expenses, including the costs and expenses of their counsel, any transfer taxes on the Stock which they may sell and the expenses of advertising any offering of the Stock made by the Underwriters. Section 7. Conditions of Underwriters' Obligations. The respective obligations of the Underwriters hereunder are subject to the accuracy, when made and on each Delivery Date, of the representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder, and to the satisfaction or waiver by the Representatives (in the Representatives' sole discretion) of each of the following additional terms and conditions: (a) The Final Prospectus shall have been timely filed with the Commission in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and any request of the Commission for inclusion of additional information in the Registration Statement or the Final Prospectus or otherwise shall have been complied with. (b) All corporate proceedings of the Company incident to the authorization, form and validity of this Agreement, the Stock, the Registration Statement and the Final Prospectus, and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters. (c) Latham & Watkins shall have furnished to the Representatives its written opinion, as counsel to the Company, addressed to the Underwriters and dated such Delivery Date, with respect to the matters provided for in Exhibit B hereto. (d) McAfee & Taft shall have furnished to the Representatives its written opinion, as counsel to the Company, addressed to the Underwriters and dated such Delivery Date, with respect to the matters provided for in Exhibit C hereto. (e) The Representatives shall have received from Cahill Gordon & Reindel, counsel for the Underwriters, such opinion or opinions, dated such Delivery Date, with respect to such matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. (f) At the time of execution of this Agreement, the Representatives shall have received from Deloitte & Touche LLP a letter or letters, in form and substance satisfactory to -13- the Representatives, addressed to the Underwriters and dated the date hereof (i) confirming that they are independent public accountants within the meaning of the Securities Act with respect to the Company and the Subsidiaries and Core-Mark International, Inc. ("CORE-MARK") and its subsidiaries and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given or incorporated by reference in the Final Prospectus, as of a date not more than five days prior to the date hereof), the conclusions and findings of such firm with respect to the financial information (including, without limitation, pro forma financial information) and other matters relating to the Company and Core-Mark ordinarily covered by accountants' "comfort letters" to underwriters in connection with registered public offerings. (g) With respect to the letter or letters of Deloitte & Touche LLP referred to in the preceding paragraph and delivered to the Representatives concurrently with the execution of this Agreement (the "INITIAL LETTERS"), the Company shall have furnished to the Representatives a letter (the "BRING-DOWN LETTER") of such accountants, addressed to the Underwriters and dated such Delivery Date (i) confirming that they are independent public accountants within the meaning of the Securities Act with respect to the Company and the Subsidiaries and Core-Mark and its subsidiaries and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Final Prospectus, as of a date not more than five days prior to the date of the bring-down letter), the conclusions and findings of such firm with respect to the financial information (including, without limitation, pro forma financial information) and other matters relating to the Company and Core-Mark covered by the initial letters and (iii) confirming in all material respects the conclusions and findings set forth in the initial letters. (h) The Company shall have furnished to the Representatives a certificate, dated such Delivery Date, of its Chairman of the Board, its President or any Senior Vice President and its Chief Financial Officer stating that: (i) The representations and warranties of the Company contained in this Agreement are true and correct on and as of such Delivery Date, and the Company has performed all covenants and agreements, in all material respects, and satisfied all conditions, in all material respects, on its part to be performed or satisfied hereunder at or prior to such Delivery Date; (ii) At such Delivery Date, since the date hereof or since the date of the most recent financial statements in the Final Prospectus (exclusive of any amendment or supplement thereto after the date of the filing of the Final Prospectus as contemplated by Section 5(a) hereof), no event or development has occurred, and no infor- -14- mation has become known, that, individually or in the aggregate, has or would be reasonably likely to have a Material Adverse Effect; and (iii) To such officer's knowledge, the sale of the Stock hereunder has not been enjoined (temporarily or permanently). (i) Neither the Company nor any of the Subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Final Prospectus (A) any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Final Prospectus or (B) since such date, there shall not have been any change in the equity interests or long-term debt of the Company or any of the Subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and the Subsidiaries, otherwise than as set forth or contemplated in the Final Prospectus, the effect of which, in any such case described in clause (A) or (B), is, in the judgment of the Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Stock being delivered on such Delivery Date on the terms and in the manner contemplated in the Final Prospectus. (j) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading in securities generally on the NYSE or the American Stock Exchange or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or the settlement of such trading generally shall have been materially disrupted or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by Federal or state authorities, (iii) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or (iv) a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such), including, without limitation, as a result of terrorist activities after the date hereof, as to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the public offering or delivery of the Stock being delivered on such Delivery Date on the terms and in the manner contemplated in the Final Prospectus. (k) The NYSE shall have approved the Stock for listing, subject only to official notice of issuance. (l) The following transactions shall close substantially concurrently with the Closing under this Agreement: -15- (i) the acquisition of Core-Mark by the Company on terms not materially different from those set forth in the agreement filed as an exhibit to the Company's Form 8-K filed with the Commission on April 24, 2002; (ii) the new credit agreement of the Company described in the Final Prospectus; and (iii) the concurrent offering of senior notes of the Company described in the Final Prospectus. (m) Each executive officer and director of the Company listed under the heading "Management" in the Final Prospectus Supplement shall have furnished to the Representatives, prior to the First Delivery Date, a letter substantially in the form of Exhibit A hereto. All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters. Section 8. Indemnification and Contribution. (a) The Company shall indemnify and hold harmless each Underwriter, its directors, officers and employees and each person, if any, who controls any Underwriter within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of Stock), to which that Underwriter, director, officer, employee or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained (A) in the Registration Statement or the Preliminary Prospectus, the Final Prospectus or in any amendment or supplement thereto or (B) in any written materials or written information provided to investors by the Company in connection with the marketing of the offering of the Stock, including any written roadshow or written investor presentations made to investors by the Company (written information shall include written information provided in person or electronically) (the "MARKETING MATERIALS") (it being understood that the roadshow slide presentation prepared by the Representatives and the Company and presented to potential investors in person or electronically shall be deemed to be Marketing Materials) or (ii) the omission or alleged omission to state in the Preliminary Prospectus, the Final Prospectus, the Registration Statement, or in any amendment or supplement thereto, or in any Marketing Materials, any material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse each Underwriter and each such director, officer, employee or controlling person promptly upon demand for any legal or other expenses reasonably incurred by that Underwriter, director, officer, employee or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred; provided that the Company shall not be -16- liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in any the Preliminary Prospectus, the Final Prospectus, the Registration Statement, or in any such amendment or supplement thereto, in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company through Lehman Brothers Inc. by or on behalf of any Underwriter specifically for inclusion therein which information consists solely of the information specified in Section 8(e) hereof; provided further that the Company shall not be liable to any Underwriter under the indemnity agreement in this Section 8(a) to the extent, but only to the extent, that (i) such loss, claim, damage, or liability of such Underwriter results from an untrue statement of a material fact or an omission of a material fact contained in the Preliminary Prospectus, which untrue statement or omission was completely corrected in the Final Prospectus and (ii) the Company sustains the burden of proving that such Underwriter sold shares of Stock to the person alleging such loss, claim, liability, expense or damage without sending or giving, at or prior to written confirmation of such sale, a copy of the Final Prospectus and (iii) the Company had previously furnished sufficient quantities of the Final Prospectus to the Underwriters within a reasonable amount of time prior to such sale or such confirmation, and (iv) such Underwriter failed to deliver the Final Prospectus (excluding the documents incorporated by reference therein), if required by law to have so delivered it, and such delivery would have been a complete defense against the loss, claim, liability, expense or damage asserted by such person. The foregoing indemnity agreement is in addition to any liability which the Company may otherwise have to any Underwriter or to any director, officer, employee or controlling person of that Underwriter. (b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company, its officers and employees, each of its directors, and each person, if any, who controls the Company within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company or any such director, officer or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Prospectus, the Final Prospectus, the Registration Statement or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state in the Preliminary Prospectus, the Final Prospectus, the Registration Statement, or in any amendment or supplement thereto, any material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company through Lehman Brothers Inc. by or on behalf of such Underwriter specifically for inclusion therein, which information is limited to the information set forth in Section 8(e) hereof, and shall reimburse the Company and any such director, officer or controlling person for any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending or preparing to defend against -17- any such loss, claim, damage, liability or action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability which any Underwriter may otherwise have to the Company or any such director, officer, employee or controlling person. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the claim or the commencement of that action; provided that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 8 except to the extent it has been materially prejudiced by such failure; provided further that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 8. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the Representatives shall have the right to employ counsel to represent jointly the Representatives and those other Underwriters and their respective officers, employees and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Underwriters against the Company under this Section 8 if, in the reasonable judgment of the Representatives, it is advisable for the Representatives and those Underwriters, directors, officers, employees and controlling persons to be jointly represented by separate counsel, and in that event the fees and expenses of such separate counsel shall be paid by the Company (it being understood, however, that, in connection with such action, the Company shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances). No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. -18- (d) If the indemnification provided for in this Section 8 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Stock or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Stock purchased under this Agreement (before deducting expenses) received by the Company, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the shares of the Stock purchased under this Agreement, on the other hand, bear to the total gross proceeds from the offering of the shares of the Stock under this Agreement, in each case as set forth in the table on the cover page of the Final Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section shall be deemed to include, for purposes of this Section 8(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8(d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the shares of Stock underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute as provided in this Section 8(d) are several in proportion to their respective underwriting obligations and not joint. -19- (e) The Underwriters severally confirm and the Company acknowledges that the statements with respect to the public offering of the Stock by the Underwriters set forth in the fourth, seventh, eighth, fourteenth, sixteenth and seventeenth paragraphs appearing under the caption "Underwriting" in the Final Prospectus are correct and constitute the only information concerning such Underwriters furnished in writing to the Company by or on behalf of the Underwriters specifically for inclusion in the Registration Statement and the Final Prospectus. Section 9. Defaulting Underwriters. If, on either Delivery Date, any Underwriter defaults in the performance of its obligations under this Agreement, the remaining non-defaulting Underwriters shall be obligated to purchase the Stock which the defaulting Underwriter agreed but failed to purchase on such Delivery Date in the respective proportions which the number of shares of the Firm Stock set opposite the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the total number of shares of the Firm Stock set opposite the names of all the remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the remaining non-defaulting Underwriters shall not be obligated to purchase any of the Stock on such Delivery Date if the total number of shares of the Stock which the defaulting Underwriter or Underwriters agreed but failed to purchase on such date exceeds 9.09% of the total number of shares of the Stock to be purchased on such Delivery Date, and any remaining non-defaulting Underwriter shall not be obligated to purchase more than 110% of the number of shares of the Stock which it agreed to purchase on such Delivery Date pursuant to the terms of Section 3 hereof. If the foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or those other underwriters satisfactory to the Representatives who so agree, shall have the right, but shall not be obligated, to purchase, in such proportion as may be agreed upon among them, all the Stock to be purchased on such Delivery Date. If the remaining Underwriters or other underwriters satisfactory to the Representatives do not elect to purchase the shares which the defaulting Underwriter or Underwriters agreed but failed to purchase on such Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the obligation of the Underwriters to purchase, and of the Company to sell, the Option Stock) shall terminate without liability on the part of any non-defaulting Underwriter or the Company, except that the Company will continue to be liable for the payment of expenses to the extent set forth in Sections 6 and 11. As used in this Agreement, the term "UNDERWRITER" includes, for all purposes of this Agreement unless the context requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to this Section 9, purchases Firm Stock which a defaulting Underwriter agreed but failed to purchase. Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company for damages caused by its default. If other Underwriters are obligated or agree to purchase the Stock of a defaulting or withdrawing Underwriter, either the Representatives or the Company may postpone the Delivery Date for up to seven full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement, the Final Prospectus or in any other document or arrangement. -20- Section 10. Termination. The obligations of the Underwriters hereunder may be terminated by the Representatives by notice given to and received by the Company prior to delivery of and payment for the Firm Stock if, prior to that time, any of the events described in Section 7(i) or (j), shall have occurred or if the Underwriters shall decline to purchase the Stock for any reason permitted under this Agreement. Section 11. Reimbursement of Underwriters' Expenses. If the Company shall fail to tender the Stock for delivery to the Underwriters by reason of any failure, refusal or inability on the part of the Company to perform any agreement on its part to be performed, or because any other condition (other than the conditions set forth in Section 7(j) hereof) of the Underwriters' obligations hereunder required to be fulfilled by the Company is not fulfilled, the Company will reimburse the Underwriters for all reasonable out-of-pocket expenses (including fees, disbursements and charges of Cahill Gordon & Reindel, counsel for the Underwriters) incurred by the Underwriters in connection with this Agreement and the proposed purchase of the Stock, and upon demand by Lehman Brothers Inc. (accompanied by documentation) the Company shall pay the full amount thereof to the Representatives. If this Agreement is terminated pursuant to Section 9 by reason of the default of one or more Underwriters, the Company shall not be obligated to reimburse any Underwriter for any such expenses. Section 12. Notices, Etc. All statements, requests, notices and agreements hereunder shall be in writing, and: (a) if to the Underwriters, shall be delivered or sent by mail, telex or facsimile transmission to Lehman Brothers Inc., 101 Hudson Street, Jersey City, NJ 07302, Attention: Syndicate Department (Fax: (201) 524-5980), with a copy, in the case of any notice pursuant to Section 8(c), to the Director of Litigation, Office of the General Counsel, Lehman Brothers Inc., 399 Park Avenue, 15th Floor, New York, NY 10022 with a copy to Cahill Gordon & Reindel, Attention: John Tripodoro (Fax: (212) 269-5420); (b) if to the Company, shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: General Counsel (Fax: (972) 906-1560 with a copy to Latham & Watkins, Attention: Tracy Edmonson (Fax: (415) 395-8095)). Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. The Company shall be entitled to act and rely upon any request, consent, notice or agreement given or made on behalf of the Underwriters by Lehman Brothers Inc. on behalf of the Representatives. Section 13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Underwriters, the Company, and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (A) the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the directors, officers and the person or persons, if any, who control any Underwriter within the meaning of Section 15 of the Securities Act and (B) the indemnity agreement of the Underwriters con- -21- tained in Section 8(b) of this Agreement shall be deemed to be for the benefit of the directors of the Company and officers of the Company and any person controlling the Company within the meaning of Section 15 of the Securities Act. Nothing in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section 13, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. Section 14. Survival. The respective indemnities, representations, warranties and agreements of the Company and the Underwriters contained in this Agreement or made by or on behalf on them, respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Stock and shall remain in full force and effect, regardless of any investigation made by or on behalf of any of them or any person controlling any of them. Section 15. Definition of the Term "BUSINESS DAY". For purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close. Section 16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York. Section 17. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument. Section 18. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. -22- If the foregoing correctly sets forth the agreement between the Company and the Underwriters, please indicate your acceptance in the space provided for that purpose below. Very truly yours, FLEMING COMPANIES, INC. By: /s/ Carlos M. Hernandez --------------------------------------- Name: Carlos M. Hernandez Title: Senior Vice President, General Counsel and Secretary -23- ACCEPTED: LEHMAN BROTHERS INC. DEUTSCHE BANK SECURITIES INC. FIRST UNION SECURITIES, INC. MORGAN STANLEY & CO. INCORPORATED For themselves and as Representatives of the several Underwriters named in Schedule 1 hereto By: LEHMAN BROTHERS INC. By: /s/ Charles Hardwick ----------------------------------- Name: Charles Hardwick Title: Vice President By: DEUTSCHE BANK SECURITIES INC. By: /s/ John Kennedy ----------------------------------- Name: John Kennedy Title: Managing Director By: /s/ Herb May ----------------------------------- Name: Herb May Title: Managing Director -24- EX-4.1 5 d97911exv4w1.txt INDENTURE EXHIBIT 4.1 ================================================================================ FLEMING COMPANIES, INC. INDENTURE Dated as of June 18, 2002 Manufacturers and Traders Trust Company Trustee ================================================================================ TABLE OF CONTENTS Page ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE...................... 1 Section 1.1. Definitions..................................... 1 Section 1.2. Other Definitions............................... 5 Section 1.3. Incorporation by Reference of Trust Indenture Act............................................. 5 Section 1.4. Rules of Construction........................... 6 ARTICLE II. THE SECURITIES................................................. 6 Section 2.1. Issuable in Series.............................. 6 Section 2.2. Establishment of Terms of Series of Securities.. 6 Section 2.3. Execution and Authentication.................... 9 Section 2.4. Registrar and Paying Agent...................... 10 Section 2.5. Paying Agent to Hold Money in Trust............. 10 Section 2.6. Securityholder Lists............................ 11 Section 2.7. Transfer and Exchange........................... 11 Section 2.8. Mutilated, Destroyed, Lost and Stolen Securities 11 Section 2.9. Outstanding Securities.......................... 12 Section 2.10. Treasury Securities............................. 13 Section 2.11. Temporary Securities............................ 13 Section 2.12. Cancellation.................................... 13 Section 2.13. Defaulted Interest.............................. 13 Section 2.14. Global Securities............................... 13 Section 2.15. CUSIP Numbers................................... 15 ARTICLE III. REDEMPTION.................................................... 15 Section 3.1. Notice to Trustee............................... 15 Section 3.2. Selection of Securities to be Redeemed.......... 15 Section 3.3. Notice of Redemption............................ 16 Section 3.4. Effect of Notice of Redemption.................. 16 Section 3.5. Deposit of Redemption Price..................... 16 Section 3.6. Securities Redeemed in Part..................... 17 ARTICLE IV. COVENANTS...................................................... 17 Section 4.1. Payment of Principal and Interest............... 17 Section 4.2. SEC Reports..................................... 17 Section 4.3. Compliance Certificate.......................... 17 Section 4.4. Stay, Extension and Usury Laws.................. 17 Section 4.5. Corporate Existence............................. 18 Section 4.6. Taxes. 18 ARTICLE V. SUCCESSORS...................................................... 18 Section 5.1. When Company May Merge, Etc..................... 18 Section 5.2. Successor Corporation Substituted............... 19 i ARTICLE VI. DEFAULTS AND REMEDIES.......................................... 20 Section 6.1. Events of Default............................... 20 Section 6.2. Acceleration of Maturity; Rescission and Annulment....................................... 21 Section 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee.......................... 22 Section 6.4. Trustee May File Proofs of Claim................ 23 Section 6.5. Trustee May Enforce Claims Without Possession of Securities................................... 23 Section 6.6. Application of Money Collected.................. 23 Section 6.7. Limitation on Suits............................. 24 Section 6.8. Unconditional Right of Holders to Receive Principal and Interest.......................... 24 Section 6.9. Restoration of Rights and Remedies.............. 25 Section 6.10. Rights and Remedies Cumulative.................. 25 Section 6.11. Delay or Omission Not Waiver.................... 25 Section 6.12. Control by Holders.............................. 25 Section 6.13. Waiver of Past Defaults......................... 26 Section 6.14. Undertaking for Costs........................... 26 ARTICLE VII. TRUSTEE....................................................... 26 Section 7.1. Duties of Trustee............................... 26 Section 7.2. Rights of Trustee............................... 28 Section 7.3. Individual Rights of Trustee.................... 28 Section 7.4. Trustee's Disclaimer............................ 28 Section 7.5. Notice of Defaults.............................. 28 Section 7.6. Reports by Trustee to Holders................... 29 Section 7.7. Compensation and Indemnity...................... 29 Section 7.8. Replacement of Trustee.......................... 30 Section 7.9. Successor Trustee by Merger, etc................ 31 Section 7.10. Eligibility; Disqualification................... 31 Section 7.11. Preferential Collection of Claims Against Company........................................ 31 ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE...................... 31 Section 8.1. Satisfaction and Discharge of Indenture........ 31 Section 8.2. Application of Trust Funds; Indemnification.... 32 Section 8.3. Legal Defeasance of Securities of any Series... 33 Section 8.4. Covenant Defeasance............................ 34 Section 8.5. Repayment to Company........................... 35 ARTICLE IX. AMENDMENTS AND WAIVERS........................................ 36 Section 9.1. Without Consent of Holders..................... 36 Section 9.2. With Consent of Holders........................ 36 Section 9.3. Limitations.................................... 37 Section 9.4. Compliance with Trust Indenture Act............ 37 Section 9.5. Revocation and Effect of Consents.............. 38 Section 9.6. Notation on or Exchange of Securities.......... 38 Section 9.7. Trustee Protected.............................. 38 ARTICLE X. MISCELLANEOUS.................................................. 38 Section 10.1. Trust Indenture Act Controls................... 38 ii Section 10.2. Notices........................................ 38 Section 10.3. Communication by Holders with Other Holders.... 39 Section 10.4. Certificate and Opinion as to Conditions Precedent...................................... 40 Section 10.5. Statements Required in Certificate or Opinion.. 40 Section 10.6. Rules by Trustee and Agents.................... 40 Section 10.7. Legal Holidays................................. 40 Section 10.8. No Recourse Against Others..................... 41 Section 10.9. Counterparts................................... 41 Section 10.10. Governing Laws................................. 41 Section 10.11. No Adverse Interpretation of Other Agreements.. 41 Section 10.12. Successors..................................... 41 Section 10.13. Severability................................... 41 Section 10.14. Table of Contents, Headings, Etc............... 41 Section 10.15. Securities in a Foreign Currency or in ECU..... 42 Section 10.16. Judgment Currency.............................. 42 ARTICLE XI. SINKING FUNDS................................................. 43 Section 11.1. Applicability of Article....................... 43 Section 11.2. Satisfaction of Sinking Fund Payments with Securities..................................... 43 Section 11.3. Redemption of Securities for Sinking Fund...... 44 iii FLEMING COMPANIES, INC. Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of June 18, 2002 Section 310(a)(1) .................................... 7.10 (a)(2) ......................................... 7.10 (a)(3) ......................................... Not Applicable (a)(4) ......................................... Not Applicable (a)(5) ......................................... 7.10 (b) ......................................... 7.10 Section 311(a) .................................... 7.11 (b) ......................................... 7.11 (c) ......................................... Not Applicable Section 312(a) .................................... 2.6 (b) ......................................... 10.3 (c) ......................................... 10.3 Section 313(a) .................................... 7.6 (b)(1) ......................................... 7.6 (b)(2) ......................................... 7.6 (c)(1) ......................................... 7.6 (d) ......................................... 7.6 Section 314(a) .................................... 4.2, 10.5 (b) ......................................... Not Applicable (c)(1) ......................................... 10.4 (c)(2) ......................................... 10.4 (c)(3) ......................................... Not Applicable (d) ......................................... Not Applicable (e) ......................................... 10.5 (f) ......................................... Not Applicable Section 315(a) .................................... 7.1 (b) ......................................... 7.5 (c) ......................................... 7.1 (d) ......................................... 7.1 (e) ......................................... 6.14 Section 316(a) .................................... 2.10 (a)(1)(A) ......................................... 6.12 (a)(1)(B) ......................................... 6.13 (b) ......................................... 6.8 Section 317(a)(1) .................................... 6.3 (a)(2) ......................................... 6.4 (b) ......................................... 2.5 Section 318(a) .................................... 10.1 Note: This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture. iv Indenture dated as of June 18, 2002 between Fleming Companies, Inc., an Oklahoma corporation (the "Company"), and Manfacturers and Traders Trust Company (the "Trustee"). Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Securities issued under this Indenture. ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.1. Definitions. "Additional Amounts" means any additional amounts which are required hereby or by any Security, under circumstances specified herein or therein, to be paid by the Company in respect of certain taxes imposed on Holders specified therein and which are owing to such Holders. "Affiliate" of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities or by agreement or otherwise. "Agent" means any Registrar, Paying Agent or Service Agent. "Authorized Newspaper" means a newspaper in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in the place in connection with which the term is used. If it shall be impractical in the opinion of the Trustee to make any publication of any notice required hereby in an Authorized Newspaper, any publication or other notice in lieu thereof that is made or given by the Trustee shall constitute a sufficient publication of such notice. "Bearer" means anyone in possession from time to time of a Bearer Security. "Bearer Security" means any Security, including any interest coupon appertaining thereto, that does not provide for the identification of the Holder thereof. "Board of Directors" means the Board of Directors of the Company or any duly authorized committee thereof. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been adopted by the Board of Directors or pursuant to authorization by the Board of Directors and to be in full force and effect on the date of the certificate and delivered to the Trustee. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in the City of New York are authorized or obligated by law or executive order to close. "Company" means Fleming Companies, Inc. and any and all successors thereto that become a party to this Indenture in accordance with its terms. "Company Order" means a written order signed in the name of the Company by one or more Officers. "Company Request" means a written request signed in the name of the Company by its President, Chief Executive Officer, any of its Vice Presidents, Chief Operating Officer, Treasurer, Secretary or the Chief Financial Officer, and delivered to the Trustee. "Consolidated" means, with respect to any person, the consolidation of the accounts of such person and each of its subsidiaries if and to the extent the accounts of such person and each of its subsidiaries would normally be consolidated with those of such Person, all in accordance with generally accepted accounting principles consistently applied. "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered. "Debt" of any person as of any date means, without duplication, all indebtedness of such person in respect of borrowed money, including all interest, fees and expenses owed in respect thereto (whether or not the recourse of the lender is to the whole of the assets of such person or only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments. "Default" means any event which is, or after notice or passage of any time or both would be, an Event of Default. "Depository" means, with respect to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities, the person designated as Depository for such Series by the Company, which Depository shall be a clearing agency registered under the Exchange Act; and if at any time there is more than one such person, "Depository" as used with respect to the Securities of any Series shall mean the Depository with respect to the Securities of such Series. "Discount Security" means any Security that provides for an amount less than the stated principal amount thereof to be due and payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.2. "Dollars" means the currency of The United States of America. "ECU" means the European Currency Unit as determined by the Commission of the European Union. "Exchange Act" means the Securities Exchange Act of 1934, as amended. 2 "Foreign Currency" means any currency or currency unit issued by a government other than the government of The United States of America. "Foreign Government Obligations" means with respect to Securities of any Series that are denominated in a Foreign Currency, (i) direct obligations of the government that issued or caused to be issued such currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by or acting as an agency or instrumentality of such government the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case under clauses (i) or (ii), are not callable or redeemable at the option of the issuer thereof. "Global Security" or "Global Securities" means a Security or Securities, as the case may be, in the form established pursuant to Section 2.2 evidencing all or part of a Series of Securities, issued to the Depository for such Series or its nominee, and registered in the name of such Depository or nominee. "Holder" or "Securityholder" means a person in whose name a Security is registered or the holder of a Bearer Security. "Indenture" means this Indenture as amended from time to time and shall include the form and terms of particular Series of Securities established as contemplated hereunder. "interest" with respect to any Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "Maturity," when used with respect to any Security or installment of principal thereof, means the date on which the principal of such Security or such installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, notice of option to elect repayment or otherwise. "Officer" means the President, Chief Executive Officer, any Vice President, Chief Operating Officer, Treasurer, Secretary or the Chief Financial Officer of the Company. "Officers' Certificate" means a certificate signed by two Officers; provided, however, that every Officers' Certificate with respect to compliance with a covenant or condition provided for in this Indenture shall include (i) a statement that the Officers making or giving such Officers' Certificate have read such condition and any definitions or other provisions contained in this Indenture relating thereto and (ii) a statement at to whether, in the opinion of the signers, such conditions has been complied with. "Opinion of Counsel" means a written opinion of legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee "person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. 3 "principal" of a Security means the principal of the Security plus, when appropriate, the premium, if any, on, and any Additional Amounts in respect of, the Security. "Responsible Officer" means, when used with respect to the Trustee, any managing director, director, principal, vice president, assistant vice president, assistant treasurer, associate or any other officer within the corporate trust department of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also shall mean, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge and familiarity with the particular subject. "SEC" means the Securities and Exchange Commission. "Securities" means the debentures, notes or other debt instruments of the Company of any Series authenticated and delivered under this Indenture. "Series" or "Series of Securities" means each series of debentures, notes or other debt instruments of the Company created pursuant to Sections 2.1 and 2.2 hereof. "Significant Subsidiary" means (i) any direct or indirect Subsidiary of the Company that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as amended, as such regulation is in effect on the date hereof, or (ii) any group of direct or indirect Subsidiaries of the Company that, taken together as a group, would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as amended, as such regulation is in effect on the date hereof. "Stated Maturity" when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable. "Subsidiary" of any specified person means any corporation of which at least a majority of the outstanding stock having by the terms thereof ordinary voting power for the election of directors of such corporation (irrespective of whether or not at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned by such person, or by one or more other Subsidiaries, or by such person and one or more other Subsidiaries. "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "TIA" means, to the extent required by any such amendment, the Trust Indenture Act as so amended. "Trustee" means the person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each person who is then a Trustee hereunder, and if at any time there is more than one such person, "Trustee" as 4 used with respect to the Securities of any Series shall mean the Trustee with respect to Securities of that Series. "U.S. Government Obligations" means securities which are (i) direct obligations of The United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of The United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by The United States of America, and which in the case of (i) and (ii) are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation evidenced by such depository receipt. Section 1.2. Other Definitions. TERM DEFINED IN SECTION "Bankruptcy Law" 6.1 "Custodian" 6.1 "Event of Default" 6.1 "Journal" 10.15 "Judgment Currency" 10.16 "Legal Holiday" 10.7 "mandatory sinking fund payment" 11.1 "Market Exchange Rate" 10.15 "New York Banking Day" 10.16 "optional sinking fund payment" 11.1 "Paying Agent" 2.4 "Registrar" 2.4 "Required Currency" 10.16 "Service Agent" 2.4 Section 1.3. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC. "indenture securities" means the Securities. "indenture security holder" means a Securityholder. 5 "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company and any successor obligor upon the Securities. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA and not otherwise defined herein are used herein as so defined. Section 1.4. Rules of Construction. Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles; (c) references to "generally accepted accounting principles" shall mean generally accepted accounting principles in effect as of the time when and for the period as to which such accounting principles are to be applied; (d) "or" is not exclusive; (e) words in the singular include the plural, and in the plural include the singular; and (f) provisions apply to successive events and transactions. ARTICLE II. THE SECURITIES Section 2.1. Issuable in Series. The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more Series. All Securities of a Series shall be identical except as may be set forth in a Board Resolution, a supplemental indenture or an Officers' Certificate detailing the adoption of the terms thereof pursuant to the authority granted under a Board Resolution. In the case of Securities of a Series to be issued from time to time, the Board Resolution, Officers' Certificate or supplemental indenture may provide for the method by which specified terms (such as interest rate, maturity date, record date or date from which interest shall accrue) are to be determined. Securities may differ between Series in respect of any matters, provided that all Series of Securities shall be equally and ratably entitled to the benefits of the Indenture. Section 2.2. Establishment of Terms of Series of Securities. 6 At or prior to the issuance of any Securities within a Series, the following shall be established (as to the Series generally, in the case of Subsection 2.2.1 and either as to such Securities within the Series or as to the Series generally in the case of Subsections 2.2.2 through 2.2.22) by a Board Resolution, a supplemental indenture or an Officers' Certificate pursuant to authority granted under a Board Resolution: 2.2.1. the title of the Series (which shall distinguish the Securities of that particular Series from the Securities of any other Series); 2.2.2. the price or prices (expressed as a percentage of the principal amount thereof) at which the Securities of the Series will be issued; 2.2.3. any limit upon the aggregate principal amount of the Securities of the Series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6); 2.2.4. the date or dates on which the principal of the Securities of the Series is payable; 2.2.5. the rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to determine such rate or rates (including, but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the Securities of the Series shall bear interest, if any, the date or dates from which such interest, if any, shall accrue, the date or dates on which such interest, if any, shall commence and be payable and any regular record date for the interest payable on any interest payment date; 2.2.6. the place or places where the principal of and interest, if any, on the Securities of the Series shall be payable, or the method of such payment, if by wire transfer, mail or other means; 2.2.7. if applicable, the period or periods within which, the price or prices at which and the terms and conditions upon which the Securities of the Series may be redeemed, in whole or in part, at the option of the Company; 2.2.8. the obligation, if any, of the Company to redeem or purchase the Securities of the Series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; 2.2.9. the dates, if any, on which and the price or prices at which the Securities of the Series will be repurchased by the Company at the option of the Holders thereof and other detailed terms and provisions of such repurchase obligations; 2.2.10. if other than denominations of $1,000 and any integral multiple thereof, the denominations in which the Securities of the Series shall be issuable; 7 2.2.11. the forms of the Securities of the Series in bearer or fully registered form (and, if in fully registered form, whether the Securities will be issuable as Global Securities); 2.2.12. if other than the principal amount thereof, the portion of the principal amount of the Securities of the Series that shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.2; 2.2.13. the currency of denomination of the Securities of the Series, which may be Dollars or any Foreign Currency, including, but not limited to, the ECU, and if such currency of denomination is a composite currency other than the ECU, the agency or organization, if any, responsible for overseeing such composite currency; 2.2.14. the designation of the currency, currencies or currency units in which payment of the principal of and interest, if any, on the Securities of the Series will be made; 2.2.15. if payments of principal of or interest, if any, on the Securities of the Series are to be made in one or more currencies or currency units other than that or those in which such Securities are denominated, the manner in which the exchange rate with respect to such payments will be determined; 2.2.16. the manner in which the amounts of payment of principal of or interest, if any, on the Securities of the Series will be determined, if such amounts may be determined by reference to an index based on a currency or currencies or by reference to a commodity, commodity index, stock exchange index or financial index; 2.2.17. the provisions, if any, relating to any guarantee of or security provided for the Securities of the Series; 2.2.18. any addition to or change in the Events of Default which applies to any Securities of the Series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.2; 2.2.19. any addition to or change in the covenants set forth in Articles IV or V which applies to Securities of the Series; 2.2.20. any other terms of the Securities of the Series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.1, but which may modify or delete any provision of this Indenture insofar as it applies to such Series); and 2.2.21. any depositories, interest rate calculation agents, exchange rate calculation agents or other agents with respect to Securities of such Series if other than those appointed herein. All Securities of any one Series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the Board Resolution, supplemental indenture or Officers' Certificate referred to 8 above, and the authorized principal amount of any Series may not be increased to provide for issuances of additional Securities of such Series, unless otherwise provided in such Board Resolution, supplemental indenture or Officers' Certificate. Section 2.3. Execution and Authentication. One or more Officers shall sign the Securities for the Company by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee shall at any time, and from time to time, authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or Officers' Certificate, upon receipt by the Trustee of a Company Order. Such Company Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent or agents, which oral instructions shall be promptly confirmed in writing. Each Security shall be dated the date of its authentication unless otherwise provided by a Board Resolution, a supplemental indenture hereto or an Officers' Certificate. The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution, supplemental indenture hereto or Officers' Certificate delivered pursuant to Section 2.2, except as provided in Section 2.8. Prior to the issuance of Securities of any Series, the Trustee shall have received and (subject to Section 7.2) shall be fully protected in relying on: (a) the Board Resolution, supplemental indenture hereto or Officers' Certificate establishing the form of the Securities of that Series or of Securities within that Series and the terms of the Securities of that Series or of Securities within that Series, (b) an Officers' Certificate complying with Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4. The Trustee shall have the right to decline to authenticate and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines that such action may not lawfully be taken; or (b) if the Trustee in good faith by its board of directors or trustees, executive committee or a trust committee of directors and/or vice-presidents shall determine that such action would expose the Trustee to personal liability to Holders of any then outstanding Series of Securities. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate. 9 Section 2.4. Registrar and Paying Agent. The Company shall maintain, with respect to each Series of Securities, at the place or places specified with respect to such Series pursuant to Section 2.2, an office or agency where Securities of such Series may be presented or surrendered for payment ("Paying Agent"), where Securities of such Series may be surrendered for registration of transfer or exchange ("Registrar") and where notices and demands to or upon the Company in respect of the Securities of such Series and this Indenture may be served ("Service Agent"). The Registrar shall keep a register with respect to each Series of Securities and to their transfer and exchange. The Company will give prompt written notice to the Trustee of the name and address, and any change in the name or address, of each Registrar, Paying Agent or Service Agent. If at any time the Company shall fail to maintain any such required Registrar, Paying Agent or Service Agent or shall fail to furnish the Trustee with the name and address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more co-registrars, additional paying agents or additional service agents and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligations to maintain a Registrar, Paying Agent and Service Agent in each place so specified pursuant to Section 2.2 for Securities of any Series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the name or address of any such co-registrar, additional paying agent or additional service agent. The term "Registrar" includes any co-registrar; the term "Paying Agent" includes any additional paying agent; and the term "Service Agent" includes any additional service agent. The Company hereby appoints the Trustee the initial Registrar, Paying Agent and Service Agent for each Series unless another Registrar, Paying Agent or Service Agent, as the case may be, is appointed prior to the time Securities of that Series are first issued. Section 2.5. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust, for the benefit of Securityholders of any Series of Securities, or the Trustee, all money held by the Paying Agent for the payment of principal of or interest on the Series of Securities, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of Securityholders of any Series of Securities all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes. 10 Section 2.6. Securityholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders of each Series of Securities and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Securityholders of each Series of Securities. Section 2.7. Transfer and Exchange. Where Securities of a Series are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of the same Series, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Trustee shall authenticate Securities at the Registrar's request. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or 9.6). Neither the Company nor the Registrar shall be required (a) to issue, register the transfer of, or to exchange Securities of any Series for the period beginning at the opening of business 15 days immediately preceding the mailing of a notice of redemption of Securities of that Series selected for redemption and ending at the close of business on the day of such mailing, (b) to register the transfer of or to exchange Securities of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part or (c) to register the transfer of or to exchange any Security between a record date and the next succeeding interest payment date with respect to such Security. Prior to due presentment for the registration of a transfer of any Security, the Trustee, any Agent and the Company may deem and treat the person in whose name any Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Securities and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. Section 2.8. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in 11 the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any Series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 2.9. Outstanding Securities. The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest on a Global Security effected by the Trustee in accordance with the provisions hereof and those described in this Section as not outstanding. If a Security is replaced pursuant to Section 2.8, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds on the Maturity of Securities of a Series money sufficient to pay such Securities payable on that date, then on and after that date such Securities of the Series cease to be outstanding and interest on them ceases to accrue. A Security does not cease to be outstanding because the Company or an Affiliate holds the Security. In determining whether the Holders of the requisite principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of a Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and 12 payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.2. Section 2.10. Treasury Securities. In determining whether the Holders of the required principal amount of Securities of a Series have concurred in any request, demand, authorization, direction, notice, consent or waiver Securities of a Series owned by the Company or an Affiliate shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver only Securities of a Series that the Trustee knows are so owned shall be so disregarded. Section 2.11. Temporary Securities. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities upon a Company Order. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee upon request shall authenticate definitive Securities of the same Series and date of maturity in exchange for temporary Securities. Until so exchanged, temporary securities shall have the same rights under this Indenture as the definitive Securities. Section 2.12. Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Securities surrendered for transfer, exchange, payment, replacement or cancellation and shall destroy such canceled Securities (subject to the record retention requirement of the Exchange Act) and deliver a certificate of such destruction to the Company, unless the Company otherwise directs. The Company may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for cancellation. Section 2.13. Defaulted Interest. If the Company defaults in a payment of interest on a Series of Securities, it shall pay the defaulted interest, plus, to the extent permitted by law, any interest payable on the defaulted interest, to the persons who are Securityholders of the Series on a subsequent special record date. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Security and the date of the proposed payment. The Company shall fix or cause to be fixed the record date and payment date; provided that no such special record date shall be less than ten days prior to the related payment date for such defaulted interest. At least 15 days before the record date, the Company shall mail to the Trustee and to each Securityholder of the Series a notice that states the record date, the payment date and the amount of interest to be paid. The Company may pay defaulted interest in any other lawful manner. Section 2.14. Global Securities. 13 2.14.1. Terms of Securities. A Board Resolution, a supplemental indenture hereto or an Officers' Certificate shall establish whether the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities and the Depository for such Global Security or Securities. 2.14.2. Transfer and Exchange. Notwithstanding any provisions to the contrary contained in Section 2.7 of the Indenture and in addition thereto, any Global Security shall be exchangeable pursuant to Section 2.7 of the Indenture for Securities registered in the names of Holders other than the Depository for such Security or its nominee only if (i) such Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Security or if at any time such Depository ceases to be a clearing agency registered under the Exchange Act, and, in either case, the Company fails to appoint a successor Depository within 120 days after the date of such notice from the Depositary, or (ii) the Company executes and delivers to the Trustee an Officers' Certificate to the effect that such Global Security shall be so exchangeable. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Securities registered in such names as the Depository shall direct in writing in an aggregate principal amount equal to the principal amount of the Global Security with like tenor and terms. Except as provided in this Section 2.14.2, a Global Security may not be transferred except as a whole by the Depository with respect to such Global Security to a nominee of such Depository, by a nominee of such Depository to such Depository or another nominee of such Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository. 2.14.3. Legend. Any Global Security issued hereunder shall bear a legend in substantially the following form: "THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH A SUCCESSOR DEPOSITORY." 2.14.4. Acts of Holders. The Depository, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture. 14 2.14.5. Payments. Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.2, payment of the principal of and interest, if any, on any Global Security shall be made to the Holder thereof. 2.14.6. Consents, Declaration and Directions. Except as provided in Section 2.14.5, the Company, the Trustee and any Agent shall treat a person as the Holder of such principal amount of outstanding Securities of such Series represented by a Global Security as shall be specified in a written statement of the Depositary with respect to such Global Security, for purposes of obtaining any consents, declarations, waivers or directions required to be given by the Holders pursuant to this Indenture. Section 2.15. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. ARTICLE III. REDEMPTION Section 3.1. Notice to Trustee. The Company may, with respect to any Series of Securities, reserve the right to redeem and pay the Series of Securities or may covenant to redeem and pay the Series of Securities or any part thereof prior to the Stated Maturity thereof at such time and on such terms as provided for in such Securities. If a Series of Securities is redeemable and the Company wants or is obligated to redeem prior to the Stated Maturity thereof all or part of the Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee of the redemption date and the principal amount of Series of Securities to be redeemed. The Company shall give the notice at least 30 days but not more than 60 days before the redemption date (or such shorter notice as may be acceptable to the Trustee). Section 3.2. Selection of Securities to be Redeemed. Unless otherwise indicated for a particular Series by a Board Resolution, a supplemental indenture or an Officers' Certificate, if less than all the Securities of a Series are to be redeemed, the Trustee shall select the Securities of the Series to be redeemed among the Holders in compliance with the requirements of the principal national securities exchange, if any, on which the Securities are listed or, if the Securities are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee in its sole discretion considers fair and appropriate. The Trustee shall make the selection from Securities of the Series then outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities of the Series that have denominations larger than $1,000. Securities of the Series and portions of them it selects shall be in amounts of $1,000 or whole multiples of $1,000 15 or, with respect to Securities of any Series issuable in other denominations pursuant to Section 2.2.10, the minimum principal denomination for each Series and integral multiples thereof; except that if all of the Securities of a Holder are to be redeemed, the entire outstanding amount of Securities held by such Holder, even if not a multiple of $1,000, shall be redeemed. Provisions of this Indenture that apply to Securities of a Series called for redemption also apply to portions of Securities of that Series called for redemption. Section 3.3. Notice of Redemption. Unless otherwise indicated for a particular Series by Board Resolution, a supplemental indenture hereto or an Officers' Certificate, at least 30 days but not more than 60 days before a redemption date, the Company shall mail a notice of redemption to each Holder whose Securities are to be redeemed and if any Bearer Securities are outstanding, publish on one occasion a notice in an Authorized Newspaper. The notice shall identify the Securities of the Series to be redeemed and shall state: (a) the redemption date; (b) the redemption price; (c) the name and address of the Paying Agent; (d) that Securities of the Series called for redemption must be surrendered to the Paying Agent to collect the redemption price; (e) that interest on Securities of the Series called for redemption ceases to accrue on and after the redemption date; and (f) any other information as may be required by the terms of the particular Series or the Securities of a Series being redeemed. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense. Section 3.4. Effect of Notice of Redemption. Once notice of redemption is mailed or published as provided in Section 3.3, Securities of a Series called for redemption become due and payable on the redemption date and at the redemption price. A notice of redemption may not be conditional. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price plus accrued interest to the redemption date. Section 3.5. Deposit of Redemption Price. 16 On or before the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest, if any, on all Securities to be redeemed on that date. Section 3.6. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Trustee shall authenticate for the Holder a new Security of the same Series and the same maturity equal in principal amount to the unredeemed portion of the Security surrendered. ARTICLE IV. COVENANTS Section 4.1. Payment of Principal and Interest. The Company covenants and agrees for the benefit of the Holders of each Series of Securities that it will duly and punctually pay the principal of and interest, if any, on the Securities of that Series in accordance with the terms of such Securities and this Indenture. Section 4.2. SEC Reports. The Company shall deliver to the Trustee within 15 days after it files them with the SEC copies of the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company also shall comply with the other provisions of TIA Section 314(a). Section 4.3. Compliance Certificate. The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year of the Company, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he may have knowledge). The Company will, so long as any of the Securities are outstanding, deliver to the Trustee, forthwith upon becoming aware of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. Section 4.4. Stay, Extension and Usury Laws. 17 The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture or the Securities; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. Section 4.5. Corporate Existence. Subject to Article V, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership or other existence of each Significant Subsidiary in accordance with the respective organizational documents of each Significant Subsidiary and the rights (charter and statutory), licenses and franchises of the Company and its Significant Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any Significant Subsidiary, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole and that the loss thereof is not adverse in any material respect to the Holders. Section 4.6. Taxes. The Company shall, and shall cause each of its Significant Subsidiaries to, pay prior to delinquency all taxes, assessments and governmental levies, except as contested in good faith and by appropriate proceedings. ARTICLE V. SUCCESSORS Section 5.1. When Company May Merge, Etc. (a) The Company shall not, in a single transaction or a series of related transactions, consolidate with or merge with or into any other person or sell, assign, convey, transfer or lease or otherwise dispose of all or substantially all of its properties and assets to any person or group of affiliated persons if such transaction or transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease or disposal of all or substantially all of the properties and assets of the Company on a Consolidated basis to any other person or group of affiliated persons, unless at the time and after giving effect thereto: (i) either: (A) the Company shall be the surviving or continuing corporation; or 18 (B) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the person which acquires by sale, assignment, conveyance, transfer, lease or disposition the properties and assets of the Company substantially as an entirety (the "Surviving Entity") shall be a corporation duly organized and validly existing under the laws of the United States, any state thereof or the District of Columbia and shall, in any case, expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Securities and this Indenture, and this Indenture shall remain in full force and effect; (ii) immediately before and immediately after giving effect to such transaction on a pro forma basis (and treating any Debt not previously an obligation of the Company which becomes an obligation of the Company in connection with or as a result of such transaction as having been incurred at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and (iii) the Company shall have delivered, or caused to be delivered, to the Trustee, in form and substance satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel, each to the effect that such consolidation, merger, sale, assignment, conveyance, transfer, lease or other transaction and the supplemental indenture in respect thereto, if required, comply with the provisions in clauses (i) and (ii) of this paragraph (a) and that all conditions precedent herein provided for relating to such transaction have been complied with. (b) The foregoing paragraph (a) shall not prohibit a merger effected solely for the purpose of reincorporating the Company in another jurisdiction. Section 5.2. Successor Corporation Substituted. Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.1 hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the "Company" shall refer instead to the successor corporation and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; provided, however, that, in the case of a transfer by lease, the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Securities. 19 ARTICLE VI. DEFAULTS AND REMEDIES Section 6.1. Events of Default. "Event of Default," wherever used herein with respect to Securities of any Series, means any one of the following events, unless in the establishing Board Resolution, supplemental indenture or Officers' Certificate, it is provided that such Series shall not have the benefit of said Event of Default: (a) default in the payment of any interest on any Security of that Series when it becomes due and payable, and continuance of such default for a period of 30 days; or (b) default in the payment of the principal of any Security of that Series at its Maturity; or (c) default in the deposit of any sinking fund payment, when and as due in respect of any Security of that Series; or (d) default in the performance, or breach, of any covenant or agreement of the Company in this Indenture (other than a default in the performance, or breach, of a covenant or agreement that is specifically dealt with in the immediately preceding clauses (a), (b) or (c) or that has been included in this Indenture solely for the benefit of Series of Securities other than that Series), which default continues uncured for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the then outstanding Securities of that Series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (e) (i) a default in the payment of the principal of any Debt of the Company (including a Default with respect to Securities of any Series other than that Series) or any Subsidiary of the Company shall have occurred under any agreements, indentures or instruments under which the Company or any Subsidiary of the Company then has outstanding Debt in excess of $50 million when the same shall become due and payable in full and such default shall have continued after any applicable grace period and shall not have been cured or waived; or (ii) an event of default as defined in any of the agreements, indentures or instruments described in clause (i) of this clause (e) shall have occurred and the Debt thereunder, if not already matured at its final maturity in accordance with its terms, shall have been accelerated; or (f) (i) the Company or any Significant Subsidiary commences a voluntary case or proceeding under any applicable Bankruptcy Law or any other case or proceeding to be adjudicated bankrupt or insolvent; (ii) the Company or any Significant Subsidiary consents to the entry of a decree or order for relief in respect of the Company or such Significant Subsidiary in an 20 involuntary case or proceeding under any applicable Bankruptcy Law or to the commencement of any bankruptcy or insolvency case or proceeding against it; (iii) the Company or any Significant Subsidiary files a petition or answer or consent seeking reorganization or relief under any applicable federal or state law; (iv) the Company or any Significant Subsidiary: (A) consents to the filing of such petition or the appointment of, or taking possession by, a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or such Significant Subsidiary or of any substantial part of its property; (B) makes an assignment for the benefit of creditors; or (C) admits in writing its inability to pay its debts generally as they become due; or (g) there shall have been the entry by a court of competent jurisdiction of: (i) a decree or order for relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy Law; or (ii) a decree or order adjudging the Company or any Significant Subsidiary bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any Significant Subsidiary under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Significant Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order for relief shall continue to be in effect, or any such other decree or order shall be unstayed and in effect, for a period of 60 consecutive days; or (h) any other Event of Default provided with respect to Securities of that Series, which is specified in a Board Resolution, a supplemental indenture hereto or an Officers' Certificate, in accordance with Section 2.2.18. The term "Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law. The term "Custodian" means any custodian, receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law. Section 6.2. Acceleration of Maturity; Rescission and Annulment. 21 If an Event of Default with respect to Securities of any Series at the time outstanding occurs and is continuing (other than an Event of Default referred to in Section 6.1(f) or (g)) then in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the then outstanding Securities of that Series may declare the principal amount (or, if any Securities of that Series are Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) of and accrued and unpaid interest, if any, on all of the Securities of that Series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) and accrued and unpaid interest, if any, shall become immediately due and payable. If an Event of Default specified in Section 6.1(f) or (g) occurs and is continuing, the principal amount (or specified amount) of and accrued and unpaid interest, if any, on all outstanding Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. At any time after such a declaration of acceleration with respect to any Series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in aggregate principal amount of the then outstanding Securities of that Series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if: (a) the Company has paid or deposited with the Trustee a sum sufficient to pay: (i) all overdue interest, if any, on all Securities of that Series; (ii) the principal of any Securities of that Series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities; (iii) to the extent that payment of such interest is lawful, interest upon any overdue principal and overdue interest at the rate or rates prescribed therefor in such Securities; and (iv) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (b) all Events of Default with respect to Securities of that Series, other than the non-payment of the principal of Securities of that Series which have become due solely by such declaration of acceleration, have been cured or waived in writing as provided in Section 6.13. No such rescission shall affect any subsequent Default or impair any right consequent thereon. Section 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee. 22 If an Event of Default specified in Section 6.1(a), (b) or (c) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Securities and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any amounts due the Trustee under Section 7.7 hereof. Section 6.4. Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor upon the Securities), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent in writing to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 6.5. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. Section 6.6. Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such 23 money on account of principal or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: First: to the Trustee, its agents and attorneys for amounts due under Section 7.7 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; and Second: to Holders of Securities for amounts due and unpaid on the Securities for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, premium, if any and interest, respectively; and Third: to the Company or to such party as a court of competent jurisdiction shall direct. Section 6.7. Limitation on Suits. No Holder of any Security of any Series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that Series; (b) the Holders of not less than 25% in aggregate principal amount of the then outstanding Securities of that Series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (c) such Holder or Holders have offered and, if requested, provided to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the then outstanding Securities of that Series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders. Section 6.8. Unconditional Right of Holders to Receive Principal and Interest. 24 Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Security on the Stated Maturity or Stated Maturities expressed in such Security (or, in the case of redemption, on the redemption date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. Section 6.9. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. Section 6.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 6.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 6.12. Control by Holders. The Holders of a majority in aggregate principal amount of the then outstanding Securities of any Series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such Series, provided that (a) such direction shall not be in conflict with any rule of law or with this Indenture; 25 (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and (c) subject to the provisions of Section 6.1, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability. Section 6.13. Waiver of Past Defaults. The Holders of not less than a majority in aggregate principal amount of the then outstanding Securities of any Series may on behalf of the Holders of all the Securities of such Series waive any past Default hereunder with respect to such Series and its consequences, except a Default in the payment of the principal of or interest on any Security of such Series (provided, however, that the Holders of a majority in principal amount of the then outstanding Securities of any Series may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 6.14. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Security pursuant to Section 6.8 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Securities. ARTICLE VII. TRUSTEE Section 7.1. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (i) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others; and 26 (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon Officers' Certificates or Opinions of Counsel furnished to the Trustee and conforming to the requirements of this Indenture; however, in the case of any such Officers' Certificates or Opinions of Counsel which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officers' Certificates and Opinions of Counsel to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section. (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it with respect to Securities of any Series in good faith in accordance with the direction of the Holders of a majority in principal amount of the then outstanding Securities of such Series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such Series. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraph (a), (b) and (c) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) No provision of this Indenture shall require the Trustee to risk its own funds or otherwise incur any financial liability in the performance of any of its duties, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk is not reasonably assured to it. (h) The Paying Agent, the Registrar and any authenticating agent shall be entitled to the protections, immunities and standard of care as are set forth in paragraphs (a), (b) and (c) of this Section with respect to the Trustee. 27 Section 7.2. Rights of Trustee. (a) The Trustee may rely on and shall be protected in acting or refraining from acting upon any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. No Depository shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any act or omission by any Depository. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (e) The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Securities unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. Section 7.3. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11. Section 7.4. Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities, and it shall not be responsible for any statement in the Securities other than its authentication. Section 7.5. Notice of Defaults. 28 If a Default or Event of Default occurs and is continuing with respect to the Securities of any Series and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder of the Securities of that Series and, if any Bearer Securities are outstanding, publish on one occasion in an Authorized Newspaper, notice of a Default or Event of Default within 90 days after it occurs or, if later, after a Responsible Officer of the Trustee has knowledge of such Default or Event of Default. Except in the case of a Default or Event of Default in payment of principal of or interest on any Security of any Series, the Trustee may withhold the notice if and so long as its corporate trust committee or a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Securityholders of that Series. Section 7.6. Reports by Trustee to Holders. Within 60 days after May 15 in each year, the Trustee shall transmit by mail to all Securityholders, as their names and addresses appear on the register kept by the Registrar and, if any Bearer Securities are outstanding, publish in an Authorized Newspaper, a brief report dated as of such May 15, in accordance with, and to the extent required under, TIA Section 313. A copy of each report at the time of its mailing to Securityholders of any Series shall be filed with the SEC and each stock exchange on which the Securities of that Series are listed. The Company shall promptly notify the Trustee when Securities of any Series are listed on any stock exchange. Section 7.7. Compensation and Indemnity. The Company shall pay to the Trustee from time to time reasonable compensation for its services. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee (including the cost of defending itself) against any loss, liability or expense incurred by it except as set forth in the next paragraph in the performance of its duties under this Indenture as Trustee or Agent. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. This indemnification shall apply to officers, directors, employees, shareholders and agents of the Trustee. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee or by any officer, director, employee, shareholder or agent of the Trustee through negligence or bad faith. To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by the 29 Trustee, except that held in trust to pay principal and interest on particular Securities of that Series. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1(f) or (g) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. Section 7.8. Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign with respect to the Securities of one or more Series by so notifying the Company. The Holders of a majority in principal amount of the Securities of any Series may remove the Trustee with respect to that Series by so notifying the Trustee and the Company. The Company may remove the Trustee with respect to Securities of one or more Series if: (a) the Trustee fails to comply with Section 7.10; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a Custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee with respect to the Securities of any one or more Series does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in aggregate principal amount of the then outstanding Securities of the applicable Series may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee with respect to the Securities of any one or more Series fails to comply with Section 7.10, any Securityholder of the applicable Series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee subject to the lien provided for in Section 7.7, the resignation or removal of the retiring Trustee shall become effective, and the 30 successor Trustee shall have all the rights, powers and duties of the Trustee with respect to each Series of Securities for which it is acting as Trustee under this Indenture. A successor Trustee shall mail a notice of its succession to each Securityholder of each such Series and, if any Bearer Securities are outstanding, publish such notice on one occasion in an Authorized Newspaper. Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Company's obligations under Section 7.7 hereof shall continue for the benefit of the retiring trustee with respect to expenses and liabilities incurred by it prior to such replacement. Section 7.9. Successor Trustee by Merger, etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. Section 7.10. Eligibility; Disqualification. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA Section 310(b). Section 7.11. Preferential Collection of Claims Against Company. The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated. ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE Section 8.1. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Order cease to be of further effect (except as hereinafter provided in this Section 8.1), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (a) either (i) all Securities theretofore authenticated and delivered (other than Securities that have been destroyed, lost or stolen and that have been replaced or paid) have been delivered to the Trustee for cancellation; or (ii) all such Securities not theretofore delivered to the Trustee for cancellation (1) have become due and payable, or 31 (2) will become due and payable at their Stated Maturity within one year, or (3) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or (4) are deemed paid and discharged pursuant to Section 8.3, as applicable; and the Company, in the case of (1), (2) or (3) above, has deposited or caused to be deposited with the Trustee as trust funds in trust an amount sufficient for the purpose of paying and discharging the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Securities which have become due and payable on or prior to the date of such deposit) or to the Stated Maturity or redemption date, as the case may be; (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.7, and, if money shall have been deposited with the Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.4, 2.7, 2.8, 8.1 8.2 and 8.5 shall survive. Section 8.2. Application of Trust Funds; Indemnification. (a) Subject to the provisions of Section 8.5, all money deposited with the Trustee pursuant to Section 8.1, all money and U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4 and all money received by the Trustee in respect of U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the persons entitled thereto, of the principal and interest for whose payment such money has been deposited with or received by the Trustee or to make mandatory sinking fund payments or analogous payments as contemplated by Sections 8.3 or 8.4. (b) The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against U.S. Government Obligations or Foreign Government Obligations deposited pursuant to Sections 8.3 or 8.4 or the interest 32 and principal received in respect of such obligations other than any payable by or on behalf of Holders. (c) The Trustee shall deliver or pay to the Company from time to time upon Company Request any U.S. Government Obligations or Foreign Government Obligations or money held by it as provided in Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered to the Trustee, are then in excess of the amount thereof which then would have been required to be deposited for the purpose for which such U.S. Government Obligations or Foreign Government Obligations or money were deposited or received. This provision shall not authorize the sale by the Trustee of any U.S. Government Obligations or Foreign Government Obligations held under this Indenture. Section 8.3. Legal Defeasance of Securities of any Series. Unless this Section 8.3 is otherwise specified, pursuant to Section 2.2.20, to be inapplicable to Securities of any Series, the Company shall be deemed to have paid and discharged the entire indebtedness on all the outstanding Securities of such Series on the 91st day after the date of the deposit referred to in subparagraph (d) hereof, and the provisions of this Indenture, as it relates to such outstanding Securities of such Series, shall no longer be in effect (and the Trustee, at the expense of the Company, shall, upon its receipt of a Company Request, execute proper instruments acknowledging the same), except as to: (a) the rights of Holders of Securities of such Series to receive, from the trust funds described in subparagraph (d) hereof, (i) payment of the principal of and each installment of principal of and interest on the outstanding Securities of such Series on the Stated Maturity of such principal or installment of principal or interest and (ii) the benefit of any mandatory sinking fund payments applicable to the Securities of such Series on the day on which such payments are due and payable in accordance with the terms of this Indenture and the Securities of such Series; (b) the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and (c) the rights, powers, trust and immunities of the Trustee hereunder; provided that, the following conditions shall have been satisfied: (d) the Company shall have deposited or caused to be deposited irrevocably with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of such Securities (i) in the case of Securities of such Series denominated in Dollars, cash in Dollars (or such other money or currencies as shall then be legal tender in the United States) and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof, in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on such Trustee), not later 33 than one day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge each installment of principal (including mandatory sinking fund or analogous payments) of and interest, if any, on all the Securities of such Series on the dates such installments of interest or principal are due; (e) such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (f) no Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date of such deposit or during the period ending on the 91st day after such date; (g) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel to the effect that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the Securities of such Series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred; (h) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; (i) such deposit shall not result in the trust arising from such deposit constituting an investment company (as defined in the Investment Company Act of 1940, as amended), or such trust shall be qualified under such Act or exempt from regulation thereunder; and (j) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance contemplated by this Section have been complied with. Section 8.4. Covenant Defeasance. Unless this Section 8.4 is otherwise specified pursuant to Section 2.2.20 to be inapplicable to Securities of any Series, on and after the 91st day after the date of the deposit referred to in subparagraph (a) hereof, the Company may omit to comply with any term, provision or condition set forth under Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as any additional covenants contained in a supplemental indenture hereto for a particular Series of 34 Securities or a Board Resolution or an Officers' Certificate delivered pursuant to Section 2.2.20 (and the failure to comply with any such covenants shall not constitute a Default or Event of Default under Section 6.1) and the occurrence of any event described in clause (e) of Section 6.1 shall not constitute a Default or Event of Default hereunder, with respect to the Securities of such Series, provided that the following conditions shall have been satisfied: (a) With reference to this Section 8.4, the Company has deposited or caused to be irrevocably deposited (except as provided in Section 8.2(c)) with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities (i) in the case of Securities of such Series denominated in Dollars, cash in Dollars (or such other money or currencies as shall then be legal tender in the United States) and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect thereof, in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on such Trustee), not later than one day before the due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered to the Trustee, to pay principal and interest, if any, on and any mandatory sinking fund in respect of the Securities of such Series on the dates such installments of interest or principal are due; (b) Such deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (c) No Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date of such deposit or during the period ending on the 91st day after such date; (d) the Company shall have delivered to the Trustee an Opinion of Counsel confirming that Holders of the Securities of such Series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; (e) the Company shall have delivered to the Trustee an Officers' Certificate stating the deposit was not made by the Company with the intent of preferring the Holders of the Securities of such Series over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and (f) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the defeasance contemplated by this Section have been complied with. Section 8.5. Repayment to Company. 35 The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal and interest that remains unclaimed for two years. After that, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person. ARTICLE IX. AMENDMENTS AND WAIVERS Section 9.1. Without Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Securities of one or more Series without the consent of any Securityholder: (a) to cure any ambiguity, defect or inconsistency; (b) to comply with Article V; (c) to provide for uncertificated Securities in addition to or in place of certificated Securities; (d) to make any change that would provide any additional rights or benefits to the Holders of the Securities or that does not adversely affect in any material respect the rights of any Securityholder; (e) to provide for the issuance of and establish the form and terms and conditions of Securities of any Series as permitted by this Indenture; (f) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee; or (g) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. Section 9.2. With Consent of Holders. The Company and the Trustee may enter into a supplemental indenture with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities of each Series affected by such supplemental indenture (including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series), for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Securityholders of each such Series. Except as provided in Section 6.13, the Holders of at least a majority in principal amount of the outstanding Securities of each Series affected by such waiver by notice to the Trustee (including consents obtained in connection with a tender offer or exchange offer for the Securities of such Series) may waive compliance by the Company with any provision of this Indenture or the Securities with respect to such Series. 36 It shall not be necessary for the consent of the Holders of Securities under this Section 9.2 to approve the particular form of any proposed supplemental indenture or waiver, but it shall be sufficient if such consent approves the substance thereof. After a supplemental indenture or waiver under this section becomes effective, the Company shall mail to the Holders of Securities affected thereby and, if any Bearer Securities affected thereby are outstanding, publish on one occasion in an Authorized Newspaper, a notice briefly describing the supplemental indenture or waiver. Any failure by the Company to mail or publish such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver. Section 9.3. Limitations. Without the consent of each Securityholder affected, an amendment or waiver may not: (a) change the amount of Securities whose Holders must consent to an amendment, supplement or waiver; (b) reduce the rate of or extend the time for payment of interest (including default interest) on any Security; (c) reduce the principal or change the Stated Maturity of any Security or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation; (d) reduce the principal amount of Discount Securities payable upon acceleration of the maturity thereof; (e) waive a Default or Event of Default in the payment of the principal of or interest, if any, on any Security (except a rescission of acceleration of the Securities of any Series by the Holders of at least a majority in principal amount of the then outstanding Securities of such Series and a waiver of the payment default that resulted from such acceleration); (f) make the principal of or interest, if any, on any Security payable in any currency other than that stated in the Security; (g) make any change in Sections 6.8, 6.13, 9.3 (this sentence), 10.15 or 10.16; or (h) waive a redemption payment with respect to any Security or change any of the provisions with respect to the redemption of any Securities. Section 9.4. Compliance with Trust Indenture Act. Every amendment to this Indenture or the Securities of one or more Series shall be set forth in a supplemental indenture hereto that complies with the TIA as then in effect. 37 Section 9.5. Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. Any amendment or waiver once effective shall bind every Securityholder of each Series affected by such amendment or waiver unless it is of the type described in any of clauses (a) through (g) of Section 9.3. In that case, the amendment or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security. Section 9.6. Notation on or Exchange of Securities. The Trustee may place an appropriate notation about an amendment or waiver on any Security of any Series thereafter authenticated. The Company in exchange for Securities of that Series may issue and the Trustee shall authenticate upon request new Securities of that Series that reflect the amendment or waiver. Section 9.7. Trustee Protected. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.1) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee shall sign all supplemental indentures, except that the Trustee need not sign any supplemental indenture that adversely affects its rights. ARTICLE X. MISCELLANEOUS Section 10.1. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies, or conflicts with another provision which is required or deemed to be included in this Indenture by the TIA, such required or deemed provision shall control. Section 10.2. Notices. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, facsimile or overnight air courier guaranteeing next day delivery, to the other's address: 38 if to the Company: Fleming Companies, Inc. 1945 Lakepointe Drive Lewisville, Texas 75029 Facsimile No.: (972) 906-1555 Attention: Chief Financial Officer With a copy (which shall not constitute notice) to: Latham & Watkins 505 Montgomery Street, 19th Floor San Francisco, California 94111 Facsimile No.: (415) 395-8095 Attention: Tracy K. Edmonson, Esq. if to the Trustee: Manufacturers and Traders Trust Company One M&T Plaza 7th Floor, Corporate Trust Department Buffalo, New York 14203 Facsimile No.: (716) 842-4474 Attention: Russell T. Whitley The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if sent by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Securityholder shall be mailed by first-class mail to his address shown on the register kept by the Registrar and, if any Bearer Securities are outstanding, published in an Authorized Newspaper. Failure to mail a notice or communication to a Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to other Securityholders of that or any other Series. If a notice or communication is mailed or published in the manner provided above, within the time prescribed, it is duly given, whether or not the Securityholder receives it. If the Company mails a notice or communication to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time. Section 10.3. Communication by Holders with Other Holders. 39 Securityholders of any Series may communicate pursuant to TIA Section 312(b) with other Securityholders of that Series or any other Series with respect to their rights under this Indenture or the Securities of that Series or all Series. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). Section 10.4. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (a) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. Section 10.5. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include: (a) a statement that the person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. Section 10.6. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or a meeting of Securityholders of one or more Series. Any Agent may make reasonable rules and set reasonable requirements for its functions. Section 10.7. Legal Holidays. Unless otherwise provided by Board Resolution, Officers' Certificate or supplemental indenture for a particular Series, a "Legal Holiday" is any day that is not a Business Day. If a payment date is a Legal Holiday at a place of payment, payment may be 40 made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. Section 10.8. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. Section 10.9. Counterparts. This Indenture may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Section 10.10. Governing Laws. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF. Section 10.11. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 10.12. Successors. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. Section 10.13. Severability. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 10.14. Table of Contents, Headings, Etc. The Table of Contents, Cross Reference Table, and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. 41 Section 10.15. Securities in a Foreign Currency or in ECU. Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officers' Certificate delivered pursuant to Section 2.2 of this Indenture with respect to a particular Series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all Series or all Series affected by a particular action at the time outstanding and, at such time, there are outstanding Securities of any Series which are denominated in a coin or currency other than Dollars (including ECUs), then the principal amount of Securities of such Series which shall be deemed to be outstanding for the purpose of taking such action shall be that amount of Dollars that could be obtained for such amount at the Market Exchange Rate at such time. For purposes of this Section 10.15, "Market Exchange Rate" shall mean the noon Dollar buying rate in New York City for cable transfers of that currency as published by the Federal Reserve Bank of New York; provided, however, in the case of ECUs, Market Exchange Rate shall mean the rate of exchange determined by the Commission of the European Union (or any successor thereto) as published in the Official Journal of the European Union (such publication or any successor publication, the "Journal"). If such Market Exchange Rate is not available for any reason with respect to such currency, the Trustee shall use, in its sole discretion and without liability on its part, such quotation of the Federal Reserve Bank of New York or, in the case of ECUs, the rate of exchange as published in the Journal, as of the most recent available date, or quotations or, in the case of ECUs, rates of exchange from one or more major banks in The City of New York or in the country of issue of the currency in question or, in the case of ECUs, in Luxembourg or such other quotations or, in the case of ECUs, rates of exchange as the Trustee, upon consultation with the Company, shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a Series denominated in currency other than Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture. All decisions and determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the preceding paragraph shall be in its sole discretion and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and irrevocably binding upon the Company and all Holders. Section 10.16. Judgment Currency. The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of or interest or other amount on the Securities of any Series (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a New York Banking Day, then, the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be 42 discharged or satisfied by any tender, any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable, and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions are authorized or required by law, regulation or executive order to close. ARTICLE XI. SINKING FUNDS Section 11.1. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of a Series, except as otherwise permitted or required by any form of Security of such Series issued pursuant to this Indenture. The minimum amount of any sinking fund payment provided for by the terms of the Securities of any Series is herein referred to as a "mandatory sinking fund payment" and any other amount provided for by the terms of Securities of such Series is herein referred to as an "optional sinking fund payment." If provided for by the terms of Securities of any Series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 11.2. Each sinking fund payment shall be applied to the redemption of Securities of any Series as provided for by the terms of the Securities of such Series. Section 11.2. Satisfaction of Sinking Fund Payments with Securities. The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of such Securities (1) deliver outstanding Securities of such Series to which such sinking fund payment is applicable (other than any of such Securities previously called for mandatory sinking fund redemption) and (2) apply as credit Securities of such Series to which such sinking fund payment is applicable and which have been redeemed either at the election of the Company pursuant to the terms of such Series of Securities (except pursuant to any mandatory sinking fund) or through the application of permitted optional sinking fund payments or other optional redemptions pursuant to the terms of such Securities, provided that such Securities have not been previously so credited. Such Securities shall be received by the Trustee, together with an Officers' Certificate with respect thereto, not later than 15 days prior to the date on which the Trustee begins the process of selecting Securities for redemption, and shall be credited for such purpose by the Trustee at the price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. If as a result of the delivery or credit of Securities in lieu of cash payments pursuant to this Section 11.2, the principal amount of Securities of such Series to be redeemed in order to exhaust 43 the aforesaid cash payment shall be less than $100,000, the Trustee need not call Securities of such Series for redemption, except upon receipt of a Company Order that such action be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking fund payment, provided, however, that the Trustee or such Paying Agent shall from time to time upon receipt of a Company Order pay over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that Series purchased by the Company having an unpaid principal amount equal to the cash payment required to be released to the Company. Section 11.3. Redemption of Securities for Sinking Fund. Not less than 45 days (unless otherwise indicated in the Board Resolution, supplemental indenture hereto or Officers' Certificate in respect of a particular Series of Securities) prior to each sinking fund payment date for any Series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing mandatory sinking fund payment for that Series pursuant to the terms of that Series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of Securities of that Series pursuant to Section 11.2, and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and the Company shall thereupon be obligated to pay the amount therein specified. Not less than 30 days (unless otherwise indicated in the Board Resolution, Officers' Certificate or supplemental indenture in respect of a particular Series of Securities) before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.2 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.3. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.4, 3.5 and 3.6. 44 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written. Fleming Companies, Inc. By: /s/ Matthew H. Hildreth ------------------------------------ Name: Matthew H. Hildreth Its: Senior Vice President and Treasurer Manufacturers and Traders Trust Company By: /s/ Russell T. Whitley ------------------------------------ Name: Russell T. Whitley Its: Assistant Vice President EX-4.2 6 d97911exv4w2.txt FIRST SUPPLEMENTAL INDENTURE EXHIBIT 4.2 EXECUTION COPY FLEMING COMPANIES, INC. 9 1/4% SENIOR NOTES DUE 2010 FIRST SUPPLEMENTAL INDENTURE Dated as of June 18, 2002 to Indenture Dated as of June 18, 2002 MANUFACTURERS AND TRADERS TRUST COMPANY Trustee TABLE OF CONTENTS
Page ---- ARTICLE I Application of Supplemental Indenture and Creation of 9 1/4% Senior Notes due 2010 Section 1.01 Application of This Supplemental Indenture............................................... 2 Section 1.02 Effect of Supplemental Indenture......................................................... 2 Section 1.03 Authentication; Designation and Amount of Notes.......................................... 3 Section 1.04 Form and Dating.......................................................................... 4 Section 1.05 Registrar and Paying Agent............................................................... 5 Section 1.06 Paying Agent to Hold Money in Trust...................................................... 5 Section 1.07 Defaulted Interest....................................................................... 6 Section 1.08 Outstanding Notes........................................................................ 6 Section 1.09 Treasury Notes........................................................................... 6 ARTICLE II Definitions and Incorporation by Reference Section 2.01 Definitions.............................................................................. 7 Section 2.02 Other Definitions........................................................................ 32 ARTICLE III Transfer and Exchange Section 3.01 Transfer and Exchange of Global Notes.................................................... 33 Section 3.02 Global Notes............................................................................. 33 Section 3.03 Transfer and Exchange of Beneficial Interests in the Global Notes........................ 33 Section 3.04 Transfer or Exchange of Beneficial Interests for Definitive Notes........................ 36 Section 3.05 Transfer and Exchange of Definitive Notes for Beneficial Interests....................... 38 Section 3.06 Transfer and Exchange of Definitive Notes for Definitive Notes........................... 41 Section 3.07 Exchange Offer........................................................................... 42 Section 3.08 Legends.................................................................................. 43 Section 3.09 Cancellation and/or Adjustment of Global Notes........................................... 44 Section 3.10 General Provisions Relating to Transfers and Exchanges................................... 45 ARTICLE IV Redemption Section 4.01 Optional Redemption...................................................................... 46 Section 4.02 Mandatory Redemption..................................................................... 46 Section 4.03 Offer to Purchase by Application of Excess Proceeds...................................... 47
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Page ---- ARTICLE V Covenants Section 5.01 Restricted Payments...................................................................... 49 Section 5.02 Dividend and Other Payment Restrictions Affecting Subsidiaries........................... 52 Section 5.03 Incurrence of Indebtedness............................................................... 53 Section 5.04 Asset Sales.............................................................................. 54 Section 5.05 Transactions with Affiliates............................................................. 55 Section 5.06 Liens.................................................................................... 56 Section 5.07 Offer to Repurchase upon Change of Control............................................... 56 Section 5.08 Limitation on Issuances and Sales of Capital Stock of Subsidiaries....................... 58 Section 5.09 Payments for Consent..................................................................... 58 Section 5.10 Additional Guarantees.................................................................... 59 Section 5.11 Termination of Certain Covenants in Event of Investment Grade Rating..................... 59 Section 5.12 Additional Interest...................................................................... 59 Section 5.13 Reports.................................................................................. 59 ARTICLE VI Successor Company Section 6.01 Merger, Consolidation and Sale of Assets................................................. 60 Section 6.02 Successor Corporation Substituted........................................................ 61 ARTICLE VII Defaults and Remedies Section 7.01 Events of Default........................................................................ 62 Section 7.02 Acceleration............................................................................. 64 Section 7.03 Other Remedies........................................................................... 65 Section 7.04 Waiver of Past Defaults.................................................................. 65 Section 7.05 Control by Majority...................................................................... 65 Section 7.06 Limitation on Suits...................................................................... 66 Section 7.07 Rights of Holders of Notes to Receive Payment............................................ 66 Section 7.08 Collection Suit by Trustee............................................................... 66 Section 7.09 Trustee May File Proofs of Claim......................................................... 66 Section 7.10 Priorities............................................................................... 67 Section 7.11 Undertaking for Costs.................................................................... 67 ARTICLE VIII Legal Defeasance and Covenant Defeasance Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance................................. 68
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Page ---- Section 8.02 Legal Defeasance and Discharge........................................................... 68 Section 8.03 Covenant Defeasance...................................................................... 68 Section 8.04 Conditions to Legal or Covenant Defeasance............................................... 69 Section 8.05 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions............................................................. 70 Section 8.06 Repayment to Company..................................................................... 71 Section 8.07 Reinstatement............................................................................ 71 Section 8.08 Satisfaction and Discharge............................................................... 71 Section 8.09 Application of Trust Money............................................................... 72 ARTICLE IX Amendment, Supplement and Waiver Section 9.01 Without Consent of Holders of Notes...................................................... 73 Section 9.02 With Consent of Holders of Notes......................................................... 73 Section 9.03 Compliance with Trust Indenture Act...................................................... 75 Section 9.04 Revocation and Effect of Consents........................................................ 75 Section 9.05 Notation on or Exchange of Notes......................................................... 75 Section 9.06 Trustee to Sign Amendments, etc.......................................................... 75 ARTICLE X Guarantee Section 10.01 Guarantee................................................................................ 76 Section 10.02 Limitation on Guarantor Liability........................................................ 77 Section 10.03 Execution and Delivery of Note Guarantee................................................. 77 Section 10.04 Guarantors May Consolidate, etc., on Certain Terms....................................... 78 Section 10.05 Releases of Note Guarantees.............................................................. 78 ARTICLE XI Miscellaneous Section 11.01 Trust Indenture Act Controls............................................................. 79 Section 11.02 Notices.................................................................................. 79 Section 11.03 Communication by Holders of Notes with Other Holders of Notes............................ 80 Section 11.04 Certificate and Opinion as to Conditions Precedent....................................... 81 Section 11.05 Statements Required in Certificate or Opinion............................................ 81 Section 11.06 Rules by Trustee and Agents.............................................................. 81 Section 11.07 No Personal Liability of Directors, Officers, Employees and Stockholders......................................................................... 81 Section 11.08 Governing Law............................................................................ 82 Section 11.09 No Adverse Interpretation of Other Agreements............................................ 82 Section 11.10 Successors............................................................................... 82 Section 11.11 Severability............................................................................. 82
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Page ---- Section 11.12 Counterpart Originals.................................................................... 82 Section 11.13 Table of Contents, Headings, etc......................................................... 82 EXHIBIT A FORM OF NOTE EXHIBIT B FORM OF NOTATION OF GUARANTEE EXHIBIT C FORM OF CERTIFICATE OF TRANSFER EXHIBIT D FORM OF CERTIFICATE OF EXCHANGE EXHIBIT E FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR EXHIBIT F FORM OF SUPPLEMENT TO SUPPLEMENTAL INDENTURE
-iv- This FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of June 18, 2002 among Fleming Companies, Inc., an Oklahoma corporation (the "Company"), the Guarantors and Manufacturers and Traders Trust Company, as trustee (the "Trustee") to the Indenture dated as of June 18, 2002 between the Company and the Trustee (the "Base Indenture" and as supplemented by this Supplemental Indenture, the "Indenture"). RECITALS WHEREAS, the Company and the Trustee have heretofore executed and delivered the Base Indenture to provide for the issuance of the Company's debt securities in one or more series; WHEREAS, Sections 2.1, 2.2 and 9.1 of the Base Indenture provide, among other things, that the Company and the Trustee may enter into indentures supplemental to the Base Indenture to provide for specific terms applicable to any series of Securities (as defined in the Base Indenture) and to add to or modify the covenants of the Company or other provisions of the Base Indenture for the benefit of the Holders of all or any series of Securities; WHEREAS, the Company has duly authorized the execution and delivery of this Supplemental Indenture to provide for the issuance on the Issue Date, of $200,000,000 aggregate principal amount of its 9 1/4% Senior Notes due 2010 (the "Initial Notes"); WHEREAS, the Company may, if permitted to do so pursuant to the terms of the Credit Agreement, the Initial Notes, the Existing Notes and the terms of its other indebtedness existing on such future date, authorize the issuance of: (i) if and when issued, additional 9 1/4% Senior Notes due 2010 which may be offered subsequent to the Issue Date in accordance with the Indenture (the "Additional Notes"), which may be in the form of Restricted Additional Notes or Unrestricted Additional Notes; (ii) if and when issued pursuant to a registered exchange offer for Restricted Additional Notes as provided for in the applicable Registration Rights Agreement, if any, its additional 9 1/4% Senior Notes due 2010 (the "Exchange Notes"); and (iii) if and when issued pursuant to a private exchange for Restricted Additional Notes as provided for in the applicable Registration Rights Agreement, if any, its additional 9 1/4% Senior Notes due 2010 (the "Private Exchange Notes," and together with the Initial Notes, any Additional Notes and any Exchange Notes, the "Notes"), pursuant to this Supplemental Indenture and the Company and the Trustee have agreed that the Company shall issue and deliver, and the Trustee shall authenticate, the Notes pursuant to the terms of this Supplemental Indenture and substantially in the form set forth as Exhibit A hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Base Indenture and this Supplemental Indenture; WHEREAS, the Guarantors have duly authorized the execution and delivery of this Supplemental Indenture to provide for the guarantee of the Initial Notes by the Guarantors substan- -2- tially in the form of Exhibit B hereto, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Base Indenture and this Supplemental Indenture; and WHEREAS, all action on the part of the Company and the Guarantors necessary to make this Supplemental Indenture a valid agreement of the Company and the Guarantors and to authorize the issuance of the Initial Notes (and the Note Guarantee endorsed thereon) under the Indenture has been duly taken; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I APPLICATION OF SUPPLEMENTAL INDENTURE AND CREATION OF 9 1/4% SENIOR NOTES DUE 2010 Section 1.01 Application of This Supplemental Indenture. Notwithstanding any other provision of this Supplemental Indenture, the provisions of this Supplemental Indenture, including as provided in Section 1.02 below, are expressly and solely for the benefit of the Holders of the Notes and the Note Guarantees. The Notes constitute a series of Securities as provided in Section 2.1 of the Base Indenture. Unless otherwise expressly specified, references in this Supplemental Indenture to specific Article numbers or Section numbers refer to Articles and Sections contained in this Supplemental Indenture, and not the Base Indenture or any other document. Section 1.02 Effect of Supplemental Indenture. With respect to the Notes (and any Note Guarantee endorsed thereon) only, the Base Indenture shall be supplemented pursuant to Sections 2.1, 2.2 and 9.1 thereof to establish the terms of the Notes (and any Note Guarantee endorsed thereon) as set forth in this Supplemental Indenture, including as follows: (a) Definitions. The definitions set forth in Article I of the Base Indenture shall be modified to the extent provided in Article II of this Supplemental Indenture; (b) Form and Terms. The form and terms of the securities representing the Notes required to be established pursuant to Sections 2.1 through 2.5, 2.9, 2.10 and 2.13 of the Base Indenture shall be established in accordance with Sections 1.03 through 1.09 of this Supplemental Indenture; (c) Transfer and Exchange. The provisions of Section 2.7 of the Base Indenture regarding transfer and exchange are deleted and replaced in their entirety by the provisions of Article III of this Supplemental Indenture; -3- (d) Redemption. The provisions of Article III of the Base Indenture regarding redemption are supplemented by the provisions of Article IV of this Supplemental Indenture; (e) Covenants. The provisions of Article IV of the Base Indenture regarding certain covenants of the Company are supplemented and amended by the provisions of Article V of this Supplemental Indenture; (f) Successors. The provisions of Article V of the Base Indenture regarding successors are deleted and replaced in their entirety by Article VI of this Supplemental Indenture; (g) Events of Default. The provisions of Article VI of the Base Indenture regarding Events of Default are deleted and replaced in their entirety by the provisions of Article VII of this Supplemental Indenture; (h) Satisfaction and Discharge; Defeasance. The provisions of Article VIII of the Base Indenture regarding satisfaction, discharge and defeasance are deleted and replaced in their entirety by the provisions of Article VIII of this Supplemental Indenture; (i) Amendments and Waivers. The provisions of Article IX of the Base Indenture regarding amendments and waivers are deleted and replaced in their entirety by the provisions of Article IX of this Supplemental Indenture; (j) Guarantees. The provisions of Article X of this Supplemental Indenture regarding Note Guarantees shall supplement the Base Indenture; and (k) Miscellaneous. The provisions of Article XI of this Supplemental Indenture regarding other items shall supplement the Base Indenture. To the extent that the provisions of this Supplemental Indenture (including those referred to in clauses (a) through (k) above) conflict with any provision of the Base Indenture, the provisions of this Supplemental Indenture shall govern and be controlling, solely with respect to the Notes (and any Note Guarantee endorsed thereon). Section 1.03 Authentication; Designation and Amount of Notes. The Notes shall be known and designated as the "9 1/4% Senior Notes due 2010." The Trustee shall, upon a written order of the Company signed by one or more Officers (an "Authentication Order"), authenticate Notes for original issue on the Issue Date in an aggregate principal amount not to exceed $200,000,000 (other than as provided in Section 2.8 of the Base Indenture) (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, Notes pursuant to Article III of this Supplemental Indenture or Section 2.8, 2.11 or 3.6 of the Base Indenture). The Trustee shall authenticate Additional Notes thereafter in an unlimited amount (so long as permitted by the terms of the Indenture) for original issue upon one or more Authentication Orders in aggregate principal amount as specified in such order (other than as provided in Section 2.8 of the Base Indenture). Each such Authentication Order shall specify the amount of Notes to be authenticated, whether the Notes are to be Initial Notes, Additional Notes, Exchange Notes or Private -4- Exchange Notes and whether the Notes are to be issued as Definitive Notes or Global Notes and such other information as the Trustee shall reasonably request. The Notes (including the Initial Notes and any Additional Notes, Exchange Notes or Private Exchange Notes) shall together constitute one series for purposes of the Base Indenture and this Supplemental Indenture, including, without limitation, vote, waivers, consents, amendments, redemptions and offers to purchase. Section 1.04 Form and Dating. (a) General. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $1,000 and integral multiples thereof. The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of the Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of the Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. (b) Global Notes. Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with written instructions given by the Holder thereof as required by Section 3.01 hereof. (c) Euroclear and Clearstream Procedures Applicable. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream" and "Customer Handbook" of Cedel Bank (as adopted by Clearstream) and any alternative or additional procedures from time to time adopted by Euroclear or Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream. (d) Additional Notes. The terms of any Additional Notes shall be substantially identical to those of the Initial Notes (except for the first record date and the first interest payment date and except that Additional Notes may be issued as Restricted Additional Notes or Unrestricted Addi- -5- tional Notes). With respect to any Additional Notes, the Company shall set forth in an Officers' Certificate, a copy of each of which shall be delivered to the Trustee, the following information: (1) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Supplemental Indenture; (2) the issue price and issue date of such Additional Notes and the amount of interest payable on the first interest payment date applicable thereto; and (3) whether such Additional Notes shall be Restricted Additional Notes or Unrestricted Additional Notes, and in the case of Restricted Additional Notes, (i) any limitations on purchasers for such Restricted Additional Notes (e.g., issuances to qualified institutional buyers (as defined in Rule 144A) only) and (ii) any registration obligations relating to the Restricted Additional Notes, including relating to additional interest payable on such Notes in the event of the failure by the Company to register such Notes during the periods specified in the applicable Registration Rights Agreement. Section 1.05 Registrar and Paying Agent. The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where Notes may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to the Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes. Section 1.06 Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee in writing of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying -6- Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes. Section 1.07 Defaulted Interest. If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.1 of the Base Indenture. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date; provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. Section 1.08 Outstanding Notes. The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 1.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note. If a Note is replaced pursuant to Section 2.8 of the Base Indenture, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. If the principal amount of any Note is considered paid under Section 4.1 of the Base Indenture, it ceases to be outstanding and interest on it ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest. Section 1.09 Treasury Notes. In determining whether the Holders of the required principal amount of Notes have concurred in any request, demand, authorization, notice, direction, waiver or consent, Notes owned by the Company, or by any Affiliate of the Company, shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand, authorization, notice, direction, waiver or consent, only Notes that the Trustee actually knows are so owned shall be so disregarded. -7- ARTICLE II DEFINITIONS AND INCORPORATION BY REFERENCE Section 2.01 Definitions. (a) All capitalized terms used herein and not otherwise defined below shall have the meanings ascribed thereto in the Base Indenture. (b) The following are definitions used in this Supplemental Indenture and to the extent that a term is defined both herein and in the Base Indenture, unless otherwise specified, the definition in this Supplemental Indenture shall govern solely with respect to the Notes (and any Note Guarantee endorsed thereon). "Acquired Indebtedness" means Indebtedness of a Person: (a) existing at the time such Person becomes a Restricted Subsidiary of the Company; or (b) assumed in connection with the acquisition of assets from such Person; in each case, other than Indebtedness incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary of the Company or such acquisition. "Additional Interest" has the meaning given such term in the applicable Registration Rights Agreement. "Affiliate" means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control," when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through ownership of Voting Stock, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent" means any Registrar or Paying Agent. "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange. "Asset Sale" means: (a) the sale, lease, conveyance or other disposition of any assets (including, without limitation, by way of a sale and leaseback), other than sales of inventory in the ordinary course of business consistent with past practices (provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Sub- -8- sidiaries taken as a whole will be governed by Section 5.07 and/or Article VI and not by the provisions of Section 5.04); and (b) the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company's Restricted Subsidiaries, whether in a single transaction or a series of related transactions, in either case: (i) that have a fair market value in excess of $2.5 million; or (ii) for net proceeds in excess of $2.5 million. Notwithstanding the foregoing, a transfer of assets by the Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, or by a non-Wholly Owned Restricted Subsidiary to any other Restricted Subsidiary will not be deemed to be an Asset Sale. "Average Life to Stated Maturity" means, as of the date of determination with respect to any Indebtedness, the quotient obtained by dividing: (a) the sum of the products of: (i) the number of years from the date of determination to the date or dates of each successive scheduled principal payment of such Indebtedness; multiplied by (ii) the amount of each such principal payment; by (b) the sum of all such principal payments. "Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment or succession to or change in any such law. "Banks" means the banks and other financial institutions from time to time that are lenders under the Credit Agreement. "Board of Directors" means, as to any Person, the board of directors of such Person or any duly authorized committee thereof. "Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee. -9- "Borrowing Base Amount" means, as of any date, an amount equal to the sum of: (a) 85% of the aggregate book value of all accounts receivable of the Company and its Restricted Subsidiaries; and (b) 60% of the aggregate book value of all inventory owned by the Company and its Restricted Subsidiaries, all calculated on a consolidated basis and in accordance with GAAP. To the extent the information is not available as to the amount of accounts receivable or inventory as of a specific date, the Company shall use the most recent available information for purposes of calculating the Borrowing Base. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in The City of New York are authorized or obligated by law or executive order to close. "Capital Lease Obligation" of any Person means any obligation of such Person and its Subsidiaries on a Consolidated basis under any capital lease of real or personal property which, in accordance with GAAP, has been recorded as a capitalized lease obligation. "Capital Stock" of any Person means any and all shares, interests, partnership interests, participations or other equivalents (however designated) of such Person's capital stock whether now outstanding or issued after the Issue Date, including, without limitation, all common stock and Preferred Stock. "Change of Control" means the occurrence of any of the following events: (a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to have beneficial ownership of all shares that such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total outstanding Voting Stock of the Company; (b) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election to such Board of Directors, or whose nomination for election by the stockholders of the Company, was approved by a vote of 66 2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of such Board of Directors then in office; (c) a "Change of Control" has occurred under: (i) clause (c) of the definition thereof under the indenture for either the Existing Senior Notes or the Subordinated Notes due 2012; or -10- (ii) clause (iii) of the definition thereof under the indenture for the Subordinated Notes due 2007; or (d) the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution other than in a transaction which complies with the provisions of Article VI. "Clearstream" means Clearstream Banking, S.A. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or if at any time after the execution of the Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means Fleming Companies, Inc. and any and all successors thereto that become a party to the Indenture in accordance with its terms. "Consolidated" means, with respect to any Person, the consolidation of the accounts of such Person and each of its subsidiaries if and to the extent the accounts of such Person and each of its subsidiaries would normally be consolidated with those of such Person, all in accordance with GAAP consistently applied. "Consolidated EBITDA" means, with respect to the Company and its Restricted Subsidiaries on a Consolidated basis for any period, all determined in accordance with GAAP, the sum of, without duplication: (a) Consolidated Net Income, plus (b) Consolidated Interest Expense, to the extent deducted in computing such Consolidated Net Income, plus (c) Consolidated Income Tax Expense, to the extent deducted in computing such Consolidated Net Income, plus (d) Consolidated Non-Cash Charges, to the extent deducted in computing such Consolidated Net Income, minus (e) non-cash items increasing such Consolidated Net Income (other than such non-cash items in the ordinary course of business). "Consolidated Fixed Charge Coverage Ratio" of the Company means, for any period, the ratio of: (a) Consolidated EBITDA for such period to: -11- (b) Consolidated Interest Expense for such period; provided that: (i) in making such computation, the Consolidated Interest Expense attributable to interest on any Indebtedness computed on a pro forma basis; and (A) bearing a floating interest rate shall be computed as if the rate in effect on the date of computation had been the applicable rate for the entire period; and (B) which was not outstanding during the period for which the computation is being made but which bears, at the option of the Company, a fixed or floating rate of interest, shall be computed by applying, at the option of the Company, either the fixed or floating rate; and (ii) in making such computation, Consolidated Interest Expense attributable to interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. "Consolidated Income Tax Expense" means for any period the provision for federal, state, local and foreign income taxes of the Company and its Restricted Subsidiaries for such period as determined on a Consolidated basis in accordance with GAAP. "Consolidated Interest Expense" means, without duplication, for any period, the sum of: (a) the interest expense of the Company and its Restricted Subsidiaries for such period, as determined on a Consolidated basis in accordance with GAAP, including, without limitation: (i) amortization of debt discount; (ii) the net cost under Interest Rate Agreements (including amortization of discount); (iii) the interest portion of any deferred payment obligation; and (iv) accrued interest; plus (b) the aggregate amount for such period of dividends on any Redeemable Capital Stock or Preferred Stock of the Company and its Restricted Subsidiaries; (c) the interest component of the Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person during such period; and (d) all capitalized interest of the Company and its Restricted Subsidiaries, -12- in each case under each of (a) through (d) determined on a Consolidated basis in accordance with GAAP. "Consolidated Net Income" means, for any period, the Consolidated net income (or loss) of the Company and its Restricted Subsidiaries for such period as determined on a Consolidated basis in accordance with GAAP, adjusted, to the extent included in calculating such net income (loss), by excluding, without duplication: (a) any net after-tax extraordinary gains or losses (less all fees and expenses relating thereto); (b) the portion of net income (or loss) of the Company and its Restricted Subsidiaries determined on a Consolidated basis allocable to minority interests in unconsolidated Persons to the extent that cash dividends or distributions have not actually been received by the Company or any Restricted Subsidiary; (c) net income (or loss) of any Person combined with the Company or any Restricted Subsidiary on a "pooling of interests" basis attributable to any period prior to the date of combination; (d) net gains or losses (less all fees and expenses relating thereto) in respect of dispositions of assets other than in the ordinary course of business; and (e) the net income of any Restricted Subsidiary to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is not at the time permitted, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its shareholders. "Consolidated Net Worth" means, with respect to any Person as of any date, the sum of: (a) the consolidated equity of the common equity holders of such Person and its Restricted Subsidiaries as of such date; plus (b) the respective amounts reported on such Person's balance sheet as of such date with respect to any series of Preferred Stock (other than Redeemable Capital Stock) that by its terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such Person upon issuance of such Preferred Stock; less (i) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made within 12 months after the acquisition of such business) subsequent to the Issue Date in the -13- book value of any asset owned by such Person or a consolidated Restricted Subsidiary of such Person; (ii) all investments as of such date in unconsolidated Restricted Subsidiaries and in Persons that are not Subsidiaries (except, in each case, Permitted Investments); and (iii) all unamortized debt discount and expense and unamortized deferred charges as of such date, all of the foregoing determined in accordance with GAAP. "Consolidated Non-Cash Charges" means, for any period, the aggregate depreciation, amortization and other non-cash charges of the Company and its Restricted Subsidiaries for such period, as determined on a Consolidated basis in accordance with GAAP (excluding any non-cash charges which require an accrual or reserve for any future period). "Consolidated Senior Debt Leverage Ratio" of the Company means the ratio of (i) Consolidated Indebtedness of the Company and its Restricted Subsidiaries (other than Subordinated Indebtedness) as of the date of the transaction giving rise to the need to calculate such Consolidated Senior Debt Leverage Ratio to (ii) Consolidated EBITDA for the four full fiscal quarters immediately preceding the date of the transaction giving rise to the need to calculate such Consolidated Senior Debt Leverage Ratio, taken as one period. "Consolidated Tangible Assets" means the total of all the assets appearing on the Consolidated balance sheet of the Company and its majority-owned or Wholly Owned Restricted Subsidiaries less: (a) intangible assets including, without limitation, items such as goodwill, trademarks, trade names, patents and unamortized debt discount; and (b) appropriate adjustments on account of minority interests of other persons holding stock in any majority-owned Restricted Subsidiary of the Company. "Consolidated Total Assets" means, with respect to the Company, the total of all assets appearing on the Consolidated balance sheet of the Company and its majority-owned or Wholly Owned Restricted Subsidiaries, as determined on a Consolidated basis in accordance with GAAP. "Credit Agreement" means the credit agreement dated as of June 18, 2002 among the Company, the Banks, the agents listed therein and Deutsche Bank Trust Company Americas, as administrative agent, as such agreement may be amended, renewed, extended, substituted, refinanced, restructured, replaced, supplemented or otherwise modified from time to time (including, without limitation, any successive renewals, extensions, substitutions, refinancings, restructurings, replacements, supplementations or other modifications of the foregoing). "Currency Agreements" means any spot or forward foreign exchange agreements and currency swap, currency option or other similar financial agreements or arrangements entered into by the Company or any of its Restricted Subsidiaries. -14- "Custodian" means any custodian, receiver, trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law. "Default" means any event which is, or after notice or passage of any time or both would be, an Event of Default. "Definitive Note" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Article III in the form of Exhibit A except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. "Depositary" means, with respect to the Global Notes, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Global Notes as contemplated by Section 1.05. "Disinterested Director" means, with respect to any transaction or series of transactions in respect of which the Board of Directors is required to deliver a resolution of the Board of Directors under the Indenture, a member of the Board of Directors who does not have any material direct or indirect financial interest in or with respect to such transaction or series of transactions. "Distribution Compliance Period" means the "distribution compliance period" as defined in Regulation S. "Equity Interest" of any Person means any shares, interests, participations or other equivalents (however designated) in such Person's equity, and shall in any event include any Capital Stock issued by, or partnership or membership interests in, such Person. "Equity Offering" means a public or private offering of Qualified Capital Stock of the Company generating gross proceeds to the Company of at least $50.0 million (other than the equity offering occurring on the Issue Date). "Euroclear" means Euroclear Bank, S.A./N.V., as operator of the Euroclear System. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Offer" means, in the case of Restricted Additional Notes, the offer to exchange such Notes in accordance with the terms of the applicable Registration Rights Agreement. "Existing Notes" means, collectively, the Existing Senior Notes and the Subordinated Notes. "Existing Senior Notes" means the Company's 10 1/8% Senior Notes due 2008. "Fair Market Value" means, with respect to any asset or property, a price which could be negotiated in an arm's length transaction, for cash, between a willing seller and a willing buyer, neither of whom is under undue pressure to complete the transaction. Fair Market Value shall be determined by officers of the Company acting in good faith; provided that any transaction that results in -15- a price in excess of $10.0 million shall be determined by the Board of Directors of the Company acting in good faith and shall be evidenced by a Board Resolution attached to an Officers' Certificate delivered to the Trustee. "Generally Accepted Accounting Principles" or "GAAP" means generally accepted accounting principles in the United States, as in effect on the Issue Date. "Global Note Legend" means the legend set forth in Section 3.08(b) which is required to be placed on all Global Notes issued under the Indenture. "Global Notes" means, individually and collectively, each Note in global form issued under the Indenture, substantially in the form of Exhibit A, bearing the Global Note Legend and issued in accordance with Section 1.04 and, in the case of exchanges of Notes initially issued as Restricted Additional Notes, Section 3.05(b) or 3.07. "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America, and for the payment of which the United States pledges its full faith and credit. "Guaranteed Debt" means, with respect to any Person, without duplication, all Indebtedness of any other Person referred to in the definition of Indebtedness contained herein guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement: (a) to pay or purchase such Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness; (b) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss; (c) to supply funds to, or in any other manner invest in, the debtor (including any agreement to pay for property or services without requiring that such property be received or such services be rendered); (d) to maintain working capital of the debtor, or otherwise to maintain the net worth, solvency or other financial condition of the debtor; or (e) otherwise to assure a creditor against loss; provided that the term "guarantee" shall not include endorsements for collection or deposit, in either case in the ordinary course of business. "Guarantor" means each Restricted Subsidiary of the Company and each such Subsidiary's Restricted Subsidiaries that have executed the Indenture on the Issue Date and any Restricted Subsidiary that is required pursuant to Section 5.10, after the Issue Date, to execute a Note Guarantee -16- pursuant to the Indenture until a successor replaces any such party pursuant to the applicable provisions of the Indenture and, thereafter, shall mean such successor. "Holder" or "Noteholder" means a Person in whose name a Note is registered. "IAI Global Note" means a global note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to an Institutional Accredited Investor. "Indebtedness" means, with respect to any Person, without duplication: (a) all liabilities of such Person for borrowed money (including overdrafts) or for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities arising in the ordinary course of business, but including, without limitation, all obligations, contingent or otherwise, of such Person in connection with any letters of credit and acceptances issued under letter of credit facilities, acceptance facilities or other similar facilities; (b) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments; (c) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade payables arising in the ordinary course of business; (d) all Capital Lease Obligations of such Person; (e) all obligations under Interest Rate Agreements or Currency Agreements of such Person; (f) indebtedness referred to in clauses (a) through (e) above of other Persons, the payment of which is secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien, upon or with respect to property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness; (g) all Guaranteed Debt of such Person; (h) all Redeemable Capital Stock valued at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid dividends; and (i) any amendment, supplement, modification, deferral, renewal, extension, refunding or refinancing of any liability of the types referred to in clauses (a) through (h) above. -17- For purposes hereof, the "maximum fixed repurchase price" of any Redeemable Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with terms of such Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the Fair Market Value of such Redeemable Capital Stock, such Fair Market Value is to be determined in good faith by the Board of Directors of the issuer of such Redeemable Capital Stock. "Indirect Participant" means a Person who holds a beneficial interest in a Global Note through a Participant. "Institutional Accredited Investor" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is not also a QIB. "Interest Payment Date" means June 15 and December 15 of each year commencing, solely with respect to the Initial Notes, December 15, 2002. "Interest Rate Agreements" means any interest rate protection agreements and other types of interest rate hedging agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements). "Investee Store" means a Person in which the Company or any of its Restricted Subsidiaries has invested equity capital, to which it has made loans or for which it has guaranteed loans, in accordance with the business practice of the Company and its Restricted Subsidiaries of making equity investments in, making loans to or guaranteeing loans made to Persons for the purpose of assisting any such Person in acquiring, remodeling, refurbishing, expanding or operating one or more retail grocery stores. "Investment" means, with respect to any Person, directly or indirectly: (a) any advance (other than advances to customers in the ordinary course of business, which are recorded as accounts receivable on the Consolidated balance sheet of the Company and its Restricted Subsidiaries), loan or other extension of credit (including by way of guarantee); or (b) capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others); or (c) any purchase, acquisition or ownership by such Person of any Capital Stock, bonds, notes, debentures or other securities or assets issued or owned by any other Person. The Company shall be deemed to make an Investment in an amount equal to the greater of the book value (as determined in accordance with GAAP) and Fair Market Value of the net assets of any Restricted Subsidiary (or, if neither the Company nor any of its Restricted Subsidiaries has theretofore made an Investment in such Restricted Subsidiary, in an amount equal to the Investments being made) at the time such Restricted Subsidiary is designated an Unrestricted Subsidiary, and any property transferred to an Unrestricted Subsidiary from the Company or any Restricted Subsidiary shall be -18- deemed an Investment valued at the greater of its book value (as determined in accordance with GAAP) and its Fair Market Value at the time of such transfer. "Investment Grade" means BBB- or higher by S&P or Baa3 or higher by Moody's or the equivalent of such ratings by S&P or Moody's or in the event S&P or Moody's shall cease rating the Notes and the Company shall select any other Rating Agency, the equivalent of such ratings by such other Rating Agency. "Issue Date" means June 18, 2002, the date of original issuance of the Initial Notes. "Joint Venture" means any Person in which the Company or any of its Restricted Subsidiaries owns 30% or more of the Voting Stock (other than as a result of a Public Equity Offering). "Letter of Transmittal" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Restricted Additional Notes for use by such Holders in connection with the Exchange Offer. "Lien" means any mortgage, charge, pledge, lien (statutory or otherwise), privilege, security interest, hypothecation or other encumbrance upon or with respect to any property of any kind, real or personal, movable or immovable, now owned or hereafter acquired. "Maturity" when used with respect to any Note means the date on which the principal of such Note becomes due and payable as therein provided or as provided in the Indenture, whether at Stated Maturity or on a redemption date or pursuant to a Change of Control Purchase Offer or an Asset Sale Offer, and whether by declaration of acceleration, call for redemption, purchase or otherwise. "Moody's" means Moody's Investors Service, Inc. or any successor rating agency. "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions), any relocation expenses incurred as a result thereof, any taxes paid or payable by the Company or any of its Restricted Subsidiaries as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the permanent repayment of Indebtedness secured by a Lien on the assets or assets that were the subject of such Asset Sale and any reserve for adjustment or indemnity in respect of the sale price of such asset or assets in each case established in accordance with GAAP. "Non-Recourse Debt" means Indebtedness: (a) as to which neither the Company nor any of its Restricted Subsidiaries: (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute indebtedness); (ii) is directly or indirectly liable (as a guarantor or otherwise); or -19- (iii) constitutes the lender; (b) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness (other than the Notes being offered hereby) of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and (c) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. "Non-U.S. Person" means a Person who is not a U.S. Person. "Note Guarantee" means any guarantee by a Guarantor of the Company's obligations under the Indenture. "Obligations" means any principal, premium, interest (including post-petition interest), penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Officer" means, with respect to any Person, the President, Chief Executive Officer, any Vice President, Chief Operating Officer, Treasurer, Secretary or the Chief Financial Officer of such Person. "Officers' Certificate" means, with respect to any Person, a certificate signed by two Officers of such Person; provided, however, that every Officers' Certificate with respect to compliance with a covenant or condition provided for in the Indenture shall include (i) a statement that the Officers making or giving such Officers' Certificate have read such condition and any definitions or other provisions contained in the Indenture relating thereto and (ii) a statement as to whether, in the opinion of the signers, such conditions has been complied with. "144A Global Note" means a global note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of any Restricted Additional Notes sold in reliance on Rule 144A. "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee that meets the requirements of Section 11.05. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. "Pari Passu Indebtedness" means (a) with respect to the Notes, Indebtedness which ranks pari passu in right of payment to the Notes, and (b) with respect to any Note Guarantee, Indebtedness which ranks pari passu in right of payment to such Note Guarantee. -20- "Participant" means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream). "Participating Broker-Dealer" means any broker-dealer that is the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer. "Permitted Consideration" means consideration consisting of any combination of the following: (a) cash or Temporary Cash Investments; (b) assets used or intended for use in the Company's business as conducted on the Issue Date; (c) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet), of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any guarantee thereof) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability; and (d) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary; provided that the aggregate amount of such securities, notes or other obligations received by the Company and its Restricted Subsidiaries pursuant to this clause (d) after the Issue Date and held or carried at any date of determination shall not exceed $75.0 million. "Permitted Indebtedness" means any of the following Indebtedness of the Company or any Restricted Subsidiary, as the case may be: (a) Indebtedness of the Company and guarantees of the Guarantors under the Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed the greater of: (i) $1.0 billion, less (A) the amount of mandatory repayments actually made by the Company or any such Restricted Subsidiary since the Issue Date with Net Proceeds of an Asset Sale in respect of term Indebtedness under the Credit Agreement; and (B) further reduced by the amount of mandatory repayments of revolving credit Indebtedness thereunder (accompanied by a corresponding commitment reduction thereunder) actually made by the Company or any -21- such Restricted Subsidiary since the Issue Date with Net Proceeds of an Asset Sale; or (ii) the Borrowing Base Amount; (b) Indebtedness of the Company and guarantees of the Guarantors under uncommitted bank lines of credit (including any refinancings of such Indebtedness); provided, however, that the aggregate principal amount of Indebtedness incurred pursuant to clauses (a), (b) and (j) of this definition does not exceed the maximum amount of Indebtedness permitted under clause (a) of this definition; (c) Indebtedness of the Company and the Guarantors evidenced by the Notes and the Note Guarantees with respect thereto under the Indenture in an aggregate principal amount not to exceed $200.0 million; (d) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date; (e) obligations of the Company or any Restricted Subsidiary entered into in the ordinary course of business (i) pursuant to Interest Rate Agreements designed to protect against or manage exposure to fluctuations in interest rates in respect of Indebtedness or retailer notes receivables, which, if related to Indebtedness or such retailer notes receivables, do not exceed the aggregate notional principal amount of such Indebtedness to which such Interest Rate Agreements relate, or (ii) under any Currency Agreements in the ordinary course of business and designed to protect against or manage exposure to fluctuations in foreign currency exchange rates which, if related to Indebtedness, do not increase the amount of such Indebtedness other than as a result of foreign exchange fluctuations; (f) Indebtedness of the Company owing to a Wholly Owned Restricted Subsidiary or of any Restricted Subsidiary owing to the Company or any Wholly Owned Restricted Subsidiary; provided that any disposition, pledge or transfer of any such Indebtedness to a Person (other than the Company or another Wholly Owned Restricted Subsidiary) shall be deemed to be an incurrence of such Indebtedness by the Company or Restricted Subsidiary, as the case may be, not permitted by this clause (f); (g) Indebtedness in respect of letters of credit, surety bonds and performance bonds provided in the ordinary course of business; (h) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within ten business days of its incurrence; -22- (i) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets; (j) Indebtedness of the Company evidenced by commercial paper issued by the Company (including any refinancings of such Indebtedness); provided, however, that the aggregate principal amount of Indebtedness incurred pursuant to clauses (a), (b) and (j) of this definition does not exceed the maximum amount of Indebtedness permitted under clause (a) of this definition; (k) Indebtedness of the Company pursuant to guarantees by the Company or any Guarantor in connection with any Permitted Receivables Financing; provided, however, that such Indebtedness shall not exceed 20% of the book value of the Transferred Receivables at the time such Transferred Receivables are sold or in the case of receivables arising from direct financing leases, 30% of the book value thereof; (l) Indebtedness of the Company and its Restricted Subsidiaries in addition to that described in clauses (a) through (k) of this definition of "Permitted Indebtedness," together with any other outstanding Indebtedness incurred pursuant to this clause (l) (including any refinancings of such Indebtedness), not to exceed $100.0 million at any time outstanding in the aggregate; and (m) any renewals, extensions, substitutions, refunding, refinancings or replacements (each, a "refinancing") of any Indebtedness described in clauses (c) and (d) of this definition of "Permitted Indebtedness," including any successive refinancings, so long as: (i) the aggregate principal amount of Indebtedness represented thereby is not increased by such refinancing, for more than 60 days following the issuance thereof, to an amount greater than such principal amount plus the lesser of (A) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being refinanced or (B) the amount of premium or other payment actually paid at such time to refinance the Indebtedness, plus, in either case, the amount of reasonable expenses of the Company or any Restricted Subsidiary, as the case may be, incurred in connection with such refinancing; (ii) in the case of any refinancing of Subordinated Indebtedness, such new Indebtedness is subordinated to the Notes or the applicable Note Guarantee, as the case may be, at least to the same extent as the Indebtedness being refinanced; and (iii) such refinancing does not reduce the Average Life to Stated Maturity or the Stated Maturity of such Indebtedness. For purposes of determining compliance with Section 5.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (a) through (m) above or is permitted to be incurred pursuant to the Consolidated -23- Fixed Charge Coverage Ratio provisions of such covenant, the Company shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with Section 5.03. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms will not be deemed to be an incurrence of Indebtedness for purposes of Section 5.03. "Permitted Investment" means (a) Investments in any Wholly Owned Restricted Subsidiary or any Restricted Subsidiary that is a Guarantor or any Investment in any Person by the Company or any Restricted Subsidiary as a result of which such Person becomes a Wholly Owned Restricted Subsidiary or a Restricted Subsidiary that is a Guarantor or any Investment in the Company by a Restricted Subsidiary; (b) intercompany Indebtedness to the extent permitted under clause (f) of the definition of "Permitted Indebtedness" and Indebtedness in connection with a Permitted Receivables Financing permitted under clause (k) of the definition of "Permitted Indebtedness"; (c) Temporary Cash Investments; (d) sales of goods and services on trade credit terms consistent with the Company's past practices or otherwise consistent with trade credit terms in common use in the industry; (e) Investments in direct financing leases for equipment and real estate owned or leased by the Company and leased to its customers in the ordinary course of business consistent with past practice; (f) Investments in Joint Ventures related to the Company's operations, not to exceed $50.0 million at any one time outstanding; (g) Investments in Investee Stores either in the form of equity, loans or other extensions of credit; provided that any such Investment may only be made if the amount thereof, when added to the aggregate outstanding amount of Permitted Investments in Investee Stores (excluding for purposes of this clause (g) any Investments made pursuant to clause (e)), after giving effect to any loan repayments or returns of capital in respect of any Permitted Investment in Investee Stores, does not exceed 12.5% of Consolidated Total Assets at the time of determination; (h) Investments as a result of non-cash consideration received by the Company or a Restricted Subsidiary in connection with an Asset Sale made in compliance with Section 5.04; (i) other Investments, in addition to those permitted under (a) through (h) above, in an aggregate amount not to exceed $25.0 million; and -24- (j) any substitutions or replacements of any Investment so long as the aggregate amount of such Investment is not increased by such substitution or replacement. "Permitted Liens" means, with respect to any Person: (a) Liens existing as of the Issue Date; (b) Liens securing Indebtedness permitted to be incurred pursuant to clauses (a), (b) and (j) of the definition of "Permitted Indebtedness"; (c) Liens securing the Notes and the Note Guarantees; (d) any Lien arising by reason of: (i) any judgment, decree or order of any court, so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree or order shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired; (ii) taxes, assessments, governmental charges or levies not yet delinquent or which are being contested in good faith; (iii) security for payment of workers' compensation or other insurance; (iv) security for the performance of tenders, leases (including, without limitation, statutory and common law landlord's liens) and contracts (other than contracts for the payment of money); (v) zoning restrictions, easements, licenses, reservations, title defects, rights of others for rights of way, utilities, sewers, electric lines, telephone or telegraph lines, and other similar purposes, provisions, covenants, conditions, waivers and restrictions on the use of property or minor irregularities of title (and, with respect to leasehold interests, mortgages, obligations, liens and other encumbrances incurred, created, assumed or permitted to exist and arising by, through or under a landlord or owner of the leased property, with or without consent of the lessee), none of which materially impairs the use of any parcel of property material to the operation of the business of the Company or any Restricted Subsidiary or the value of such property for the purpose of such business; (vi) deposits to secure public or statutory obligations; (vii) operation of law in favor of growers, dealers and suppliers of fresh fruits and vegetables, carriers, mechanics, materialmen, laborers, employees or suppliers incurred in the ordinary course of business for sums which are not yet delinquent or are being contested in good faith by negotiations or by appropriate proceedings which suspend the collection thereof; -25- (viii) the grant by the Company to licensees, pursuant to security agreements, of security interests in trademarks and goodwill, patents and trade secrets of the Company to secure the damages, if any, of such licensees, resulting from the rejection of the license of such licensees in a bankruptcy, reorganization or similar proceeding with respect to the Company; or (ix) security for surety or appeal bonds; (e) any Lien on any property or assets of a Restricted Subsidiary in favor of the Company or any Wholly Owned Restricted Subsidiary; (f) any Lien securing Acquired Indebtedness created prior to (and not created in connection with, or in contemplation of) the incurrence of such Indebtedness by the Company or any Restricted Subsidiary; provided that such Lien does not extend to any assets of the Company or any Restricted Subsidiary other than the assets acquired in the transaction resulting in such Acquired Indebtedness being incurred by the Company or Restricted Subsidiary, as the case may be; (g) any Lien to secure the performance of bids, trade contracts, letters of credit and other obligations of a like nature and incurred in the ordinary course of business of the Company or any Restricted Subsidiary; (h) any Lien securing any Interest Rate Agreements or Currency Agreements permitted to be incurred pursuant to clause (e) of the definition of "Permitted Indebtedness" or any collateral for the Indebtedness to which such Interest Rate Agreements or Currency Agreements relate; (i) any Lien on an asset securing Indebtedness (including Capital Lease Obligations) incurred or assumed for the purpose of financing all or any part of the cost of acquiring or constructing such asset; provided that such Lien covers only such asset and attaches concurrently or within 180 days after the acquisition or completion of construction thereof; (j) any Lien on real or personal property securing Capital Lease Obligations of the Company or any Restricted Subsidiary as lessee with respect to such real or personal property: (i) to the extent that the Company or such Restricted Subsidiary has entered into (and not terminated), or has a binding commitment for, subleases on terms which, to the Company or such Restricted Subsidiary, are at least as favorable, on a current basis, as the terms of the corresponding capital lease; or (ii) under which the aggregate principal component of the annual rent payable does not exceed $5.0 million; (k) any Lien on a Transferred Receivable or other receivable that is transferred in a Permitted Receivables Financing; -26- (l) any Lien consisting of any pledge to any Person of Indebtedness owed by any Restricted Subsidiary to the Company or to any Wholly Owned Restricted Subsidiary; provided that: (i) such Restricted Subsidiary is a Guarantor; and (ii) the principal amount pledged does not exceed the Indebtedness secured by such pledge; (m) Liens securing Indebtedness which is incurred to refinance any Indebtedness which has been secured by a Lien permitted under the Indenture and which has been incurred in accordance with the provisions of the Indenture; provided, however, that such Liens: (i) are no less favorable to the Holders and are not more favorable to the lienholders with respect to such Liens than the Liens in respect of the Indebtedness being refinanced; and (ii) do not extend to or cover any property or assets of the Company or any of the Restricted Subsidiaries not securing the Indebtedness so refinanced; and (n) any extension, renewal, substitution or replacement, in whole or in part, of any Lien described in the foregoing clauses (d) through (l); provided that the Lien so extended, renewed, substituted or replaced does not extend to any additional property or assets. "Permitted Receivables Financing" means any transaction involving the transfer (by way of sale, pledge or otherwise) by the Company or any of its Restricted Subsidiaries of receivables to any other Person; provided that after giving effect to such transaction the sum of: (a) the aggregate uncollected balances of the receivables so transferred ("Transferred Receivables"); plus (b) the aggregate amount of all collections on Transferred Receivables theretofore received by the seller but not yet remitted to the purchaser, in each case at the date of determination, would not exceed $600.0 million. "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Preferred Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person's preferred stock whether now outstanding, or issued after the Issue Date, and including, without limitation, all classes and series of preferred or preference stock of such Person. "Private Placement Legend" means the legend set forth in Section 3.08(a) to be placed on any Restricted Additional Notes issued under the Indenture except where otherwise permitted by the provisions of the Indenture. -27- "Public Equity Offering" means with respect to the last sentence of Section 5.08, a primary or secondary public offering of equity securities of any Restricted Subsidiary of the Company pursuant to an effective registration statement under the Securities Act. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "Qualified Capital Stock" of any Person means any and all Capital Stock of such Person other than Redeemable Capital Stock. "Rating Agency" means any of: (a) S&P; (b) Moody's; or (c) if S&P or Moody's or both shall not make a rating of the Notes publicly available, a security rating agency or agencies, as the case may be, nationally recognized in the United States, selected by the Company, which shall be substituted for S&P or Moody's or both, as the case may be, and, in each case, any successors thereto. "Rating Category" means: (a) with respect to S&P, any of the following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories); (b) with respect to Moody's, any of the following categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and (c) the equivalent of any such category of S&P or Moody's used by another Rating Agency. In determining whether the rating of the Notes has decreased by one or more gradation, gradations within Rating Categories (+ and -- for S&P; 1, 2 and 3 for Moody's; or the equivalent gradations for another Rating Agency) shall be taken into account (e.g., with respect to S&P, a decline in rating from BB+ to BB, as well as from BB -- to B+, will constitute a decrease of one gradation). "Redeemable Capital Stock" means any Capital Stock that, either by its terms or by the terms of any security into which it is convertible or exchangeable or otherwise, is, or upon the happening of an event or passage of time would be, required to be redeemed prior to any Stated Maturity of the principal of the Notes or is redeemable at the option of the holder thereof at any time prior to any such Stated Maturity, or is convertible into or exchangeable for debt securities at any time prior to any such Stated Maturity at the option of the holder thereof. "refinancing" has the meaning specified in the definition of "Permitted Indebtedness" set forth herein. -28- "Registration Rights Agreement" means one or more registration rights agreements to be entered into by and among the Company and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time, relating to rights given by the Company to the purchasers of Restricted Additional Notes which may be issued under the Indenture from time to time to register such notes, or exchange such notes for Exchange Notes or Private Exchange Notes, under the Securities Act. "Regulation S" means Regulation S promulgated under the Securities Act, as such may be amended from time to time, or any similar rules or regulation hereafter adopted by the Commission. "Regulation S Global Note" means a temporary Global Note in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of any Restricted Additional Notes initially sold in reliance on Rule 903. "Restricted Additional Notes" means Additional Notes that, upon issuance, are not registered under the Securities Act and which shall be initially issued as Restricted Global Notes and/or Restricted Definitive Notes. "Restricted Definitive Notes" means one or more Definitive Notes that bears the Private Placement Legend. "Restricted Global Note" means a Global Note in the form of Exhibit A attached hereto that bears the Global Note Legend, the Private Placement Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto and that is deposited with or on behalf of and registered in the name of the Depositary. "Restricted Subsidiary" means any Subsidiary of the Company that is not an Unrestricted Subsidiary. "Rule 144" means Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission. "Rule 144A" means Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission. "Rule 903" means Rule 903 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission. "Rule 904" means Rule 904 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission. -29- "Securities Act" means the U.S. Securities Act of 1933, as amended and (unless the context otherwise requires) includes the rules and regulations of the Commission promulgated thereunder. "Shelf Registration" means the shelf registration relating to any Restricted Additional Notes to be provided for in the applicable Registration Rights Agreement. "Significant Subsidiary" of the Company means any Subsidiary of the Company that is a "significant subsidiary" as defined in Regulation S-X under the Exchange Act. "S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill Inc., a New York corporation, or any successor rating agency. "Stated Maturity" when used with respect to any Indebtedness or any installment of interest thereon means the dates specified in such Indebtedness as the fixed date on which the principal of or premiums on such Indebtedness or such installment of interest is due and payable. "Subordinated Indebtedness" means Indebtedness of the Company or the Guarantors that is subordinate or junior in right of payment to the Notes or the Note Guarantees, as the case may be. "Subordinated Notes" means, collectively, the Subordinated Notes due 2007 and the Subordinated Notes due 2012. "Subordinated Notes due 2007" means the Company's 10 5/8% Senior Subordinated Notes due 2007. "Subordinated Notes due 2012" means the Company's 9 7/8% Senior Subordinated Notes due 2012. "Subsidiary" means any Person a majority of the equity ownership or the Voting Stock of which is at the time owned, directly or indirectly, by the Company or by one or more other Restricted Subsidiaries, or by the Company and one or more other Restricted Subsidiaries. "Tangible Assets" means the total of all the assets appearing on the Consolidated balance sheet of a majority-owned or Wholly Owned Restricted Subsidiary of the Company less the following: (a) intangible assets including, without limitation, items such as goodwill, trademarks, trade names, patents and unamortized debt discount and expense; and (b) appropriate adjustments on account of minority interests of other Persons holding stock in any such majority-owned Restricted Subsidiary of the Company. -30- "Temporary Cash Investments" means: (a) any evidence of Indebtedness issued by the United States, or an instrumentality or agency thereof, and guaranteed fully as to principal, premium, if any, and interest by the United States; (b) any certificate of deposit issued by, or time deposit of, a financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500.0 million, whose debt has a rating, at the time as of which any investment therein is made, of "A" (or higher) according to Moody's or "A" (or higher) according to S&P; (c) commercial paper issued by a corporation (other than an Affiliate or Restricted Subsidiary of the Company) organized and existing under the laws of the United States with a rating, at the time as of which any investment therein is made, of "P-1" (or higher) according to Moody's or "A-1 (or higher) according to S&P; (d) any money market deposit accounts issued or offered by a financial institution that is a member of the Federal Reserve System having capital and surplus in excess of $500.0 million; (e) short term tax-exempt bonds with a rating, at the time as of which any investment is made therein, of "Aa3" (or higher) according to Moody's or "AA -- " (or higher) according to S&P; (f) shares in a mutual fund, the investment objectives and policies of which require it to invest substantially in the investments of the type described in clauses (a) through (e); and (g) repurchase and reverse repurchase obligations with the term of not more than seven days for underlying securities of the types described in clauses (a) and (b) entered into with any financial institution meeting the qualifications specified in clause (b); provided that in the case of clauses (a), (b), (c) and (e), such investment matures within one year from the date of acquisition thereof. "Transferred Receivables" has the meaning specified in the definition of "Permitted Receivables Financing" set forth herein. "Unrestricted Additional Notes" means Additional Notes that are distributed pursuant to an effective registration statement under the Securities Act and which shall be initially issued as Unrestricted Global Notes and/or Unrestricted Definitive Notes. "Unrestricted Definitive Note" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend. -31- "Unrestricted Global Note" means a Global Note in the form of Exhibit A attached hereto that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto and that is deposited with or on behalf of and registered in the name of the Depositary, but that does not bear the Private Placement Legend. "Unrestricted Subsidiary" means any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement, contract, arrangement or understanding with the Company or any of its Restricted Subsidiaries unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company; (c) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (i) to subscribe for additional Equity Interests or (ii) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; (d) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries; and (e) does not directly or through any of its Subsidiaries own any Capital Stock of, or own or hold any Lien on any property of, the Company or any of its Restricted Subsidiaries. Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions and was permitted by Section 5.01. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under Section 5.03, the Company shall be in default of Section 5.03). The Board of Directors may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if: (a) such Indebtedness is permitted under the covenant described under Section 5.03; and -32- (b) no Default or Event of Default would be in existence following such designation. "U.S. Person" means a U.S. person as defined in Rule 902(o) under the Securities Act. "Voting Stock" means stock or securities of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a Person (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). "Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary all the Capital Stock (other than directors' qualifying shares) of which is owned by the Company or another Wholly Owned Restricted Subsidiary. Section 2.02 Other Definitions.
Defined Term in Section - ---- ---------- "Additional Notes" .......................................... Recitals "Affiliate Transaction" ..................................... 5.05 "Asset Sale Offer" .......................................... 4.03 "Authentication Order" ...................................... 1.03 "Base Indenture" ............................................ Recitals "Change of Control Date" .................................... 5.07 "Change of Control Purchase Date" ........................... 5.07 "Change of Control Purchase Offer" .......................... 5.07 "Change of Control Purchase Price" .......................... 5.07 "Company" ................................................... Recitals "Covenant Defeasance" ....................................... 8.03 "Defeasance Redemption Date" ................................ 8.04 "DTC" ....................................................... 1.05 "Excess Proceeds" ........................................... 5.04 "Exchange Notes" ............................................ Recitals "Indenture" ................................................. Recitals "Initial Notes" ............................................. Recitals "Notes" ..................................................... Recitals "Offer Amount" .............................................. 4.03 "Offer Payment Date" ........................................ 5.07 "Offer Period" .............................................. 4.03 "Paying Agent" .............................................. 1.05 "Private Exchange Notes" .................................... Recitals "Purchase Date" ............................................. 4.03 "Registrar" ................................................. 1.05 "Supplemental Indenture" .................................... Recitals
-33- "Surviving Entity" .......................................... 6.01 "Trustee" ................................................... Recitals
ARTICLE III TRANSFER AND EXCHANGE Section 3.01 Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee written notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee in writing. Global Notes also may be exchanged or replaced, in whole or in part, as provided in this Article III and Sections 2.08 and 2.11 of the Base Indenture. Except as provided in this Section 3.01 and in Section 3.03(b) and Section 3.04 for the exchange or transfer of Global Notes for Definitive Notes, every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Article III or Sections 2.08 or 2.11 of the Base Indenture, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 3.01; however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 3.02, 3.03, 3.04 or 3.05. Section 3.02 Global Notes. (a) Euroclear and Clearstream Procedures Applicable. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream" and "Customer Handbook" of Cedel Bank (as adopted by Clearstream) and any alternative or additional procedures from time to time adopted by Euroclear or Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or Clearstream. Section 3.03 Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of the Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer -34- comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (a) or (b) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: (a) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Distribution Compliance Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person. Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 3.03(a). (b) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 3.03(a) above, the transferor of such beneficial interest must deliver to the Depositary either (i) (A) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (B) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (ii) (A) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (B) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (A) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in any Regulation S Global Note prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon consummation of an Exchange Offer by the Company in accordance with Section 3.07, the requirements of this Section 3.03(b) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in the Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 3.09. (c) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 3.03(b) above and the Registrar receives the following: -35- (i) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications in item (1) thereof; (ii) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications in item (2) thereof; and (iii) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit C hereto, including the certifications and certificates and Opinion of Counsel required by item (3)(d) thereof, if applicable. (d) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 3.03(b) above and: (i) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal or via the Depositary's book-entry system that it is not (A) a broker-dealer, (B) a Person participating in the distribution of the Exchange Notes or (C) a Person who is an affiliate (as defined in Rule 144) of the Company; (ii) such transfer is effected pursuant to the Shelf Registration in accordance with the Registration Rights Agreement; (iii) such transfer is effected by a Participating Broker-Dealer pursuant to the registration statement filed to effect the Exchange Offer in accordance with the Registration Rights Agreement; or (iv) the Registrar receives the following: (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit D, including the certifications in item (1)(a) thereof; or (B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global -36- Note, a certificate from such holder in the form of Exhibit C, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (iv), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer is effected pursuant to subparagraph (ii) or (iv) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 1.03, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (ii) or (iv) above. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. Section 3.04 Transfer or Exchange of Beneficial Interests for Definitive Notes. (a) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: (i) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit D, including the certifications in item (2)(a) thereof; (ii) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit C, including the certifications in item (1) thereof; (iii) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit C, including the certifications in item (2) thereof; (iv) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit C, including the certifications in item (3)(a) thereof; -37- (v) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (ii) through (iv) above, a certificate to the effect set forth in Exhibit C, including the certifications, certificates and Opinion of Counsel required by item (3)(d) thereof, if applicable; (vi) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit C, including the certifications in item (3)(b) thereof; or (vii) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit C, including the certifications in item (3)(c) thereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 3.09, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 3.04 shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 3.04(a) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. (b) Notwithstanding Sections 3.04(a)(i) and (iii), a beneficial interest in any Regulation S Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904. (c) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: (i) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; -38- (ii) such transfer is effected pursuant to the Shelf Registration in accordance with the Registration Rights Agreement; (iii) such transfer is effected by a Participating Broker-Dealer pursuant to the registration statement filed to effect the Exchange Offer in accordance with the Registration Rights Agreement; or (iv) the Registrar receives the following: (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit D, including the certifications in item (1)(b) thereof; or (B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit C, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (iv), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (d) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 3.03(c), the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 3.09, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 3.04(d) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 3.04(d) shall not bear the Private Placement Legend. Section 3.05 Transfer and Exchange of Definitive Notes for Beneficial Interests. (a) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest -39- in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: (i) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit D, including the certifications in item (2)(b) thereof; (ii) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit C, including the certifications in item (1) thereof; (iii) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit C, including the certifications in item (2) thereof; (iv) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit C, including the certifications in item (3)(a) thereof; (v) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (ii) through (iv) above, a certificate to the effect set forth in Exhibit C, including the certifications, certificates and Opinion of Counsel required by item (3)(d) thereof, if applicable; (vi) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit C, including the certifications in item (3)(b) thereof; or (vii) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit C, including the certifications in item (3)(c) thereof, the Trustee shall cancel the Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of, in the case of clause (i) above, the appropriate Restricted Global Note, in the case of clause (ii) above, the 144A Global Note, in the case of clause (iii) above, the Regulation S Global Note and, in all other cases, the IAI Global Note. (b) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if: -40- (i) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (ii) such transfer is effected pursuant to the Shelf Registration in accordance with the Registration Rights Agreement; (iii) such transfer is effected by a Participating Broker-Dealer pursuant to the registration statement filed to effect the Exchange Offer in accordance with the Registration Rights Agreement; or (iv) the Registrar receives the following: (A) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit D, including the certifications in item (1)(c) thereof; or (B) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (iv), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of any of the subparagraphs in this Section 3.05(b), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. (c) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraph (b)(ii), (b)(iv) or (c) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in -41- accordance with Section 1.03, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. Section 3.06 Transfer and Exchange of Definitive Notes for Definitive Notes. Upon written request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 3.06, the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 3.06. (a) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: (i) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit C, including the certifications in item (1) thereof; (ii) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit C, including the certifications in item (2) thereof; and (iii) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit C, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. (b) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: (i) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (ii) any such transfer is effected pursuant to the Shelf Registration in accordance with the Registration Rights Agreement; -42- (iii) any such transfer is effected by a Participating Broker-Dealer pursuant to the registration statement filed to effect the Exchange Offer in accordance with the Registration Rights Agreement; or (iv) the Registrar receives the following: (A) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit D, including the certifications in item (1)(d) thereof; or (B) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (iv), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (c) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a written request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. Section 3.07 Exchange Offer. Notwithstanding the provisions of Section 3.03, upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 1.03, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver (i) to the Depositary, the Unrestricted Global Note(s) in the amount(s) referred to above and (ii) to the Persons designated by the Holders of Definitive Notes so accepted, Definitive Notes in the appropriate principal amounts, in each case in accordance with the applicable terms of the Indenture. -43- Section 3.08 Legends. The following legends shall appear on the face of all Restricted Global Notes and Restricted Definitive Notes issued under the Indenture unless specifically stated otherwise in the applicable provisions of the Indenture. (a) Private Placement Legend. (i) Except as permitted by subparagraph (ii) below, each Restricted Additional Note evidenced by a Global Note or a Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO FLEMING COMPANIES, INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF FLEMING COMPANIES, INC. SO REQUESTS), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION -44- STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND FLEMING COMPANIES, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. (ii) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to Section 3.03(d), 3.04(c), 3.04(d), 3.05(b), 3.05(c), 3.06(b), 3.06(c) or 3.07 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. (b) Global Note Legend. Each Global Note shall bear a legend in substantially the following form: THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 9.05 OF THE SUPPLEMENTAL INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.01 OF THE SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.09 OF THE SUPPLEMENTAL INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. Section 3.09 Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.12 of the Base Indenture. At any time prior to such cancellation, -45- if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. Section 3.10 General Provisions Relating to Transfers and Exchanges. (a) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company's order or at the Registrar's request. (b) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Section 2.7, 2.11, 2.14.2 or 3.6 of the Base Indenture or Sections 4.03, 5.04 and 5.07 of this Supplemental Indenture. (c) The Registrar shall not be required (A) to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of the mailing of notice of redemption under Section 3.3 of the Base Indenture and ending at the close of business on such day of mailing, or (B) to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. (d) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under the Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (e) The Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of the mailing of notice of redemption under Section 3.3 of the Base Indenture and ending at the close of business on such day of mailing, or (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer or to exchange a Note between a record date and the next succeeding Interest Payment Date. (f) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. -46- (g) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 1.03. (h) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Article III to effect a registration of transfer or exchange may be submitted by facsimile. ARTICLE IV REDEMPTION Section 4.01 Optional Redemption. (a) Except as set forth in paragraph (b) below, the Notes are not redeemable before June 15, 2006. Thereafter, the Company may redeem the Notes at its option, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-month period commencing on June 15 of the year set forth below.
YEAR PERCENTAGE ------------------------------------------------ ---------- 2006 ........................................... 104.6250% 2007 ........................................... 102.3125% 2008 and thereafter ............................ 100.0000%
In addition, the Company must pay all accrued and unpaid interest on the Notes redeemed. (b) Notwithstanding the foregoing, up to 35% of the initial aggregate principal amount of the Notes may be redeemed on or prior to June 15, 2005, at the option of the Company, within 90 days of an Equity Offering with the net proceeds of such offering at a redemption price equal to 109.25% of the principal amount thereof, together with accrued and unpaid interest, if any, to the date of redemption (subject to the right of Holders on relevant record dates to receive interest due on relevant Interest Payment Dates); provided that after giving effect to such redemption at least 65% of the Notes originally issued under the Indenture remain outstanding. Other than as specifically provided in this Section 4.01, any redemption pursuant to this Section 4.01 shall be made pursuant to the provisions of Sections 3.1 through 3.6 of the Base Indenture. Section 4.02 Mandatory Redemption. The Company shall not be required to make mandatory redemption payments with respect to the Notes prior to Maturity. -47- Section 4.03 Offer to Purchase by Application of Excess Proceeds. In the event that, pursuant to Section 5.04 hereof, the Company shall be required to commence an offer to all Holders and holders of other Pari Passu Indebtedness containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an "Asset Sale Offer") to purchase Notes, it shall follow the procedures specified below. The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "Offer Period"). No later than five Business Days after the termination of the Offer Period (the "Purchase Date"), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 5.04 hereof (the "Offer Amount") or, if less than the Offer Amount has been tendered, all Notes tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer. Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state: (a) that the Asset Sale Offer is being made pursuant to this Section 4.03 and Section 5.04 hereof and the length of time the Asset Sale Offer shall remain open; (b) the Offer Amount, the purchase price and the Purchase Date; (c) that any Note not tendered or accepted for payment shall continue to accrue interest; (d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Purchase Date; (e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only; (f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the -48- Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; (g) that Holders shall be entitled to withdraw their election if the Company, the depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; (h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and (i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer). On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 4.03. The Company, the Depositary or the Paying Agent at the expense of the Company, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company shall authenticate and mail or deliver at the expense of the Company, such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. Other than as specifically provided in this Section 4.03, any purchase pursuant to this Section 4.03 shall be made pursuant to the provisions of Sections 3.1 through 3.6 of the Base Indenture. ARTICLE V COVENANTS The covenants contained in this Article V and Sections 4.1 through 4.6 of the Base Indenture shall be applicable to the Notes. In the event that this Article V conflicts with any provision of the Base Indenture, the provisions of this Article V shall govern and be controlling, solely with respect to the Notes (and any Note Guarantee endorsed thereon). -49- Section 5.01 Restricted Payments. (a) The Company will not, and will not permit any Restricted Subsidiary of the Company to, directly or indirectly: (i) declare or pay any dividend on, or make any distribution to the holders of, any Capital Stock of the Company or of any Restricted Subsidiary (other than dividends or distributions payable (A) solely in shares of Qualified Capital Stock of the Company or such Restricted Subsidiary or in options, warrants or other rights to purchase such Qualified Capital Stock or (B) by a Restricted Subsidiary to the Company or any Wholly Owned Restricted Subsidiary); (ii) purchase, redeem or otherwise acquire or retire for value, directly or indirectly, any Capital Stock of the Company or any Restricted Subsidiary or any options, warrants or other rights to acquire such Capital Stock held by any Person (other than the Company or any Wholly Owned Restricted Subsidiary of the Company); (iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, prior to any scheduled repayment, sinking fund payment or maturity, any Subordinated Indebtedness; or (iv) make any Investment (other than any Permitted Investment) in any Person (such payments described in clauses (i) through (iv) and not excepted thereby are collectively referred to herein as "Restricted Payments"); unless at the time of and immediately after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment, if other than cash, being the Fair Market Value thereof as determined by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a Board Resolution): (1) no Default or Event of Default shall have occurred and be continuing; (2) the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) in accordance with Section 5.03 hereof; and (3) such Restricted Payment, together with the aggregate of all other Restricted Payments made by the Company and its Restricted Subsidiaries on or after the Issue Date, is less than the sum of, without duplication: (w) 50% of the aggregate cumulative Consolidated Net Income of the Company for the period (taken as one accounting period) from April 21, 2002 to the end of the Company's most recently ended fiscal quarter for which financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus -50- (x) 100% of the aggregate net cash proceeds received by the Company as capital contributions or from the issue or sale after the Issue Date of Equity Interests of the Company or of debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or convertible debt securities) sold to a Restricted Subsidiary of the Company and other than Redeemable Capital Stock or debt securities that have been converted into Redeemable Capital Stock); plus (y) any cash received by the Company after the date of initial issuance of the Notes as a dividend or distribution from any of its Unrestricted Subsidiaries less the cost of disposition and taxes, if any (but in each case excluding any such amounts included in Consolidated Net Income); plus (z) $62.0 million. (b) Notwithstanding paragraph (a) above, the Company and its Restricted Subsidiaries may take the following actions so long as (with respect to clauses (ii), (iii), (iv) and (vi) below) at the time of and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing: (i) the payment of any dividend within 60 days after the date of declaration thereof, if such dividend would have been permitted on the date of declaration; (ii) the purchase, redemption or other acquisition or retirement for value of any shares of Capital Stock of the Company, in exchange for, or out of the net cash proceeds of, a substantially concurrent issuance and sale (other than to a Restricted Subsidiary) of shares of Capital Stock of the Company (other than Redeemable Capital Stock, unless the redemption provisions of such Redeemable Capital Stock prohibit the redemption thereof prior to the date on which the Capital Stock to be acquired or retired was, by its terms, required to be redeemed); (iii) the purchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness (other than Redeemable Capital Stock) in exchange for or out of the net cash proceeds of a substantially concurrent issuance and sale (other than to a Restricted Subsidiary) of shares of Capital Stock of the Company (other than Redeemable Capital Stock, unless the redemption provisions of such Redeemable Capital Stock prohibit the redemption thereof prior to the Stated Maturity of the Subordinated Indebtedness to be acquired or retired); (iv) the purchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness (other than Redeemable Capital Stock) in exchange for, or out of the net cash proceeds of a substantially concurrent incurrence or sale (other than to a Restricted Subsidiary) of, new Subordinated Indebtedness of the Company or a Guarantor, as the case may be, so long as: (A) the principal amount of such new Subordinated Indebtedness does not exceed, for more than 60 days following the issuance thereof, the principal amount -51- (or, if such Subordinated Indebtedness being refinanced provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount as of the date of determination) of the Subordinated Indebtedness being so purchased, redeemed, defeased, acquired or retired, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Subordinated Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of reasonable expenses of the Company or such Guarantor, as the case may be, incurred in connection with such refinancing; (B) such new Subordinated Indebtedness is subordinated to the Notes or the Note Guarantee of such Guarantor, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, redeemed, defeased, acquired or retired; and (C) such new Subordinated Indebtedness has an Average Life longer than the Average Life of the Notes and a final Stated Maturity of principal later than the final Stated Maturity of principal of the Notes; (v) the payment of a dividend on the Company's Capital Stock (other than Redeemable Capital Stock) of up to $0.08 per quarter per share (or up to $0.32 per annum per share; provided that dividend payments may not be cumulated for more than four consecutive quarters); (vi) the purchase, redemption or other acquisition or retirement for value of shares of Capital Stock of the Company issued pursuant to options granted under stock option plans of the Company, in order to pay withholding taxes due as a result of income recognized upon the exercise of such options; provided that: (A) the Company is permitted, by the terms of such plans, to effect such purchase, redemption or other acquisition or retirement for value of such shares; and (B) the aggregate consideration paid by the Company for such shares so purchased, redeemed or otherwise acquired or retired for value does not exceed $2 million during any fiscal year of the Company; (vii) the repurchase of Capital Stock of the Company deemed to occur upon the exercise of stock options if such Capital Stock represents a portion of the exercise price thereof; and (viii) in addition to clause (iv) above, the purchase, redemption, defeasance or other acquisition or retirement for value of the Subordinated Notes in exchange for, or out of the net cash proceeds of a substantially concurrent incurrence or sale (other than to a Restricted Subsidiary) of, Indebtedness of the Company or a Restricted Subsidiary, as the case may be, so long as such Indebtedness is incurred in accordance with Section 5.03(c) hereof. -52- (c) The actions described in clauses (ii), (iii), (v) and (vi) of paragraph (b) above shall be Restricted Payments that shall be permitted to be taken in accordance with paragraph (b) above but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of paragraph (a) above. Section 5.02 Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to: (a) (i) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (A) on its Capital Stock or (B) with respect to any other interest or participation in, or measured by, its profits, or (ii) pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries; (b) make loans or advances to the Company or any of its Restricted Subsidiaries; (c) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries; (d) grant Liens in favor of Holders; or (e) guarantee the Notes; except in each case for such encumbrances or restrictions existing under or by reason of: (i) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date; (ii) the Credit Agreement as in effect as of the Issue Date, and any amendments, modifications, restatements, renewals, increase, supplements, refunding, replacements or refinancings thereof; provided that such amendments, modifications, restatements, renewals, increase, supplements, refundings, replacements or refinancings are no more restrictive with respect to such dividend and other payment restrictions than those contained in the Credit Agreement in effect on the Issue Date; (iii) the Indenture and the Notes; (iv) applicable law; (v) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not -53- applicable to any Person, or the property or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; (vi) by reason of customary non-assignment provisions in existing and future leases entered into in the ordinary course of business and consistent with past practices; (vii) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (c) above on the property so acquired; and (viii) restrictions incurred by the Company or any Restricted Subsidiary in connection with any Permitted Receivables Financing. Section 5.03 Incurrence of Indebtedness. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, create, assume, or directly or indirectly guarantee or in any other manner become directly or indirectly liable for the payment of, or otherwise incur (collectively, "incur"), any Indebtedness (including any Acquired Indebtedness) other than Permitted Indebtedness. Notwithstanding the foregoing, the Company and the Guarantors may incur Indebtedness if, at the time of such event (and after giving effect on a pro forma basis to: (i) the incurrence of such Indebtedness and (if applicable) the application of the proceeds therefrom, including to refinance other Indebtedness; (ii) the incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period; and (iii) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Company or its Restricted Subsidiaries, as the case may be, since the first day of such four-quarter period as if such acquisition or disposition had occurred at the beginning of such four-quarter period), the Consolidated Fixed Charge Coverage Ratio of the Company for the four full fiscal quarters immediately preceding such event, taken as one period and calculated on the assumption that such Indebtedness had been incurred on the first day of such four-quarter period and, in the case of Acquired Indebtedness, on the assumption that the related acquisition (whether by means of purchase, merger or otherwise) also had occurred on such date, with such pro forma adjustments as may be determined in accordance with GAAP and the rules, regulations and guidelines of the Commission (including without limitation Article 11 of Regulation S-X under the Exchange Act), would have been at least equal to 2.25 to 1. -54- (b) The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of the Company or such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the Note Guarantee of such Guarantor to the same extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be. (c) The Company will not, and will not permit any of its Restricted Subsidiaries to, incur any Indebtedness (other than Subordinated Indebtedness), whether pursuant to clause (a) of this Section 5.03 or pursuant to one or more items of Permitted Indebtedness, the proceeds of which will be used to repay in whole or in part any Subordinated Notes. Notwithstanding the foregoing sentence, the Company and the Restricted Subsidiaries (to the extent the Company and/or such Restricted Subsidiary is permitted to incur such Indebtedness pursuant to clause (a) above or pursuant to one or more items of Permitted Indebtedness) may incur such Indebtedness if, at the time of such event (and after giving effect on a pro forma basis to: (i) the incurrence of such Indebtedness and the application of the proceeds therefrom, including to refinance the Subordinated Notes; and (ii) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Company or its Restricted Subsidiaries, as the case may be, since the first day of the four-quarter period referred to in the definition of "Consolidated Senior Debt Leverage Ratio" as if such acquisition or disposition had occurred at the beginning of such four-quarter period), the Consolidated Senior Debt Leverage Ratio of the Company would have been less than 2.75 to 1. Section 5.04 Asset Sales. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in an Asset Sale unless the Company or such Restricted Subsidiary, as the case may be, receives Permitted Consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of. (b) Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company or such Restricted Subsidiary must apply such Net Proceeds: (i) to permanently reduce Indebtedness of the Company or one or more Restricted Subsidiaries under the Credit Agreement (and to correspondingly reduce commitments with respect thereto); (ii) to offer to repurchase and repurchase the Existing Senior Notes to the extent required by the indenture governing the Existing Senior Notes; or -55- (iii) to make capital expenditures or acquire long-term assets used or useful in its businesses or in businesses similar or related to the businesses of the Company immediately prior to the Issue Date. (c) Pending the final application of any such Net Proceeds, the Company may temporarily reduce the revolving credit portion of the Credit Agreement or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this paragraph will be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will be required to make an Asset Sale Offer to purchase the maximum principal amount of Notes and such other Pari Passu Indebtedness that may be purchased out of the Excess Proceeds (on a pro rata basis if the amount available for such repayment, purchase or redemption is less than the aggregate amount of (x) the principal amount of the Notes tendered in such Asset Sale Offer and (y) the principal amount of such Pari Passu Indebtedness), at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the date of purchase, in accordance with Section 4.03 hereof. To the extent that any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use any remaining Excess Proceeds for general corporate purposes (subject to the restrictions of the Indenture). Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero. (d) Notwithstanding the foregoing provisions of paragraph (c) of this Section 5.04, the Company and its Restricted Subsidiaries may sell or dispose of property, whether in the form of assets or capital stock of a Restricted Subsidiary, in the aggregate amount not exceeding $15.0 million in any year, and any notes received by the Company or its Restricted Subsidiaries as consideration in any disposition made pursuant to such $15.0 million exclusion from the provisions of this covenant shall not be taken into account in determining whether the $75.0 million limitation set forth in the definition of "Permitted Consideration" has been met. Section 5.05 Transactions with Affiliates. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (other than the Company, a Wholly Owned Restricted Subsidiary or a Restricted Subsidiary that is a Guarantor) (each of the foregoing, an "Affiliate Transaction"), unless: (a) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction with an unrelated Person; and (b) the Company delivers to the Trustee: (i) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5.0 million, an Officers' Certificate certifying that such Affiliate Transaction complies with clause (a) above -56- and that such Affiliate Transaction has been approved by a majority of the Disinterested Directors; and (ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, both an Officers' Certificate referred to in clause (i) and an opinion as to the fairness of such Affiliate Transaction to the Company or the relevant Restricted Subsidiary from a financial point of view issued by an investment banking firm of national standing with total assets in excess of $1.0 billion; provided, however, that this Section 5.05 shall not apply to (A) fees, compensation and employee benefits, including bonuses, retirement plans and stock options, paid to or established for directors and officers of the Company or any Restricted Subsidiary in the ordinary course of business and approved by a majority of the Disinterested Directors and (B) transactions in the ordinary course of business with customers, vendors and suppliers, the terms of which have been approved in good faith by an officer of the Company. Section 5.06 Liens. The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer to exist any Lien of any nature whatsoever against any asset of the Company or any Restricted Subsidiary (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, or any proceeds therefrom, or assign or otherwise convey any right to receive income or profits therefrom, except for Permitted Liens, unless contemporaneously therewith: (a) in the case of any Lien securing Subordinated Indebtedness, effective provision is made to secure the Notes or such Note Guarantee, as the case may be, with a Lien on the same collateral that is senior in priority to the Lien securing such Subordinated Indebtedness; and (b) in all other cases, the Notes or such Note Guarantee, as the case may be, is secured on an equal and ratable basis. Section 5.07 Offer to Repurchase upon Change of Control. (a) If a Change of Control shall occur at any time (the date of such occurrence, the "Change of Control Date"), then each Holder of Notes shall have the right, to the extent not inconsistent with the Company's bylaws as in effect on the Issue Date, to require the Company to purchase such Holder's Notes in whole or in part in integral multiples of $1,000 at a purchase price (the "Change of Control Purchase Price") in cash in an amount equal to 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, at the date of purchase (the "Change of Control Purchase Date"), pursuant to and in accordance with the offer described in this Section 5.07 (the "Change of Control Purchase Offer"). -57- (b) Within 30 days following the Change of Control Date, the Company shall send, by first class mail, a notice to the Holders and the Trustee stating: (i) that the Change of Control Offer is being made pursuant to this Section 5.07 and that all Notes validly tendered will be accepted for payment; (ii) the Change of Control Purchase Price and the Change of Control Purchase Date, which shall be a Business Day that is no earlier than 30 days nor later than 60 days from the date such notice is mailed (the "Offer Payment Date") other than as may be required by law; (iii) that any Note not tendered will continue to accrue interest; (iv) that any Note accepted for payment pursuant to the Change of Control Purchase Offer shall cease to accrue interest after the Offer Payment Date unless the Company shall default in the payment of the Change of Control Purchase Price of the Notes and the only remaining right of the Holder is to receive payment of the Change of Control Purchase Price upon surrender of the applicable Note to the Paying Agent; (v) that Holders electing to have a portion of a Note purchased pursuant to a Change of Control Purchase Offer may only elect to have such Note purchased in integral multiples of $1,000; (vi) that if a Holder elects to have a Note purchased pursuant to the Change of Control Purchase Offer it will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Offer Payment Date; (vii) that a Holder will be entitled to withdraw its election if the Company receives, not later than the third Business Day preceding the Offer Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Notes such Holder delivered for purchase, and a statement that such Holder is withdrawing its election to have such Note purchased; and (viii) that if Notes are purchased only in part a new Note of the same type will be issued in principal amount equal to the unpurchased portion of the Notes surrendered. (c) On or before the Offer Payment Date, the Company shall, to the extent lawful, accept for payment, all Notes or portions thereof validly tendered pursuant to the Change of Control Purchase Offer, and shall deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 5.07. The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Offer Payment Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon -58- written request from the Company shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. (d) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of Notes pursuant to an offer hereunder. To the extent the provisions of any securities laws or regulations conflict with the provisions under this Section 5.07, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 5.07 by virtue thereof. (e) The Company is not required to make a Change of Control Purchase Offer upon a Change of Control if a third party (i) makes the Change of Control Purchase Offer in the manner and at the time and otherwise in compliance with the terms of this Section 5.07, and (ii) purchases all Notes validly tendered and not withdrawn under the Change of Control Purchase Offer. Section 5.08 Limitation on Issuances and Sales of Capital Stock of Subsidiaries. (a) The Company will not, and will not permit any of its Restricted Subsidiaries to, transfer, convey, sell or otherwise dispose of any Capital Stock of any Restricted Subsidiary of the Company to any Person (other than the Company or a Wholly Owned Restricted Subsidiary of the Company), unless: (i) such transfer, conveyance, sale or other disposition of all of the Capital Stock of such Restricted Subsidiary owned by the Company and its Restricted Subsidiaries; and (ii) such transaction is made in accordance with Section 5.04 hereof provided that 85% of the proceeds from such a sale of Capital Stock of any Restricted Subsidiary that is a Significant Subsidiary shall consist of cash or Temporary Cash Investments. (b) Notwithstanding the foregoing or the provisions of any other covenant, the Company or any Restricted Subsidiary may sell Qualified Capital Stock of any Restricted Subsidiary in a Public Equity Offering; provided that: (i) 100% of the Net Proceeds from such Public Equity Offering shall be in cash and shall be applied as provided in Section 5.04 hereof; and (ii) the Tangible Assets of such Restricted Subsidiary do not exceed 10% of the Consolidated Tangible Assets of the Company, determined as of the last day of the quarter ending immediately before the commencement of such Public Equity Offering. Section 5.09 Payments for Consent. The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or oth- -59- erwise, to any Holder for or as an inducement to any consent, waiver or amendment of any terms or provisions of the Notes unless such consideration is offered to be paid or agreed to be paid to all Holders which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. Section 5.10 Additional Guarantees. If any existing or future Restricted Subsidiary shall, after the Issue Date, guarantee the Credit Agreement or any Existing Notes, the Company will cause any such Restricted Subsidiary to: (a) execute and deliver to the Trustee a supplement to this Supplemental Indenture in form and substance reasonably satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall guarantee all of the obligations of the Company with respect to the Notes on a senior basis; and (b) deliver to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee to the effect that a supplement to this Supplemental Indenture has been duly executed and delivered by such Restricted Subsidiary and is in compliance with the terms of the Indenture. Section 5.11 Termination of Certain Covenants in Event of Investment Grade Rating. In the event that each of the Rating Categories assigned to the Notes by the Rating Agencies is Investment Grade, the obligations under the covenants contained in Sections 5.01, 5.03, 5.04, 5.05, 5.08 and clause (iii) of Section 6.01(a) hereof shall cease to apply to the Company and its Restricted Subsidiaries from and after the date on which the second of the Rating Agencies notifies the Company of the assignment of such Rating Category. Notwithstanding the foregoing, if the Rating Category assigned by either Rating Agency to the Notes should subsequently decline below Investment Grade, the foregoing covenants and such Consolidated Net Worth requirement shall be reinstituted as and from the date of such rating decline. Section 5.12 Additional Interest. If Additional Interest is payable pursuant to the Registration Rights Agreement, the Company shall deliver to the Trustee a certificate to that effect stating the amount of such Additional Interest that is payable. Section 5.13 Reports. (a) Whether or not required by the rules and regulations of the Commission, including the reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as any Notes are outstanding, the Company will furnish to the Holders: (i) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were re- -60- quired to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" that describes the financial condition and results of operations of the Company and its Subsidiaries and, with respect to the annual information only, a report on the consolidated financial statements required by Form 10-K by the Company's independent certified public accountants; and (ii) all reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports. In addition, whether or not required by the rules and regulations of the Commission, the Company will file a copy of all such information with the Commission for public availability (unless the Commission will not accept such a filing) and make such information available to investors or prospective investors who request it in writing. ARTICLE VI SUCCESSOR COMPANY Section 6.01 Merger, Consolidation and Sale of Assets. (a) The Company shall not, in a single transaction or a series of related transactions, consolidate with or merge with or into any other Person or sell, assign, convey, transfer or lease or otherwise dispose of all or substantially all of its properties and assets to any Person or group of affiliated Persons, or permit any of its Restricted Subsidiaries to enter into any such transaction or transactions if such transaction or transactions, in the aggregate, would result in a sale, assignment, transfer, lease or disposal of all or substantially all of the properties and assets of the Company and its Restricted Subsidiaries on a Consolidated basis to any other Person or group of affiliated Persons, unless at the time and after giving effect thereto: (i) either: (A) the Company shall be the surviving or continuing corporation; or (B) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by sale, assignment, conveyance, transfer, lease or disposition the properties and assets of the Company substantially as an entirety (the "Surviving Entity") shall be a corporation duly organized and validly existing under the laws of the United States, any state thereof or the District of Columbia and shall, in any case, expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company, under the Notes and the Indenture, and the Indenture shall remain in full force and effect; (ii) immediately before and immediately after giving effect to such transaction on a pro forma basis (and treating any Indebtedness not previously an obligation of the Company or any of its Restricted Subsidiaries which becomes an obligation of the Company or any of its Restricted Subsidiaries in connection with or as a result of such transaction as having been in- -61- curred at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; (iii) immediately after giving effect to such transaction, except in the case of a merger of the Company with or into a Wholly Owned Restricted Subsidiary, the Company (or the Surviving Entity if the Company is not the continuing obligor under the Indenture) will have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction; (iv) immediately after giving effect to such transaction on a pro forma basis (on the assumption that the transaction occurred on the first day of the four-quarter period immediately prior to the consummation of such transaction with the appropriate adjustments with respect to the transaction being included in such pro forma calculation), the Company (or the Surviving Entity if the Company is not the continuing obligor under the Indenture) could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under Section 5.03 above; (v) each Guarantor, unless it is the other party to the transactions described above, shall have confirmed, by supplemental indenture to the Indenture, that its respective Note Guarantee with respect to the Notes shall apply to such Person's obligations under the Indenture and the Notes; (vi) if any of the property or assets of the Company or any of its Restricted Subsidiaries would thereupon become subject to any Lien, the provisions of Section 5.06 hereof are complied with; and (vii) the Company shall have delivered, or caused to be delivered, to the Trustee, in form and substance satisfactory to the Trustee, an Officers' Certificate and an opinion of counsel, each to the effect that such consolidation, merger, sale, assignment, conveyance, transfer, lease or other transaction and the supplemental indenture in respect thereto, if required, comply with the provisions in clauses (i) through (vi) of this paragraph (a) and that all conditions precedent herein provided for relating to such transaction have been complied with. (b) The foregoing paragraph (a) shall not prohibit a merger of any Restricted Subsidiary of the Company with and into the Company or a merger effected solely for the purpose of reincorporating the Company in another jurisdiction. Section 6.02 Successor Corporation Substituted. Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 6.01 hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of the Indenture referring to the "Company" shall refer instead to the successor corporation and not to the Company), and may exercise -62- every right and power of the Company under the Indenture with the same effect as if such successor Person had been named as the Company herein; provided, however, that, in the case of a transfer by lease, the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Notes. ARTICLE VII DEFAULTS AND REMEDIES Section 7.01 Events of Default. An "Event of Default" occurs if: (a) there shall be a default in the payment of any interest on the Notes when such interest becomes due and payable, and continuance of such default for a period of 30 days; (b) there shall be a default in the payment of the principal of (or premium, if any, on) any Notes at Maturity; (c) (i) there shall be a default in the performance, or breach, of any covenant or agreement of the Company or any Guarantor under the Indenture (other than a default in the performance, or breach, of a covenant or agreement which is specifically dealt with in the immediately preceding clauses (a) or (b) or in clauses (ii) or (iii) of this clause (c)), and such default or breach shall continue for a period of 60 days after written notice has been given, by certified mail: (A) to the Company by the Trustee; or (B) to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the outstanding Notes; (ii) there shall be a default in the performance or breach of the provisions described in Article VI or Section 5.04; or (iii) the Company shall have failed to comply with the provisions of Section 5.07 for any reason, including the inconsistency of such covenant with the Company's Bylaws as in effect on the Issue Date; (d) (i) any default in the payment of the principal of any Indebtedness shall have occurred under any agreements, indentures or instruments under which the Company or any Restricted Subsidiary of the Company then has outstanding Indebtedness in excess of $50.0 million when the same shall become due and payable in full and such default shall have continued after any applicable grace period and shall not have been cured or waived; or (ii) an event of default as defined in any of the agreements, indentures or instruments described in clause (i) of this clause (d) shall have occurred and the Indebtedness -63- thereunder, if not already matured at its final maturity in accordance with its terms, shall have been accelerated; (e) any Note Guarantee of any Significant Subsidiary individually or any other Subsidiaries if such Restricted Subsidiaries in the aggregate represent 15% or more of Consolidated Total Assets with respect to the Notes shall for any reason cease to be, or be asserted in writing by the Company, any Guarantor or any other Restricted Subsidiary of the Company, as applicable, not to be, in full force and effect, enforceable in accordance with its terms, except pursuant to the release of any such Note Guarantee in accordance with the Indenture; (f) one or more judgments, orders or decrees for the payment of money in excess of $50.0 million (net of amounts covered by insurance, bond or similar instrument), either individually or in the aggregate, shall be entered against the Company or any Restricted Subsidiary of the Company or any of their respective properties and shall not be discharged and either: (i) any creditor shall have commenced an enforcement proceeding upon such judgment, order or decree; or (ii) there shall have been a period of 60 consecutive days during which a stay of enforcement of such judgment or order, by reason of an appeal or otherwise, shall not be in effect; (g) there shall have been the entry by a court of competent jurisdiction of: (i) a decree or order for relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy Law; or (ii) a decree or order adjudging the Company or any Significant Subsidiary bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any Significant Subsidiary under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Significant Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order for relief shall continue to be in effect, or any such other decree or order shall be unstayed and in effect, for a period of 60 consecutive days; or (h) (i) the Company or any Significant Subsidiary commences a voluntary case or proceeding under any applicable Bankruptcy Law or any other case or proceeding to be adjudicated bankrupt or insolvent; (ii) the Company or any Significant Subsidiary consents to the entry of a decree or order for relief in respect of the Company or such Significant Subsidiary in an in- -64- voluntary case or proceeding under any applicable Bankruptcy Law or to the commencement of any bankruptcy or insolvency case or proceeding against it; (iii) the Company or any Significant Subsidiary files a petition or answer or consent seeking reorganization or relief under any applicable federal or state law; (iv) the Company or any Significant Subsidiary: (A) consents to the filing of such petition or the appointment of, or taking possession by, a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or such Significant Subsidiary or of any substantial part of its property; (B) makes an assignment for the benefit of creditors; or (C) admits in writing its inability to pay its debts generally as they become due; or (v) the Company or any Significant Subsidiary takes any corporate action in furtherance of any such actions in this clause (h). Section 7.02 Acceleration. (a) If an Event of Default (other than as specified in clause (g) or (h) of Section 7.01 hereof) shall occur and be continuing with respect to the Notes, the Trustee, by notice in writing to the Company, or the Holders of at least 25% in aggregate principal amount then outstanding of such Notes, by notice in writing to the Trustee and to the Company, may declare such Notes due and payable immediately. Upon such declaration, all amounts payable in respect of such Notes shall be immediately due and payable. If an Event of Default specified in clause (g) or (h) of Section 7.01 hereof occurs and is continuing, then all of the outstanding Notes under the Indenture shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee thereunder or any Holder. (b) After a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of a majority in aggregate principal amount outstanding of Notes, by written notice to the Company and the Trustee, may annul such declaration if: (i) the Company has paid or deposited with the Trustee a sum sufficient to pay: (A) all sums paid or advanced by the Trustee under the Notes and the reasonable compensation, expenses, disbursements, and advances of the Trustee, its agents and counsel; (B) all overdue interest on all of the Notes; and -65- (C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Notes; and (ii) all Events of Default, other than the non-payment of principal of such Notes which have become due solely by such declaration of acceleration, have been cured or waived in writing. (c) The Holders of a majority in aggregate principal amount of the Notes outstanding may, on behalf of the Holders of all of such Notes, waive any past defaults under the Indenture except a default in the payment of the principal of, premium, if any, or interest on any such Note, or in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the Holder of each such outstanding Note. Section 7.03 Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or the Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. Section 7.04 Waiver of Past Defaults. Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice in writing to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium, if any, or interest on, the Notes (including in connection with an offer to purchase) (provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of the Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 7.05 Control by Majority. Holders of a majority in principal amount of the then outstanding Notes may, by written notice, direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or the Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in any personal liability. -66- Section 7.06 Limitation on Suits. A Holder of a Note may pursue a remedy with respect to the Indenture or the Notes only if: (a) a Holder gives to the Trustee written notice of a continuing Event of Default; (b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy; (c) such Holder or Holders offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a written direction inconsistent with the request. A Holder may not use the Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. Section 7.07 Rights of Holders of Notes to Receive Payment. Notwithstanding any other provision of the Indenture, the right of any Holder to receive payment of principal, premium, if any, and interest on the Note so held, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. Section 7.08 Collection Suit by Trustee. If an Event of Default specified in Section 7.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any amounts due the Trustee under Section 7.7 of the Base Indenture. Section 7.09 Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company (or any other -67- obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent in writing to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 of the Base Indenture. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 of the Base Indenture out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 7.10 Priorities. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee, its agents and attorneys for amounts due under Section 7.7 of the Base Indenture, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any and interest, respectively; and Third: to the Company or to such party as a court of competent jurisdiction shall direct. The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 7.10. Section 7.11 Undertaking for Costs. In any suit for the enforcement of any right or remedy under the Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note -68- pursuant to Section 7.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes. ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at the option of its Board of Directors evidenced by a Board Resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article VIII. Section 8.02 Legal Defeasance and Discharge. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of the Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes and the Indenture (and the Trustee, on written demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due, (b) the Company's obligations with respect to such Notes under Article II hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith and (d) this Article VIII. Subject to compliance with this Article VIII, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. Section 8.03 Covenant Defeasance. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Sections 5.01, 5.02, 5.03, 5.04, 5.05, 5.06, 5.07, 5.08, 5.09, 5.10 and 5.11 hereof, clauses (iii), (iv) and (vi) of Section 6.01 hereof and Section 4.5 of the Base Indenture with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being under- -69- stood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 7.01 hereof, but, except as specified above, the remainder of the Indenture and such Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 7.01(c), (d), (e) and (g) hereof shall not constitute Events of Default. Section 8.04 Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes: (a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of such Notes, cash in United States dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay and discharge the principal of, premium, if any, and interest on the outstanding Notes on the Stated Maturity thereof or on the applicable redemption date (such date being referred to as the "Defeasance Redemption Date"), as the case may be, and any other amounts owing under this Indenture, if in the case of a Defeasance Redemption Date prior to electing to exercise either Legal Defeasance or Covenant Defeasance, the Company has delivered to the Trustee an irrevocable notice to redeem all of the outstanding Notes on such Defeasance Redemption Date; (b) in the case of an election under Section 8.02 hereof, the Company shall have delivered to the Trustee an opinion of independent counsel in the United States stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of independent counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; provided, that the foregoing opinion of independent counsel required by this clause (b) with respect to a Legal Defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (A) have become due and payable or (B) will become due and payable at Maturity within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company; (c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to the Trustee an opinion of independent counsel in the United States to the effect that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal in- -70- come tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article VIII concurrently with such incurrence); (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under the Indenture or any material agreement or instrument to which the Company or any of the Guarantors is a party or by which the Company or any of the Guarantors is bound; (f) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of the Notes or any Guarantor over any other creditors of the Company or any Guarantor or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company, any Guarantor or others; and (g) the Company shall have delivered to the Trustee an Officers' Certificate stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with. Section 8.05 Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and the Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the written request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. -71- Section 8.06 Repayment to Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its written request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. Section 8.07 Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under the Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. Section 8.08 Satisfaction and Discharge. The Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder, when: (a) either: (i) all Notes issued under the Indenture and theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment funds have been deposited in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation; or (ii) all Notes issued under the Indenture and not theretofore delivered to the Trustee for cancellation; (A) have become due and payable or -72- (B) will become due and payable at their Stated Maturity or pursuant to an optional redemption within one year, and either the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness in respect of the Notes, for principal of, premium and interest to the date of redemption or Stated Maturity, as the case may be; (b) the Company or any Guarantor has paid all other sums payable by the Company and any Guarantor under the Indenture; (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that all conditions precedent to the satisfaction and discharge of the Indenture, as specified therein, have been complied with and that such satisfaction and discharge will not result in a breach or violation of, or constitute a default under, the Indenture or any other material agreement or instrument to which the Company or any Guarantor is a party or by which it is bound; and (d) the Company has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of the Notes at Stated Maturity or the redemption date, as the case may be. Notwithstanding the satisfaction and discharge of the Indenture, if money shall have been deposited with the Trustee pursuant to subclause (ii)(B) of clause (a) of this Section, the provisions of Section 7.7 of the Base Indenture, Section 10.02 and Section 8.06 shall survive. Section 8.09 Application of Trust Money. Subject to the provisions of Section 8.06, all money deposited with the Trustee pursuant to Section 8.08 shall be held in trust and applied by it, in accordance with the provisions of the Notes and the Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law. If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 8.08 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and any Guarantor's obligations under the Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.08; provided that if the Company has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent. -73- ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER Section 9.01 Without Consent of Holders of Notes. Notwithstanding Section 9.02 of the Indenture, the Company, the Guarantors and the Trustee may amend or supplement the Indenture, the Note Guarantees or the Notes without the consent of any Holder of a Note: (a) to cure any ambiguity, defect or inconsistency; (b) to provide for uncertificated Notes in addition to or in place of certificated Notes or to alter the provisions of Article II of the Base Indenture (including the related definitions) in a manner that does not materially adversely affect any Holder; (c) to provide for the assumption of the Company's or a Guarantor's obligations to the Holders by a successor to the Company or a Guarantor pursuant to Article VI or Article X hereof, as the case may be; (d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect in any material respect the rights hereunder of any Holder of the Note; (e) to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; (f) to allow any Guarantor to execute a supplemental indenture and/or a Note Guarantee with respect to the Notes; or (g) to evidence and provide for the acceptance of appointment under the Indenture of a successor Trustee. Upon the written request of the Company accompanied by a Board Resolution authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Section 7.2 of the Base Indenture, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of the Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under the Indenture or otherwise. Section 9.02 With Consent of Holders of Notes. Except as provided below in this Section 9.02, the Company, the Guarantors and the Trustee may amend or supplement the Indenture (including Sections 4.03, 5.04 and 5.07 hereof), the Note Guarantees and the Notes with the written consent of the Holders of at least a majority in princi- -74- pal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 7.04 and 7.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of the Indenture, the Note Guarantees or the Notes may be waived with the written consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Upon the written request of the Company accompanied by a Board Resolution authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.2 of the Base Indenture, the Trustee shall join with the Company in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee's own rights, duties or immunities under the Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture. It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 7.04 and 7.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive in writing compliance in a particular instance by the Company with any provision of the Indenture or the Notes. However, without the written consent of each Holder affected, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder): (a) change the Stated Maturity or the principal of, or any installment of interest on, any Note or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or change the coin or currency in which any Note or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the Stated Maturity thereof; (b) after a Change of Control has occurred, amend, change or modify the obligation of the Company to make and consummate a Change of Control Purchase Offer with respect to such Change of Control or modify any of the provisions or definitions with respect thereto; (c) reduce the percentage in principal amount of outstanding Notes whose Holders must consent to a modification, amendment, supplement or waiver; -75- (d) modify any of the provisions relating to supplemental indentures requiring the consent of Holders or relating to the waiver of past defaults or relating to the waiver of certain covenants, except to increase the percentage of outstanding Notes required for such actions or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of each Holder; (e) make any change in Section 7.04 or 7.07 hereof or in the foregoing amendment and waiver provisions; or (f) except as otherwise permitted under Article VI consent to the assignment or transfer by the Company or any Guarantor of any of its rights and obligations under the Indenture. Section 9.03 Compliance with Trust Indenture Act. Every amendment or supplement to the Indenture or the Notes shall be set forth in a amended or supplemental indenture that complies with the TIA as then in effect. Section 9.04 Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. Section 9.05 Notation on or Exchange of Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. Section 9.06 Trustee to Sign Amendments, etc. The Trustee shall sign any amended or supplemental indenture authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.1 of the Base Indenture) shall be fully protected in relying conclusively upon, in addition to the documents required by Section 11.04 hereof, -76- an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by the Indenture. ARTICLE X GUARANTEE Section 10.01 Guarantee. Subject to this Article X, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (a) the principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture, solely with respect to the Notes (and any Note Guarantee endorsed thereon). If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VII hereof for the purposes of this Note Guar- -77- antee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article VII hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. Section 10.02 Limitation on Guarantor Liability. Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article X, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance. Section 10.03 Execution and Delivery of Note Guarantee. To evidence its Note Guarantee set forth in Section 10.01, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form included in Exhibit E shall be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that the Indenture shall be executed on behalf of such Guarantor by its President or one of its Vice Presidents. Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee. If an Officer whose signature is on the Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in the Indenture on behalf of the Guarantors. In the event that any Restricted Subsidiary is required to guarantee the Indebtedness in respect to the Notes in accordance with Section 5.10 hereof, the Company shall cause such Restricted Subsidiaries to execute a supplement to this Supplemental Indenture and Note Guarantees in accordance with Section 5.01 hereof and this Article X, to the extent applicable. -78- Section 10.04 Guarantors May Consolidate, etc., on Certain Terms. Except as otherwise provided in Section 10.05, no Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person whether or not affiliated with such Guarantor unless: (a) subject to Section 10.05 hereof, the Person formed by or surviving any such consolidation or merger (if other than a Guarantor or the Company) unconditionally assumes all the obligations of such Guarantor, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Notes, the Indenture and the Note Guarantee on the terms set forth herein or therein; and (b) immediately after giving effect to such transaction, no Default or Event of Default exists. In case of any such consolidation or merger and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of the Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Note Guarantees so issued shall in all respects have the same legal rank and benefit under the Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of the Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof. Except as set forth in Articles V and VI hereof, and notwithstanding clauses (a) and (b) above, nothing contained in the Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. Section 10.05 Releases of Note Guarantees. (a) In the event of a sale or other disposition of all of the assets of any Guarantor, by way of merger, consolidation, liquidation, dissolution or otherwise, or a sale or other disposition of all of the capital stock of any Guarantor otherwise in compliance with this Indenture, in each case to a Person that is not (either before or after giving effect to such transactions) a Restricted Subsidiary of the Company, then such Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) will be released and relieved of any obligations under its Note Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture, including without limitation Section 5.04 hereof. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such sale or other dis- -79- position was made by the Company in accordance with the provisions of the Indenture, including without limitation Section 5.04 hereof, the Trustee shall execute any documents reasonably required and requested of it in writing in order to evidence the release of any Guarantor from its obligations under its Note Guarantee. (b) Upon the designation of a Restricted Subsidiary to become an Unrestricted Subsidiary otherwise in compliance with the Indenture, such Guarantor will be deemed released from its obligations under its Note Guarantee; provided, however, that any such termination shall occur only to the extent that all obligations of such Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure, any Indebtedness of the Company or any other Restricted Subsidiary shall also terminate upon such release, sale or transfer. (c) Any Guarantor not released from its obligations under its Note Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under the Indenture as provided in this Article X. ARTICLE XI MISCELLANEOUS Section 11.01 Trust Indenture Act Controls. If any provision of the Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control. Section 11.02 Notices. Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others' address: If to the Company and/or any Guarantor: Fleming Companies, Inc. 1945 Lakepointe Drive Lewisville, Texas 75029 Telecopier No.: (972) 906-1555 Attention: Chief Financial Officer -80- With a copy to: Latham & Watkins 505 Montgomery Street, 19th Floor San Francisco, CA 94111 Telecopier No.: (415) 395-8095 Attention: Tracy Edmonson, Esq. If to the Trustee: Manufacturers and Traders Trust Company One M & T Plaza 7th Floor, Corporate Trust Department Buffalo, New York 14203 The Company, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. Section 11.03 Communication by Holders of Notes with Other Holders of Notes. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under the Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). -81- Section 11.04 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under the Indenture, the Company shall furnish to the Trustee: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in the Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. Section 11.05 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in the Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. Section 11.06 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. Section 11.07 No Personal Liability of Directors, Officers, Employees and Stockholders. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or such Guarantor under the Notes, the Note Guarantees, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives -82- and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Section 11.08 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. Section 11.09 No Adverse Interpretation of Other Agreements. The Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret the Indenture. Section 11.10 Successors. All agreements of the Company in the Indenture and the Notes shall bind its successors. All agreements of the Trustee in the Indenture shall bind its successors. All agreements of each Guarantor in the Indenture shall bind its successors, except as otherwise provided in Section 11.05. Section 11.11 Severability. In case any provision in the Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11.12 Counterpart Originals. The parties may sign any number of copies of the Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 11.13 Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of the Indenture have been inserted for convenience of reference only, are not to be considered a part of the Indenture and shall in no way modify or restrict any of the terms or provisions hereof. [Signatures on following page] IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above. FLEMING COMPANIES, INC. By: /s/ Carlos M. Hernandez -------------------------------------------- Name: Carlos M. Hernandez Title: Senior Vice President, General Counsel and Secretary ABCO FOOD GROUP, INC. BAKER'S FOOD GROUP, INC. RAINBOW FOOD GROUP, INC. RETAIL INVESTMENTS, INC. Each, a Subsidiary Guarantor By: /s/ Timothy M. Otte -------------------------------------------- Name: Timothy M. Otte Title: Secretary AG, L.L.C., a Subsidiary Guarantor By: Fleming Companies, Inc., sole member By: /s/ Carlos M. Hernandez -------------------------------------------- Name: Carlos M. Hernandez Title: Senior Vice President, General Counsel and Secretary FOOD 4 LESS BEVERAGE COMPANY, INC., a Subsidiary Guarantor By: /s/ Charles L. Hall -------------------------------------------- Name: Charles L. Hall Title: President ABCO MARKETS INC. ABCO REALTY CORP. AMERICAN LOGISTICS GROUP, INC. CARDINAL WHOLESALE, INC. DUNIGAN FUELS, INC. FAVAR CONCEPTS, LTD. FLEMING FOODS MANAGEMENT CO. L.L.C. FLEMING FOODS OF TEXAS L.P. FLEMING INTERNATIONAL LTD. FLEMING SUPERMARKETS OF FLORIDA, INC. FLEMING TRANSPORTATION SERVICE, INC. FLEMING WHOLESALE, INC. FUELSERV, INC. GATEWAY INSURANCE AGENCY, INC. HEAD DISTRIBUTING COMPANY LAS, INC. MINTER-WEISMAN CO. PIGGLY WIGGLY COMPANY PROGRESSIVE REALTY, INC. RETAIL SUPERMARKETS, INC. RFS MARKETING SERVICES, INC. RICHMAR FOODS, INC. SCRIVNER TRANSPORTATION, INC. Each, a Subsidiary Guarantor By: /s/ Carlos M. Hernandez -------------------------------------------- Name: Carlos M. Hernandez Title: Secretary MANUFACTURERS AND TRADERS TRUST COMPANY, not in its individual capacity, but solely as Trustee By: /s/ Russell T. Whitley -------------------------------------------- Name: Russell T. Whitley Title: Assistant Vice President EX-4.3 7 d97911exv4w3.txt FORM OF 9.25% SENIOR NOTE & NOTATION OF GUARANTEE EXHIBIT 4.3 [FORM OF NOTE] - -------------------------------------------------------------------------------- CUSIP/CINS 339130AX4 9 1/4% Senior Notes due 2010 No. 1 $200,000,000 FLEMING COMPANIES, INC. promises to pay ______________________________________ or registered assigns the principal sum of TWO HUNDRED MILLION Dollars on June 15, 2010. Interest Payment Dates: June 15 and December 15 Record Dates: June 1 and December 1 Dated: June 18, 2002 [Signature Page Follows] FLEMING COMPANIES, INC. By: --------------------------------- Name: Title: This is one of the Notes referred to in the within-mentioned Indenture: MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee By: ------------------------------ Authorized Signatory 9 1/4% Senior Notes due 2010 THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 9.05 OF THE SUPPLEMENTAL INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.01 OF THE SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.09 OF THE SUPPLEMENTAL INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. Fleming Companies, Inc., an Oklahoma corporation (the "Company"), promises to pay interest on the principal amount of this Note at 9 1/4% per annum from June 18, 2002 until maturity. The Company will pay interest semi-annually in arrears on June 15 and December 15 of each year or, if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be December 15, 2002. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the June 1 or December 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.13 of the Base Indenture and Section 1.07 of the Supplemental Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. PAYING AGENT AND REGISTRAR. Initially, Manufacturers and Traders Trust Company, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Notes under a First Supplemental Indenture (the "Supplemental Indenture"), dated as of June 18, 2002, among the Company, the Guarantors named therein and the Trustee, to the Indenture, dated as of June 18, 2002, between the Company and the Trustee (the "Base Indenture" and as supplemented by the Supplemental Indenture, the "Indenture") . The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the TIA. The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are obligations of the Company which may be issued in unlimited amounts from time to time subject to compliance with Section 5.03 of the Supplemental Indenture. The Company is issuing $200 million in aggregate principal amount of Notes on the Issue Date. 5. OPTIONAL REDEMPTION. (a) Except as described below, the Notes are not redeemable before June 15, 2006. Thereafter, the Company may redeem the Notes at its option, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-month period commencing on June 15 of the year set forth below.
YEAR PERCENTAGE ------------------------ ------------ 2006.................... 104.6250% 2007.................... 102.3125% 2008 and thereafter..... 100.0000%
In addition, the Company must pay all accrued and unpaid interest on the Notes redeemed. (b) Notwithstanding the foregoing, up to 35% of the initial aggregate principal amount of the Notes may be redeemed on or prior to June 15, 2005, at the option of the Company, within 90 days of an Equity Offering with the net proceeds of such offering at a redemption price equal to 109.25% of the principal amount thereof, together with accrued and unpaid interest, if any, to the date of redemption (subject to the right of holders of record on relevant record dates to receive interest due on relevant interest payment dates); provided, that after giving effect to such redemption at least 65% of the Notes originally issued under the Indenture remain outstanding. 6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption payments with respect to the Notes. 7. REPURCHASE AT OPTION OF HOLDER. (a) Upon the occurrence of a Change of Control, the Company will be required to offer to purchase all of the outstanding Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the date of repurchase. (b) The Company is, subject to certain conditions, obligated to make an offer to purchase the Notes at 100% of their principal amount, plus accrued and unpaid interest, if any, thereon to the date of repurchase with certain net cash proceeds of certain sales or other dispositions of assets in accordance with the Indenture. 8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company and the Trustee may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. 10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Note Guarantees or the Notes may be amended or supplemented with the written consent of the Holders of at least a majority in principal amount of the then outstanding Notes voting as a single class, and any existing default or compliance with any provision of the Indenture, the Note Guarantees or the Notes may be waived with the written consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class. Without the consent of any Holder of a Note, the Indenture, the Note Guarantees or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company's or Guarantor's obligations to Holders of the Notes in case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect in any material respects the rights under the Indenture of any such Holder, to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the TIA, or to allow any Guarantor to execute a supplement to the Supplemental Indenture and/or a Note Guarantee with respect to the Notes, or to evidence and provide for the acceptance of appointment under the Indenture of a successor Trustee. 12. DEFAULTS AND REMEDIES. Events of Default are set forth in the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in writing in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default re- lating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes; provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder, of the Company, as such, shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 15. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: Fleming Companies, Inc. 1945 Lakepointe Drive Lewisville, Texas 75029 Attention: Investor Relations ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to: ----------------------------------- (Insert assignee's legal name) - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint -------------------------------------------------------- to transfer this Note on the books of the Company. The agent may substitute another to act for him. Date: --------------- Your Signature: ---------------------------- (Sign exactly as your name appears on the face of this Note) Signature Guarantee*: ------------------------- * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 5.04 or 5.07 of the Supplemental Indenture, check the appropriate box below: [ ] Section 5.04 [ ] Section 5.07 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 5.04 or Section 5.07 of the Supplemental Indenture, state the amount you elect to have purchased: $ --------------- Date: ----------------- Your Signature: ----------------------- (Sign exactly as your name appears on the face of this Note) Tax Identification No.: --------------- Signature Guarantee*: ---------------------------------------------- * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
Amount of Amount of Principal decrease in increase in Amount of this Signature of Principal Principal Global Note authorized Amount of Amount of following such officer of Date of Exchange this Global this Global decrease Trustee Note Note (or increase)
NOTATION OF GUARANTEE For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the base indenture (the "Base Indenture"), dated as of June 18, 2002 between Fleming Companies, Inc., an Oklahoma corporation (the "Company") and Manufacturers and Traders Trust Company, as trustee (the "Trustee") as supplemented by the first supplemental indenture (the "Supplemental Indenture" and together with the Base Indenture, the "Indenture"), dated June 18, 2002 among the Company, the Guarantors listed on the signature pages thereto and the Trustee (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article X of the Supplemental Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee. [Signature Pages Follow] ABCO FOOD GROUP, INC. BAKER'S FOOD GROUP, INC. RAINBOW FOOD GROUP, INC. RETAIL INVESTMENTS, INC. By: ---------------------------------- Name: Timothy M. Otte Title: Secretary AG, L.L.C. By: Fleming Companies, Inc., sole member By: ---------------------------------- Name: Carlos M. Hernandez Title: Title: Senior Vice President, General Counsel and Secretary FOOD 4 LESS BEVERAGE COMPANY, INC. By: ---------------------------------- Name: Charles L. Hall Title:President ABCO MARKETS INC. ABCO REALTY CORP. AMERICAN LOGISTICS GROUP, INC. CARDINAL WHOLESALE, INC. DUNIGAN FUELS, INC. FAVAR CONCEPTS, LTD. FLEMING FOOD MANAGEMENT CO. L.L.C. FLEMING FOODS OF TEXAS L.P. FLEMING INTERNATIONAL LTD. FLEMING SUPERMARKETS OF FLORIDA, INC. FLEMING TRANSPORTATION SERVICE, INC. FLEMING WHOLESALE, INC. FUELSERV, INC. GATEWAY INSURANCE AGENCY, INC. HEAD DISTRIBUTING COMPANY LAS, INC. MINTER-WEISMAN CO. PIGGLY WIGGLY COMPANY PROGRESSIVE REALTY, INC. RETAIL SUPERMARKETS, INC. RFS MARKETING SERVICES, INC. RICHMAR FOODS, INC. SCRIVNER TRANSPORTATION, INC. By: ---------------------------------- Name: Carlos M. Hernandez Title: Secretary EX-10.1 8 d97911exv10w1.txt CREDIT AGREEMENT EXHIBIT 10.1 - -------------------------------------------------------------------------------- CREDIT AGREEMENT dated as of June 18, 2002 among FLEMING COMPANIES, INC., THE LENDERS PARTY HERETO, DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent, JPMORGAN CHASE BANK and CITICORP NORTH AMERICA, INC., as Syndication Agents, LEHMAN COMMERCIAL PAPER INC. and WACHOVIA BANK, NATIONAL ASSOCIATION, as Documentation Agents, DEUTSCHE BANK SECURITIES INC. and J.P. MORGAN SECURITIES INC., as Joint Book Managers, and DEUTSCHE BANK SECURITIES INC., J.P. MORGAN SECURITIES INC., and SALOMON SMITH BARNEY INC., as Joint Lead Arrangers - -------------------------------------------------------------------------------- FORTIS CAPITAL CORP., MANUFACTURERS AND TRADERS TRUST COMPANY, BNP PARIBAS, COMERICA BANK and TRANSAMERICA BUSINESS CAPITAL CORPORATION as Senior Managing Agents TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS................................................................................. 1 SECTION 1.01. DEFINED TERMS........................................................................... 1 SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS.................................................. 35 SECTION 1.03. TERMS GENERALLY......................................................................... 35 SECTION 1.04. ACCOUNTING TERMS; GAAP; FISCAL YEARS.................................................... 36 SECTION 1.05. CERTAIN PRO FORMA CALCULATIONS.......................................................... 36 ARTICLE II THE CREDITS................................................................................. 38 SECTION 2.01. COMMITMENTS............................................................................. 38 SECTION 2.02. LOANS AND BORROWINGS.................................................................... 39 SECTION 2.03. REQUESTS FOR BORROWINGS................................................................. 39 SECTION 2.04. SWINGLINE LOANS......................................................................... 40 SECTION 2.05. INCREMENTAL TERM LOAN COMMITMENTS....................................................... 42 SECTION 2.06. LETTERS OF CREDIT....................................................................... 45 SECTION 2.07. FUNDING OF BORROWINGS................................................................... 50 SECTION 2.08. INTEREST ELECTIONS...................................................................... 51 SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS................................................ 52 SECTION 2.10. REPAYMENT OF LOANS; EVIDENCE OF DEBT.................................................... 53 SECTION 2.11. AMORTIZATION OF TERM LOANS.............................................................. 54 SECTION 2.12. PREPAYMENT OF LOANS..................................................................... 55 SECTION 2.13. FEES.................................................................................... 58 SECTION 2.14. INTEREST................................................................................ 59 SECTION 2.15. ALTERNATE RATE OF INTEREST.............................................................. 60 SECTION 2.16. INCREASED COSTS......................................................................... 60 SECTION 2.17. BREAK FUNDING PAYMENTS.................................................................. 62 SECTION 2.18. TAXES................................................................................... 62 SECTION 2.19. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS............................. 65 SECTION 2.20. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.......................................... 66 SECTION 2.21. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR LOANS...................................... 67 ARTICLE III REPRESENTATIONS AND WARRANTIES.............................................................. 68 SECTION 3.01. CORPORATE EXISTENCE AND POWER........................................................... 68 SECTION 3.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; CONTRAVENTION................................. 68 SECTION 3.03. BINDING EFFECT.......................................................................... 68 SECTION 3.04. FINANCIAL INFORMATION................................................................... 68 SECTION 3.05. LITIGATION.............................................................................. 69
(i)
Page ---- SECTION 3.06. COMPLIANCE WITH ERISA................................................................... 69 SECTION 3.07. ENVIRONMENTAL MATTERS................................................................... 70 SECTION 3.08. TAX RETURNS............................................................................. 70 SECTION 3.09. SUBSIDIARIES............................................................................ 71 SECTION 3.10. NOT AN INVESTMENT COMPANY............................................................... 71 SECTION 3.11. NO CONFLICTING REQUIREMENTS............................................................. 71 SECTION 3.12. DISCLOSURE.............................................................................. 72 SECTION 3.13. SECURITY DOCUMENTS...................................................................... 72 SECTION 3.14. PUBLIC UTILITY HOLDINGS COMPANY......................................................... 72 SECTION 3.15. LABOR RELATIONS......................................................................... 72 SECTION 3.16. INDEBTEDNESS............................................................................ 73 SECTION 3.17. INSURANCE............................................................................... 73 SECTION 3.18. SUBORDINATION; DESIGNATION OF THE LOAN DOCUMENTS AS "SENIOR INDEBTEDNESS" AND "DESIGNATED SENIOR INDEBTEDNESS"; DESIGNATION OF THIS AGREEMENT AS THE "CREDIT AGREEMENT"; JUSTIFICATION OF INDEBTEDNESS INCURRED HEREUNDER; ETC...................... 73 SECTION 3.19. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION); JURISDICTION OF ORGANIZATION; ETC....................................................... 74 ARTICLE IV CONDITIONS.................................................................................. 75 SECTION 4.01. EFFECTIVE DATE.......................................................................... 75 SECTION 4.02. EACH BORROWING.......................................................................... 79 SECTION 4.03. INCREMENTAL TERM LOANS.................................................................. 79 ARTICLE V AFFIRMATIVE COVENANTS....................................................................... 80 SECTION 5.01. INFORMATION............................................................................. 80 SECTION 5.02. PAYMENT OF OBLIGATIONS.................................................................. 82 SECTION 5.03. MAINTENANCE OF PROPERTY; INSURANCE...................................................... 83 SECTION 5.04. MAINTENANCE OF EXISTENCE................................................................ 83 SECTION 5.05. COMPLIANCE WITH LAWS.................................................................... 83 SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS; COLLATERAL AUDITS............................ 83 SECTION 5.07. USE OF PROCEEDS......................................................................... 84 SECTION 5.08. GUARANTEE REQUIREMENT; COLLATERAL REQUIREMENT; FURTHER ASSURANCES....................... 84 SECTION 5.09. CORE-MARK RECEIVABLES FACILITY.......................................................... 85 ARTICLE VI NEGATIVE COVENANTS.......................................................................... 86 SECTION 6.01. LIENS................................................................................... 86 SECTION 6.02. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.............................................. 88 SECTION 6.03. INDEBTEDNESS............................................................................ 91 SECTION 6.04. DIVIDENDS............................................................................... 95 SECTION 6.05. TRANSACTIONS WITH AFFILIATES............................................................ 96
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Page ---- SECTION 6.06. ACQUISITIONS AND INVESTMENTS............................................................ 97 SECTION 6.07. LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES...................................... 99 SECTION 6.08. CAPITAL EXPENDITURES.................................................................... 100 SECTION 6.09. CONSOLIDATED FIXED CHARGE COVERAGE RATIO; ADJUSTED CONSOLIDATED FIXED CHARGE COVERAGE RATIO.......................................................................... 100 SECTION 6.10. TOTAL LEVERAGE RATIO.................................................................... 100 SECTION 6.11. ASSET COVERAGE RATIO.................................................................... 101 SECTION 6.12. LIMITATION ON ISSUANCES OF CAPITAL STOCK................................................ 101 SECTION 6.13. LIMITATION ON MODIFICATIONS OF CERTAIN INDEBTEDNESS..................................... 101 SECTION 6.14. CHANGE OF LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION); JURISDICTION OF ORGANIZATION; ETC....................................................... 101 SECTION 6.15. LIMITATION ON CREATION OF SUBSIDIARIES.................................................. 102 SECTION 6.16. CONDUCT OF BUSINESS..................................................................... 102 SECTION 6.17. NO DESIGNATION OF OTHER INDEBTEDNESS AS "DESIGNATED SENIOR INDEBTEDNESS"................ 103 ARTICLE VII EVENTS OF DEFAULT........................................................................... 103 ARTICLE VIII THE AGENTS.................................................................................. 106 SECTION 8.01. APPOINTMENT............................................................................. 106 SECTION 8.02. NATURE OF DUTIES........................................................................ 106 SECTION 8.03. LACK OF RELIANCE ON THE AGENTS.......................................................... 106 SECTION 8.04. CERTAIN RIGHTS OF THE AGENTS............................................................ 107 SECTION 8.05. RELIANCE................................................................................ 107 SECTION 8.06. INDEMNIFICATION......................................................................... 107 SECTION 8.07. EACH AGENT IN ITS INDIVIDUAL CAPACITY................................................... 108 SECTION 8.08. RESIGNATION............................................................................. 108 SECTION 8.09. THE JOINT LEAD ARRANGERS, JOINT BOOK MANAGERS, SYNDICATION AGENTS AND DOCUMENTATION AGENTS.................................................................... 109 ARTICLE IX MISCELLANEOUS............................................................................... 109 SECTION 9.01. NOTICES................................................................................. 109 SECTION 9.02. WAIVERS; AMENDMENTS..................................................................... 110 SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER...................................................... 112 SECTION 9.04. SUCCESSORS AND ASSIGNS.................................................................. 113 SECTION 9.05. SURVIVAL................................................................................ 116 SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS................................................ 116 SECTION 9.07. SEVERABILITY............................................................................ 116 SECTION 9.08. RIGHT OF SETOFF......................................................................... 116 SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.............................. 117
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Page ---- SECTION 9.10. WAIVER OF JURY TRIAL.................................................................... 117 SECTION 9.11. HEADINGS................................................................................ 118 SECTION 9.12. CONFIDENTIALITY......................................................................... 118 SECTION 9.13. INTEREST RATE LIMITATION................................................................ 118 SECTION 9.14. EXCEPTED DEFAULT UNDER THE 10-5/8% SENIOR SUBORDINATED NOTE INDENTURES.................. 119
SCHEDULES: Schedule 2.01 Commitments Schedule 2.06(a) Rolled-In Letters of Credit Schedule 3.09 Subsidiaries Schedule 3.16 Existing Indebtedness Schedule 3.17 Insurance Schedule 3.19 Legal Names; Type of Organization; Jurisdiction of Organization Schedule 6.01 Existing Liens Schedule 6.02(c) Additional Asset Sale Basket Amount Schedule 6.05 Transactions with Affiliates Concerning Real Property EXHIBITS: Exhibit A -- Assignment and Acceptance Exhibit B -- Guarantee Agreement Exhibit C -- Incremental Term Loan Commitment Agreement Exhibit D -- Pledge Agreement Exhibit E -- Security Agreement Exhibit F -- Notice of Borrowing Request Exhibit G -- Letter of Credit Request Exhibit H -- Notice of Interest Election Request Exhibit I -- Section 2.18(e) Certificate Exhibit J -- Opinion of Borrower's Counsel Exhibit K -- Solvency Certificate Exhibit L -- Subordination Agreement (iv) CREDIT AGREEMENT dated as of June 18, 2002 among FLEMING COMPANIES, INC., the LENDERS party hereto, DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent, JPMORGAN CHASE BANK and CITICORP NORTH AMERICA, INC., as Syndication Agents, LEHMAN COMMERCIAL PAPER INC. and WACHOVIA BANK, NATIONAL ASSOCIATION, as Documentation Agents, DEUTSCHE BANK SECURITIES INC. and J.P. MORGAN SECURITIES INC., as Joint Book Managers and DEUTSCHE BANK SECURITIES INC., J.P. MORGAN SECURITIES INC. and SALOMON SMITH BARNEY INC., as Joint Lead Arrangers. The parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following terms have the meanings specified below: "ABR", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate. "ACCOUNTS" has the meaning assigned to such term in the Security Agreement. "ACQUISITION" means each of (i) an investment by the Borrower or any of its Wholly-Owned Subsidiaries in any Person (other than the Borrower or any of its Subsidiaries) pursuant to which such Person shall concurrently become a Wholly-Owned Subsidiary or shall be merged into or consolidated with the Borrower or any of its Wholly-Owned Subsidiaries and (ii) an acquisition by the Borrower or any of its Wholly-Owned Subsidiaries of the property and assets of any Person (other than the Borrower or any of its Subsidiaries) that constitute substantially all of the assets of such Person or of any division or line of business of such Person; PROVIDED, HOWEVER, no such acquisition of property or assets of any Person, or investment in any Person owning any property or assets, constructed in contemplation of such acquisition or investment, as the case may be, shall constitute an "Acquisition" under this definition. Notwithstanding anything to the contrary contained in clause (i) of the immediately preceding sentence, the Borrower or its Wholly-Owned Subsidiaries may effect an Acquisition of 100% of the Equity Interests of a Person by means of a "two-step merger transaction", so long as (x) on the date of the consummation of the initial step of such transaction, the Borrower or its respective Wholly-Owned Subsidiary shall have acquired sufficient Equity Interests of the Person being acquired so that such Person on such date becomes a Subsidiary and so long as, under applicable law and the organizational documents of the Person being acquired, the Borrower or its respective Wholly-Owned Subsidiary has acquired sufficient Equity Interests to effect the merger described in succeeding clause (y) (without obtaining favorable votes from any other Person) within six months following the date of the consummation of the first step of such Acquisition transaction, (y) within six months after the date of the consummation of the first step of the Acquisition transaction, the Borrower causes the Person to be acquired to be merged with or into a Wholly-Owned Subsidiary into the Borrower or a Wholly-Owned Subsidiary thereof, as a result of which (at such time) the Acquisition is effected and meets the requirements of clause (i) of the immediately preceding sentence and (z) in the case of any two-step Acquisition transaction as described in this sentence, the Borrower shall establish that all tests required to be met pursuant to this Agreement (including those financial tests required to be met on a Post-Test Period Pro Forma Basis) would be satisfied on the date of the consummation of the first step of the respective Acquisition transaction calculated both (x) based on the Equity Interests actually acquired on such date and the financing therefor and (y) as if the second-step of the Acquisition transaction were actually effected on such date (giving effect to the acquisition of 100% of the Equity Interests in such case and all financing required therefor). "ADDITIONAL ASSET SALE BASKET AMOUNT" has the meaning provided on Part I of Schedule 6.02(c). "ADJUSTED CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of Consolidated EBITDAR to Adjusted Consolidated Fixed Charges for such period. "ADJUSTED CONSOLIDATED FIXED CHARGES" for any period, means the sum of (i) Consolidated Interest Expense, (ii) Consolidated Rent Expense, and (iii) Capital Expenditures made pursuant to Section 6.08(a), in each case for or during (as the case may be) such period; PROVIDED that (subject to adjustments which may be required to be made for Significant Acquisitions and Significant Asset Dispositions occurring after the Effective Date, in the case of determinations of Adjusted Consolidated Fixed Charges or the Adjusted Consolidated Fixed Charge Coverage Ratio being made on the Post-Test Period Pro Forma Basis), Adjusted Consolidated Fixed Charges for the Borrower's fiscal quarters ended December 29, 2001, April 20, 2002 and July 13, 2002 shall be deemed to be $145,444,000, $144,631,000 and $115,870,000, respectively. "ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate. "ADMINISTRATIVE AGENT" means DBTCA, in its capacity as administrative agent for the Lenders hereunder. "ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in a form supplied by the Administrative Agent. "AFFILIATE" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "AGENTS" means the Administrative Agent, the Collateral Agent, each Syndication Agent, each Documentation Agent and, for the purposes of Article VIII only, the Joint Book Managers and the Joint Lead Arrangers. -2- "AGGREGATE GUARANTEE EXCLUSION AMOUNT" at any time means $50,000,000 less the aggregate fair market value of all assets owned by Persons which at such time are not required to become Guarantors by reason of the provisions of clause (ii) of the proviso to the definition of "Guarantee Requirement" contained herein. "AGGREGATE SUPERMAJORITY LENDERS" means those Non-Defaulting Lenders which would constitute "Required Lenders" under, and as defined in, this Credit Agreement if the percentage "50%" contained therein were changed to "66-2/3%". "AGREEMENT" means this Credit Agreement, as modified, supplemented, amended, restated (including any amendment and restatement hereof), extended or renewed from time to time. "ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively. "ALTERNATE CURRENCY" means, with respect to any Letter of Credit, Canadian Dollars, Pounds Sterling and Euros, and any other currency other than Dollars as may be acceptable to the Administrative Agent and the Issuing Lender with respect thereto in their sole discretion. "APPLICABLE COMMITMENT FEE PERCENTAGE" means, for each day, the respective percentage per annum set forth below under column entitled "Applicable Commitment Fee Percentage" and opposite the respective row below indicating the total Revolving Exposure on such day as a percentage of the total Revolving Commitments on such day (with such percentage being indicated by the letter "x"):
APPLICABLE COMMITMENT FEE REVOLVING EXPOSURE ("x") PERCENTAGE ------------------------ ---------- 0% < (or equal to) x < (or equal to) 33.3% 0.750% 33.3% < x < (or equal to) 100% 0.500%
"APPLICABLE PERCENTAGE" means, with respect to any Revolving Lender, the percentage of the total Revolving Commitments represented by such Lender's Revolving Commitment. If the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Revolving Commitments most recently in effect, giving effect to any assignments. "APPLICABLE RATE" for any day during the respective period means (x) with respect to B Term Loans (i) in the case of Eurodollar Term Loans, 2.25% and (ii) in the case of ABR Term Loans, 1.25%, (y) (i) with respect to Incremental Term Loans added to the B Term Loan Class, the respective percentages per annum as provided above in clause (x) and (ii) with -3- respect to any other Class of Incremental Term Loans, the respective percentages per annum relating to the respective Type of such Class of Incremental Term Loans as set forth in the applicable Incremental Term Loan Commitment Agreement (or, in the case of any one such Class of Incremental Term Loans extended pursuant to one Incremental Term Loan Commitment Agreement, as may be provided in the first Incremental Term Loan Commitment Agreement executed and delivered with respect to such Class) and (z) with respect to Revolving Loans and Swingline Loans, the respective percentage per annum set forth below under the appropriate column (determined according to the respective Class of Loans and the total Revolving Exposure on such day as a percentage of the total Revolving Commitments on such day (with such percentage being indicated in the table below by the letter "x")), opposite the respective Level (i.e., Level 1 or Level 2, as the case may be) of the Total Leverage Ratio indicated to have been achieved in the respective officer's certificate delivered as required below:
- ---------------------------------------------------------------------------------------- Eurodollar Eurodollar Eurodollar Revolving Revolving Revolving Total Loans when 0% Loans when Loans when Leverage < (or equal to) x 33.3% < x 66.6% < x Level Ratio < (or equal to) 33.3% < (or equal to) 66.6% < (or equal to) 100% - ---------------------------------------------------------------------------------------- 2 Greater 1.75% 2.00% 2.25% than or equal to 3.50:1.00 - ---------------------------------------------------------------------------------------- 1 Less than 1.50% 1.75% 2.00% 3.50:1.00 - ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------- ABR Revolving ABR Revolving ABR Revolving Loans and Loans and Loans and Swingline Swingline Swingline Total Loans when 0% Loans when Loans when Leverage < (or equal to) x 33.3% < x 66.6% < x Level Ratio < (or equal to) 33.3% < (or equal to) 66.6% < (or equal to) 100% - ----------------------------------------------------------------------------------------------- 2 Greater 0.75% 1.00% 1.25% than or equal to 3.50:1.00 - ----------------------------------------------------------------------------------------------- 1 Less than 0.50% 0.75% 1.00% 3.50:1.00 - -----------------------------------------------------------------------------------------------
, with the Total Leverage Ratio to be determined based on the delivery of a certificate of the Borrower by a Financial Officer of the Borrower to the Administrative Agent (who shall make available to each Lender), within 50 days of the last day of any fiscal quarter of the Borrower (or 95 days in the case of the fiscal year end of the Borrower) (the date of each such delivery, the "Start Date") which certificate shall set forth the calculation of the Total Leverage Ratio as at the last day of the Test Period ended immediately prior to the relevant Start Date (or, if any Significant Acquisition or Significant Asset Disposition has occurred after the last day of such Test Period and prior to the respective Start Date, with the Total Leverage Ratio to be calculated on a Post-Test Period Pro Forma Basis as at the date the last such Significant Acquisition or Significant Asset Disposition was effected, after giving effect thereto) and the Applicable Rates which shall be thereafter applicable (until same are changed or cease to apply in accordance with this definition); PROVIDED that at the time of the consummation of any Significant Acquisition and any Significant Asset Disposition, a Financial Officer of the Borrower shall deliver to the Administrative Agent a certificate setting forth the calculation of the Total Leverage Ratio on a Post-Test Period Pro Forma Basis (with Consolidated Indebtedness to be determined on the date of the consummation of the respective such Significant Acquisition or Significant Asset Disposition, and after giving effect thereto, and with Consolidated EBITDA to be calculated for the Test Period most recently ended prior to the date on which such Significant Acquisition or such Significant Asset Disposition, as the case may be, is consummated for which financial statements have been made available (or were required to be made available) pursuant to Section -4- 5.01(a) or (b), as the case may be), and the date of such consummation shall be deemed to be a Start Date and the Applicable Rates which shall be thereafter applicable (until same are changed or cease to apply in accordance with this definition) shall be based upon the Total Leverage Ratio as so calculated. The Applicable Rates so determined shall apply, except as set forth in the succeeding sentence, from the relevant Start Date to the earlier of (x) the date on which the next certificate is delivered to the Administrative Agent, (y) the date on which the next Significant Acquisition or the next Significant Asset Disposition, as the case may be, is consummated or (z) the date which is 50 (or, in the case of a fiscal year end, 95) days following the last day of the Test Period in which the previous Start Date occurred (such earliest date, the "End Date"), at which time, if no certificate has been delivered to the Administrative Agent indicating an entitlement to new Applicable Rates (and thus commencing a new Start Date), the Applicable Rates shall be those set forth in the table above determined as if the Total Leverage Ratio were greater than 3.50:1.00 and utilization exceeded 66.6% (such Applicable Rates as so determined, the "Highest Applicable Rates"). Notwithstanding anything to the contrary contained above in this definition, the Applicable Rates with respect to Revolving Loans and Swingline Loans shall be (x) at all times prior to the date of delivery of the financial statements pursuant to Section 5.01(b) for the fiscal quarter ending closest to September 30, 2002, (i) 2.00% in the case of Eurodollar Revolving Loans and (ii) 1.00% in the case of ABR Revolving Loans and Swingline Loans and (y) at any time when an Event of Default exists, the Highest Applicable Rates. "ASSET COVERAGE RATIO" means, at any time, the ratio of (i) (x) the consolidated net trade accounts receivable (excluding any such trade accounts receivable sold or transferred to CM Capital pursuant to the Core-Mark Receivables Facility Documents prior to the termination thereof and the repayment of all outstanding amounts thereunder and net of allowances for doubtful accounts) of the Borrower and the Guarantors plus (y) the consolidated net inventory of the Borrower and the Guarantors at such time (valued on a First-in First-out (FIFO) basis), in each case only to the extent the Collateral Agent has a first priority perfected security interest therein (subject to no other Lien other than any statutory Lien on such inventory permitted pursuant to Section 6.01(h), but only if such Lien would not affect in any material respect the value of such inventory or the ability of the Collateral Agent to exercise its rights against such inventory pursuant to the Security Agreement), to (ii) the sum of (x) the aggregate amount of all principal of Loans outstanding at such time plus (y) the total LC Exposure at such time. Notwithstanding anything to the contrary contained in this definition, for the purposes of making determinations of the Asset Coverage Ratio at any time, the Collateral Agent shall not be considered to have a first priority perfected security interest in any Inventory of the Borrower or any Guarantor which is located on real property (i) that the Borrower or the respective Guarantor leases (other than pursuant to an acquired or assumed lease) from a Person (other than the Borrower or any of its Subsidiaries) pursuant to a lease entered into after the Effective Date unless the lessor of such real property has executed and delivered to the Collateral Agent a Landlord-Lender Agreement or (ii) owned by the Borrower or one of its Subsidiaries that is subject to a mortgage (other than an acquired or assumed mortgage) entered into after the Effective Date in favor of a Person (other than the Borrower or any Subsidiary thereof) unless the mortgagee in respect thereof shall have executed and delivered to the Collateral Agent a Mortgagee Agreement. "ASSET DISPOSITION" means (a) any sale, issuance, transfer or other disposition of any Equity Interest of any Subsidiary to any Person other than the Borrower or any -5- Wholly Owned Subsidiary (including, without limitation, through the merger of any Subsidiary with or into any Person other than the Borrower or any Wholly Owned Subsidiary), (b) any sale, transfer or other disposition of any other property or asset of the Borrower or any Subsidiary to any Person other than the Borrower or any Wholly Owned Subsidiary, other than any sale, transfer or other disposition of: (i) any current asset in the ordinary course of business; (ii) any property or assets the subject of a Sale-Leaseback Transaction; (iii) Financing Notes sold in connection with a Permitted Note Sale; (iv) sales pursuant to the Core-Mark Receivables Facility Documents (but only until the date when the trust relating to the Core-Mark Receivables Facility is required to be terminated pursuant to Section 5.09); (v) any property or assets within 180 days after the acquisition, or completion of construction, thereof, to a Person other than the Borrower or a Subsidiary who then leases such property to the Borrower or a Subsidiary; (vi) existing property or assets in consideration (in whole or in part) for the acquisition of new property or assets of a similar character in the ordinary course of business; (vii) inventory in the ordinary course of business; and (viii) any other property or assets in the ordinary course of business if the total consideration received by the Borrower and its Subsidiaries in respect thereof and any property or assets sold concurrently or in a related transaction or series of transactions does not exceed $1,000,000, or (c) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, properties or assets of the Borrower or any Subsidiary where the total consideration received by the Borrower and its Subsidiaries in respect of such event or proceeding, or series of events or proceedings, exceeds $1,000,000. "ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent. "B TERM LOAN" means a Loan made pursuant to paragraph (a) of Section 2.01. "B TERM LOAN COMMITMENT" means, with respect to each Lender, the commitment, if any, of such Lender to make a B Term Loan hereunder on the Effective Date, expressed as an amount representing the maximum principal amount of the B Term Loan to be made by such Lender hereunder, as such commitment may be reduced pursuant to Section 2.09. The initial amount of each Lender's Term Loan Commitment is set forth on Schedule 2.01. The initial aggregate amount of the Lenders' Term Loan Commitments is $425,000,000. "B TERM LOAN MATURITY DATE" means June 18, 2008. "B TERM LOAN SCHEDULED REPAYMENT" has the meaning provided in Section 2.11(a). "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 the Borrower, any of its Subsidiaries or any ERISA Affiliate. -6- "BOARD" means the Board of Governors of the Federal Reserve System of the United States of America. "BORROWER" means Fleming Companies, Inc., an Oklahoma corporation and, after any consummation thereof, the survivor of any Reincorporation Merger. "BORROWER'S KNOWLEDGE" means the knowledge of any executive officer of the Borrower, any other employee of the Borrower charged with the responsibility of administering this Agreement, or any Financial Officer, the General Counsel of the Borrower or any assistant treasurer, associate general counsel or similar officer of the Borrower. "BORROWING" means (a) any group of Loans of the same Class and Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan. "BORROWING REQUEST" means a request by the Borrower for a Borrowing in accordance with Section 2.03. "BUSINESS DAY" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term "Business Day" shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market. "CAPITAL EXPENDITURES" means, with respect to any Person, all expenditures by such Person which should be capitalized in accordance with GAAP and, without duplication, the amount of Capital Lease Obligations incurred by such Person. For purposes of determining compliance with Section 6.08(a), the Borrower and its Subsidiaries shall be deemed to have made Capital Expenditures pursuant to Section 6.08(a) during the Borrower's fiscal quarters ended December 29, 2001, April 20, 2002 and July 13, 2002 in the amounts of $73,712,000, $62,233,000, and $54,846,000, respectively. "CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. "CFC SUBSIDIARY" means any Foreign Subsidiary that is a "controlled foreign corporation" as defined in Section 957(a) of the Code. "CHANGE IN CONTROL" means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) of shares representing 35% or more of the aggregate ordinary voting power represented by the issued and outstanding capital stock (or equivalent equity interests) of the Borrower; (b) the occupation at any time of a majority of the seats (other than vacant seats) -7- on the board of directors of the Borrower by Persons who were neither (i) nominated by the board of directors of the Borrower (determined on the Effective Date) nor (ii) appointed by directors so nominated; or (c) any "change of control" or similar event shall occur under any of the Existing Note Documents, the New Senior Notes or any agreement or instrument evidencing or relating to any Indebtedness in an aggregate principal amount in excess of $25,000,000. "CHANGE IN LAW" means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or any Issuing Lender (or, for purposes of Section 2.16(b), by any lending office of such Lender or by such Lender's or such Issuing Lender's holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. "CHOUTEAU" means Chouteau Development Company LLC, an Oklahoma limited liability company. "CITI" means Citicorp North America, Inc., in its individual capacity. "CLASS", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, B Term Loans, Swingline Loans or, after the extension of any Incremental Term Loans, one or more additional classes of Term Loans as designated pursuant to the relevant Incremental Term Loan Commitment Agreement in accordance with Section 2.05 and, when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment, a B Term Loan Commitment or, after the extension of any Incremental Term Loan Commitments, the respective class of Incremental Term Loan Commitments as designated pursuant to the relevant Incremental Term Loan Commitment Agreement in accordance with Section 2.05. "CM CAPITAL" means CM Capital Corporation, a Delaware corporation. "CODE" means the Internal Revenue Code of 1986, as amended from time to time. "COLLATERAL" means any and all "Collateral", as defined in the Security Documents. "COLLATERAL AGENT" has the meaning ascribed to it in the Security Agreement. "COLLATERAL REQUIREMENT" means at any date that (a) the Pledge Agreement creates in favor of the Collateral Agent, for the benefit of the Lenders, first priority perfected pledges of and security interests in all Equity Interests owned by the Borrower or any Guarantor, and (b) the Security Agreement (together with all Uniform Commercial Code financing statements actually filed) creates in favor of the Collateral Agent, for the benefit of the Secured Creditors, first priority perfected security interests in Inventory and accounts receivable (and Related Collateral and Proceeds as required by, and defined in, the Security Agreement) of the Borrower and each Guarantor representing at least 95% of the consolidated Inventory and -8- accounts receivable of the Borrower and its Subsidiaries; PROVIDED, that (i) the Borrower and the Subsidiaries will not be required at any time prior to the fifth Business Day after the termination of the Core-Mark Receivables Facility (which shall occur within the time frame contemplated in Section 4.01(n)), in order to satisfy the Collateral Requirement, to subject to the Lien of the Security Agreement Inventory, accounts receivable or related assets transferred to CM Capital pursuant to the Core-Mark Receivables Facility and/or subject to the security interests created pursuant to the Core-Mark Receivables Facility, (ii) the Borrower and the Guarantors shall not be required to pledge Equity Interests of entities in which they collectively hold a 50% or less equity interest so long as the fair market value of any and all such Equity Interests not pledged pursuant to this clause (ii) does not exceed $10 million in the aggregate, (iii) unless there has been a Change of Law as a result of which the granting of the pledge of more than 66-2/3% of the voting Equity Interest of a Foreign Subsidiary will not give rise to adverse "deemed dividend" tax consequences to the Borrower under Section 956 of the Code, then not more than 65% of the outstanding voting Equity Interests (plus 100% of the non-voting Equity Interests) of any CFC Subsidiary held directly by the Borrower or any Domestic Subsidiary shall be required to be pledged to the Collateral Agent pursuant to the Pledge Agreement and (iv) the Borrower and its Subsidiaries shall not be required to pledge any of the Equity Interests of Chouteau so long as Chouteau is not treated as a Subsidiary pursuant to the proviso contained in the first sentence of the definition thereof. For the purposes of making determinations as to whether the Collateral Requirement has been met at any time, the Collateral Agent shall not be considered to have a first priority perfected security interest in any Inventory of the Borrower or any Guarantor which is located on real property (i) that the Borrower or the respective Guarantor leases (other than pursuant to an acquired or assumed lease) from a Person (other than the Borrower or any of its Subsidiaries or a landlord in respect of a retail location) pursuant to a lease entered into after the Effective Date unless the lessor of such real property has executed and delivered to the Collateral Agent a Landlord-Lender Agreement or (ii) owned by the Borrower or one of its Subsidiaries that is subject to a mortgage (other than an acquired or assumed mortgage) entered into after the Effective Date in favor of a Person (other than the Borrower or any Subsidiary thereof) unless the mortgagee in respect thereof shall have executed and delivered to the Collateral Agent a Mortgagee Agreement. "COMMITMENT" means a Revolving Commitment, B Term Loan Commitment or Incremental Term Loan Commitment or any combination thereof (as the context requires). "COMMON EQUITY FINANCING" has the meaning provided in Section 4.01(k). "COMMON EQUITY FINANCING DOCUMENTS" means each of the documents and agreements entered into in connection with the consummation of the Common Equity Financing. "CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income for such period plus, without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) federal, state, local and foreign income, value added and similar tax expense, (b) Consolidated Interest Expense, (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, and amortization and/or impairment charges with respect to -9- goodwill and other intangible assets, and (e) any extraordinary, unusual or non-recurring expenses or losses except for the amount of cash payments made in respect of such expenses or losses in the respective period in which such charge was taken, and minus, to the extent included in the statement of such Consolidated Net Income for such period, the sum of (a) any extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period), (b) any net gains on sales of assets (other than (x) sales of inventory and worn-out or obsolete equipment, in each case made in the ordinary course of business and (y) sales of other assets made in the ordinary course of business; PROVIDED that the aggregate amount of gains excluded pursuant to clause (y) of this parenthetical for any Test Period shall not exceed 2% of Consolidated EBITDA (determined without giving effect to any exclusions pursuant to this clause (y)) for such Test Period), (c) any other non-cash income (other than accruals made in the ordinary course of business), all as determined on a consolidated basis and (d) any cash payment made during such period associated with any non-cash charge, or any extraordinary, unusual or non-recurring expense or loss, in each case taken in a prior period to the extent such non-cash charge, or extraordinary, unusual or non-recurring expense or loss, was added back to the calculation of Consolidated EBITDA in such prior period; PROVIDED that (subject to adjustments which may be required to be made for Significant Acquisitions and Significant Asset Dispositions occurring after the Effective Date, in the case of determinations of Consolidated EBITDA being made on a Pro Forma Basis or Post-Test Period Pro Forma Basis), Consolidated EBITDA for the Borrower's fiscal quarters ended December 29, 2001, April 20, 2002 and July 13, 2002 shall be deemed to be $148,600,000, $158,200,000 and $153,600,000, respectively. "CONSOLIDATED EBITDAR" means, for any period, Consolidated EBITDA for such period plus, to the extent deducted in determining such Consolidated EBITDA (i.e., deducted in determining Consolidated Net Income for such period and not added back pursuant to the definition of Consolidated EBITDA), Consolidated Rent Expense for such period; PROVIDED that (subject to adjustments which may be required to be made for Significant Acquisitions and Significant Asset Dispositions occurring after the Effective Date, in the case of determinations of Consolidated EBITDAR, the Consolidated Fixed Charge Coverage Ratio or the Adjusted Consolidated Fixed Charge Coverage Ratio being made on a Post-Test Period Pro Forma Basis), Consolidated EBITDAR for the Borrower's fiscal quarters ended December 29, 2001, April 20, 2002 and July 13, 2002 shall be deemed to be $175,800,000, $181,100,000 and $170,000,000, respectively. "CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means for any period, the ratio of Consolidated EBITDAR to Consolidated Fixed Charges for such period. "CONSOLIDATED FIXED CHARGES" for any period, means, the sum of (i) Consolidated Interest Expense and (ii) Consolidated Rent Expense in each case for such period; PROVIDED that (subject to adjustments which may be required to be made for Significant Acquisitions and Significant Asset Dispositions occurring after the Effective Date, in the case of determinations of Consolidated Fixed Charges or the Consolidated Fixed Charge Coverage Ratio being made on a Post-Test Period Pro Forma Basis), Consolidated Fixed Charges for the Borrower's fiscal quarters ended December 29, 2001, April 20, 2002 and July 13, 2002 shall be deemed to be $71,732,000, $82,398,000 and $61,024,000, respectively. -10- "CONSOLIDATED INDEBTEDNESS" means, at any time, the sum of (without duplication) (x) all Indebtedness of the Borrower and its Subsidiaries as would be required to be reflected on the liability side of a balance sheet of such Person at such time in accordance with GAAP as determined on a consolidated basis and (y) all Indebtedness of the Borrower and its Subsidiaries of the type described in clauses (ii) (other than arising from surety bonds), (iv) and (vii) of the definition of Indebtedness contained herein; provided that for purposes of this definition (i) the amount of Indebtedness in respect of Hedging Agreements shall be at any time the unrealized net loss position, if any, of the Borrower and/or its Subsidiaries thereunder on a marked-to-market basis determined no more than 45 days prior to such time, (ii) the amount of Indebtedness in respect of any Synthetic Lease Obligation shall be the amount thereof which would have been reflected if same were structured as balance sheet Indebtedness and (iii) the amount of Indebtedness in respect of letters of credit, bankers' acceptances and similar obligations shall be limited to the aggregate amount of all funded letters of credit, bankers' acceptances and similar obligations issued or extended for the account of the Borrower or any of its Subsidiaries that have not been reimbursed by the Borrower or any of its Subsidiaries. "CONSOLIDATED INTEREST EXPENSE" means, for any period, the gross interest expense of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP. "CONSOLIDATED NET INCOME" means, for any period, the net income or loss of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, PROVIDED that (i) the net income of any other Person which is not a Subsidiary of the Borrower or is accounted for by the Borrower by the equity method of accounting shall be included only to the extent of the payment of cash dividends or cash distributions by such other Person to the Borrower or a Subsidiary thereof during such period, (ii) the net income of any Subsidiary of the Borrower shall be excluded to the extent that the declaration or payment of cash dividends or similar cash distributions by that Subsidiary of that net income is not at the date of determination permitted by operation of its charter or any agreement, instrument or law applicable to such Subsidiary and (iii) to the extent Consolidated Net Income reflects amounts attributable to minority interests in Subsidiaries, Consolidated Net Income shall be reduced by the amounts attributable to such minority interests and (iv) there shall be excluded the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any of the Subsidiaries or the date that Person's assets are acquired by the Borrower or any of the Subsidiaries. "CONSOLIDATED RENT EXPENSE" means, for any period, the rent expense (net of sub-lease income) of the Borrower and its Subsidiaries for such period for leases of real and personal property, determined on a consolidated basis in accordance with GAAP (excluding any such expense that is included in Consolidated Interest Expense for such period). "CONSOLIDATED SENIOR INDEBTEDNESS" means, at any time the remainder of (x) Consolidated Indebtedness at such time less (y) the sum of (i) the aggregate principal amount of Subordinated Notes outstanding at such time, (ii) all Later Maturing Indebtedness incurred pursuant to Section 6.03(a)(iv) (in each case, to the extent same are reflected in Consolidated Indebtedness at such time), (iii) all Later Maturing Indebtedness, which is subordinated Indebtedness, incurred pursuant to Section 6.03(a)(xii) to refinance theretofore -11- outstanding Indebtedness as described in this clause (y) and (iv) other unsecured subordinated Indebtedness of the Borrower (which may be Guaranteed on a subordinated basis by the Guarantors) consented to by (and the terms of which (including, without limitation, the subordination provisions) are satisfactory to) the Administrative Agent. "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 as of such date. "CONTROL" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. A Person shall be deemed to "Control" another Person if such Person directly or directly owns more than 15% of any class of capital stock (or equivalent equity interests) in such Person or such Person is a director, executive officer or general partner of such Person. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto. "CORE-MARK" means Core-Mark International, Inc., a Delaware corporation. "CORE-MARK BOND INDENTURE" means the Indenture, dated as of September 27, 1996, between Core-Mark and Bankers Trust Company, as Trustee, as in effect on Effective Date. "CORE-MARK BONDS" means the 11-3/8% Senior Subordinated Notes due 2003 of Core-Mark. "CORE-MARK EXISTING CREDIT AGREEMENT" means the Amended and Restated Credit Agreement among Core-Mark, the several lenders from time to time parties thereto and The Chase Manhattan Bank (now known as JPMorgan Chase Bank), as Administrative Agent, dated as of April 1, 1998. "CORE-MARK RECEIVABLES FACILITY" means that certain receivables facility and trust evidenced by the Core-Mark Receivables Master Trust Pooling Agreement, dated as of April 1, 1998, among CM Capital, Core-Mark, and The Chase Manhattan Bank (now known as JPMorgan Chase Bank), as Trustee on behalf of the holders of the certificates referred to therein. "CORE-MARK RECEIVABLES FACILITY DOCUMENTS" means each of the documents evidencing or relating to the Core-Mark Receivables Facility. "CUSTOMER SUPPORT" means Investments made by the Borrower and its Subsidiaries in the ordinary course of business consistent with past practices in the form of (i) purchases of outstanding Equity Interests of, or capital contributions to, customers of the Borrower and its Subsidiaries, (ii) loans (including without limitation Financing Notes and Forgiveness Notes) and advances to, and unsecured Guarantees supporting obligations of, such customers and (iii) leases entered into by the Borrower and its Subsidiaries on behalf of, or for the purpose of subletting to, any such customers (it being understood that leases or sub-leases to customers of property not acquired or leased by the Borrower or its Subsidiaries in -12- contemplation of leasing or sub-leasing same to customers shall not constitute Customer Support), (iv) conversions of accounts receivable of the Borrower and its Subsidiaries into notes receivables or other long term payment obligations and (v) any residual liability of the Borrower and any of its Subsidiaries in connection with any Permitted Note Sale. "DBSI" means Deutsche Bank Securities Inc., in its individual capacity. "DBTCA" means Deutsche Bank Trust Company Americas, in its individual capacity. "DEFAULT" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. "DEFAULTING LENDER" means any Lender with respect to which a Lender Default is in effect. "DEPARTING LENDER" has the meaning provided in Section 2.20(b). "DIVIDEND" means, with respect to any Person, that such Person has declared or paid a dividend, distribution or returned any equity capital to its stockholders, partners or members or authorized or made any other distribution, payment or delivery of property (other than common equity or Qualified Preferred Stock of such Person) or cash to its stockholders, partners or members as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration any Equity Interests outstanding on or after the Effective Date (or any options or warrants issued by such Person with respect to its Equity Interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration any Equity Interests of such Person outstanding on or after the Effective Date (including any options or warrants issued by such Person with respect to its Equity Interests). Without limiting the foregoing, "Dividends" with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, stock appreciation plans, equity incentive or equity achievement plans or any similar plans or setting aside of any funds for the foregoing purposes, except that such payments shall not constitute Dividends to the extent, and only to the extent, the respective such payment has actually reduced Consolidated Net Income. "DOCUMENTATION AGENT" means each of Lehman and Wachovia, each in its capacity as documentation agents under this Agreement. "DOLLAR EQUIVALENT" of an amount denominated in an Alternate Currency means, at any time for the determination thereof, the amount of Dollars which could be purchased with the amount of the Alternate Currency involved in such computation at the spot exchange rate therefor as quoted by the Administrative Agent as of 11:00 a.m. (New York time) on the date two Business Days prior to the date of any determination thereof for purchase on such date, PROVIDED that the Dollar Equivalent of any unpaid drawing under a Letter of Credit expressed in an Alternate Currency shall be determined at the time the drawing under the related Letter of Credit was paid or disbursed by the Issuing Lender, PROVIDED FURTHER, that for purposes of (x) determining compliance with Sections 2.01(c), 2.06(b) and 2.12(h) and (y) -13- calculating fees pursuant to Section 2.13(b), the Dollar Equivalent of any amounts denominated in an Alternate Currency shall be revalued on a monthly basis using the spot exchange rates therefor as shown in The Wall Street Journal (or, if same does not provide such exchange rates, on such other basis as is satisfactory to the Administrative Agent) on the last Business Day of each calendar month, PROVIDED, HOWEVER, that at any time during a calendar month, if the Revolving Exposure (for the purposes of the determination thereof, using the Dollar Equivalent as recalculated based on the spot exchange rate therefor as shown in The Wall Street Journal (or, if same does not provide such exchange rates, on such other basis as is satisfactory to the Administrative Agent) on the respective date of determination pursuant to this exception) would exceed 85% of the total Revolving Commitments or if any Specified Default is in existence, then at the discretion of the Administrative Agent or at the request of the Required Lenders, the Dollar Equivalent shall be reset based upon the spot exchange rates on such date as shown in The Wall Street Journal (or, if same does not provide such exchange rates, on such other basis as is satisfactory to the Administrative Agent), which rates shall remain in effect until the first Business Day of the then immediately succeeding calendar month or such earlier date, if any, as the rate is reset pursuant to this proviso. "DOMESTIC SUBSIDIARY" means, as to any Person, any Subsidiary of such Person that is incorporated under the laws of the United States of America, any State thereof, the District of Columbia, the United States Virgin Islands or Puerto Rico. "EFFECTIVE DATE" means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02). "ELIGIBLE TRANSFEREE" means and includes a commercial bank, an insurance company, a finance company, a financial institution, any fund that invests in loans or any other "accredited investor" (as defined in Regulation D of the Securities Act of 1933, as amended) other than an individual Person, but in any event excludes the Borrower and its Subsidiaries. "ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters. "ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. "EQUITY INTERESTS" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however -14- designated) equity of such Person, including any preferred stock, any limited or general partnership interest and any limited liability company membership interest. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA AFFILIATE" means any trade or business (whether or not incorporated) that, together with the Borrower or any of its Subsidiaries, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. "EURODOLLAR" means, with respect to any Loan or Borrowing, any Loan or Borrowing that bears interest at a rate determined by reference to the Adjusted LIBO Rate. "EVENT OF DEFAULT" has the meaning provided in Article VII. "EXCEPTED DEFAULT" means any Default or Event of Default under, and as defined in, the 10-5/8% Senior Subordinated Note Indentures arising solely as a result of outstanding Indebtedness of Core-Mark under the Core-Mark Receivables Facility Documents; PROVIDED no such Default or Event of Default shall constitute an Excepted Default hereunder at any time after the earlier of (x) the 45th day following the Effective Date and (y) the date when the Trustee under either 10-5/8% Senior Subordinated Note Indenture or holders of 10-5/8% Senior Subordinated Notes accelerate any amounts payable in respect of the 10-5/8% Senior Subordinated Notes or otherwise take any enforcement action in respect of the 10-5/8% Senior Subordinated Notes or under either 10-5/8% Senior Subordinated Note Indenture. "EXCLUDED TAXES" means, with respect to the Administrative Agent, any Lender, any Issuing Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) the Administrative Agent, any Lender, any Issuing Lender or any other recipient's, as the case may be, net income by (i) the jurisdiction (or any political subdivision thereof), in each case, under the laws of which such recipient is organized or (ii) the jurisdiction (or any political subdivision thereof), in each case in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.20(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) to the extent such Foreign Lender fails to provide the forms required to be provided by Section 2.18(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled solely on account of a change, after the date on which such Foreign Lender became a party to this Agreement, in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of such withholding tax to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.18(a), at the time of designation of a new lending office (or assignment). -15- "EXISTING CREDIT AGREEMENTS" means each of the Core-Mark Existing Credit Agreement and the Fleming Existing Credit Agreement. "EXISTING NOTE DOCUMENTS" means the (i) 5-1/4% Convertible Senior Subordinated Note Documents, (ii) 9-7/8% Senior Subordinated Note Documents, (iii) 10-5/8% Senior Subordinated Note Documents and (iv) 10-1/8% Senior Note Documents. "Existing Note Indentures" means (i) the 5-1/4% Convertible Senior Subordinated Note Indenture, (ii) the 9-7/8% Senior Subordinated Note Indenture, (iii) the 10-5/8% Senior Subordinated Note Indentures and (iv) the 10-1/8% Senior Note Indenture. "EXISTING NOTES" means the (i) 5-1/4% Convertible Senior Subordinated Notes, (ii) 9-7/8% Senior Subordinated Notes, (iii) 10-5/8% Senior Subordinated Notes and (iv) 10-1/8% Senior Notes. "FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent. "FINANCIAL OFFICER" means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower. "FINANCING NOTES" means notes receivable arising from investments in retailer notes or chattel paper (other than any retailer note or chattel paper received by the Borrower and its Subsidiaries in exchange or substitution for or in payment or other satisfaction of any Account). "5-1/4% CONVERTIBLE SENIOR SUBORDINATED NOTE DOCUMENTS" means the 5-1/4% Convertible Senior Subordinated Note Indenture, the 5-1/4% Convertible Senior Subordinated Notes and any guarantees thereof executed and delivered with respect to the 5-1/4% Convertible Senior Subordinated Notes and the 5-1/4% Convertible Senior Subordinated Note Indenture, as in effect on the Effective Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. "5-1/4% CONVERTIBLE SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture, dated as of March 15, 2001, among the Borrower, the Subsidiary Guarantors named therein and Bank One, N.A., as Trustee, as in effect on the Effective Date and as thereafter amended, modified or supplemented from time to time. "5-1/4% CONVERTIBLE SENIOR SUBORDINATED NOTES" means the Borrower's 5-1/4% Convertible Senior Subordinated Notes due 2009, issued pursuant to the 5-1/4% Convertible Senior Subordinated Note Indenture. -16- "FLEMING EXISTING CREDIT AGREEMENT" means the Credit Agreement dated as of July 25, 1997 among the Borrower, the lenders party thereto, BancAmerica Securities, Inc., as Syndication Agent, Societe Generale, as Documentation Agent and The Chase Manhattan Bank (now known as JPMorgan Chase Bank), as Administrative Agent, as in effect on the Effective Date and immediately prior to the termination thereof. "FOREIGN LENDER" means any Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code). "FOREIGN SUBSIDIARY" means, as to any Person, any Subsidiary of such Person which is not a Domestic Subsidiary. "FORGIVENESS NOTES" means promissory notes received by the Borrower or any Subsidiary from customers, with the expectation that all or portions of such promissory note shall be forgiven over time based upon the volume of purchases actually made by the respective customer. "GAAP" means generally accepted accounting principles in the United States of America. "GOVERNMENTAL AUTHORITY" means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "GRANTOR" means the Borrower and each Subsidiary that is, or is required by Section 5.08 to be, a party to the Pledge Agreement or the Security Agreement. "GUARANTEE" by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take or pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), PROVIDED that the term Guarantee shall not include (a) endorsements for collection or deposit in the ordinary course of business or (b) agreements entered into in the ordinary course of business to purchase inventory or retail store fixtures of another Person at a price not greater than the market value thereof. The term "Guarantee" used as a verb has a corresponding meaning. "GUARANTEE AGREEMENT" means a Guarantee Agreement in substantially the form of Exhibit B hereto among the Guarantors and the Administrative Agent acting on behalf of the Lenders, as the same may be amended, modified or supplemented from time to time in accordance with the provisions hereof. -17- "GUARANTEE REQUIREMENT" means at any date that (a) all Wholly Owned Subsidiaries are Guarantors and (b) the assets of the Guarantors, together with the assets of the Borrower, constitute as of the last day of the most recently ended fiscal quarter of the Borrower at least 95% of the consolidated total assets of the Borrower and its Subsidiaries; PROVIDED that (i) CM Capital shall not be required to be a Guarantor, so long as CM Capital's activities are limited to those incident to the Core-Mark Receivables Facility, until five Business Days after the earlier of (x) the 180th day following the Effective Date and (y) the date of termination of the Core-Mark Receivables Facility and repayment of outstanding amounts thereunder, (ii) no CFC Subsidiary of the Borrower or of any of its Subsidiaries shall be required to be a Guarantor unless there has been a Change of Law as a result of which the execution and delivery by it of the Guarantee Agreement will not give rise to adverse "deemed dividend" tax consequences to the Borrower under Section 956 of the Code and (iii) other Subsidiaries of the Borrower that own assets (including without limitation any amounts owed to it by the Borrower and its other Subsidiaries) with an aggregate fair market value (or, if greater, the face amount of any amounts owed to it by the Borrower and its other Subsidiaries) which is equal to or less than the Aggregate Guarantee Exclusion Amount at such time shall not be required to be Guarantors unless the aggregate fair market value (or, if greater, the face amount of any amounts owed to it by the Borrower and its other Subsidiaries) of all assets (including without limitation any amounts owed to it by the Borrower and its other Subsidiaries) of all such Subsidiaries exceeds the Aggregate Guarantee Exclusion Amount at such time, in which case one or more such Subsidiaries shall be required to become Guarantors so that such threshold is not exceeded. For the avoidance of doubt, it is understood that the assets of Subsidiaries which are not required to become Guarantors by reason of the proviso (excluding clause (i)) to the immediately preceding sentence shall nonetheless be included in determining the consolidated total assets of the Borrower and its Subsidiaries for purposes of determining whether Subsidiaries other than those expressly excluded pursuant to said proviso must become Guarantors pursuant to clause (b) of the immediately preceding sentence. Notwithstanding anything to the contrary contained above in this definition, all Subsidiaries of the Borrower that have provided, or are required to provide, a guarantee of any Indebtedness under any of the Existing Note Documents, the New Senior Note Documents, any Indebtedness incurred pursuant to Sections 6.03(a)(iv) and (a)(v) or any refinancing (or successive refinancing) of any of the foregoing shall be required, on or prior to the date such guarantee of such other Indebtedness is provided, to be a Guarantor hereunder. Except as expressly provided otherwise, for purposes of this definition, assets shall be taken at their net book value. "GUARANTORS" means the Subsidiaries listed on Schedule 3.09 hereto and each other Subsidiary that becomes party to the Guarantee Agreement pursuant to Section 5.08 or otherwise (in each case, unless and until released as a Guarantor from the Guarantee Agreement), PROVIDED, that for purposes of the definition of "Guarantee Requirement", a Subsidiary that is an indirect Subsidiary of the Borrower shall not be considered a Guarantor unless each intermediate Subsidiary is also a Guarantor. "HAZARDOUS MATERIALS" means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law. -18- "HEDGING AGREEMENT" means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement. The "principal amount" or "termination value" of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time. "INCREMENTAL TERM LOAN" means a Loan made pursuant to clause (b) of Section 2.01. "INCREMENTAL TERM LOAN BORROWING DATE" means, with respect to each class of Incremental Term Loans, each date on which Incremental Term Loans of such class are incurred pursuant to Section 2.01(b) and the relevant Incremental Term Loan Commitment Agreement. "INCREMENTAL TERM LOAN COMMITMENT" means, for each Lender, any commitment to make Incremental Term Loans provided by such Lender pursuant to this Agreement, in such amount as agreed to by such Lender in the respective Incremental Term Loan Commitment Agreement and as set forth opposite such Lender's name in Schedule 2.01 directly below the column entitled "Incremental Term Loan Commitment", as the same may be (x) reduced from time to time or terminated pursuant to Sections 2.09 and/or Article VII or (y) adjusted from time to time as a result of assignments to and from such Lender pursuant to Section 9.04. "INCREMENTAL TERM LOAN COMMITMENT AGREEMENT" means each Incremental Term Loan Commitment Agreement in the form of Exhibit C executed in accordance with Section 2.05. "INCREMENTAL TERM LOAN COMMITMENT TERMINATION DATE" means, with respect to any class of Incremental Term Loans, the last date by which Incremental Term Loans under such class may be incurred under this Agreement, which date shall be set forth in the respective Incremental Term Loan Commitment Agreement but may be no later than the Revolving Loan Maturity Date. "INCREMENTAL TERM LOAN LENDER" has the meaning provided in Section 2.05(b). "INCREMENTAL TERM LOAN MATURITY DATE" means, for any class of Incremental Term Loans, the final maturity date set forth for such class of Incremental Term Loans in the respective Incremental Term Loan Commitment Agreement relating thereto, provided that the final maturity date for all Incremental Term Loans of a given class shall be the same date. "INCREMENTAL TERM LOAN SCHEDULED REPAYMENT" has the meaning provided in Section 2.11(b). -19- "INDEBTEDNESS" means, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money and all obligations of such Person for the deferred purchase price of property or services, (ii) the maximum amount available to be drawn under all surety bonds, letters of credit, bankers' acceptances and similar obligations issued for the account of such Person and all unpaid drawings or unreimbursed payments in respect of such surety bonds, letters of credit, bankers' acceptances and similar obligations, (iii) all Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any Lien on any property owned by such Person, whether or not such Indebtedness has been assumed by such Person (provided that, if the Person has not assumed or otherwise become liable in respect of such Indebtedness, such Indebtedness shall be deemed to be in an amount equal to the lesser of the aggregate amount of such Indebtedness and the fair market value of the property to which such Lien relates as determined in good faith by such Person), (iv) all Capital Lease Obligations and Synthetic Lease Obligations of such Person, (v) all obligations of such Person to pay a specified purchase price for goods or services even if such goods or services are not delivered or accepted, i.e. take-or-pay and similar obligations, (vi) all Guarantees of such Person and (vii) all obligations under any Hedging Agreement or under any similar type of agreement. Notwithstanding the foregoing, Indebtedness shall not include trade payables and accrued expenses incurred by any Person in accordance with customary practices and in the ordinary course of business of such Person. "INDEMNIFIED TAXES" means Taxes other than Excluded Taxes. "INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months' duration, each day of such Interest Period that occurs at intervals of three months' duration after the first day of such Interest Period, and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid. "INTEREST PERIOD" means (a) except with respect to one week Interest Periods, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months (or, if each Lender shall make interest periods of such duration available, nine or twelve months) thereafter, as the Borrower may elect and (b) with respect to any one week Interest Period, the period commencing on the date of such Borrowing and ending on the corresponding day on the following calendar week; PROVIDED, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) (except in the case of Eurodollar Borrowings with one-week interest periods), any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing. -20- "INVENTORY" has the meaning assigned to such term in the Security Agreement. "INVESTMENT" means any investment in any Person, whether by means of share purchase, capital contribution, loan, Guarantee, time deposit or otherwise; PROVIDED that Accounts arising in the ordinary course of business do not constitute Investments. "ISSUING LENDERS" means each of (i) DBTCA, JPMorgan Chase and Citi in their respective capacity as issuers of Letters of Credit hereunder, (ii) with respect to any Rolled-In Letters of Credit, the respective Lender that is the issuer thereof and (iii) any other Lender reasonably acceptable to the Administrative Agent which agrees to issue Letters of Credit hereunder and, in each case, their respective successors in such capacity as provided in Section 2.06(i); PROVIDED that as of the Effective Date and until such time as it agrees otherwise, DBTCA shall not be the Issuing Lender with respect to any trade Letter of Credit. Any Issuing Lender may, in its discretion, arrange for one or more Letters of Credit to be issued by one or more Affiliates of such Issuing Lender, PROVIDED, in each case, that the Borrower does not reasonably object based on such Affiliate's creditworthiness, and the term "Issuing Lender" shall include any such Affiliate with respect to Letters of Credit issued by it. "JOINT BOOK MANAGERS" means DBSI and JPMSI in their capacity as such hereunder. "JOINT LEAD ARRANGERS" means DBSI, JPMSI and SSBI in their capacity as such hereunder. "JPMORGAN CHASE" means JPMorgan Chase Bank, in its individual capacity. "JPMSI" means J.P. Morgan Securities Inc., in its individual capacity. "LANDLORD-LENDER AGREEMENT" means an agreement whereby a lessor of real property (i) waives any and all statutory and all other Liens it may have against any Inventory located at such real property and (ii) grants access rights to such real property to the Collateral Agent and its designees to inspect or remove any Inventory located at such real property in connection with the exercise of any of its rights pursuant to the Security Agreement or protecting the Inventory located on such real property. "LATER MATURING INDEBTEDNESS" means unsecured Indebtedness of the Borrower incurred after the date hereof that (i) has a final maturity at least six months after the latest Maturity Date then in effect and no portion of which is subject to any scheduled principal payments or any mandatory repayment or repurchase at the option of the holders thereof or otherwise prior to such time (other than required offers to purchase (x) as a result of a change in control (in no event to be defined any way which is more expansive than the definition of "Change in Control" contained in the New Senior Note Indenture) of the Borrower or (y) as a result of asset sales, pursuant to asset sale and offer to purchase provisions which are no more expansive than those contained in the New Senior Note Indenture) and (ii) contains no defaults or covenants more restrictive to the Borrower or any Subsidiary in any material respect than those contained in the New Senior Note Documents, except to the extent acceptable to the -21- Administrative Agent and reflective of then prevailing market conditions for public issuances of senior or subordinated debt securities, as the case may be. "LC DISBURSEMENT" means a payment made by any Issuing Lender pursuant to a Letter of Credit. "LC EXPOSURE" means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time (calculated taking the Dollar Equivalent of any then outstanding Letter of Credit denominated in an Alternate Currency) plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time. "LC SUPPORTABLE OBLIGATIONS" means (i) obligations of the Borrower and its Subsidiaries with respect to workers compensation, surety bonds and other similar obligations and (ii) such other obligations of the Borrower or any of its Subsidiaries as are incurred in the ordinary course of business (but in any event not any obligations under the Existing Note Documents, the New Senior Note Documents or any Later Maturing Indebtedness). "LEHMAN" means Lehman Commercial Paper Inc., in its individual capacity. "LENDER DEFAULT" means (i) the wrongful refusal (which has not been cured) of a Lender to make available its portion of any Borrowing or to fund its portion of any unreimbursed payment under Section 2.06(e) or (ii) a Lender having notified (and not retracted) in writing the Borrower and/or the Administrative Agent that such Lender does not intend to comply with its obligations under Section 2 in circumstances where such non-compliance would constitute a breach of such Lender's obligations under such Section. "LENDERS" means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance. Unless the context otherwise requires, the term "Lenders" includes the Swingline Lender. "LETTER OF CREDIT" means any letter of credit issued pursuant to this Agreement (including any Rolled-In Letter of Credit). "LETTER OF CREDIT REQUEST" has the meaning provided in Section 2.06(b). "LIBO RATE" means, with respect to any Eurodollar Borrowing for any Interest Period, the rate (rounded upwards, if necessary, to the next 1/16% of 1%) appearing on the LIBO Page of the Reuters Information Service (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at -22- such time for any reason, then the "LIBO RATE" with respect to such Eurodollar Borrowing for such Interest Period shall be the rate (rounded upwards, if necessary, to the next 1/16% of 1%) at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. "LIEN" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. "LOAN DOCUMENTS" means this Agreement, the Guarantee Agreement and the Security Documents. "LOAN PARTIES" means the Borrower and the Guarantors. "LOANS" means the loans made by the Lenders to the Borrower pursuant to this Agreement. "LOCATION" of any Person means such Person's "location" as determined pursuant to Section 9-307 of the Uniform Commercial Code of the State of New York. "MAJORITY LENDERS" of any Class means those Non-Defaulting Lenders which would constitute the Required Lenders under, and as defined in, this Agreement if all outstanding Obligations of the other Classes under this Agreement were repaid in full and all Commitments with respect thereto were terminated. "MARGIN STOCK" has the meaning provided in Regulation U. "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the business, properties, assets, operations, liabilities, prospects or condition (financial or otherwise) of the Borrower and the Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform its obligations under any Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document. It is understood and agreed that Kmart Corporation's filing under Chapter 11 of the United States Code entitled "Bankruptcy" as disclosed in the Borrower's Form 10-K for its fiscal year ended December 29, 2001 does not, in and of itself, constitute a Material Adverse Effect, although any adverse change or effect after the Effective Date resulting therefrom will be considered in determining whether a Material Adverse Effect has occurred. "MATERIAL PLAN" means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $15,000,000. "MATURITY DATE" means the Term Loan Maturity Date, each Incremental Term Loan Maturity Date or the Revolving Maturity Date, as the case may be. -23- "MERGER" means the merger of Platform Corporation into Core-Mark with Core-Mark being the Survivor as a wholly-owned direct Subsidiary of the Borrower, all in accordance with the Merger Agreement. "MERGER AGREEMENT" means that certain Agreement and Plan of Merger made and entered into as of April 23, 2002 by and among Core-Mark, the Borrower and Platform Corporation, a Delaware corporation and Wholly Owned Subsidiary of the Borrower. "MERGER DOCUMENTS" means the Merger Agreement and all other documents relating to the Merger. "MINIMUM REQUIRED COMMITMENT AMOUNT" has the meaning provided in Section 6.06. "MOODY'S" means Moody's Investors Service, Inc. "MORTGAGEE AGREEMENT" means an agreement whereby a mortgagee of real property (i) waives any and all statutory and other Liens it may have against any Inventory located at such real property and (ii) grants access rights to such real property to the Collateral Agent and its designees to inspect or remove any Inventory located at such real property in connection with the exercise of any of its rights pursuant to the Security Agreement or protecting the Inventory located on such real property. "MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "NET PROCEEDS" means, with respect to any event (a) the cash proceeds received by the Borrower and the Subsidiaries in respect of such event including (i) any cash received in respect of any non-cash proceeds, but only as and when received, (ii) in the case of a casualty, insurance proceeds, and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and the Subsidiaries to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale or other disposition of an asset (including pursuant to a casualty or condemnation), the amount of all payments required to be made by the Borrower and the Subsidiaries as a result of such event to repay Indebtedness (other than Loans) secured by such asset and (iii) in the case of a sale or other disposition of an asset (including pursuant to a casualty or condemnation event), the marginal increase in income taxes paid (or reasonably estimated to be payable) by the Borrower's consolidated group with respect to the fiscal year in which such sale or other disposition occurs that are directly attributable to such sale or other disposition (as determined reasonably and in good faith by the chief financial officer or another Financial Officer of the Borrower). "NET SALES" means, for any period, sales of merchandise and services by the Borrower and its Subsidiaries to their respective third party customers, as reported in the Borrower's Form 10-K and/or 10-Q's filed with the Securities and Exchange Commission covering such period; PROVIDED, that Net Sales for the Borrower's fiscal quarters ended December 29, 2001, April 20, 2002 and July 13, 2002 shall be deemed to be $4,870,500,000, $5,875,200,000 and $4,684,500,000, respectively. -24- "NEW SENIOR NOTE DOCUMENTS" means the New Senior Note Indenture, the New Senior Notes and any guarantees thereof executed and delivered with respect to the New Senior Notes and the New Senior Note Indenture, as in effect on the Effective Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. "NEW SENIOR NOTE INDENTURE" means the Indenture, dated as of June 18, 2002, between the Borrower and Manufacturers and Traders Trust Company, as Trustee, as supplemented by the Supplemental Indenture dated as of June 18, 2002 among the Borrower, the Subsidiary Guarantors named therein and the Trustee, all as in effect on the Effective Date and as thereafter amended, modified or supplemented from time to time. "NEW SENIOR NOTES" means the Borrower's Senior Notes due 2010 issued pursuant to the New Senior Note Indenture. "9-7/8% SENIOR SUBORDINATED NOTE DOCUMENTS" means the 9-7/8% Senior Subordinated Note Indenture, the 9-7/8% Senior Subordinated Notes and any guarantees thereof executed and delivered with respect to the 9-7/8% Senior Subordinated Notes and the 9-7/8% Senior Subordinated Note Indenture, as in effect on the Effective Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. "9-7/8% SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture, dated as of April 15, 2002, among the Borrower, the Subsidiary Guarantors named therein and Manufacturers and Traders Trust Company, as Trustee, as in effect on the Effective Date and as thereafter amended, modified or supplemented from time to time. "9-7/8% SENIOR SUBORDINATED NOTES" means the Borrower's 9-7/8% Senior Subordinated Notes due 2012, issued pursuant to the 9-7/8% Senior Subordinated Note Indenture. "NON-DEFAULTING LENDER" means and includes each Lender other than a Defaulting Lender. "NOTICE OF BORROWING REQUEST" has the meaning provided in Section 2.03(b). "NOTICE OF INTEREST ELECTION REQUEST" has the meaning provided in Section 2.08(b). "OBLIGATIONS" means all amounts owing by any or all of the Loan Parties to each Joint Book Manager, each Joint Lead Arranger, each Agent, each Issuing Lender, the Swingline Lender or any Lender pursuant to the terms of this Agreement or any other Loan Document. "OTHER TAXES" means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment -25- made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. "PERMITTED EXISTING INDEBTEDNESS" means (x) all Indebtedness of the Borrower and its Subsidiaries set forth on Schedule 3.16 and (y) other Indebtedness of the Borrower and its Subsidiaries which is to remain outstanding after the Effective Date in an aggregate principal amount not to exceed $25,000,000; PROVIDED that in no event shall Permitted Existing Indebtedness include any of the Existing Notes, the New Senior Notes, the Core-Mark Bonds, Indebtedness under the Core-Mark Receivables Facility, the Loans, Letters of Credit, any Hedging Agreements (or obligations relating thereto) or any surety bonds or Capital Lease Obligations of, or Guaranteed by, the Borrower or any of its Subsidiaries. "PERMITTED NOTE SALE" means any transaction involving the sale by the Borrower or any of its Subsidiaries of Financing Notes to any other Person, PROVIDED that (i) each such sale is in an arms-length transaction and the Borrower or the respective Subsidiary receives at least fair market value therefor (as determined in good faith by the Borrower) and (ii) the consideration therefor paid to the Borrower or the respective Subsidiary is 100% in cash and paid at the time of the closing of the respective transaction. "PERSON" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. "PLAN" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower, any of its Subsidiaries or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA, or is contributing to (or is obligated to contribute to), or has contributed to (or had an obligation to contribute to) in the last six years. "PLEDGE AGREEMENT" means the Pledge Agreement substantially in the form of Exhibit D hereto among the Borrower, the Guarantors and the Collateral Agent acting on behalf of the Secured Creditors, as the same may be amended, modified or supplemented from time to time in accordance with the provisions hereof. "POST-TEST PERIOD PRO FORMA BASIS" means the making of calculations on a pro forma basis (for the Test Period most recently ended in the case of determinations of compliance with Section 6.09, and with calculations of Consolidated EBITDA to be based on the Test Period most recently ended in the case of determinations of compliance with Section 6.10) in accordance with, and to the extent required by, the provisions of Section 1.05, taking into account certain events occurring after the end of the respective Test Period and on or prior to the date of determination, in accordance with the provisions of Section 1.05 with respect to determinations to be made on a Post-Test Period Pro Forma Basis. "PRIME RATE" means the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate in effect at its principal office in -26- New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. "PRO FORMA BASIS" means, with respect to any Test Period, the making of calculations on a pro forma basis for certain events (including Significant Acquisitions and Significant Asset Dispositions) in accordance with, and to the extent required by, the provisions of Section 1.05 hereof, but without making adjustments for events which occurred after the end of the respective Test Period. "PROCEEDS" has the meaning assigned to such term in the Security Agreement. "PROJECTIONS" means the projections contained in the Confidential Information Memorandum, dated May 2002, which were prepared by or on behalf of the Borrower in connection with this Agreement and delivered to the Administrative Agent and the Lenders prior to the Effective Date. "QUALIFIED PREFERRED STOCK" means any preferred equity interests of the Borrower so long as the terms of any such preferred equity interests (w) do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision prior to the date occurring six months following the latest Maturity Date then in effect, (x) do not require the cash payment of dividends or distributions at any time that such cash payment would result in a Default hereunder, (y) do not contain any covenants (other than reporting or information covenants), and (z) do not grant the holders thereof any voting rights except for (I) voting rights required to be granted to such holders under applicable law and (II) limited customary voting rights on fundamental matters such as mergers, consolidations, sales of all or substantially all of the assets of the Borrower and its Subsidiaries, or liquidations involving the Borrower. "REGISTER" has the meaning provided in Section 9.04(d). "REGULATION D" means Regulation D of the Board as from time to time in effect and any successor to all or a portion thereof. "REGULATION T" means Regulation T of the Board as from time to time in effect and any successor to all or a portion thereof. "REGULATION U" means Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof. "REGULATION X" means Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof. "REINCORPORATION MERGER" has the meaning provided in Section 6.02(k). "RELATED COLLATERAL" means, with respect to all Inventory and Accounts in which the Borrower or any Guarantor has granted a security interest to the Collateral Agent for the benefit of the Lenders, all Supporting Obligations relating to any such Accounts or Inventory and all Proceeds of any such Inventory, Accounts or Supporting Obligations. -27- "RELATED PARTIES" means, with respect to any specified Person, such Person's Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such Person and such Person's Affiliates. "RELEVANT AMOUNT" means, during any year, (i) $150,000,000 at any time from January 1 through August 14 of such year and (ii) $100,000,000 at any time from August 15 through December 31 of such year. "REPORTABLE EVENT" means an event described in Section 4043(c) of ERISA with respect to a Plan other than those events as to which the 30-day notice period is waived under subsection .22, .23, .25, .27, or .28 of PBGC Regulation Section 4043. "REQUIRED LENDERS" means, at any time, Lenders having Revolving Exposures, Term Loans and unused Commitments representing more than 50% of the sum of the total Revolving Exposures, outstanding Term Loans and unused Commitments at such time. "RESTRICTED CASH" means, without duplication, (i) any cash or Temporary Cash Investments irrevocably deposited with a Person other than the Borrower or one of its Subsidiaries, and (ii) until the termination thereof and the repayment of all outstandings thereunder, any cash held in an account with the Trustee or with CM Capital thereunder pursuant to the Core-Mark Receivables Facility and (iii) any cash which has been credited to one of the Borrower's or any of its Subsidiaries' deposit accounts, which cash is not actually available to the Borrower or such Subsidiary at such time because the amounts so "credited" have not then "cleared". "RESTRICTED SUBSIDIARY" at any time means any Person which constitutes a "Restricted Subsidiary" at such time under, and as defined in, any of the Specified Existing Note Indentures. "RETURNS" has the meaning provided in Section 3.08. "REVOLVING AVAILABILITY PERIOD" means the period from and including the Effective Date to but excluding the earlier of the Revolving Maturity Date and the date of termination of the Revolving Commitments. "REVOLVING COMMITMENT" means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender's Revolving Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The initial aggregate amount of the Lenders' Revolving Commitments is $550,000,000. -28- "REVOLVING EXPOSURE" means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Revolving Loans and its LC Exposure and Swingline Exposure at such time. "REVOLVING LENDER" means a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure. "REVOLVING LOAN" means a Loan made pursuant to clause (c) of Section 2.01. "REVOLVING MATURITY DATE" means June 18, 2007. "ROLLED-IN LETTERS OF CREDIT" has the meaning provided in Section 2.06(a). "SALE-LEASEBACK TRANSACTION" means the sale and leaseback by the Borrower or a Subsidiary of its real property and/or equipment, PROVIDED that (i) each such sale-leaseback transaction is an arm's length transaction and the Borrower or the respective Subsidiary receives at least fair market value (as determined in good faith by the Borrower) for the sale of the real property and/or equipment, (ii) the total consideration received by the Borrower is cash and at least 95% of such consideration is paid at the time of the closing of such sale, (iii) on or prior to the consummation of each such Sale-Leaseback Transaction involving real property at which Inventory is or is expected to be located, the Borrower or the respective Subsidiary shall have entered into with the lessor of any real property the subject of any such Sale-Leaseback Transaction a Landlord-Lender Agreement, (iv) the Net Proceeds therefrom are applied as required by Section 2.12(c), (v) to the extent that any such sale-leaseback transaction results in a Capital Lease Obligation, such Capital Lease Obligations are permitted under Section 6.03(a)(viii), and (vi) the aggregate fair market value of, and the gross cash proceeds received from, all such real property and/or equipment pursuant to Sale-Lease Back Transactions shall not exceed $200,000,000. "S&P" means Standard & Poor's Rating Group. "SECTION 2.18(E) CERTIFICATE" has the meaning provided in Section 2.18(e). "SECURED CREDITORS" has the meaning assigned to such term in the Security Agreement. "SECURITY AGREEMENT" means the Security Agreement substantially in the form of Exhibit E hereto among the Borrower, the applicable Subsidiaries and the Collateral Agent acting on behalf of the Secured Creditors, as the same may be amended, modified or supplemented from time to time in accordance with the provisions hereof. "SECURITY DOCUMENTS" means the Security Agreement, the Pledge Agreement and each other security agreement or other instrument or document executed and delivered pursuant to Section 4.01 or 5.08 in satisfaction of the Collateral Requirement. -29- "SIGNIFICANT ACQUISITION" means any Acquisition the aggregate consideration (taking the amount of cash and Temporary Cash Investments, the aggregate amount expected to be paid on or after the date of the respective Acquisition pursuant to any earn-out, non-compete, consulting or deferred compensation or purchase price adjustment or similar arrangements, the fair market value (as determined in good faith by the Borrower) of all other non-cash consideration and the aggregate amount of assumed Indebtedness) for which exceeds $25,000,000. "SIGNIFICANT ASSET DISPOSITION" means any Asset Disposition the aggregate consideration (taking the amount of cash and Temporary Cash Investments, the aggregate amount expected to be paid on or after the date of the respective Acquisition pursuant to any earn-out, non-compete, consulting or deferred compensation or purchase price adjustment or similar arrangements, the fair market value (as determined in good faith by the Borrower) of all other non-cash consideration and the aggregate amount of assumed Indebtedness) for which exceeds $25,000,000. "SPECIFIED DEFAULT" means (i) any Default under paragraphs (a), (b), (g) or (h) of Article VII and (ii) any Event of Default. "SPECIFIED EXISTING NOTE INDENTURES" means (i) the 9-7/8% Senior Subordinated Note Indenture, (ii) the 10-5/8% Senior Subordinated Note Indentures and (iii) the 10-1/8% Senior Note Indenture. "SPECIFIED RESTRICTIVE PROVISIONS" means and includes (i) Section 4.08 of the 9-7/8% Senior Subordinated Note Indenture, (ii) Section 10.15 of the 10-5/8% Senior Subordinated Note Indentures and (iii) Section 4.08 of the 10-1/8% Senior Note Indenture. "SSBI" means Salomon Smith Barney Inc. in its individual capacity. "STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "SUBORDINATED NOTE DOCUMENTS" means the (i) 5-1/4% Convertible Senior Subordinated Note Documents, (ii) the 9-7/8% Senior Subordinated Note Documents and (iii) 10-5/8% Senior Subordinated Note Documents. -30- "SUBORDINATED NOTE INDENTURES" means (i) the 5-1/4% Convertible Subordinated Note Indenture, (ii) the 9-7/8% Senior Subordinated Note Indenture and (iii) the 10-5/8% Senior Subordinated Note Indentures. "SUBORDINATED NOTES" means (i) the 5-1/4% Convertible Senior Subordinated Notes, (ii) the 9-7/8% Senior Subordinated Notes and (iii) the 10-5/8% Senior Subordinated Notes. "SUBSIDIARY" means, with respect to any Person (the "Parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership or limited liability company, more than 50% of the general partnership or limited liability company (as the case may be) interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the Parent or one or more subsidiaries of the Parent or by the Parent and one or more subsidiaries of the Parent; PROVIDED that, except for the purposes of the definition of the Guarantee Requirement (and to the extent Chouteau becomes a Guarantor hereunder, the purposes of the Collateral Requirement), Chouteau shall not be treated as a Subsidiary for the purposes of this Agreement and the other Loan Documents so long as no more than $17,500,000 of Investments are made therein (whether directly or indirectly) by the Borrower and its Subsidiaries. Unless otherwise specified, "Subsidiary" means a Subsidiary of the Borrower. "SUPERMAJORITY LENDERS" of any Class means those Non-Defaulting Lenders which would constitute the Required Lenders under, and as defined in, this Agreement if (x) all outstanding Obligations of the other Classes under this Agreement were repaid in full and all Commitments with respect thereto were terminated and (y) the percentage "50%" contained therein were changed to "66-2/3%". "SUPPORTING OBLIGATION" has the meaning assigned to such term in the Security Agreement. "SWINGLINE EXPOSURE" means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time. "SWINGLINE LENDER" means DBTCA, in its capacity as the lender of Swingline Loans hereunder. "SWINGLINE LOAN" means a Loan made pursuant to Section 2.04. "SYNDICATION AGENTS" means each of JPMorgan Chase Bank and Citicorp North America, Inc., each in its capacity as syndication agents under this Agreement. -31- "SYNDICATION DATE" means the date upon which the Joint Lead Arrangers determine in their sole discretion (and notify the Borrower) that the primary syndication (and resultant addition of Persons as Lenders pursuant to Section 9.04(b)) has been completed. "SYNTHETIC LEASE OBLIGATION" means the monetary obligation of a Person under (a) a so-called synthetic off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment). "TAX BENEFIT" has the meaning provided in Section 2.18(f). "TAXES" means any and all present or future taxes, levies, imposts, duties, deductions, charges, fees, withholdings or similar liabilities (together with any interest, penalties or similar liabilities with respect thereto) imposed by any Governmental Authority. "TEMPORARY CASH INVESTMENTS" 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-2 by S&P and P-2 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, (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, (v) short-term tax exempt bonds rated at least AA- by S&P or AA3 by Moody's or (vi) shares in a mutual fund, the investment objectives and policies of which require it to invest substantially all of its assets in short-term tax exempt bonds rated at least AA- by S&P or AA3 by Moody's, PROVIDED that in the case of clauses (i) through (v) above such Investment matures within one year from the date of acquisition thereof by the Borrower or a Subsidiary. "10-1/8% SENIOR NOTE DOCUMENTS" means the 10-1/8% Senior Note Indenture, the 10-1/8% Senior Notes and any guarantees thereof executed and delivered with respect to the 10-1/8% Senior Notes and the 10-1/8% Senior Note Indenture, as in effect on the Effective Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. "10-1/8% SENIOR NOTE INDENTURE" means the Indenture, dated as of March 15, 2001, among the Borrower, the Subsidiary Guarantors named therein and Bankers Trust Company, as Trustee, as in effect on the Effective Date and as thereafter amended, modified or supplemented from time to time. "10-1/8% SENIOR NOTES" means the Borrower's 10-1/8% Senior Notes due 2008, issued pursuant to the 10-1/8% Senior Note Indenture. "10-5/8% SENIOR SUBORDINATED NOTE DOCUMENTS" means the 10-5/8% Senior Subordinated Note Indentures, the 10-5/8% Senior Subordinated Notes and any guarantees thereof executed and delivered with respect to the 10-5/8% Senior Subordinated Notes and the 10-5/8% Senior Subordinated -32- Note Indentures, as in effect on the Effective Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. "10-5/8% SENIOR SUBORDINATED NOTE INDENTURES" means the Indentures, dated as of July 25, 1997 and October 15, 2001, among the Borrower, the Subsidiary Guarantors named therein and Manufacturers and Traders Trust Company, as Trustee, as in effect on the Effective Date and as thereafter amended, modified or supplemented from time to time. "10-5/8% SENIOR SUBORDINATED NOTES" means the Borrower's 10-5/8% Senior Subordinated Notes due 2007, issued pursuant to the 10-5/8% Senior Subordinated Note Indentures. "TERM LENDER" means a Lender with a Term Loan Commitment or an outstanding Term Loan. "TERM LOAN" means each B Term Loan and each Incremental Term Loan. "TERM LOAN COMMITMENT" means, each B Term Loan Commitment and each Incremental Term Loan Commitment. "TERM LOAN MATURITY DATE" means (i) in the case of B Term Loans, the B Term Loan Maturity Date and (ii) in the case of any Class of Incremental Term Loans, the maturity date for such Class of Incremental Term Loans set forth in the Incremental Term Loan Commitment Agreement relating thereto, PROVIDED that the Term Loan Maturity Date for all Incremental Term Loans of a given Class shall be the same date. "TERM LOAN SCHEDULED REPAYMENTS" has the meaning provided in Section 2.11(b). "TEST PERIOD" means each period of four consecutive fiscal quarters of the Borrower (in each case taken as one accounting period) ended after the Effective Date (beginning with the period of four consecutive fiscal quarters ended on the last day of the third fiscal quarter of the Borrower occurring in its fiscal year ended closest to December 31, 2002). "TOTAL INCREMENTAL TERM LOAN COMMITMENT" means at any time and for any class of Incremental Term Loans, the sum of the Incremental Term Loan Commitments of such class of each of the Lenders at such time. "TOTAL LEVERAGE RATIO" means, at any time, the ratio of Consolidated Indebtedness at such time to Consolidated EBITDA for the Test Period then most recently ended; PROVIDED that (x) in the case of any determination of the Total Leverage Ratio being made on the last day of a Test Period, Consolidated Indebtedness shall be determined based on the actual amount of Consolidated Indebtedness outstanding on the last day of the respective Test Period in accordance with the provisions of Section 1.05(b) and Consolidated EBITDA shall be determined on a Pro Forma Basis (in accordance with Section 1.05(a)) to give effect to all Significant Acquisitions and Significant Asset Dispositions (in each case, if any) made after the -33- Effective Date and during the respective Test Period and (y) in the case of any determination of Total Leverage Ratio being made on (or as at) any date other than the last date of a Test Period, Consolidated Indebtedness shall be determined on the actual amount outstanding on the date of determination in accordance with the provisions of Section 1.05(b) and Consolidated EBITDA shall be determined on a Post-Test Period Pro Forma Basis to give effect to all Significant Acquisitions and Significant Asset Dispositions (in each case, if any) actually made after the Effective Date and during the respective Test Period or thereafter and on or prior to the date of the required determination thereof (in the case of any determinations pursuant to Section 2.05, 6.03 or 6.06, after giving effect to the respective events which require the determination to be made on a Post-Test Period Pro Forma Basis). "TOTAL SENIOR LEVERAGE RATIO" means at any time, the ratio of Consolidated Senior Indebtedness at such time to Consolidated EBITDA for the Test Period then most recently ended; PROVIDED that (x) in the case of any determination of the Total Senior Leverage Ratio being made on the last day of a Test Period, Consolidated Senior Indebtedness shall be determined based on the actual amount of Consolidated Senior Indebtedness outstanding on the last day of the respective Test Period in accordance with the provisions of Section 1.05(b) and Consolidated EBITDA shall be determined on a Pro Forma Basis (in accordance with Section 1.05(a)) to give effect to all Significant Acquisitions and Significant Asset Dispositions (in each case, if any) made after the Effective Date and during the respective Test Period and (y) in the case of any determination of Total Senior Leverage Ratio being made on (or as at) any date other than the last date of a Test Period, Consolidated Senior Indebtedness shall be determined on the actual amount outstanding on the date of determination in accordance with the provisions of Section 1.05(b) and Consolidated EBITDA shall be determined on a Post-Test Period Pro Forma Basis to give effect to all Significant Acquisitions and Significant Asset Dispositions (in each case, if any) actually made after the Effective Date and during the respective Test Period or thereafter and on or prior to the date of the required determination thereof (in the case of any determinations pursuant to Section 2.05, 6.03 or 6.06, after giving effect to the respective events which require the determination to be made on a Post-Test Period Pro Forma Basis). "TRANSACTION" means, collectively, (i) the Merger, (ii) the Common Equity Financing, (iii) the issuance of the New Senior Notes, (iv) the refinancing of all outstanding amounts under the Existing Credit Agreements and the termination of all commitments thereunder, (v) the discharge of the Core-Mark Bond Indenture as contemplated in Section 4.01(o), (vi) the incurrence of Loans hereunder on the Effective Date and (vii) the payment of all fees and expenses in connection with the foregoing. "TRANSACTION DOCUMENTS" means (i) the Loan Documents, (ii) the Merger Documents, (iii) the Common Equity Financing Documents and (iv) the New Senior Note Documents. "TREASURY SERVICES" means treasury, depositary or cash management services (including, without limitation, overnight overdraft services) from, or any automated clearinghouse transfer of funds to, JPMorgan Chase (or any successor by merger thereto) and/or one or more of its affiliates or another bank reasonably acceptable to the Administrative Agent. -34- "TYPE", when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate. "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 the Borrower, a Subsidiary of the Borrower or an ERISA Affiliate to the PBGC or any other Person under Title IV of ERISA. "WACHOVIA" means Wachovia Bank, National Association, in its individual capacity. "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the then outstanding principal amount of such Indebtedness into (ii) the product obtained by multiplying (x) the amount of each then remaining installment or other required scheduled payments of principal, including payment at final maturity, in respect thereof, by (y) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such remaining installment or other required scheduled payment. "WHOLLY-OWNED DOMESTIC SUBSIDIARY" shall mean each Domestic Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower. "WHOLLY-OWNED FOREIGN SUBSIDIARY" shall mean each Foreign Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower. "WHOLLY-OWNED SUBSIDIARY" means any 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. "WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this Agreement, Loans may be classified and referred to by Class (E.G., a "Revolving Loan") or by Type (E.G., a "Eurodollar Loan") or by Class and Type (E.G., a "Eurodollar Revolving Loan"). Borrowings also may be classified and referred to by Class (E.G., a "Revolving Borrowing") or by Type (E.G., a "Eurodollar Borrowing") or by Class and Type (E.G., a "Eurodollar Revolving Borrowing"). SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The -35- words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. SECTION 1.04. ACCOUNTING TERMS; GAAP; FISCAL YEARS. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; PROVIDED that (i) if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Administrative Agent or the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith and (ii) in the event the Borrower changes its fiscal year end and the Administrative Agent notifies the Borrower that the Administrative Agent or the Required Lenders request an amendment to any provision of Article VII hereof for the purpose of modifying such provision in an appropriate manner to address the effect of the change in the fiscal year end, the Borrower agrees to promptly enter into such amendment. SECTION 1.05. CERTAIN PRO FORMA CALCULATIONS. (a) For purposes of calculating Consolidated EBITDA for any Test Period on a Pro Forma Basis or a Post-Test Period Pro Forma Basis for purposes of this Agreement, the following rules shall apply: (i) if at any time after the Effective Date and during the respective Test Period (and, in the case of determinations being made on a Post-Test Period Pro Forma Basis only, thereafter and on or prior to the date of determination) the Borrower or any of its Subsidiaries shall have made any Significant Asset Disposition, Consolidated EBITDA for such Test Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the assets or Equity Interests which are the subject of such Significant Asset Disposition for such Test Period or increased by an amount equal to the Consolidated EBITDA (if negative) applicable thereto for such Test Period; PROVIDED that if any Significant Asset Disposition is of Equity Interests in a Subsidiary of the Borrower which remains a Subsidiary after giving effect to such -36- Significant Asset Disposition, Consolidated EBITDA shall be adjusted to give pro forma effect thereto (as if such disposition occurred on the first day of the respective Test Period) in accordance with the rules set forth in the definition of Consolidated Net Income contained herein; (ii) if at any time after the Effective Date and during such Test Period (and, in the case of determinations being made on a Post-Test Period Pro Forma Basis only, thereafter and on or prior to the date of determination) the Borrower or any Subsidiaries shall have made any Significant Acquisition, Consolidated EBITDA for such Test Period shall be calculated after giving pro forma effect thereto as if such Significant Acquisition had occurred on the first day of such Test Period; (iii) if during such Test Period (and, in the case of determinations being made on a Post-Test Period Pro Forma Basis only, thereafter and on or prior to the date of determination) any Person that became a Subsidiary or was merged with or into the Borrower or any of its Subsidiaries since the beginning of such Test Period pursuant to a Significant Acquisition made after the Effective Date shall have entered into any disposition or acquisition transaction that would have required an adjustment pursuant to clause (i) or (ii) above if made by the Borrower or a Subsidiary of the Borrower during such Test Period, Consolidated EBITDA for such Test Period shall be calculated after giving pro forma effect thereto as if such transaction occurred on the first day of such Test Period; and (iv) pro forma calculations of Consolidated EBITDA, whether pursuant to this Section 1.05 or otherwise, shall not give effect to anticipated cost savings and/or increases to Consolidated EBITDA for the relevant period, except in cases of Significant Acquisitions for factually supportable and identifiable cost savings and expenses which would otherwise be accounted for as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Act of 1933, as amended, as if such cost savings or expenses were realized on the first day of the respective period. (b) For purposes of calculating Consolidated Indebtedness and Consolidated Senior Indebtedness for purposes of this Agreement (including as used in the definitions of Total Leverage Ratio and Total Senior Leverage Ratio), the following rule shall apply: (i) all determinations of Consolidated Indebtedness and Consolidated Senior Indebtedness shall be made based on the actual amount of Consolidated Indebtedness or Consolidated Senior Indebtedness, as the case may be, outstanding on the date of the required determination of Consolidated Indebtedness or Consolidated Senior Indebtedness (or of the Total Leverage Ratio or Total Senior Leverage Ratio, as the case may be) (in the case of determinations to be made on a Post-Test Period Pro Forma Basis, after giving effect to all incurrences of Indebtedness in connection with the respective event or occurrence requiring that a determination be made on a Post-Test Period Pro Forma Basis). (c) For purposes of calculating the Consolidated Fixed Charge Coverage Ratio and the Adjusted Consolidated Fixed Charge Coverage Ratio for any Test Period on a -37- Post-Test Period Pro Forma Basis for purposes of this Agreement, the following rules shall apply: (i) Consolidated EBITDAR for the respective Test Period shall be determined in substantially the same fashion as Consolidated EBITDA for the respective Test Period would be determined on a Post-Test Period Pro Forma Basis pursuant to clause (a) above, making all necessary reference changes of "Consolidated EBITDA" to "Consolidated EBITDAR"; and (ii) all determinations of Consolidated Fixed Charges and Adjusted Consolidated Fixed Charges for the respective Test Period shall be made, with such pro forma adjustments as may be determined in accordance with GAAP and the rules, regulations and guidelines of the SEC (including without limitation Article 11 of Regulation S-X), after giving effect to all Significant Acquisitions and Significant Asset Dispositions effected after the first day of the respective Test Period and on or prior to the date of any determination on a Post-Test Period Pro Forma Basis, as well as to all incurrences of Indebtedness and permanent repayments of Indebtedness (excluding revolving and similar working capital Indebtedness) during the respective Test Period or thereafter and on or prior to the date of the respective determination on a Post-Test Period Pro Forma Basis as if same had occurred on the first day of the respective Test Period. Notwithstanding anything to the contrary contained above, all determinations made on a Pro Forma Basis and Post-Test Period Pro Forma Basis shall be required to be satisfactory to the Administrative Agent, except any such determinations made solely to reflect adjustments for Significant Acquisitions which are based on audited financial statements (reported on without a qualification arising out of the scope of audit) by independent certified public accountants of nationally recognized standing for the Person or business acquired pursuant to the respective Significant Acquisition for the relevant Test Period (although any adjustments, including those for cost and expense savings, shall be required to be satisfactory to the Administrative Agent). ARTICLE II THE CREDITS SECTION 2.01. COMMITMENTS. Subject to the terms and conditions set forth herein (a) each Lender with a B Term Loan Commitment agrees to make a B Term Loan or B Term Loans to the Borrower on the Effective Date in an aggregate principal amount equal to its B Term Loan Commitment on such date, (b) each Lender with an Incremental Term Loan Commitment agrees to make an Incremental Term Loan or Incremental Term Loans on one or more Incremental Term Loan Borrowing Dates (as provided in the relevant Incremental Term Loan Commitment Agreement) in an aggregate principal amount up to its Incremental Term Loan Commitment on such date and (c) each Lender with a Revolving Commitment agrees to make Revolving Loans to the Borrower from time to time during the Revolving Availability Period in an aggregate principal amount up to its Revolving Commitment, subject to the limitation that such Lender's Revolving Exposure shall not exceed such Lender's Revolving Commitment at any time. Within the foregoing limits and subject to the terms and conditions set -38- forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts repaid in respect of Term Loans may not be reborrowed. SECTION 2.02. LOANS AND BORROWINGS. (a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; PROVIDED that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required. (b) Subject to Section 2.15, each Borrowing (excluding any Borrowing of Swingline Loans) shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; PROVIDED that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement. (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $10,000,000. At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $10,000,000; PROVIDED that an ABR Revolving Borrowing may be in a lesser aggregate amount that is equal to the entire unused balance of the total Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $1,000,000. Borrowings of more than one Type and Class may be outstanding at the same time; PROVIDED that there shall not at any time be more than a total of 10 Eurodollar Revolving Borrowings and 10 Eurodollar Term Borrowings outstanding. (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date applicable to the Loans comprising such Borrowing. (e) Each Eurodollar Borrowing occurring prior to the earlier of (i) the 90th day after the Effective Date and (ii) the Syndication Date shall be subject to the provisions of Section 2.08(g). SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Borrowing, the Borrower shall notify the Administrative Agent of such request in writing (or by telephone promptly confirmed in writing) (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, on the date of the proposed Borrowing. Each such written notice or written confirmation of telephonic -39- notice (each a "Notice of Borrowing Request") shall be irrevocable and shall be signed and delivered by the Borrower to the Administrative Agent in the form of Exhibit F appropriately completed to specify the following information in compliance with Section 2.02: (i) whether the requested Borrowing is to be a Revolving Borrowing, a B Term Borrowing or an Incremental Term Loan Borrowing (in which case such notice shall set forth the respective Class of Incremental Term Loans to be incurred pursuant to such Borrowing); (ii) the aggregate amount of such Borrowing; (iii) the date of such Borrowing, which shall be a Business Day; (iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; (v) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term "Interest Period"; and (vi) the location and number of the Borrower's account to which funds are to be disbursed, which shall comply with the requirements of Section 2.07 If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested LIBOR Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. Promptly following receipt of a Notice of Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender which is required to make Loans of the Class specified in the respective Notice of Borrowing Request, of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing. SECTION 2.04. SWINGLINE LOANS. (a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Revolving Availability Period, in an aggregate principal amount outstanding that will not, at any time, result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $40,000,000 or (ii) the sum of the total Revolving Exposures exceeding the total Revolving Commitments; PROVIDED that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans. (b) To request a Swingline Loan, the Borrower shall notify the Swingline Lender of such request in writing (or by telephone promptly confirmed in writing), not later than 1:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the date (which shall be a Business Day) and amount of the requested Swingline Loan. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an -40- LC Disbursement as provided in Section 2.06(e), by remittance to the applicable Issuing Lender) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan. (c) The Swingline Lender may by written notice given to the Administrative Agent not later than 1:00 p.m., New York City time, on any Business Day require the Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Revolving Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Revolving Lender's Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Revolving Lender's Applicable Percentage of such Swingline Loan or Loans and the interest accrued and not yet paid thereon. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, MUTATIS MUTANDIS, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof. Notwithstanding anything to the contrary contained in this Section 2.04, the Swingline Lender shall not be obligated to make any Swingline Loans at a time when a Lender Default exists with respect to a Revolving Lender unless the Swingline Lender has entered into arrangements satisfactory to it and the Borrower to eliminate the Swingline Lender's risk with respect to the Defaulting Lender's or Lenders' participation in such Swingline Loans, including by cash collateralizing such Defaulting Lender's or Lenders' Swingline Exposure. In addition, the Swingline Lender shall not make any Swingline Loan after it has received written notice from the Borrower, any other Loan Party, the Administrative Agent or the Required Lenders stating that a Default exists and is continuing, until such time as (A) the Swingline Lender shall have received written notice (i) of rescission of all such notices from the party or parties originally delivering such notice or notices, or (ii) of the waiver of such Default by the Required Lenders or (B) the Administrative Agent in good faith believes that such Default has ceased to exist. -41- SECTION 2.05. INCREMENTAL TERM LOAN COMMITMENTS. (a) The Borrower shall have the right, with the approval of the Administrative Agent, to request at any time and from time to time after the Effective Date and prior to the Incremental Term Loan Commitment Termination Date that one or more Lenders (and/or one or more other Persons which will become Lenders as provided below) provide Incremental Term Loan Commitments of a given Class of Incremental Term Loans as designated in the respective Incremental Term Loan Commitment Agreement and, subject to the terms and conditions contained in this Agreement and in the respective Incremental Term Loan Commitment Agreement, make Incremental Term Loans pursuant thereto, so long as (i) no Default then exists or would exist after giving effect thereto and all of the representations and warranties contained herein and in the other Loan Documents are true and correct in all material respects at such time (unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date), (ii) the Borrower and its Subsidiaries will be in compliance with Sections 6.09 and 6.10 on a Post-Test Period Pro Forma Basis after giving effect to each incurrence of Incremental Term Loans and the application of the proceeds therefrom, and (iii) at the time of each incurrence of Incremental Term Loans, the Borrower shall have delivered to the Administrative Agent a certificate of a Financial Officer certifying (with supporting calculations in reasonable detail) as to the matters set forth in preceding clauses (i) and (ii) and in Section 3.18, and, in each case, demonstrating in reasonable detail that the full amount of such Incremental Term Loans may be incurred in accordance with each Existing Note Indenture and the New Senior Note Indenture on the basis contemplated in Section 3.18, and will not violate the provisions of any such Existing Note Indenture or the New Senior Note Indenture. Furthermore, it is understood and agreed that (i) no Lender shall be obligated to provide an Incremental Term Loan Commitment, and until such time, if any, as a particular Lender has agreed in its sole discretion to provide an Incremental Term Loan Commitment and executed and delivered to the Borrower and the Administrative Agent an Incremental Term Loan Commitment Agreement as provided in clause (b) of this Section 2.05, such Lender shall not be obligated to fund any Incremental Term Loans, (ii) any Lender (or, in the circumstances contemplated by clause (xi) below, any other Person which will qualify as an Eligible Transferee) may so provide an Incremental Term Loan Commitment without the consent of any other Lender (although the consent of the Administrative Agent shall be required as provided above), (iii) the amount of each Class of Incremental Term Loan Commitments shall be in a minimum aggregate amount for all Lenders which provide an Incremental Term Loan Commitment under such Class of Incremental Term Loans (including, in the circumstances contemplated by clause (xi) below, Eligible Transferees who will become Lenders) of at least $50,000,000, (iv) the aggregate amount of all Incremental Term Loan Commitments permitted to be provided pursuant to this Section 2.05 and the aggregate principal amount of all Incremental Term Loans permitted to be made pursuant to this Section 2.05 shall not exceed $250,000,000, (v) the up-front fees and, if applicable, any unutilized commitment fees and/or other fees, payable in respect of each Incremental Term Loan Commitment shall be separately agreed to by the Borrower and each Incremental Term Loan Lender (and with all such fees to be disclosed by the Borrower to the Administrative Agent), (vi) the Applicable Rates, the Incremental Term Loan Maturity Date and the Incremental Term Loan Scheduled Repayments in respect of each Class of Incremental Term Loans shall be reasonably satisfactory to the Administrative Agent and shall be as set forth in the respective Incremental Term Loan Commitment Agreement (provided that each Class of Incremental Term Loans shall have (I) an Incremental Term -42- Loan Maturity Date of no earlier than the B Term Loan Maturity Date and (II) a Weighted Average Life to Maturity of no less than the Weighted Average Life to Maturity as then in effect for the B Term Loans), (vii) the proceeds of all Incremental Term Loans shall be used only for the purposes permitted by Section 5.07, (viii) each Incremental Term Loan Commitment Agreement shall specifically designate, with the approval of the Administrative Agent, the Class of the Incremental Term Loan Commitments being provided thereunder (which Class shall be a new Class (i.e., not the same as any existing Class of Incremental Term Loans, Incremental Term Loan Commitments or other Term Loans) unless the requirements of paragraph (c) of this Section are satisfied); (ix) all Incremental Term Loans (and all interest, fees and other amounts payable thereon) shall be Obligations and shall be secured by the Collateral, and guaranteed under the Guarantee Agreement, on a pari passu basis with all other Loans; (x) each Lender (or, in the circumstances contemplated by clause (xi) below, any other Person which will qualify as an Eligible Transferee) agreeing to provide an Incremental Term Loan Commitment pursuant to an Incremental Term Loan Commitment Agreement shall, subject to the satisfaction of the relevant conditions set forth in this Agreement, make Incremental Term Loans under the Class specified in such Incremental Term Loan Commitment Agreement as provided in Section 2.01(b) and such Loans shall thereafter be deemed to be Incremental Term Loans under such Class for all purposes of this Agreement and other Loan Documents, and (xi) if, within 5 Business Days after the Borrower has requested the then existing Lenders (other than those Lenders that are not then honoring their funding obligations hereunder) to provide Incremental Term Loan Commitments pursuant to this Section 2.05 the Borrower has not received Incremental Term Loan Commitments in an aggregate amount equal to that amount of Incremental Term Loan Commitments which the Borrower desires to obtain pursuant to such request (as set forth in the notice provided by the Borrower as provided below), then the Borrower may, with the approval of the Administrative Agent, request Incremental Term Loan Commitments from Persons which are Eligible Transferees in an aggregate amount equal to such deficiency (and with the fees to be paid to such Eligible Transferees to be no greater than those fees to be paid to (or which were offered to) the then existing Lenders providing (or which were requested to provide) Incremental Term Loan Commitments), and otherwise hereunder. (b) At the time of the provision of Incremental Term Loan Commitments pursuant to this Section 2.05, the Borrower, each other Loan Party, the Administrative Agent and each Lender or Eligible Transferee which agrees to provide an Incremental Term Loan Commitment (each, an "Incremental Term Loan Lender") shall execute and deliver to the Borrower and the Administrative Agent an Incremental Term Loan Commitment Agreement, appropriately completed (with the effectiveness of the Incremental Term Loan Commitment(s) provided therein to occur on the date set forth in such Incremental Term Loan Commitment Agreement upon the payment of any fees (including, without limitation, any fees payable pursuant to clause (II) of the immediately succeeding sentence) required in connection therewith, the satisfaction of the conditions set forth in this Section 2.05 and the satisfaction of any other conditions precedent that may be set forth in such Incremental Term Loan Commitment Agreement). In addition, (x) on or prior to the effective date of the respective Incremental Term Loan Commitment Agreement, (I) the Borrower and its Subsidiaries shall have delivered such technical amendments, modifications and/or supplements to the Security Documents as are reasonably requested by the Administrative Agent to ensure that the additional Obligations to be incurred pursuant to the Incremental Term Loan Commitments are secured by, and entitled to the benefits of, the Security Documents, and each of the Lenders hereby agrees to, and authorizes the -43- Collateral Agent to enter into, any such technical amendments, modifications and/or supplements, (II) unless waived by the Administrative Agent, the Administrative Agent shall have received from the respective Incremental Term Loan Lender (or the Borrower, if so agreed between the Borrower and Incremental Term Loan Lender) the payment of a non-refundable fee of $3,500 for each Eligible Transferee which becomes a Lender pursuant to this Section 2.05, (III) the Administrative Agent shall have received from the president, any vice president or a Financial Officer of the Borrower a certificate stating that the conditions set forth in clauses (i) and (ii) of the first sentence of Section 2.05(a) have been satisfied, (IV) the Borrower shall have delivered to the Administrative Agent an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent, from counsel to the Loan Parties reasonably satisfactory to the Administrative Agent and dated such effective date, covering such of the matters set forth in the opinions of counsel delivered to the Administrative Agent on the Effective Date pursuant to Section 4.01(b) as may be reasonably requested by the Administrative Agent, and such other matters as the Administrative Agent may reasonably request, (V) the Borrower and the other Loan Parties shall have delivered to the Administrative Agent such other officers' certificates, resolutions and evidence of good standing as the Administrative Agent shall reasonably request, and (VI) to the extent requested by such Incremental Term Loan Lenders, notes will be issued, at the Borrower's expense, to such Incremental Term Loan Lenders, to the extent needed to reflect the Incremental Term Loan Commitments and outstanding Incremental Term Loans made by such Incremental Term Loan Lenders, and (y) on or prior to each Incremental Term Loan Borrowing Date, the applicable conditions precedent set forth in Article IV shall have been satisfied. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Incremental Term Loan Commitment Agreement and, at such time, Schedule I shall be deemed modified to reflect the Incremental Term Loan Commitments of such Incremental Term Loan Lenders. (c) Notwithstanding anything to the contrary contained above in this Section 2.05, the Incremental Term Loan Commitments provided by an Incremental Term Loan Lender or Incremental Term Loan Lenders, as the case may be, pursuant to each Incremental Term Loan Commitment Agreement shall constitute a new Class of Term Loans, which shall be separate and distinct from the existing Classes of Term Loans under this Agreement (with a designation which may be made in letters (i.e., A, B, C, etc.), numbers (1, 2, 3, etc.) or a combination thereof (i.e., A-1, A-2, B-1, B-2, C-1, C-2, etc.), provided that, with the consent of the Administrative Agent, the parties to a given Incremental Term Loan Commitment Agreement may specify therein that the respective Incremental Term Loans made pursuant thereto shall constitute part of, and be added to, an existing Class of Incremental Term Loans or to the outstanding Class of B Term Loans, in either case so long as the following requirements are satisfied: (i) the Incremental Term Loans to be made pursuant to such Incremental Term Loan Commitment Agreement shall have the same Maturity Date as the Class of Term Loans to which the new Incremental Term Loans are being added, and shall have the same Applicable Rates applicable to such Class; (ii) the new Incremental Term Loans shall have the same Term Loan Scheduled Repayment dates as then remain with respect to the Class to which such new Incremental Term Loans are being added (with the amount of each Term Loan Scheduled Repayment applicable to such new Incremental Term Loans to be the same (on a -44- proportionate basis) as is theretofore applicable to the Class to which such new Incremental Term Loans are being added), thereby increasing the amount of each then remaining Term Loan Scheduled Repayment of the respective Class proportionately; and (iii) on the date of the making of such new Incremental Term Loans, and notwithstanding anything to the contrary set forth in Section 2.08, such new Incremental Term Loans shall be added to (and form part of) each Borrowing of outstanding Term Loans of the respective Class on a pro rata basis (based on the relative sizes of the various outstanding Borrowings), so that each Lender will participate proportionately in each then outstanding Borrowing of Term Loans of the respective Class, and so that the existing Lenders with respect to such Class continue to have the same participation (by amount) in each Borrowing as they had before the making of the new Term Loans of such Class. To the extent the provisions of preceding clause (iii) require that Lenders making new Incremental Term Loans add same to then outstanding Borrowings of Eurodollar Loans, it is acknowledged that the effect thereof may result in such new Incremental Term Loans having short Interest Periods (i.e., an Interest Period that began during an Interest Period then applicable to outstanding Borrowings of Eurodollar Loans to which such new Incremental Term Loans are being added, and which will end on the last day of such then applicable Interest Period). In connection therewith, the Borrower may agree, in the respective Incremental Term Loan Commitment Agreement, to compensate the Lenders making the new Incremental Term Loans of the respective Class for funding Eurodollar Loans during an existing Interest Period on such basis as may be agreed by the Borrower and the respective Lender or Lenders. SECTION 2.06. LETTERS OF CREDIT. (a) GENERAL. Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own account and for the benefit of any holder (or any trustee, agent or other similar representative for any such holders) of LC Supportable Obligations and sellers of goods to the Borrower and its Subsidiaries, in a form reasonably acceptable to the Administrative Agent and the applicable Issuing Lenders, at any time and from time to time from and after the Effective Date until 30 days prior to the Revolving Maturity Date. All Letters of Credit shall be denominated in Dollars or an Alternate Currency and shall be issued on a sight basis only. It is acknowledged and agreed that (i) each of the letters of credit which were issued under the Existing Credit Agreements prior to the Effective Date and, in each case which remain outstanding on the Effective Date and are set forth on Schedule 2.06(a) (each such letter of credit, a "Rolled-In Letter of Credit" and, collectively, the "Rolled-In Letters of Credit") shall, from and after the Effective Date, constitute a Letter of Credit issued for the account of the Borrower (regardless of whether any such letter of credit was in fact originally issued for the account of a Subsidiary of the Borrower) for all purposes of this Agreement and shall, for purposes of paragraph (d) of this Section and Section 2.13(b), be deemed issued on the Effective Date. The stated amount of each Rolled-In Letter of Credit and the expiry date therefor is set forth on Schedule 2.06(a). (b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN CONDITIONS. Whenever the Borrower requires the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), it shall give the -45- Administrative Agent (i) written notice in the form of Exhibit G (a "Letter of Credit Request") and (ii) to the extent requested by the respective Issuing Lender, an application for such Letter of Credit (it being understood that in the case of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreements submitted by the Borrower to, or entered into by the Borrower with, the respective Issuing Lender relating to any Letter of Credit, the terms and conditions of this Agreement shall control). Such Letter of Credit Request may be delivered by facsimile (or transmitted by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Lender). Upon receipt by the Administrative Agent of a written Letter of Credit Request pursuant to this paragraph (b) requesting the issuance of a Letter of Credit, in the event the Administrative Agent elects to issue such Letter of Credit, the Administrative Agent shall promptly so notify the Borrower thereof, and the Administrative Agent shall be the Issuing Lender with respect thereto. In the event that the Administrative Agent elects not to issue such Letter of Credit, the Administrative Agent shall promptly so notify the Borrower, whereupon the Borrower may request any other Issuing Lender to issue such Letter of Credit on the terms and conditions provided in this Section 2.06 by delivering to such Issuing Lender a copy of the applicable written Notice of Letter of Credit Request. Except with respect to trade letters of credit, in the event that all other Issuing Lenders shall have declined to issue such Letter of Credit, notwithstanding the prior election of Administrative Agent not to issue such Letter of Credit, the Administrative Agent shall, subject to compliance with the provisions of this Section 2.06, be obligated to issue such Letter of Credit and shall be the Issuing Lender with respect thereto; PROVIDED that in the circumstances described above with respect to trade Letters of Credit JPMorgan Chase agrees to be the Issuing Lender with respect thereto, subject to compliance with the provisions of Section 2.06. Any Letter of Credit Request requesting the amendment, renewal or extension of an outstanding Letter of Credit shall identify the Letter of Credit to be amended, renewed or extended and such other information as shall be necessary to amend, renew or extend the respective Letter of Credit. All Letter of Credit Requests must be delivered to the Administrative Agent and the applicable Issuing Lender at least five Business Days in advance (or such shorter period as may be acceptable to the respective Issuing Lender) of the requested date the Letter of Credit is to be issued, amended, renewed or extended. The transmittal by the Borrower of each Letter of Credit Request shall be deemed to be a representation and warranty by the Borrower that (A) each of the conditions precedent as set forth in Section 4.02 have been satisfied and (B) after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $225,000,000 and (ii) the total Revolving Exposures shall not exceed the total Revolving Commitments. The applicable Issuing Lender (if other than the Administrative Agent) shall not issue, amend, renew or extend any Letter of Credit unless it has obtained written approval to do so from the Administrative Agent. Upon the issuance of or amendment to any standby Letter of Credit, the applicable Issuing Lender shall notify the Borrower and the Administrative Agent, in writing of such issuance or amendment and the notice shall be accompanied by a copy of the issuance or amendment. Upon receipt of such notice, the Administrative Agent shall promptly notify the Lenders, in writing, of such issuance or amendment and if requested to do so by any Lender the Administrative Agent shall furnish such Lender with copies of such issuance or amendment. In the case of trade Letters of Credit, the applicable Issuing Lender shall provide the Administrative Agent, by facsimile on the first Business Day of each week, with a report detailing the daily aggregate outstanding trade Letters of Credit issued by such Issuing Lender for the previous calendar week. -46- (c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) in the case of standby Letters of Credit (x) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension); PROVIDED that certain Rolled-in Letters of Credit may have expiry dates beyond the one year anniversary of the issuance thereof as set forth in Schedule 2.06(a) and (y) the date that is 10 Business Days prior to the Revolving Maturity Date and (ii) in the case of trade Letters of Credit (x) the date 180 days after the date of the issuance of such Letter of Credit and (y) the date that is 30 Business Days prior to the Revolving Maturity Date. (d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Lender, the applicable Issuing Lender hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from the applicable Issuing Lender, a participation in such Letter of Credit equal to such Lender's Applicable Percentage from time to time of the aggregate amount (taking the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternate Currency) available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the applicable Issuing Lender, such Lender's Applicable Percentage of each LC Disbursement (taking the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternate Currency) made by the applicable Issuing Lender and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. (e) REIMBURSEMENT. If the applicable Issuing Lender shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement (or the Dollar Equivalent thereof in the case of any LC Disbursement with respect to a Letter of Credit denominated in an Alternate Currency) not later than 12:00 noon, New York City time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement provided in paragraph (g) of this Section prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, New York City time, on the Business Day immediately following the day that the Borrower receives such notice; PROVIDED that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an amount equal to such LC Disbursement (or the Dollar Equivalent thereof in the case of any LC Disbursement with respect to a Letter of Credit denominated in an Alternate Currency) and, to the extent so financed, the Borrower's obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Revolving -47- Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender's Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, MUTATIS MUTANDIS, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the applicable Issuing Lender the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the applicable Issuing Lender or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse such Issuing Lender, then to such Revolving Lenders and such Issuing Lender as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the applicable Issuing Lender for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement. (f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by any Issuing Lender under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower's obligations hereunder. None of the Agents, the Lenders or the Issuing Lenders, or any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Lenders; PROVIDED that the foregoing shall not be construed to excuse any Issuing Lender from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Lender's failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the respective Issuing Lender (as determined by a court of competent jurisdiction in a final and non-appealable decision), such Issuing Lender shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance -48- with the terms of a Letter of Credit, the applicable Issuing Lender may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (g) DISBURSEMENT PROCEDURES. The applicable Issuing Lender shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The applicable Issuing Lender shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Lender has made or will make an LC Disbursement thereunder; PROVIDED that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Lender and the Revolving Lenders with respect to any such LC Disbursement. (h) INTERIM INTEREST. If any Issuing Lender shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof (or the Dollar Equivalent of such unpaid amount in the case of an LC Disbursement in respect of any Letter of Credit denominated in an Alternate Currency) shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; PROVIDED that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.14(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the applicable Issuing Lender, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the applicable Issuing Lender shall be for the account of such Revolving Lender to the extent of such payment. (i) REPLACEMENT OF AN ISSUING LENDER. An Issuing Lender may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Lender and the successor Issuing Lender. The Administrative Agent shall notify the Lenders of any such replacement of an Issuing Lender. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Lender pursuant to Section 2.13(b). From and after the effective date of any such replacement, (i) the successor Issuing Lender shall have all the rights and obligations of the replaced Issuing Lender under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term "Issuing Lender" shall be deemed to include such successor or any previous Issuing Lender, or such successor and all previous Issuing Lenders, as the context shall require. After the replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit. (j) CASH COLLATERALIZATION. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative -49- Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposures representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in Dollars in cash up to 100% of the LC Exposure (as requested by the Administrative Agent or relevant Lenders, as the case may be) as of such date plus any accrued and unpaid interest thereon; PROVIDED that the obligation to deposit such cash collateral (in an amount equal to 100% of the LC Exposure as of such date and any accrued and unpaid interest thereon) shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (g) or (h) of Article VII. Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the discretion of the Administrative Agent and at the Borrower's risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the applicable Issuing Lender for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived. SECTION 2.07. FUNDING OF BORROWINGS. (a) Each Lender shall make each Loan (other than any Swingline Loan) to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:30 p.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; PROVIDED that Swingline Loans shall be made as provided in Section 2.04. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Administrative Agent in New York City and designated by the Borrower in the applicable Notice of Borrowing Request; PROVIDED that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the applicable Issuing Lender. (b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and -50- the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, in each case for the first three days and at the interest rate otherwise applicable to ABR Loans for each day thereafter or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such Borrowing. SECTION 2.08. INTEREST ELECTIONS. (a) Each Revolving Borrowing and Term Borrowing initially shall be of the Type and Class specified in the applicable Notice of Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Notice of Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which may not be converted or continued. (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election in writing (or by telephone promptly confirmed in writing) by the time that a Notice of Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such notification shall be irrevocable and shall be in writing (or by telephone promptly confirmed in writing) signed by the Borrower, in substantially the form of Exhibit H (the "Notice of Interest Election Request"). (c) Each Notice of Interest Election Request shall specify the following information, which shall be consistent with the requirements of Section 2.02 and paragraphs (f) and (g) of this Section: (i) the Borrowing to which such Notice of Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing); (ii) the effective date of the election made pursuant to such Notice of Interest Election Request, which shall be a Business Day; (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and -51- (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term "Interest Period". If any such Notice of Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. (d) Promptly following receipt of a Notice of Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender's portion of each resulting Borrowing. (e) If the Borrower fails to deliver a timely Notice of Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. (f) A Borrowing of any Class may not be converted to or continued as a Eurodollar Borrowing if after giving effect thereto (i) the Interest Period therefor would commence before and end after a date on which any principal of the Loans of such Class is scheduled to be repaid and (ii) the sum of the aggregate principal amount of outstanding Eurodollar Borrowings of such Class with Interest Periods ending on or prior to such scheduled repayment date plus the aggregate principal amount of outstanding ABR Borrowings of such Class would be less than the aggregate principal amount of Loans of such Class required to be repaid on such scheduled repayment date. (g) No Eurodollar Borrowings may be incurred prior to the fifth day following the Effective Date. Thereafter until the earlier of (i) the 90th day after the Effective Date and (ii) the Syndication Date, Interest Periods in respect of Eurodollar Borrowings shall be limited to one month Interest Periods, all of which shall begin and end on the same date (although Eurodollar Revolving Borrowings with one week Interest Periods may be incurred as otherwise permitted hereunder during any such one month Interest Period so long as the end of each such one week Interest Period ends on the last day as the relevant one month Interest Period for all Eurodollar Borrowings then in effect). SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. (a) Unless previously terminated, (i) all of the B Term Loan Commitments shall terminate upon the earlier of (x) the incurrence of the B Term Loans hereunder on the Effective Date and (y) 5:00 p.m., New York City time, on the Effective Date, (ii) all of the Commitments shall terminate on September 18, 2002 if the Effective Date and initial borrowing hereunder shall not have occurred on or prior to such date and (iii) unless the Required Lenders otherwise agree in -52- writing (in their sole discretion), all of the Commitments shall terminate upon the occurrence of a Change of Control. (b) The Total Incremental Term Loan Commitment of a given Class shall (i) be permanently reduced (x) on each Incremental Term Loan Borrowing Date in respect of such Class in an amount equal to the aggregate principal amount of Incremental Term Loans of such Class incurred on each such date, (ii) terminate in its entirety (to the extent not theretofore terminated) on the respective Incremental Term Loan Commitment Termination Date (after giving effect to any Incremental Term Loans to be made on such date) and (iii) prior to the termination of the Total Incremental Term Loan Commitment in respect of such Class, be permanently reduced from time to time to the extent required by Section 2.12(g). (c) The Revolving Commitments shall terminate in their entirety on the Revolving Maturity Date. (d) The Borrower may at any time terminate, or from time to time reduce, the then outstanding Commitments of any Class; PROVIDED that (i) each reduction of the Commitments of any Class shall be in an amount that is an integral multiple of $1,000,000 and not less than $10,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.12, the sum of the Revolving Exposures would exceed the total Revolving Commitments. (e) The Borrower shall notify the Administrative Agent in writing of any election to terminate or reduce the Commitments under paragraph (d) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; PROVIDED that a notice of termination of the Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by written notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. (f) Any termination or reduction of the Commitments of any Class shall be permanent. Each reduction of the Commitments of any Class shall be made ratably among the Lenders in accordance with their respective Commitments of such Class. SECTION 2.10. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan of such Lender on the Revolving Maturity Date, (ii) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Term Loan of such Lender as provided in Section 2.11 and (iii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the seventh Business Day after the date on which such Swingline Loan is made or, if earlier, the fifth day prior to the Revolving Maturity Date. -53- (b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender's share thereof. (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the existence and amounts of the obligations recorded therein (although in the case of any conflict between determinations made pursuant to paragraphs (b) and (c), determinations made pursuant to paragraph (c) shall control); PROVIDED that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement. (e) Any Lender may request that Loans of any Class made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns). SECTION 2.11. AMORTIZATION OF TERM LOANS. (a) Subject to adjustment pursuant to paragraph (c) of this Section, the Borrower shall repay B Term Borrowings on each date set forth below in the aggregate principal amount set forth opposite such date (each such repayment, as the same may be reduced as provided in Sections 2.12(a) and 2.12(g), a "B Term Loan Scheduled Repayment"):
Date Amount ---- ------ September 30, 2002 $ 1,062,500 December 31, 2002 $ 1,062,500 March 31, 2003 $ 1,062,500 June 30, 2003 $ 1,062,500 September 30, 2003 $ 1,062,500 December 31, 2003 $ 1,062,500 March 31, 2004 $ 1,062,500 June 30, 2004 $ 1,062,500 September 30, 2004 $ 1,062,500 December 31, 2004 $ 1,062,500
-54-
Date Amount ---- ------ March 31, 2005 $ 1,062,500 June 30, 2005 $ 1,062,500 September 30, 2005 $ 1,062,500 December 31, 2005 $ 1,062,500 March 31, 2006 $ 1,062,500 June 30, 2006 $ 1,062,500 September 30, 2006 $ 1,062,500 December 31, 2006 $ 1,062,500 March 31, 2007 $ 1,062,500 June 30, 2007 $ 1,062,500 September 30, 2007 $ 100,937,500 December 31, 2007 $ 100,937,500 March 31, 2008 $ 100,937,500 B Term Loan Maturity Date $ 100,937,500
(b) The Borrower shall be required to make, with respect to each Class of Incremental Term Loans, to the extent then outstanding, scheduled amortization payments of such Class of Incremental Term Loans on the dates and in the principal amounts set forth in the respective Incremental Term Loan Commitment Agreement (each such repayment, as the same may be reduced as provided in Sections 2.12(a) and 2.12(g), an "Incremental Term Loan Scheduled Repayment" and, together with the B Term Loan Scheduled Repayments, the "Term Loan Scheduled Repayments"); PROVIDED that, if any Incremental Term Loans are incurred which will be added to (and form part of) an existing Class of Term Loans, the amount of the then remaining Term Loan Scheduled Repayments of the respective Class shall be proportionally increased (with the aggregate amount of increases to the then remaining Term Loan Scheduled Repayments of such Class to equal the aggregate principal amount of such new Incremental Term Loans then being incurred) in accordance with the requirements of clause (ii) of Section 2.05(c). (c) To the extent not previously paid, all Term Loans shall be due and payable on the Maturity Date therefor. SECTION 2.12. PREPAYMENT OF LOANS. (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section and payment of any related amounts owing pursuant to Section 2.17. (b) In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any Asset Disposition, the Borrower shall, within 10 Business Days after such Net Proceeds are received, (x) in the case of any Asset Disposition which utilizes, and to the extent same utilizes, the Additional Asset Sale Basket Amount, apply an amount equal to 100% of the Net Proceeds therefrom (i) first, to repay outstanding principal of Revolving Loans (with no corresponding reduction to the Revolving Commitments) (although, for all repayments made after the Effective Date pursuant to this clause (x), not more than $100 million in the aggregate may be applied pursuant to this subclause -55- (i)), (ii) second, to repay principal of then outstanding Term Loans and (iii) third, to repay any other then outstanding Revolving Loans and Swingline Loans (with no corresponding reduction to the Revolving Commitments), or (y) in the case of any Asset Disposition to the extent not covered by preceding clause (x), prepay outstanding Term Loans in an aggregate amount equal to 100% of such Net Proceeds; PROVIDED that (i) if a Specified Default then exists or will exist immediately after giving effect to the respective Asset Disposition, the Borrower shall make the prepayments required by clause (x) or (y) above, as the case may be, immediately after receipt of any such Net Proceeds, (ii) so long as no Specified Default then exists, with respect to no more than $25,000,000 of cash proceeds in any fiscal year of the Borrower which would otherwise be required to be applied to the repayment of Loans pursuant to preceding clause (y), the Borrower shall not be subject to the obligation to make the prepayments otherwise required pursuant to clause (y) above if within 350 days after the receipt thereof, the Borrower reinvests such Net Proceeds in capital assets and (iii) in the case of any Asset Disposition of the type described in clause (c) of the definition thereof, so long as no Specified Default then exists the Borrower shall not be subject to the obligation to make the prepayments otherwise required pursuant to clause (y) above if within such 10 Business Days the Borrower notifies the Administrative Agent that it intends to use such Net Proceeds to replace or restore the assets subject to the events described in clause (c) in the definition of Asset Disposition within 350 days after the receipt thereof, and within such 350-day period the Borrower delivers to the Administrative Agent a notice certifying that such Net Proceeds have in fact been so applied to restore or replace such assets. If the Borrower gives a notice pursuant to clause (ii) or (iii) of the proviso contained in the preceding sentence and the respective Net Proceeds are not reinvested within the 350-day period referred to in such clause, the Borrower shall forthwith apply such Net Proceeds to prepay outstanding Term Loans in accordance with Section 2.12(g). Without limiting the foregoing provisions of this paragraph (b), if any Asset Disposition, Asset Sale (as defined in any Existing Note Indenture or the New Senior Note Indenture) or similar event occurs and as a result thereof (after giving effect to any reinvestment by the Borrower of the proceeds of any such event) any obligation would arise on the part of the Borrower or any Subsidiary to offer to purchase any Existing Notes, any New Senior Notes or any Indebtedness issued pursuant to Section 6.03(a)(iv) or (v) (or any permitted refinancing of any of the foregoing), then before any such obligation arises, the Borrower shall prepay then outstanding Term Loans and, after all outstanding Term Loans have been repaid in full, permanently reduce the total Revolving Commitments (and repay corresponding outstandings) in such amount as is necessary so that no obligation to make any such offer to purchase at any time arises. (c) In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of property or assets sold or otherwise disposed of in connection with a Permitted Note Sale or a Sale-Leaseback Transaction, the Borrower shall, within 10 days after such Net Proceeds are received, prepay Revolving Loans (with no corresponding reduction to the Revolving Commitments) in an amount equal to 100% of such Net Proceeds. (d) In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any incurrence of Indebtedness (other than Indebtedness permitted to be incurred under clauses (i)-(iii), inclusive, and clauses (vi) through (xvi), inclusive, of Section 6.03(a) as same is in effect on the Effective Date), the Borrower shall, on the date such Net Proceeds are received, apply an amount equal to such Net -56- Proceeds (i) first, to prepay the principal of outstanding Term Loans (to the extent then outstanding) and (ii) second, to the extent in excess thereof, to prepay principal of outstanding Revolving Loans and/or Swingline Loans to the extent then outstanding (with no corresponding reduction to the Revolving Commitments); PROVIDED that to the extent any Net Proceeds are received from any issuance of Indebtedness pursuant to Section 6.03(a)(iv) and/or (v) which are to be used (substantially concurrently with the receipt thereof) to finance or to pay the purchase consideration in connection with an Acquisition identified in writing by the Borrower to the Administrative Agent, the Net Proceeds to be applied for such purpose may be so applied and, to such extent, no repayment will be required pursuant to this Section 2.12(d) as a result of the receipt of such Net Proceeds. (e) Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings of the respective Class to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (f) of this Section. (f) The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not later than 12:00 noon, New York City time, on the Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 1:00 p.m., New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment required by reason of any Asset Disposition or series of related Asset Dispositions for Net Proceeds in excess of $25,000,000, a reasonably detailed calculation of the amount of such prepayment; PROVIDED that, if a notice of optional prepayment is given in connection with a conditional notice of termination of the Revolving Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Each repayment or prepayment of a Borrowing shall be applied ratably to the Loans included in the repaid Borrowing. Promptly following receipt of any such notice (other than a notice relating solely to Swingline Loans), the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.14. (g) Any amount required to be applied pursuant to Section 2.12(b) or (d) shall be applied as mandatory repayments of Term Loans and/or Revolving Loans and Swingline Loans (with no corresponding reduction to the Revolving Commitments) as provided in the respective such Section, with any proceeds in excess of amounts required to be applied pursuant to the respective such Section to be retained by the Borrower. The amount to be applied to repay principal of outstanding Term Loans shall, whether pursuant to a voluntary prepayment under paragraph (a) of this Section or a mandatory repayment under paragraphs (b) or (d) of this Section, be allocated among each of the Classes of the then outstanding Term Loans on a pro rata -57- basis (based upon the relative outstanding principal amounts of such Classes of Term Loans), and with the amount allocated to each such Class of Term Loans to be applied to reduce the then remaining Term Loan Scheduled Repayments of each such Class of Term Loans on a pro rata basis (based upon the then remaining principal amounts of such Term Loan Scheduled Repayments of such Class of Term Loans after giving effect to all prior reductions thereto). (h) On any day on which the total Revolving Exposure (calculated taking the Dollar Equivalent of any then outstanding Letters of Credit denominated in an Alternate Currency) exceeds the total Revolving Commitments, the Borrower shall prepay on such date the principal of Swingline Loans and, after all Swingline Loans have been repaid in full or if no Swingline Loans are outstanding, Revolving Loans in an amount equal to such excess. If, after giving effect to the prepayment of all outstanding Swingline Loans and Revolving Loans, the total LC Exposure exceeds the total Revolving Commitments at such time, the Borrower shall pay to the Administrative Agent on such day an amount of cash and/or Temporary Cash Investments equal to the amount of such excess up to a maximum amount equal to the total LC Exposure at such time, with such cash and/or Temporary Cash Investments to be held as security for the obligations of the Borrower to the Issuing Lenders and the Lenders hereunder in a cash collateral account to be established by the Administrative Agent on terms reasonably satisfactory to it. SECTION 2.13. FEES. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender (other than a Defaulting Lender) a commitment fee, which shall accrue at the Applicable Commitment Fee Percentage on the daily unused amount of each Commitment of such Revolving Lender during the period from and including the date hereof to but excluding the date on which such Revolving Commitment terminates. Accrued commitment fees shall be payable in arrears on the last Business Day of March, June, September and December of each year and on the date on which the Revolving Commitments terminate, commencing on the last Business Day in September 2002. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of determining the unused portion of the Revolving Commitments, the Revolving Commitment of a Revolving Lender shall be deemed to be used to the extent of the outstanding Revolving Loans and LC Exposure of such Revolving Lender (and the Swingline Exposure of such Revolving Lender shall be disregarded for such purpose). (b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the Applicable Rate for Eurodollar Revolving Loans on the daily amount of such Revolving Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Revolving Lender's Revolving Commitment terminates and the date on which such Revolving Lender ceases to have any LC Exposure, and (ii) to each Issuing Lender a fronting fee, which shall accrue at the rate of 1/8 of 1% per annum on the daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, PROVIDED that in no event shall the minimum -58- amount of fronting fees payable in any twelve-month period for any Letter of Credit be less than $500 (it being agreed that, on the day of issuance of any Letter of Credit and on each anniversary thereof prior to the termination or expiration of such Letter of Credit, if $500 will exceed the amount of fronting fees that will accrue with respect to such Letter of Credit for the immediately succeeding twelve-month period, the full $500 shall be payable on the date of issuance of such Letter of Credit and on each such anniversary thereof) and (iii) each Issuing Lender such Issuing Lender's standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Except as otherwise provided in the proviso to clause (ii) of the preceding sentence, participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after September 30, 2002; PROVIDED that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to an Issuing Lender pursuant to this paragraph shall be payable within five days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). (c) The Borrower agrees to pay to each Joint Lead Arranger, Joint Book Manager and Agent, for its respective account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the respective Joint Lead Arranger, Joint Book Manager and Agent. (d) The Borrower agrees to pay to the Incremental Term Loan Lenders, for their own account, such fees as may be separately agreed to with such Incremental Term Loan Lenders pursuant to the relevant Incremental Term Loan Commitment Agreement and in accordance with this Agreement. (e) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to each Issuing Lender, Joint Lead Arranger, Joint Book Manager and other Agent, in the case of fees payable to such Person) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable. SECTION 2.14. INTEREST. (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate, each as in effect from time to time. (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate in effect from time to time. (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any -59- Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Revolving Loans as provided in paragraph (a) of this Section. (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the Revolving Commitments; PROVIDED that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Revolving Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion. (e) All interest hereunder shall be computed on the basis of a year of 360 days, and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate (as in effect from time to time) and applicable Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. SECTION 2.15. ALTERNATE RATE OF INTEREST. If prior to the commencement of any Interest Period for a Eurodollar Borrowing: (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period; then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing; PROVIDED that if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted. SECTION 2.16. INCREASED COSTS. (a) If any Change in Law shall: (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Lender; or -60- (ii) impose on any Lender, any Issuing Lender, the London interbank market or other relevant interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein; and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or Issuing Lender of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or Issuing Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Lender, as the case may be, for such additional costs incurred or reduction suffered; PROVIDED, that no Lender or Issuing Lender shall be entitled under this paragraph to receive compensation for any Excluded Taxes paid by it. The preceding sentence shall not apply to increased costs with respect to Taxes which are addressed in Section 2.18. (b) If any Lender or Issuing Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender's or the Issuing Lender's capital or on the capital of such Lender's or the Issuing Lender's holding company, if any, as a consequence of this Agreement or the Loans made by, or the Commitments of, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to a level below that which such Lender or the Issuing Lender or such Lender's or Issuing Lender's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or Issuing Lender's policies and the policies of such Lender's or Issuing Lender's holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Lender or such Lender's or Issuing Lender's holding company for any such reduction suffered. (c) A certificate of a Lender or Issuing Lender setting forth the amount or amounts necessary to compensate such Lender or Issuing Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or Issuing Lender, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof. (d) Failure or delay on the part of any Lender or Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or Issuing Lender's right to demand such compensation; PROVIDED that the Borrower shall not be required to compensate a Lender or Issuing Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's or Issuing Lender's intention to claim compensation therefor; PROVIDED FURTHER that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof. -61- SECTION 2.17. BREAK FUNDING PAYMENTS. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Revolving Loan or Term Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.20, then, in any such event, the Borrower shall compensate each Lender for the economic loss, cost and expense (but not for loss of profits) attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the Eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. SECTION 2.18. TAXES. (a) Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. If any amounts are payable in respect of Indemnified Taxes or Other Taxes pursuant to the preceding sentence, then the Borrower shall be obligated to reimburse the Administrative Agent or the respective Lender or Issuing Lender (as the case may be), within ten (10) days after the written request of the Administrative Agent, or such respective Lender or Issuing Lender (as the case may be), for taxes imposed on or measured by the net income of the Administrative Agent or such respective Lender or Issuing Lender (as the case may be) pursuant to the laws of the jurisdiction in which the Administrative Agent or such respective Lender or Issuing Lender (as the case may be) is organized or in which the principal office or applicable lending office of the Administrative Agent or such respective Lender or Issuing Lender (as the case may be) is located or under the laws of any political subdivision or taxing authority thereof or therein and for any withholding of taxes as the Administrative Agent or such respective Lender or Issuing Lender shall determine are payable by, or withheld from, the Administrative Agent or such respective Lender or Issuing Lender (as the case may be) in respect of such amounts which are attributable to the increase in the sum payable as described in clause (i) of the preceding sentence so paid to or on behalf of the -62- Administrative Agent or such respective Lender or Issuing Lender (as the case may be) pursuant to clause (i) of the preceding sentence and in respect of any amounts paid to or on behalf of the Administrative Agent or such respective Lender or Issuing Lender (as the case may be), pursuant to this sentence. (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. (c) The Borrower shall indemnify the Administrative Agent, each Lender and each Issuing Lender, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or such Issuing Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate, receipt or other document as to the amount of such payment or liability delivered to the Borrower by a Lender or Issuing Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender or Issuing Lender, shall be conclusive absent manifest error. (d) Within 45 days after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. (e) Each Foreign Lender agrees to deliver to the Borrower and the Administrative Agent on or prior to the Effective Date, or in the case of a Foreign Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 9.04 (unless the respective Foreign Lender was already a Foreign Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Foreign Lender, (i) two accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or successor forms) certifying to such Foreign Lender's entitlement as of such date to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement, or (ii) if the Foreign Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit I (any such certificate, a "Section 2.18(e) Certificate") and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying to such Foreign Lender's entitlement as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement. In addition, each Foreign Lender agrees that from time to time after the Effective Date, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, it will deliver to the Borrower or the -63- Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a Section 2.18(e) Certificate, as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Foreign Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement, or it shall immediately notify the Borrower and the Agent of its inability to deliver any such Form or Certificate. If a Foreign Lender is unable to deliver any such Form or Certificate described in the immediately preceding sentence solely because a change, subsequent to the date on which such Foreign Lender becomes a party to this Agreement, in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of Indemnified Taxes causes such Foreign Lender to be legally unable to deliver such Form or Certificate, such Foreign Lender shall not be required to deliver any such Form or Certificate pursuant to this Section 2.18(e) during such period that such change causes such Foreign Lender to be legally unable to deliver such Form or Certificate. Notwithstanding anything to the contrary contained in this Section 2.18, the Borrower agrees to pay additional amounts and to indemnify each Foreign Lender in the manner set forth in Section 2.18(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any Indemnified Taxes deducted or withheld by it as a result of any changes after the Effective Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of income or similar taxes. (f) If the Borrower pays any additional amount under this Section 2.18 to or on behalf of the Administrative Agent, Lender or Issuing Lender and such Administrative Agent, Lender or Issuing Lender determines in its sole discretion that it has actually received or realized in connection therewith any refund or any reduction of, or credit against, its Tax liabilities in or with respect to the taxable year in which the additional amount is paid (a "Tax Benefit"), such Administrative Agent, Lender or Issuing Lender shall pay to the Borrower an amount that the Administrative Agent, Lender or Issuing Lender shall, in its sole discretion, determine is equal to the net benefit, after tax, which was obtained by the Administrative Agent, Lender or Issuing Lender in such year as a consequence of such Tax Benefit; PROVIDED, HOWEVER, that (i) any Administrative Agent, Lender or Issuing Lender may determine, in its sole discretion consistent with the policies of such Administrative Agent, Lender or Issuing Lender, whether to seek a Tax Benefit; (ii) any Taxes that are imposed on an Administrative Agent, Lender or Issuing Lender as a result of a disallowance or reduction (including through the expiration of any tax credit carryover or carryback of such Administrative Agent, Lender or Issuing Lender that otherwise would not have expired) of any Tax Benefit with respect to which such Administrative Agent, Lender or Issuing Lender has made a payment to the Borrower pursuant to this Section 2.18(f) shall be treated as a Tax for which the Borrower is obligated to indemnify such Administrative Agent, Lender or Issuing Lender pursuant to this Section 2.18 without any exclusions or defenses; (iii) nothing in this Section 2.18(f) shall require Administrative Agent, Lender or Issuing the Lender to disclose any confidential information to the Borrower (including, without limitation, its tax returns); and (iv) no Administrative Agent, Lender or Issuing Lender shall be required to pay any amounts pursuant to this Section 2.18(f) at any time during which a Default exists. -64- SECTION 2.19. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS. (a) The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest or fees, or of amounts payable under Section 2.16, 2.17 or 2.18, or otherwise, where time of payment has not been specified) prior to 12:30 p.m., New York City time, on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 90 Hudson Street, Fifth Floor, Jersey City, New Jersey 07302, except payments to be made directly to the applicable Issuing Lender as expressly provided herein and except that payments pursuant to Sections 2.16, 2.17, 2.18 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments under each Loan Document shall be made in Dollars. (b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties. (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans, Term Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans, Term Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans, Term Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans, Term Loans and participations in LC Disbursements and Swingline Loans; PROVIDED that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary -65- or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation. (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or an Issuing Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the applicable Issuing Lender, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or Issuing Lenders, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. (e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c), 2.06(d) or (e), 2.07(b), 2.19(d), 8.06 or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent pursuant to the Loan Documents for the account of such Lender to satisfy such Lender's obligations under such Sections until all such unsatisfied obligations are fully paid. SECTION 2.20. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If any Lender requests compensation under Section 2.16, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.18, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.16 or 2.18, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. (b) The Borrower may upon notice to any Lender and the Administrative Agent, require such Lender (the "Departing Lender") to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment) (i) if the Departing Lender has requested compensation under Section 2.16, or the Borrower is required to pay any additional amount to such Lender or any Governmental Authority for the account of such Lender pursuant to Section 2.18, or such Lender has given a notice (which has not been rescinded) pursuant to Section 2.21, or such Lender is a Defaulting Lender or was at any time a Defaulting -66- Lender as a result of such Lender providing a notice described in clause (ii) of the definition of Lender Default which such Lender subsequently retracted; or (ii) if the Required Lenders consent to such required assignment and delegation; PROVIDED that (x) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Revolving Commitment is being assigned, each Issuing Lender and the Swingline Lender), which consent shall not unreasonably be withheld, (y) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (z) in the case of any such assignment resulting from a claim for compensation under Section 2.16 or payments required to be made pursuant to Section 2.18, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any assignment and delegation under clause (i) of this paragraph (b) if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. SECTION 2.21. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR LOANS. In the event that on any date any Lender shall have determined (which determination shall be conclusive and binding upon all parties hereto) that the making, maintaining or continuation of its Eurodollar Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order enacted after the date hereof or (ii) has become impracticable, or would cause such Lender material hardship, in either such case as a result of contingencies occurring after the date of this Agreement which materially and adversely affect the interbank Eurodollar market or the position of such Lender in that market, then, and in any such event, such Lender shall be an "Affected Lender" and it shall on that day give notice (by telefacsimile or by telephone confirmed in writing) to the Borrower and the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each other Lender). Thereafter (a) the obligation of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Loans shall be suspended until such notice shall be withdrawn by the Affected Lender, (b) to the extent such determination by the Affected Lender relates to a Eurodollar Loan then being requested by the Borrower pursuant to a Notice of Borrowing Request or a Notice of Interest Election Request, the Affected Lender shall make such Loan as (or convert such Loan to, as the case may be) an Alternate Base Rate Loan, (c) the Affected Lender's obligation to maintain its outstanding Eurodollar Loans (the "Affected Loans") shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (d) the Affected Loans shall automatically convert into Alternate Base Rate Loans on the date of such termination. Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Eurodollar Loan then being requested by the Borrower pursuant to a Notice of Borrowing Request or a Notice of Interest Election Request, the Borrower shall have the option to rescind such Notice of Borrowing Request or Notice of Interest Election Request as to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to the Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission Agent shall promptly transmit to each other Lender). Except as provided in the immediately preceding sentence, nothing in this Section 2.21 shall -67- affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Loans in accordance with the terms of this Agreement. In the event that the circumstances described in the first sentence of this Section 2.21 giving rise to the limitation on incurrences of, or conversions into, Eurodollar Loans ceases to be in existence, the respective Lender shall notify the Borrower and the Agent of the same and the Borrower shall again be entitled to incur (including pursuant to conversions) from such Lender, Eurodollar Loans as otherwise provided in this Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants to the Lenders that: SECTION 3.01. CORPORATE EXISTENCE AND POWER. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of Oklahoma, and the Borrower has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. SECTION 3.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; CONTRAVENTION. The execution, delivery and performance by the Borrower of this Agreement and the other Transaction Documents to which it is a party 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 Authority 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 judgment, injunction, order or decree or any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement or material instrument binding upon the Borrower or any of its Subsidiaries or result in the creation or imposition of any Lien (other than those contemplated by the Security Documents) on any asset of the Borrower or any of its Subsidiaries. SECTION 3.03. BINDING EFFECT. Each Loan Party has duly executed and delivered each of the Loan Documents to which it is party, and each such Loan Document constitutes each such Loan Party's legal, valid and binding obligation enforceable in accordance with its terms. SECTION 3.04. FINANCIAL INFORMATION. (a) The consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of December 29, 2001, and the related consolidated statement of earnings and statement of cash flows for the fiscal year then ended, audited by Deloitte & Touche and set forth in the Borrower's annual report to the Securities and Exchange Commission on Form 10-K for such fiscal year, a copy of which has been delivered to each of the Lenders and the Administrative Agent, fairly present, in conformity with GAAP, the financial position of the Borrower and its Subsidiaries as of such date and their results or operations and cash flows for such fiscal year. (b) The unaudited condensed consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of April 20, 2002, and the related unaudited consolidated -68- statement of earnings and condensed consolidated statement of cash flows for the 16 weeks then ended, set forth in the Borrower's quarterly report to the Securities and Exchange Commission on Form 10-Q for the fiscal quarter ended April 20, 2002, a copy of which has been delivered to each of the Lenders and the Administrative Agent, fairly present, in conformity with GAAP applied on a basis consistent with the financial statements referred to in paragraph (a) of this Section (except for the omission of substantially all footnote disclosure as permitted by Regulation S-X promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended), the financial position of the Borrower and its Consolidated Subsidiaries as of such date and their results of operations and cash flows for such 16-week period (subject to normal year-end adjustments). (c) The pro forma consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of April 20, 2002 (after giving effect to the Transaction and the financing therefor) and the related pro forma consolidated statement of income of the Borrower for the 52-week period ended April 20, 2002 (after giving effect to the Transaction and the financing therefor), in each case as filed with the Securities Exchange Commission in the Borrower's Form 8-K dated June 12, 2002, copies of which have been furnished to the Lenders prior to the Effective Date, presents fairly in all material respects the pro forma consolidated financial position of the Borrower as of April 20, 2002 and the pro forma consolidated results of the operations of the Borrower for the period covered thereby. All of the foregoing pro forma financial statements have been prepared on a basis consistent with the historical financial statements of the Borrower referred to in paragraph (a) of this Section. (d) Since December 29, 2001, there has been no Material Adverse Effect. SECTION 3.05. 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 Authority that draws into question the validity of any Loan Document or in which there is a reasonable possibility of an adverse decision that would be reasonably likely to result in a material adverse effect on the creditworthiness of the Borrower and its Subsidiaries taken as a whole (it being understood that disclosure of any action, suit or proceeding in any filing with the Securities and Exchange Commission will not, in and of itself, be deemed to establish a breach of this representation). SECTION 3.06. COMPLIANCE WITH ERISA. The Borrower, each Subsidiary and each ERISA Affiliate has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and is in compliance in all material respects with its terms and all applicable law, including without limitation, the presently applicable provisions of ERISA and the Code, with respect to each Plan. Neither the Borrower nor any Subsidiary nor any ERISA Affiliate has (i) sought a currently outstanding waiver of the minimum funding standard under Section 412 of the Code or Section 303 or 304 of ERISA 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 such 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 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. No Reportable Event has occurred. No Multiemployer Plan (as defined in Section 4001(a)(3) of ERISA) is insolvent -69- or in reorganization. No Plan has Unfunded Liabilities which, individually or when aggregated with the Unfunded Liabilities with respect to all other Plans, could reasonably be expected to have a Material Adverse Effect. Using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, the withdrawal liability of the Borrower and its Subsidiaries and its ERISA Affiliates as of the close of the most recent fiscal year of each such Multiemployer Plan ended prior to the date of the most recent extension of credit made pursuant to this Agreement, would not exceed $25,000,000. Except to the extent that any of the following, either individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the ability of the Borrower to perform its obligations under this Agreement, the Borrower and its Subsidiaries do not maintain or contribute to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) which provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or have any liabilities under any Plan. SECTION 3.07. ENVIRONMENTAL MATTERS. In the ordinary course of its business, the Borrower reviews the effect of Environmental Laws which could reasonably be expected to have any material effect, individually or in the aggregate, on the business, property, assets, operations, liabilities, condition (financial or otherwise) or prospects of the Borrower and its Subsidiaries, in the course of which it evaluates associated liabilities and costs which it has identified (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 Environmental Laws 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 Materials, 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. SECTION 3.08. TAX RETURNS. The Borrower and its Subsidiaries have filed all United States federal income tax returns and all other material Tax returns that are required to be filed by them (the "Returns") and have paid all Taxes shown to be due and payable on such returns or pursuant to any assessment received by the Borrower or any Subsidiary, except such Taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with GAAP. The Returns accurately reflect in all material respects all liability for taxes of the Borrower and its Subsidiaries as a whole for the periods covered thereby. The charges, accruals and reserves on the books of the Borrower and its Subsidiaries in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate in all material respects. As of the Effective Date, there is no action, suit, proceeding, investigation, audit, or claim now pending or, to the best knowledge of the Borrower or any of its Subsidiaries, threatened by any authority regarding any United States federal or state income taxes relating to the Borrower or any of its Subsidiaries, except as could not reasonably be expected to result in a material liability of the Borrower and its Subsidiaries taken as a whole. As of the Effective Date, neither the Borrower nor any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the -70- payment or collection of United States federal and state income taxes of the Borrower or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Borrower or any of its Subsidiaries not to be subject to the normally applicable statute of limitations, except as could not reasonably be expected to result in a material liability of the Borrower and its Subsidiaries taken as a whole. None of the Borrower or any of its Subsidiaries has incurred, or will incur, any material tax liability in connection with the Transaction (it being understood that the representation contained in this sentence is not made as to any future tax liabilities of the Borrower or any of its Subsidiaries arising as a result of the operation of their businesses in the ordinary course of business, and is not made as to any tax liability that may be allocated to the Borrower or any of its Subsidiaries pursuant to Section 11.5 of the Merger Agreement). SECTION 3.09. SUBSIDIARIES. (a) Each of the Guarantors, and each Subsidiary that is a Grantor, is a corporation or other business entity duly incorporated or organized (as the case may be), validly existing and in good standing under the laws of its jurisdiction of incorporation or organization (as the case may be), and has all corporate or other relevant organizational powers and all material licenses, authorizations, consents and approvals of Governmental Authorities required to carry on its business as now conducted. The execution, delivery and performance by each Guarantor of the Transaction Documents to which it is party are within such Guarantor's corporate or other relevant organizational powers, have been duly authorized by all corporate or other organizational action, require no action by or in respect of, or filing with, any Governmental Authority 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 (or equivalent organizational documents) of any such Guarantor or of any judgment, injunction, order or decree or any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement or material instrument binding upon the Borrower or any of its Subsidiaries, and will not result in the creation or imposition of any Lien (other than those contemplated by the Security Documents) on any asset of the Borrower or any of its Subsidiaries. (b) On the date hereof, the Borrower does not have any Subsidiaries other than the Subsidiaries set forth on Schedule 3.09, which sets forth the name of, and the ownership interest of the Borrower in, each Subsidiary and identifies each Subsidiary that is a Guarantor or Grantor, in each case as of the date hereof. SECTION 3.10. NOT AN INVESTMENT COMPANY. Neither the Borrower nor any Guarantor is an "investment company" within the meaning of the Investment Company Act of 1940, as amended. SECTION 3.11. NO CONFLICTING REQUIREMENTS. Neither the Borrower nor any Subsidiary is in violation of, or in default under, any provision of applicable law, rule or regulation, or of its certificate of incorporation or by-laws (or any equivalent organizational document) or of any agreement, judgment, injunction, order, decree or other instrument binding upon it or any of its properties, which violation or default could reasonably be expected to have consequences that would have a Material Adverse Effect. -71- SECTION 3.12. DISCLOSURE. The material furnished to the Administrative Agent and the Lenders by, or on behalf and with the consent of, the Borrower and its Subsidiaries in connection with the negotiation, execution and delivery of this Agreement, and the transactions contemplated herein taken as a whole, and as supplemented from time to time prior to the date of this Agreement, does not, and all other written materials hereafter furnished by, or on behalf and with the consent of, the Borrower, will not, contain as of the date hereof, any untrue statement of a material fact and does not as of the date hereof (and will not as of the date of any materials hereafter furnished) omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made (or are made), not misleading. The projections and any appraisals provided by the Borrower to the Administrative Agent and the Lenders in connection herewith were prepared in good faith on the basis of information and assumptions that the Borrower believed to be reasonable as of the date such material was provided, and the Borrower believes that such assumptions are reasonable as of the date hereof. SECTION 3.13. SECURITY DOCUMENTS. (a) The Pledge Agreement is effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Creditors, a legal, valid and enforceable security interest in that portion of the Collateral covered in the Pledge Agreement and, upon the filing of UCC-1 Financing Statements in the required jurisdictions (which filings have been made or, if this representation and warranty is made on any date occurring prior to the tenth Business Day following the Effective Date will be made within ten Business Days following the Effective Date), the Pledge Agreement shall constitute a fully perfected first priority Lien on, and security interest in, all right, title and interest of the pledgors thereunder in such Collateral, in each case prior and superior in right to any other Person. (b) The Security Agreement is effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Creditors, a legal, valid and enforceable security interest in that portion of the Collateral covered in the Security Agreement and, upon the filing of UCC-1 Financing Statements in the required jurisdictions (which filings have been made or, if this representation and warranty is being made on any date occurring prior to the tenth Business Day following the Effective Date, will be made within 10 Business Days following the Effective Date), the Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Grantors thereunder in such Collateral, in each case prior and superior in right to any other Person, other than with respect to Liens on the Collateral expressly permitted by Section 6.01 and the Security Agreement. SECTION 3.14. PUBLIC UTILITY HOLDINGS COMPANY. Neither the Borrower nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holdings Company Act of 1935, as amended. SECTION 3.15. LABOR RELATIONS. Neither the Borrower nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against the Borrower or any of its Subsidiaries, or, to the Borrower's -72- Knowledge, threatened against any of them, before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Borrower or any of its Subsidiaries or, to the Borrower's Knowledge, threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the Borrower or any of its Subsidiaries or, to the Borrower's Knowledge, threatened against the Borrower or any of its Subsidiaries and (iii) no union representation question in existence with respect to the employees of the Borrower or any of its Subsidiaries, except (with respect to any matter specified in clause (i), (ii) or (iii) above, either individually or in the aggregate) such as could not reasonably be expected to have a Material Adverse Effect. SECTION 3.16. INDEBTEDNESS. Schedule 3.16 sets forth a true and complete list of all Indebtedness (including Guarantees but excluding surety bonds and Capital Lease Obligations and other individual items of Indebtedness in a principal amount less than $5,000,000) of the Borrower and its Subsidiaries as of the Effective Date and which is to remain outstanding after the transactions contemplated hereby, in each case showing the aggregate principal amount thereof as of the date set forth in such Schedule 3.16 and the name of the respective borrower and lender and any Loan Party or any of its Subsidiaries which directly or indirectly guarantees such debt. SECTION 3.17. INSURANCE. Schedule 3.17 sets forth a true and complete listing of all insurance maintained by the Borrower and its Subsidiaries as of the Effective Date, with the amounts insured (and any deductibles) set forth therein. SECTION 3.18. SUBORDINATION; DESIGNATION OF THE LOAN DOCUMENTS AS "SENIOR INDEBTEDNESS" AND "DESIGNATED SENIOR INDEBTEDNESS"; DESIGNATION OF THIS AGREEMENT AS THE "CREDIT AGREEMENT"; JUSTIFICATION OF INDEBTEDNESS INCURRED HEREUNDER; ETC. (a) The subordination provisions contained in the Subordinated Note Documents are enforceable against the Borrower, the Guarantors and the holders of the Subordinated Notes, and all Indebtedness of the Borrower or any Guarantor hereunder and under any Loan Document, including, without limitation, obligations to pay principal, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law), premium, if any, reimbursement obligations under letters of credit, fees, expenses and indemnities, and all obligations under Hedging Agreements with respect hereto at any time outstanding is within the definition of "Senior Indebtedness" contained in each of the Subordinated Note Indentures, and each of the Subordinated Note Indentures define "Designated Senior Indebtedness" to include "Senior Indebtedness" under this Agreement. (b) This Agreement is and, at all times prior to the date on which all Obligations shall have been repaid in full and the total Commitments have been terminated (and no further Commitments may be provided hereunder), will be, the only "Credit Agreement" under and as defined in each of the Existing Note Indentures and the New Senior Note Indenture. (c) On the Effective Date, the amount of indebtedness permitted to be incurred pursuant to (i) clause (a)(i) of the definition of "Permitted Indebtedness" contained in the 10-1/8% Senior Note Indenture is $1,000,000,000, (ii) clause (i)(x) of the definition of -73- "Permitted Indebtedness" contained in the 10-5/8% Senior Subordinated Note Indentures is $821,605,975 and (iii) clause (a)(i) of the definition of "Permitted Indebtedness" contained in the 9-7/8% Senior Subordinated Note Indenture is $1,000,000,000. (d) (i) On the Effective Date, all Loans incurred on such date will be incurred pursuant to (A) the Consolidated Fixed Charge Coverage Ratio (as defined therein) test contained in Section 10.10 of the 10-5/8% Senior Subordinated Note Indentures and (B) the Consolidated Fixed Charge Coverage Ratio (as defined therein) test contained in Section 4.09 of the 9-7/8% Senior Subordinated Note Indenture and (ii) all Loans made and Letters of Credit issued hereunder shall be permitted pursuant to such Section 10.10 and 4.09 of the 10-5/8% Senior Subordinated Note Indenture and the 9-7/8% Senior Subordinated Note Indenture, respectively. (e) All Indebtedness incurred hereunder shall be permitted under (i) the 10-1/8% Senior Note Indenture pursuant to the clause (a) of the definition of "Permitted Indebtedness" contained therein and (ii) the New Senior Note Indenture pursuant to clause (a) of the definition of "Permitted Indebtedness" contained therein, and upon the incurrence of any Loan or the issuance of any Letter of Credit, the Borrower shall make such calculations necessary to confirm that any and all such Indebtedness may be incurred pursuant to each such aforementioned clauses. The provisions of this clause (e) shall not prevent the Borrower or any of the Guarantors from classifying or reclassifying any indebtedness (other than the Loans made, and Letters of Credit issued, hereunder) pursuant to any other clause of the definition of Permitted Indebtedness under the 10-1/8% Senior Note Indenture or the New Senior Note Indenture in accordance with the last paragraph of the definition of Permitted Indebtedness contained therein. (f) All incurrences of Loans and the issuance of all Letters of Credit as permitted under this Agreement are, and when incurred or issued will be, permitted under each of (and shall give rise to no breach or violation of any of) the Existing Note Indentures, the New Senior Note Documents and all documentation evidencing Later Maturing Indebtedness incurred pursuant to Sections 6.03(a)(iv), (v) and (xii). SECTION 3.19. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION); JURISDICTION OF ORGANIZATION; ETC. Schedule 3.19 attached hereto (as of the Effective Date or, if later, the date of the most recent update to such Schedule pursuant to Section 5.01(f) or 6.14) contains (i) the exact legal name of the Borrower and each Guarantor, (ii) the type of organization of the Borrower and each Guarantor, (iii) whether or not the Borrower and each Guarantor is a registered organization, (iv) the jurisdiction of organization of the Borrower and each Guarantor, (v) the Borrower's and each Guarantor's Location and (vi) the organizational identification number (if any) of the Borrower and each Guarantor. To the extent that the Borrower or any Guarantor does not have an organizational identification number on the date hereof and later obtains one, the Borrower or such Subsidiary Guarantor shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted pursuant to the Security Documents fully perfected and in full force and effect. -74- ARTICLE IV CONDITIONS SECTION 4.01. EFFECTIVE DATE. The obligations of the Lenders to make Loans and of the Issuing Lenders to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02): (a) The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement. (b) The Administrative Agent shall have received a favorable written opinion (addressed to the Agents and the Lenders and dated the Effective Date) of each of (i) Latham & Watkins, counsel for the Borrower, substantially in the form of Exhibit J, and (ii) such local counsel as may be requested by the Administrative Agent, which opinion shall cover matters as the Required Lenders or the Administrative Agent shall reasonably request. (c) The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each of the Borrower and the Guarantors and the authorization of the transactions contemplated hereby, all in form and substance satisfactory to the Agents and their counsel. (d) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in paragraph (i) of this Section 4.01 and paragraphs (a), (b) and (c) of Section 4.02. (e) The Agents shall have received all fees and other amounts due and payable on or prior to the Effective Date, including in the case of the Agents, to the extent invoiced, reimbursement or payment or all out-of-pocket expenses required to be reimbursed or paid by any Loan Party hereunder or under any other Loan Documents. (f) The Administrative Agent shall have received counterparts of the Pledge Agreement signed on behalf of the Borrower and each Subsidiary party thereto, together with stock certificates or other instruments (if any) representing all the Equity Interests pledged thereunder and stock powers or other instruments of transfer, endorsed in blank, with respect to such stock certificates and other equity interests. (g) The Administrative Agent shall have received counterparts of the Security Agreement signed on behalf of the Borrower and each Subsidiary party thereto, together with: -75- (i) all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create or perfect the Liens intended to be created under the Security Agreement; and (ii) results of a recent search of the Uniform Commercial Code (or equivalent) filings made with respect to the Loan Parties in the jurisdictions contemplated in clause (i) above and in such other jurisdictions in which Collateral is located on the Effective Date which may be reasonably requested by the Administrative Agent, and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to the Administrative Agent that the Liens indicated by such financing statements (or similar documents) are permitted by Section 6.01 and the Security Agreement or have been released. (h) The Administrative Agent shall have received counterparts of the Guarantee Agreement signed on behalf of the Borrower and each Subsidiary party thereto. (i) The Collateral Requirement and the Guarantee Requirement shall have been satisfied as of the Effective Date. (j) There shall have been delivered to the Administrative Agent true and correct copies of the Merger Documents, and all of the terms and conditions of the Merger Documents shall be in form and substance reasonably satisfactory to the Agents. All of the conditions precedent to the consummation of the Merger as set forth in the Merger Agreement shall have been satisfied (and not waived, unless consented to by the Agents) to the reasonable satisfaction of the Agents. The Merger shall have been consummated in accordance with the terms and conditions of the Merger Documents and all applicable laws. In addition, all assets acquired by the Borrower pursuant to the Merger shall be free and clear of any liens other than Liens permitted by Section 6.01 and the Security Agreement. (k) (i) The Borrower shall have received gross cash proceeds (calculated before underwriting fees) of at least $150,000,000 from the issuance of common equity securities (the "Common Equity Financing") PROVIDED that to the extent such gross cash proceeds are less than $250,000,000 the Borrower shall have issued sufficient New Senior Notes such that the gross cash proceeds (calculated before underwriting fees) received therefrom, together with the gross cash proceeds (calculated before underwriting fees) received from the Common Equity Financing is at least $350,000,000, and (ii) the Borrower shall have used the entire amount of such gross cash proceeds to make payments owing in connection with the Transaction prior to utilizing any proceeds of Loans for such purpose. There shall have been delivered to the Lenders true and correct copies of the Common Equity Financing Documents, and all of the terms and conditions of the Common Equity Financing Documents shall be reasonably satisfactory to the Agents and the Required Lenders. -76- (l) (i) The Borrower shall have received gross cash proceeds (calculated before underwriting fees) of at least $100,000,000 from the issuance of the New Senior Notes, PROVIDED that to the extent that the Borrower has received less than $250,000,000 of gross cash proceeds (calculated before underwriting fees) from the Common Equity Financing, the Borrower shall have issued sufficient New Senior Notes such that the gross cash proceeds (calculated before underwriting fees) received therefrom, together with the gross cash proceeds (calculated before underwriting fees) received from the Common Equity Financing is at least $350,000,000, and (ii) the Borrower shall have used the entire amount of such gross cash proceeds to make payments owing in connection with the Transaction prior to utilizing any proceeds of Loans for such purpose. There shall have been delivered to the Lenders true and correct copies of the New Senior Note Documents, and all the terms and conditions of the New Senior Note Documents shall be reasonably satisfactory to the Agents and the Required Lenders. (m) The total commitments pursuant to each Existing Credit Agreement shall have been terminated, and all loans and notes with respect thereto shall have been repaid in full (together with interest thereon), all letters of credit issued thereunder shall have been terminated (or either incorporated as Letters of Credit hereunder or fully supported with Letters of Credit issued hereunder) and all other amounts (including premiums) owing pursuant to each Existing Credit Agreement shall have been repaid in full. The creditors (or the respective agent on behalf of such creditors) in respect of each Existing Credit Agreement shall have concurrently terminated and released all security interests in and Liens on the assets of the Borrower and its Subsidiaries created pursuant to the security documentation relating to each Existing Credit Agreement, and such creditors shall have returned all such assets to the Borrower or such Subsidiary, and the Administrative Agent shall have received evidence, in form and substance reasonably satisfactory to it, that the matters set forth in this paragraph (m) have been satisfied as of the Effective Date. (n) With respect to each series of certificates under the Core-Mark Receivables Facility, the Borrower shall have either (i) delivered to the Trustee and the Servicer under the Core-Mark Receivables Facility a notice of the redemption of all such outstanding certificates and deposited with the Trustee funds sufficient to redeem on the redemption date all outstanding certificates, with such redemption to be consummated within 90 days following the Effective Date or (ii) delivered a notice terminating the revolving credit facility thereunder, with all outstanding amounts thereunder to be repaid from the proceeds of accounts receivables securing the Core-Mark Receivables Facility within 180 days after the Effective Date. (o) The Borrower shall have (i) delivered an irrevocable notice of the redemption of all outstanding Core-Mark Bonds to the holders thereof and (ii) shall have deposited with the Trustee under the Core-Mark Bond Indenture proceeds received from the Common Equity Financing sufficient to pay all outstanding principal of, and interest due on, the Core-Mark Bonds on the date of the redemption of the Core-Mark Bonds as the term pursuant to the Core-Mark Bond Indenture (which date shall be no later than the 60th day following the Effective Date). The Core-Mark Bond Indenture (and all -77- obligations of Core-Mark thereunder) shall have been discharged in accordance with the provisions of Section 8.01(a) thereof. The Agents and the Required Lenders shall have received copies of an officer's certificate of the Borrower, an opinion of counsel and such other evidence reasonably requested by the Administrative Agent that the conditions set forth in this Section 4.01(o) have been satisfied. (p) Nothing shall have occurred (and no Agent nor the Required Lenders shall have become aware of any facts or conditions not previously known) which such Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, a material adverse effect on the business, properties, assets, operations, liabilities, prospects or conditions (financial or otherwise) of Core-Mark and its Subsidiaries taken as a whole or of the Borrower and its Subsidiaries taken as a whole. (q) All necessary governmental (domestic and foreign) and material third party approvals and/or consents in connection with the Transaction, the other transactions contemplated hereby and the granting of Liens under the Loan Documents shall have been obtained and remain in effect, and all applicable waiting periods with respect thereto shall have expired without any action being taken by any competent authority which restrains, prevents or imposes materially adverse conditions upon the consummation of the Transaction or the other transactions contemplated by the Transaction Documents or otherwise referred to herein or therein. On the Effective Date, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the Transaction or the other transactions contemplated by the Transaction Documents or otherwise referred to herein or therein. (r) On the Effective Date, there shall be no actions, suits or proceedings pending or, to the Borrower's Knowledge, threatened with respect to the Transaction, this Agreement or any other Transaction Document or which the Agents or the Required Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect. (s) The Administrative Agent shall have received: (i) a solvency certificate, dated the Effective Date, from the chief financial officer of the Borrower, in the form of Exhibit K; and (ii) except with respect to insurance where the respective coverage is less than $5,000,000, certificates of insurance complying with the requirements of Section 5.03 for the business and properties of the Borrower and its Subsidiaries, in form and substance reasonably satisfactory to the Administrative Agent and naming the Collateral Agent as an additional insured and/or as loss payee with respect to the Collateral, and stating that such insurance shall not be canceled without at least 30 days' prior written notice by the insurer to the Collateral Agent. -78- The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Lenders to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 12:00 noon, New York City time, on September 18, 2002 (and, in the event all such conditions are not so satisfied or waived, the Commitments of each Lender and the commitment of each Issuing Lender to issue Letters of Credit hereunder shall terminate at such time). SECTION 4.02. EACH BORROWING. The obligation of each Lender to make a Loan on the occasion of any Borrowing (other than any conversion or continuation of such Borrowing), and of the Issuing Lenders to issue, renew, extend or amend so as to increase the stated amount of any Letter of Credit, is subject to the receipt of an appropriate Borrowing Request under Section 2.03 or request for issuance, renewal, extension or amendment of a Letter of Credit under Section 2.06, as the case may be, and to the satisfaction of the following conditions: (a) The representations and warranties of the Borrower set forth in this Agreement shall be true and correct in all material respects, and the representations and warranties of the Borrower and the other Loan Parties set forth in the other Loan Documents shall be true and correct in all material respects, on and as of the date of such Borrowing or the date of such issuance, amendment, renewal or extension of such Letter of Credit, as applicable. (b) At the time of and immediately after giving effect to such Borrowing or such issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing. (c) The obligation of each Lender with a Revolving Commitment to make Revolving Loans and the Obligation of the Swingline Lender to make Swingline Loans shall be subject to the satisfaction of the condition that at the time of each such extension of credit and immediately after giving effect thereto the Borrower and its Subsidiaries shall not hold cash and Temporary Cash Investments in an aggregate amount (after giving effect to the incurrence of such extension of credit and the application of proceeds therefrom and any other cash or Temporary Cash Investments) on hand (to the extent such proceeds and/or other cash or Temporary Cash Investments are actually utilized by the Borrower and/or any Subsidiary on the respective date of incurrence of the respective extension of credit for a permitted purpose other than an investment in Temporary Cash Investments) in excess of $100,000,000; PROVIDED that for the purposes of determinations made pursuant to this paragraph (c) cash and Temporary Cash Investments will not include Restricted Cash. SECTION 4.03. INCREMENTAL TERM LOANS. The obligation of each Incremental Term Loan Lender to make Incremental Term Loans pursuant to Section 2.01(b) is subject to the satisfaction of all of the applicable conditions set forth in Sections 2.05 and 4.02. -79- Each Borrowing (other than any conversion or continuation of such Borrowing) and each such issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a), (b) and (c) and, in the case of Incremental Term Loan Borrowings, (d) of this Section. ARTICLE V AFFIRMATIVE COVENANTS Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that: SECTION 5.01. INFORMATION. The Borrower will deliver to the Administrative Agent (who will promptly make available to each of the Lenders): (a) as soon as available and in any event within 95 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 earnings and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all certified by Deloitte & Touche or other independent public accountants of nationally recognized standing, which certification shall not be subject to any "going concern" or like qualification or exception or any qualification or exception as to the scope of such audit; (b) as soon as available and in any event within 50 days after the end of each of the first three quarters of each fiscal year of the Borrower, (i) a consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter setting forth in comparative form the figures for the corresponding fiscal quarter of the Borrower's previous fiscal year and (ii) the related consolidated statement of earnings and cash flows of the Borrower and its Consolidated Subsidiaries for such quarter and for the portion of the Borrower's fiscal year ended at the end of such quarter setting forth in comparative form the figures for the related periods in the previous fiscal year, all certified (subject to normal year-end adjustments) as to fairness of presentation, generally accepted accounting principles (except for the omission of substantially all footnote disclosure as permitted by Regulation S-X promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended) 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 paragraphs (a) and (b) above, a certificate of a Financial Officer (i) setting forth in reasonable detail the calculations required to establish whether the Borrower was in compliance with the requirements of Sections 5.08, 6.02, 6.03, 6.04, 6.06, 6.08, 6.09, 6.10 and 6.11 on the date of such financial statements, (ii) setting forth in reasonable detail the calculations establishing that all Loans and Letters of Credit incurred hereunder -80- were incurred in accordance with the requirements of the Existing Note Indentures and the New Senior Note Indenture, in each case in a manner consistent with the representations and warranties made pursuant to clauses (d), (e) and (f) of Section 3.18, (iii) 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 and (iv) setting forth (x) each Plan that has an Unfunded Liability (other than any such Plan which was previously disclosed on the Borrower's most recently filed Form 10-K) and (y) any material increase in the Unfunded Liabilities of any Plan previously disclosed on the Borrower's most recently filed Form 10-K and any Plan disclosed by the Borrower pursuant to preceding clause (x); (d) simultaneously with the delivery of each set of financial statements referred to in paragraph (a) above, a statement of the firm of independent public accountants that audited such statements, which audit shall be in accordance with generally accepted auditing standards, (i) stating 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 establishing whether the Borrower was in compliance with Sections 6.08 through 6.11, inclusive, set forth in the officer's certificate delivered simultaneously therewith pursuant to paragraph (c) above; (e) no later than 60 days following the first day of each fiscal year of the Borrower (commencing with its fiscal year commencing in 2003), a budget in form reasonably satisfactory to the Administrative Agent (including budgeted statements of income, sources and uses of cash and balance sheets for the Borrower and its Subsidiaries on a consolidated basis prepared by the Borrower (i) for each quarter of such fiscal year prepared in detail and (ii) for each immediately succeeding fiscal year through and including the fiscal year in which the then latest Maturity Date occurs, prepared in summary form, in each case setting forth, with appropriate discussion, the principal assumptions upon which such budgets are based; (f) simultaneously with the delivery of each set of financial statements referred to in paragraphs (a) and (b) above, a certificate either (i) certifying that no changes are required to be made to Schedules 3.09 and 3.19, Annex C of the Security Agreement or Annexes A through F of the Pledge Agreement, in each case so as to make the information set forth therein accurate and complete as of the date of such certificate or (ii) to the extent such information is no longer accurate and complete as of such date, (x) setting forth in reasonable detail all information necessary to make all such Schedules and Annexes accurate and complete (at which time such Schedules and/or such Annexes, as the case may be, shall be deemed to be modified to reflect such information) and (y) certifying that all action required to be taken pursuant to the Security Agreement and the Pledge Agreement as a consequence of the changes giving rise to the update of said Schedules and/or Annexes as provided above has been taken; (g) within five Business Days after the obtaining of the Borrower's Knowledge of any Default, a certificate of the chief financial officer, treasurer 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; -81- (h) promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed; (i) 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) that the Borrower shall have filed with the Securities and Exchange Commission; (j) if and when the Borrower, any Subsidiary or any ERISA Affiliate (i) gives or is required to give notice to the PBGC of any Reportable Event, or knows that the plan administrator of any Plan has given or is required to give notice of any such Reportable Event, a copy of the notice of such Reportable Event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standing 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; (vii) receives notice that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan or Multiemployer Plan, a copy of such notice; or (viii) 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, treasurer or the chief accounting officer of the Borrower setting forth details as to such occurrence and action, if any, which the Borrower, the applicable Subsidiary or applicable ERISA Affiliate is required or proposes to take; and (k) from time to time such additional information regarding the condition (financial or otherwise), business or affairs of the Borrower as the Administrative Agent, at the request of any Lender, may reasonably request. SECTION 5.02. PAYMENT OF OBLIGATIONS. The Borrower will pay and discharge, and will cause each Subsidiary to pay and discharge, at or before maturity, all their respective obligations and liabilities except where the same may be contested in good faith by appropriate proceedings or where the failure to do so would not result in a Material Adverse Effect, and will maintain, and will cause each Subsidiary to maintain, in accordance with GAAP, appropriate reserves for the accrual of any and all of the same. The Borrower will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, in each case on a timely basis, and all lawful claims which, if unpaid, might become a lien or charge upon any properties of the Borrower or any of its Subsidiaries; PROVIDED that neither the Borrower nor any of its Subsidiaries shall be required to pay any -82- such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP. 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, except where the failure to do so would not have a Material Adverse Effect. (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 areas by companies of established repute engaged in the same or a similar business; and will furnish to the Administrative Agent upon its request (for distribution to the Lenders), information presented in reasonable detail as to the insurance so carried. SECTION 5.04. MAINTENANCE OF EXISTENCE. The Borrower will preserve, renew and keep in full force and effect, and, except as permitted by Section 6.02, will cause each 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; PROVIDED that a Reincorporation Merger shall be permitted in accordance with the provisions of Section 6.02(k). 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 (i) the necessity of compliance therewith or the resultant penalty, fine or cost for non-compliance is contested in good faith by appropriate proceedings and the Borrower or the respective Subsidiary has maintained adequate reserves as required by GAAP with respect thereto or (ii) the failure to do so would not have a Material Adverse Effect. SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS; COLLATERAL AUDITS. (a) The Borrower will keep, and will cause each of its Subsidiaries 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 the Administrative Agent (at the Borrower's expense) or any Lender (at such Lender'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 requested; PROVIDED that this section shall not be construed to require the Borrower to waive or cause to be waived any attorney-client privilege applicable to information in the Borrower's or a Subsidiary's possession. Each Lender agrees to maintain in confidence (in accordance with the provisions of Section 9.12) any information clearly identified in writing by the Borrower or any Subsidiary as trade secrets or proprietary information which such Lender -83- may obtain as a result of the inspections, examinations and discussions undertaken pursuant to this Section. (b) Upon the request of any Joint Book Manager or the Required Lenders (and at the Borrower's expense), which request shall be made no more than once a year unless a Specified Default exists, an audit of the Collateral, which audit (including the scope thereof) shall be reasonably acceptable to, and performed by an auditor satisfactory to, the Joint Book Managers. SECTION 5.07. USE OF PROCEEDS. (a) All proceeds of the B Term Loans will be used by the Borrower to finance, in part, the Transaction and to pay the fees and expenses related thereto (although no such proceeds shall be used to finance the redemption of the Core-Mark Bonds). (b) All proceeds of the Revolving Loans and the Swingline Loans will be used for the working capital, Capital Expenditures and general corporate purposes of the Borrower and its Subsidiaries; PROVIDED that up to, but no more than, $200,000,000 of Revolving Loans may be used by the Borrower to finance, in part, the Transaction and to pay the fees and expenses related to the Transaction (although no such proceeds shall be used to finance the redemption of the Core-Mark Bonds). (c) All proceeds of the Incremental Term Loans will be used (i) to finance Acquisitions, (ii) to repay, redeem or repurchase outstanding Indebtedness to the extent same are permitted under Section 6.03(b) and to pay fees and expenses in connection with clauses (i) and (ii), and (iii) to repay outstanding Revolving Loans. (d) No portion of any Loans (or the proceeds thereof) will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof nor the extension of any other credit pursuant to this Agreement will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System. SECTION 5.08. GUARANTEE REQUIREMENT; COLLATERAL REQUIREMENT; FURTHER ASSURANCES. (a) If at any date the Guarantee Requirement is not met, the Borrower will promptly (and, in any event, within 30 calendar days thereafter) cause one or more Subsidiaries that are not then Guarantors to become parties to the Guarantee Agreement so as to cause the Guarantee Requirement to be met; PROVIDED that if any Subsidiary is required to become a Guarantor pursuant to the second sentence of the definition of Guarantee Requirement contained herein, each such Subsidiary shall be required to become party to the Guarantee Agreement prior to, or concurrently with, its provision of any guarantee which requires it to become a Guarantor pursuant to the second sentence of the definition of Guarantee Requirements contained herein. (b) If at any date the Collateral Requirement is not met, the Borrower will promptly (and, in any event, within 30 calendar days thereafter) take and cause the Subsidiaries to take all such actions as shall be necessary, or as the Required Lenders, the Administrative Agent or the Collateral Agent may reasonably request, to cause the Collateral Requirement to be -84- met; PROVIDED that if the Collateral Requirement would not be met as a result of any transfer of assets to, or investment in, any Subsidiary, the Collateral Requirement shall instead be required to be satisfied on the date of the respective such transfer or investment. (c) The Borrower will, and will cause each Subsidiary to (i) cause each landlord in respect of real property (other than landlords in respect of retail locations) leased by the Borrower or such Subsidiary (other than pursuant to assumed or acquired leases) after the Effective Date to enter into a Landlord-Lender Agreement and each mortgagee in respect of any real property owned by the Borrower or such Subsidiary that is subjected to a mortgage (other than assumed or acquired mortgages) after the Effective Date to enter into a Mortgagee Agreement and (ii) use commercially reasonable efforts (which shall not include the payment of any amount other than nominal amounts) to cause each landlord in respect of real property (other than landlords in respect of retail locations) of the Borrower or such Subsidiary leased pursuant to leases entered into prior to the Effective Date (or assumed or acquired after the Effective Date) to enter into a Landlord-Lender Agreement and each mortgagee of any real property owned by the Borrower or such Subsidiary that was subjected to a mortgage prior to the Effective Date (or assumed or acquired after the Effective Date) to enter into a Mortgagee Agreement. (d) The Borrower will, and will cause each Subsidiary to, execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Uniform Commercial Code and other financing statements) that may be required under applicable law, or that the Required Lenders, the Administrative Agent or the Collateral Agent may reasonably request, in order to grant, confirm, preserve, protect and perfect the validity and priority of the security interests created or intended to be created by the Security Documents. Such security interests and Liens shall be created under the Security Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance satisfactory to the Collateral Agent, and the Borrower shall deliver or cause to be delivered to the Lenders all such instruments and documents (including legal opinions and lien searches) as the Collateral Agent shall reasonably request to evidence compliance with this paragraph (d). The Borrower shall provide from time to time such evidence as the Collateral Agent shall reasonably request as to the perfection and priority status of each such security interest. SECTION 5.09. CORE-MARK RECEIVABLES FACILITY. On or prior to the respective date therefor determined in accordance with the elections made by the Borrower as contemplated in Section 4.01(n), all commitments pursuant to the Core-Mark Receivables Facility Documents shall have been terminated and all outstanding loans and other amounts with respect thereto shall have been repaid in full as contemplated in Section 4.01(n). In addition, on or prior to such date, all security interests in and Liens on the assets of CM Capital and each other Loan Party created pursuant to the Core-Mark Receivables Facility Documents shall have been released, and the trustee under the Core-Mark Receivables Facility shall have transferred all such remaining assets to CM Capital, and the Administrative Agent shall have received evidence in form and substance reasonably satisfactory to it, that the matters set forth in this Section 5.09 have been satisfied as of such date. -85- ARTICLE VI NEGATIVE COVENANTS Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements have been reimbursed, the Borrower covenants and agrees with the Lenders that: SECTION 6.01. LIENS. The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any asset now owned or hereafter acquired by it, except: (a) Liens created under the Loan Documents; (b) Liens existing on the date hereof and described in Schedule 6.01 hereto (without giving effect to any extension or renewal thereof except as permitted under paragraph (g) of this Section); PROVIDED that if Schedule 6.01 provides a date by which any such Lien must be released, the respective Lien shall not be permitted to exist after such date; (c) any Lien existing on any asset of any Person at the time (if after the date hereof) such Person becomes a Consolidated Subsidiary and not created in contemplation of such event so long as (x) any Indebtedness secured by such Lien is permitted under Section 6.03(a)(ix) or (x) and (y) such Lien does not extend to any other asset or property of the Borrower or any of its Subsidiaries; (d) any Lien on any asset securing Indebtedness incurred or assumed (after the date hereof) for the purpose of financing all or any part of the cost of acquiring or constructing such asset (other than any Lien on Inventory or other Collateral), PROVIDED that such Lien attaches to such asset concurrently with or within 180 days after the acquisition or completion of construction thereof and does not extend to any other asset or property of the Borrower or any of its Subsidiaries; (e) any Lien on any asset of any Person existing at the time (if after the date hereof) such Person is merged or consolidated with or into the Borrower or a Consolidated Subsidiary and not created in contemplation of such event so long as (x) any Indebtedness secured by such Lien is permitted under Section 6.03(a)(ix) or (x) and (y) such Lien does not extend to any other asset or property of the Borrower or any of its Subsidiaries; (f) any Lien existing on any asset prior to the acquisition thereof (if after the date hereof) by the Borrower or a Consolidated Subsidiary and not created in contemplation of such acquisition so long as any Indebtedness secured by such Lien is permitted under Section 6.03(a)(ix) or (x); (g) any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of the foregoing clauses (b) -86- through (f) of this Section, PROVIDED that such Indebtedness (i) is not increased above the amount thereof at the time of any such refinancing, extension, renewal or refunding other than by an amount equal to any premium actually paid in connection with such refinancing, extension, renewal or refunding plus any reasonable financing fees, (ii) is not secured by any additional assets and (iii) except as otherwise expressly permitted in clause (E) of the proviso to Section 6.03(a)(xii), is not provided any additional Guarantees or credit support by the Borrower or any Subsidiary; (h) Liens arising in the ordinary course of its business (but not inconsistent with the Collateral Requirement) which (i) either (x) do not secure Indebtedness or Hedging Agreements, (y) are statutory Liens or (z) apply to equipment purchased pursuant to a title retention document and (ii) either (x) do not in the aggregate materially detract from the value of the assets of the Borrower or the respective Subsidiary or materially impair the use thereof in the operation of its business or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Lien; (i) Liens (but not inconsistent with the Collateral Requirement) in favor of the Borrower or another Consolidated Subsidiary that is a Guarantor; (j) Liens (on the property subject to the respective capital lease) securing Capital Lease Obligations incurred by the Borrower or any Subsidiary to the extent such Capital Lease Obligations are permitted under Section 6.03(a)(viii); (k) any Lien on any Financing Note transferred pursuant to a Permitted Note Sale so long as such Lien does not extend to any other assets or property of the Borrower or any of its Subsidiaries; (l) Liens arising in connection with, and on the property subject to, Sale-Leaseback Transactions consummated in accordance with the terms set forth in the definition thereof so long as such Lien does not extend to any other asset or property of the Borrower or any of its Subsidiaries; (m) Liens existing pursuant to the Core-Mark Receivables Facility Documents, but only until the fifth Business Day after the earlier of (i) the 180th day following the Effective Date and (ii) the date of termination of the Core-Mark Receivables Facility; (n) Liens on proceeds from Indebtedness incurred pursuant to Section 6.03(a)(xii) that have been deposited as contemplated in clause (B) of the proviso contained therein, but only for so long as the time period contemplated in such proviso; (o) easements, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances not interfering in any material respect with (x) the ordinary conduct of the business of the Borrower or any of its Subsidiaries or (y) the ability of the Collateral Agent to access the Collateral; (p) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default pursuant to clause (j) of Article VII so long as the -87- aggregate fair market value (as determined in good faith by the Borrower) of all assets subject to such Liens does not exceed $15,000,000; (q) Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations incurred in the ordinary course of business (exclusive of obligations in respect of the payment of borrowed money); PROVIDED that any consensual Liens as described above (x) shall not apply or attach to any of the Collateral and (y) shall not be secured at any time by cash, Temporary Cash Investments and/or other property with an aggregate fair market value in excess of $15,000,000; and (r) Liens (but not inconsistent with the Collateral Requirement) not otherwise permitted by the foregoing clauses of this Section securing Indebtedness in an aggregate principal or stated amount at any time outstanding not in excess of $25,000,000. SECTION 6.02. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. The Borrower will not, and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of all or any part of its property or assets, or enter into any sale-leaseback transactions, of any Person, except that: (a) each of the Borrower and its Subsidiaries may make sales of inventory in the ordinary course of business; (b) each of the Borrower and its Subsidiaries may sell obsolete, uneconomic, excess or worn-out equipment, materials or other assets (other than real property) in the ordinary course of business; (c) the Borrower and its Subsidiaries may sell assets (including the Equity Interests of any Subsidiary but only if 100% of the Equity Interests of such Subsidiary held by the Borrower and its other Subsidiaries are sold, but excluding Indebtedness or other obligations (other than real property leases) owed by the Borrower or any Subsidiary), so long as (i) in the event that the fair market value (as determined in good faith by the Borrower) of the assets the subject of such sale exceed $25,000,000, the Borrower is in compliance with Sections 6.09, 6.10 and 6.11 on a Pro Forma Basis after giving effect thereto, (ii) each such sale is in an arm's-length transaction and the Borrower or the respective Subsidiary receives at least fair market value therefor (as determined in good faith by the Borrower or such Subsidiary, as the case may be), (iv) the total consideration (taking the amount of cash and Temporary Cash Investments, and the fair market value (as determined by the Borrower in good faith) of all other consideration received by the Borrower or such Subsidiary) is at least 75% cash and is paid at the time of the closing of such sale, (v) the Net Proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section 2.12(b) and (vi) the aggregate amount of the proceeds (taking the amount of cash and Temporary Cash Investments, and -88- the fair market value (as determined by the Borrower in good faith) of all other consideration) received from all assets sold pursuant to this clause (c) in any fiscal year of the Borrower shall not exceed $50,000,000; PROVIDED that the Borrower shall have an additional aggregate basket (for the period from the Effective Date until the termination of the covenants contained in this Article VI in accordance with the introductory paragraph hereof) for asset sales as described above (determining the aggregate proceeds therefrom as calculated above but net of amounts described in clause (iii) of the definition of Net Proceeds) in an amount equal to the Additional Asset Sale Basket Amount, which may be used by the Borrower so long as (w) at the time of any asset sale which utilizes, in whole or in part, the Additional Asset Sale Basket Amount (and immediately after giving effect thereto), no Default shall be in existence, (x) the Borrower notifies the Administrative Agent in writing, at the time of the consummation of any asset sale which will utilize the Additional Asset Sale Basket Amount of its election to justify same under the Additional Asset Sale Basket Amount (and showing in reasonable detail the required repayments pursuant to Section 2.12(b)), (y) the only assets sold pursuant to this proviso (and which utilize the Additional Asset Sale Basket Amount) shall be of the type set forth on Part II of Schedule 6.02(c) and (z) all repayments of Loans required pursuant to Section 2.12(b) are made at the time of any utilization of the Additional Asset Sale Basket Amount; (d) the Borrower and its Subsidiaries may sell real property and/or equipment the subject of Sale-Leaseback Transactions, in each case on the terms set forth in the definition thereof; (e) the Borrower and its Subsidiaries may sell Financing Notes in connection with Permitted Note Sales; PROVIDED that any residual liability incurred by the Borrower or any Subsidiary in connection therewith shall be permitted under Section 6.06(vi); (f) each of the Borrower and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, Accounts arising in the ordinary course of business, but only in connection with the compromise or collection thereof and not as part of any financing or factoring transaction; (g) each of the Borrower and its Subsidiaries may, in the ordinary course of business, grant licenses, sublicenses or leases or subleases to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries, in each case so long as no such grant otherwise affects the Collateral Agent's security interest in the asset or property subject thereto; (h) (i) any Subsidiary of the Borrower may transfer assets to the Borrower or to any Wholly-Owned Domestic Subsidiary which is a Guarantor, so long as the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets so transferred shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such transfer) and (ii) any Subsidiary of the Borrower that is not a Guarantor may transfer assets to another Subsidiary of the Borrower that is not a Guarantor; -89- (i) any Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, the Borrower or any Wholly-Owned Domestic Subsidiary which is a Guarantor so long as (i) in the case of any such merger, dissolution or liquidation involving the Borrower, the Borrower is the surviving corporation of any such merger, dissolution or liquidation (it being understood and agreed that the Borrower may not be liquidated or dissolved), (ii) in all other cases, the respective Guarantor is the surviving corporation of any such merger, dissolution or liquidation and (iii) in all cases, the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of such Subsidiary shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation); (j) until the earlier of (i) the 180th day following the Effective Date and (ii) the termination of the Core-Mark Receivables Facility as contemplated in Section 4.01(n), sales, contributions and other transfers pursuant to the terms of the Core-Mark Receivables Facility Documents shall be permitted; (k) upon not less than 10 days' prior written notice to the Administrative Agent, the Borrower may merge into a newly-formed corporation that has no assets (other than de minimis cash and assets of de minimis value contributed to such corporation in connection with its initial capitalization) or liabilities and is organized under the State of Delaware or another State of the United States of America reasonably acceptable to the Administrative Agent solely for the purposes of reincorporating the Borrower in such State (any such merger consummated pursuant to this clause (k), the "Reincorporation Merger"); PROVIDED that (i) the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of the Borrower shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger) and (ii) the Borrower shall have taken all actions (including without limitation (x) providing the Administrative Agent with updated information to make Schedule 3.19 true and correct after giving effect to the Reincorporation Merger and (y) the filing of appropriate UCC-1 Financing Statements (or amendments to any existing Financing Statements)) required by law or reasonably requested by the Administrative Agent such that all such assets remain subject to the perfected security interests described in preceding clause (i); (l) the Borrower and its Subsidiaries may exchange assets with other Persons so long as (i) the Borrower or the respective Subsidiary acquires replacement assets having substantially the same fair market value (as determined in good faith by the Borrower) of the assets disposed in connection with such exchange and (ii) the aggregate fair market value (as determined in good faith by the Borrower) of all assets disposed of pursuant to such exchanges pursuant to this clause (l) does not exceed $50,000,000; (m) any Subsidiary of the Borrower having assets with the fair market value (as determined in good faith by the Borrower) of less than $50,000 may be liquidated so long as all residual assets remaining upon such liquidation (i.e., all assets remaining after satisfaction of the obligations owing by such Subsidiary to its creditors) are forthwith distributed by Dividends paid in accordance with Section 6.04(a) or (b); and -90- (n) the Borrower and its Subsidiaries may effect Acquisitions in accordance with the requirements of Section 6.06(iii) and (vii). Notwithstanding anything to the contrary contained above, so long as any of the Specified Restrictive Provisions remain in effect, the provisions of this Section 6.02 shall not be violated by reason of (i) any sale, lease, transfer or other disposition (for purposes of this sentence, each a "transfer") of property by the Borrower or any Restricted Subsidiary to the Borrower or any Restricted Subsidiary which is a Wholly Owned Subsidiary (as defined in the Fleming Existing Credit Agreement), (ii) any transfer by any Restricted Subsidiary which is not a Designated Subsidiary (as defined in the Fleming Existing Credit Agreement) of any of its property to the Borrower or any Restricted Subsidiary, (iii) any transfer by the Borrower or any Designated Subsidiary (as defined in the Fleming Existing Credit Agreement) to a Restricted Subsidiary which is not a Wholly Owned Subsidiary (as defined in the Fleming Existing Credit Agreement) of (x) property in a transaction which does not involve a "substantial part" of the property of the Borrower and its Subsidiaries (as defined in the Fleming Existing Credit Agreement), it being understood and agreed that for purposes of this clause (x) a transfer of the property of the Borrower or a Subsidiary shall be deemed to be a "substantial part" of such property if the amount of property proposed to be disposed of when added to the amount of all other property transferred (other than in the ordinary course of business and other than as permitted by following clause (y)) during any one fiscal year of the Borrower contributed more than 30% of EBITDAR (as defined in the Fleming Existing Credit Agreement) for any one of the immediately preceding three fiscal years of the Borrower, and (y) the Borrower or any Restricted Subsidiary may sell, lease, transfer or otherwise dispose of one or more warehouse facilities to the Borrower or a Restricted Subsidiary (in transactions not meeting any tests in the foregoing provisions of this sentence), PROVIDED that (i) such transactions do not in the aggregate involve all or substantially all of the property of the Borrower and its Subsidiaries (as defined in the Fleming Existing Credit Agreement) and (ii) the Borrower or any Subsidiary (as defined in the Fleming Existing Credit Agreement) retains the right to receive at least 85% of the revenue derived from such warehouse facilities, notwithstanding the sale thereof. To the extent the Required Lenders waive the provisions of this Section 6.02 with respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section 6.02 (other than to the Borrower or a Subsidiary thereof) such Collateral shall be sold free and clear of the Liens created by the Security Documents, and the Administrative Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing. SECTION 6.03. INDEBTEDNESS. (a) The Borrower will not, and will not permit any Subsidiary to, incur or at any time be liable with respect to any Indebtedness except: (i) Indebtedness outstanding under the Loan Documents; (ii) Permitted Existing Indebtedness, but no extensions or renewals thereof, except to the extent permitted under paragraph (xii) of this Section 6.03(a); (iii) (a) unsecured Indebtedness of the Borrower and any Subsidiary, as guarantor, incurred under the 10-1/8% Senior Notes and the other 10-1/8% Senior Note Documents in an aggregate principal amount not to exceed $355,000,000 less the amount -91- of any repayments of principal thereof after the Effective Date; (b) unsecured senior subordinated Indebtedness of the Borrower and any Subsidiary, as guarantor, incurred under the 10-5/8% Senior Subordinated Notes and the other 10-5/8% Senior Subordinated Note Documents in an aggregate principal amount not to exceed $400,000,000 less the amount of any repayments of principal thereof after the Effective Date; (c) unsecured senior subordinated Indebtedness of the Borrower and any Subsidiary, as guarantor, incurred under the 9-7/8% Senior Subordinated Notes and the other 9-7/8% Senior Subordinated Note Documents in an aggregate principal amount not to exceed $260,000,000 less the amount of any repayments of principal thereof after the Effective Date; (d) unsecured senior subordinated Indebtedness of the Borrower and any Guarantor, as guarantor, incurred under the 5-1/4% Convertible Senior Subordinated Notes and the other 5-1/4% Convertible Senior Subordinated Note Documents in an aggregate principal amount not to exceed $150,000,000 less the amount of any repayments of principal thereof after the Effective Date; and (e) unsecured Indebtedness of the Borrower and any Guarantor, as guarantor, incurred under the New Senior Notes and the other New Senior Note Documents in an aggregate principal amount not to exceed $200,000,000 less the amount of any repayments of principal thereof after the Effective Date; (iv) so long as (x) no Default then exists or would exist immediately after giving effect to the incurrence thereof and (y) the Borrower is in compliance with Sections 6.09 and 6.10 on a Post-Test Period Pro Forma Basis after giving effect to the incurrence thereof, Later Maturing Indebtedness that is subordinated to the Obligations on terms not less favorable to the Lenders than the terms applicable to the Subordinated Notes, and subordinated Guarantees thereof by Guarantors (so long as the respective such Person remains a Guarantor) so long as the subordination of such Guarantees is on terms not less favorable to the Lenders than the terms applicable to the subordinated Guarantees of the Subordinated Notes; (v) so long as (x) no Default then exists or would exist immediately after giving effect to the incurrence thereof, (y) the Borrower is in compliance with Sections 6.09 and 6.10 on a Post-Test Period Pro Forma Basis after giving effect to the incurrence thereof and (z) the Total Senior Leverage Ratio after giving effect to the incurrence thereof is less than 3.00:1.00, other Later Maturing Indebtedness, and Guarantees thereof by one or more Guarantors (so long as the respective such Person remains a Guarantor); (vi) Indebtedness of the Borrower owing to a Wholly-Owned Subsidiary or of a Consolidated Subsidiary owing to the Borrower or a Wholly-Owned Subsidiary or Indebtedness of the Borrower owing to a Subsidiary that is not a Wholly-Owned Subsidiary, PROVIDED that any such Indebtedness of the Borrower owing to any such non-Wholly-Owned Subsidiary (x) arises out of the Borrower's cash management activities in the ordinary course of business or (y) is subordinated to the Obligations pursuant to a subordination agreement in the form of Exhibit L; (vii) Guarantees made by the Borrower or any Subsidiary constituting Customer Support so long as all such Guarantees are permitted under Section 6.06(vi); -92- (viii) obligations of the Borrower or its Subsidiaries as lessee under capital leases the aggregate capitalized amount of which does not exceed $450,000,000 at any time outstanding, and any Guarantees of such obligations; (ix) Indebtedness assumed by the Borrower or any Subsidiary in connection with an Acquisition (if after the date hereof) and not created in contemplation of such Acquisition, PROVIDED that (x) such Indebtedness is not outstanding under any working capital facility or a bank or similar loan agreement and (y) all Capital Lease Obligations assumed pursuant to this clause (ix) shall be deemed to constitute a utilization of (and must be incurred in compliance with) the basket contained in clause (viii) of this Section and all other Indebtedness incurred pursuant to this clause (ix) shall be deemed to constitute a utilization of the basket(s) contained in clause (xiv) and/or clause (xv) of this Section; PROVIDED that to the extent any such Indebtedness is deemed to constitute a utilization of the basket contained in clause (xiv) hereof, the Borrower shall be required to establish that the Total Senior Leverage Ratio after giving effect to the incurrence of such Indebtedness is less than 3.00:1.00; (x) Indebtedness of any corporation outstanding at the time (if after the date hereof) such corporation, limited liability company or partnership becomes a Consolidated Subsidiary and not created in contemplation of such event so long as (x) such Indebtedness is not outstanding under any working capital facility or a bank or similar loan agreement and (y) all Capital Lease Obligations assumed pursuant to this clause (x) shall be deemed to constitute a utilization of (and must be incurred in compliance with) the basket contained in clause (viii) of this Section and all other Indebtedness incurred pursuant to this clause (x) shall be deemed to constitute a utilization of the basket(s) contained in clause (xiv) and/or clause (xv) of this Section; PROVIDED that to the extent any such Indebtedness is deemed to constitute a utilization of the basket contained in clause (xiv) hereof, the Borrower shall be required to establish that the Total Senior Leverage Ratio after giving effect to the incurrence of such Indebtedness is less than 3.00:1.00; (xi) Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks the Borrower or any Subsidiary is exposed to in the conduct of its business or management of its liabilities, and not for speculative purposes; (xii) Indebtedness the proceeds of which are used to refinance Indebtedness permitted by clauses (iii), (iv), (v), (ix), (x) or (xiv) of this Section 6.03(a); PROVIDED that (A) the principal amount of such Indebtedness does not exceed that of the Indebtedness outstanding at the time of any such refinancing (plus the amount of any premium actually paid on the Indebtedness so refinanced and the amount of any expenses incurred in connection with such refinancing), (B) all net proceeds of the Indebtedness incurred pursuant to this clause (xii) are substantially concurrently applied to permanently repay the Indebtedness being refinanced, except to the extent the proceeds of such refinancing Indebtedness (in an amount equal to the amount required to repay all such Indebtedness plus any accrued interest to the date of the respective refinancing plus any applicable premium) are deposited with the trustee in respect of such Indebtedness to be refinanced and thereafter applied to permanently repay such Indebtedness to be -93- refinanced within 60 days after the incurrence of such refinancing Indebtedness, (C) such Indebtedness does not have a final maturity or Weighted Average Life to Maturity shorter than that of the Indebtedness so refinanced, (D) the terms of such Indebtedness (including any applicable subordination terms) are no less favorable to the Borrower or the Lenders than the terms of the Indebtedness so refinanced, (E) the obligor on such Indebtedness is the same as the obligor on the Indebtedness so refinanced (except, with respect to Indebtedness incurred pursuant to clauses (ix) or (x) of Section 6.03(a), the refinancing Indebtedness may be incurred by the Borrower and Guaranteed by one or more Guarantors), (F) the Liens, Guarantees or other credit support for such Indebtedness are no more favorable to the obligee of such Indebtedness than such credit support for the Indebtedness being refinanced and (G) intercompany Indebtedness may only be so refinanced with other intercompany Indebtedness; (xiii) Indebtedness of the Borrower and its Subsidiaries arising in the ordinary course of operations in connection with Treasury Services provided pursuant to uncommitted lines of credit, which Indebtedness may be secured pursuant to the Security Documents; PROVIDED that the maximum amount of Indebtedness at any time outstanding pursuant to this clause (xiii) shall not exceed the greater of (a) $50,000,000 and (b) that amount which, when added to the total Revolving Exposures of all the Revolving Lenders at such time, equals the total Revolving Commitments of all the Revolving Lenders as then in effect; (xiv) so long as (x) no Default then exists or would exist immediately after giving effect thereto and (y) the Total Senior Leverage Ratio after giving effect to the incurrence of such Indebtedness is less than 3.00:1.00, Indebtedness secured by Liens described in Section 6.01(d) and incurred to finance all or any part of the cost of acquiring or constructing the respective asset or assets (other than Inventory or other Collateral) subject to such Liens; PROVIDED that (a) the aggregate principal amount of all Indebtedness incurred pursuant to this clause (xiv) shall not exceed $250,000,000, (b) the aggregate principal amount of all Indebtedness incurred pursuant to this clause (xiv) in any fiscal year of the Borrower shall not exceed $50,000,000 and (c) if any Indebtedness incurred pursuant to this clause (xiv) is secured by a mortgage on real property on which (or in which) Inventory shall or is expected to be located, the respective mortgagee shall have entered into a Mortgagee Agreement; (xv) Indebtedness of the Borrower and its Subsidiaries, in addition to other Indebtedness permitted under clauses (i) through (xiv) above and clause (xvi) below, in an aggregate principal amount not to exceed $25,000,000 at any time outstanding; (xvi) surety bonds issued for the benefit of the Borrower and its Subsidiaries in the ordinary course of their businesses; and (xvii) Indebtedness existing pursuant to the Core-Mark Receivables Facility Documents but only until the fifth Business Day after the earlier of (i) the 180th day following the Effective Date and (ii) the date of the termination of the Core-Mark Receivables Facility, PROVIDED that no extensions or renewals thereof shall be permitted pursuant to this clause (xvii). -94- (b) The Borrower will not, and will not permit any Subsidiary to, make any prepayment (or make any offer to make any prepayment) of the principal of, or repurchase, redeem, defease or otherwise retire (including in each case, without limitation, by way of depositing with the trustee with respect thereto or any other Person, monies or securities before due for the purpose of paying when due) prior to its stated maturity (whether by reason of asset sales, a change of control, or otherwise), any Indebtedness for borrowed money, except: (i) Indebtedness created under the Loan Documents; (ii) Indebtedness outstanding on the date hereof that is repaid on the Effective Date (or that is designated to be repaid within a specific period after the Effective Date on Schedule 3.16) with the proceeds of Loans made under this Agreement or the proceeds of the Common Equity Financing or the issuance of the New Senior Notes; (iii) Indebtedness under the Core-Mark Receivables Facility that is repaid or redeemed as contemplated in Section 5.09 with the proceeds of assets transferred to the trust established pursuant to the terms of the Core-Mark Receivables Facility Documents and/or with the proceeds of Loans made under this Agreement or proceeds of the Common Equity Financing or the issuance of the New Senior Notes; (iv) Indebtedness of the Borrower to a Consolidated Subsidiary or of a Consolidated Subsidiary to the Borrower or another Consolidated Subsidiary; (v) Indebtedness of the character described in clauses (viii), (ix), (x), (xi), (xiii) and (xv) of Section 6.03(a); (vi) Later Maturing Indebtedness in an aggregate principal amount not in excess of $10,000,000; (vii) in connection with (and to the extent of) the refinancing of such Indebtedness where such refinancing is expressly permitted by Section 6.03(a)(xii); (viii) Indebtedness of the Borrower or any Subsidiary which is outstanding as of the Effective Date so long as the aggregate principal amount of Indebtedness prepaid, repurchased, redeemed or pursuant to this clause (viii) does not exceed $1,000,000; and (ix) other Indebtedness so long as (x) no Default then exists or would exist immediately after giving effect to any such repurchase, redemption, defeasance or retirement, (y) the Total Leverage Ratio after giving effect to any such repurchase, redemption, defeasance or retirement is less than 3.50:1.00 and (z) the Total Senior Leverage Ratio after giving effect to any such repurchase, redemption, defeasance or retirement is less than 3.00:1.00. SECTION 6.04. DIVIDENDS. The Borrower will not, and will not permit any of its Subsidiaries to, authorize, declare or pay any Dividends with respect to the Borrower or any of its Subsidiaries, except that: -95- (a) any Subsidiary of the Borrower may declare and pay cash Dividends to the Borrower or to any Subsidiary of the Borrower; (b) any non-Wholly-Owned Subsidiary of the Borrower may declare and pay cash Dividends to its shareholders generally so long as the Borrower or its respective Subsidiary which owns the equity interest in the Subsidiary paying such Dividends receives at least its proportionate share thereof (based upon its relative holding of the equity interest in the Subsidiary paying such Dividends and taking into account the relative preferences, if any, of the various classes of equity interests of such Subsidiary); (c) the Borrower may repurchase (from the respective officers, directors or employees, or their families or estates) outstanding shares of its common stock (or options to purchase such common stock) following the death, disability or termination of employment of officers, directors or employees of the Borrower or any of its Subsidiaries, PROVIDED that (i) the aggregate amount paid by the Borrower in respect of all such repurchases shall not at any time exceed $25,000,000 (with no more than $10,000,000 of such repurchases in the aggregate to be made during the period from the Effective Date until the second anniversary thereof) and (ii) at the time of, and immediately after giving effect to, any repurchase or payment permitted to be made pursuant to this paragraph (c), no Default shall then exist; (d) (i) so long as no Default then exists or would exist immediately after giving effect thereto (and so long as the Borrower reasonably believes that no Default will exist at the time of the respective payment thereof), the Borrower may declare Dividends (in any event payable within 60 days after the date of declaration) to its shareholders generally on its common stock in an amount not to exceed $.08 per share (adjusted in an equitable manner in the event of any stock split or similar event) per fiscal quarter of the Borrower and (ii) so long as the requirements of preceding clause (i) were satisfied on the date of declaration, the Borrower may pay such Dividends within 60 days after the date of such declaration; (e) non Wholly-Owned Subsidiaries may repurchase their outstanding Equity Interests held by Persons other than the Borrower and its Subsidiaries; PROVIDED that any and all such repurchases shall be deemed to constitute Investments and shall be required to be independently justified under Section 6.06(x); and (f) the Borrower may repurchase additional shares of its outstanding common stock so long as (i) the Total Leverage Ratio after giving effect to any such repurchase is less than 3.50:1.00 and (ii) the aggregate amount paid by the Borrower with respect to all such repurchases shall not exceed $25,000,000. SECTION 6.05. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, pay any funds to or for the account of, make any investment (whether by acquisition of stock or indebtedness, by loan, advance, transfer of property, guarantee or other agreement to pay, purchase or service, directly or indirectly, any Indebtedness, or otherwise) in, lease, sell, transfer or otherwise dispose of any assets, tangible or intangible, to, or participate in, or effect any transaction in connection with -96- any joint enterprise or other joint arrangement with, any Affiliate; PROVIDED HOWEVER, that the foregoing provisions of this Section shall not prohibit (a) the Borrower or any Subsidiary from declaring or paying any lawful dividend in accordance with Section 6.04, (b) the Borrower or any Subsidiary from making sales to or purchases from any Affiliate and, in connection therewith, extending credit or making payments, or from making payments for services rendered by any Affiliate, if such sales or purchases are made or such services are rendered in the ordinary course of business and on terms and conditions at least as favorable to the Borrower or such Subsidiary as the terms and conditions which would apply in a similar transaction with a Person not an Affiliate, (c) loans to officers of the Borrower or any of its Subsidiaries permitted under Section 6.06(viii), (d) the Borrower or any Subsidiary from making payments of principal, interest and premium on any Indebtedness of the Borrower or such Subsidiary held by an Affiliate if the terms of such Indebtedness are substantially as favorable to the Borrower or such Subsidiary as the terms which could have been obtained at the time of the creation of such Indebtedness from a lender which was not an Affiliate, (e) the Borrower or any Subsidiary from participating in, or effecting any transaction in connection with, any joint enterprise or other joint arrangement with any Affiliate if the Borrower or such Subsidiary participates in the ordinary course of its business and on a basis no less advantageous than the basis on which such Affiliate participates, (f) the Borrower or any Subsidiary from making payments of reasonable compensation, fees and expenses to their respective directors and executive officers for services rendered to the board of directors of the Borrower or any Subsidiary or any committee of any thereof, (g) the Borrower or any Subsidiary from performing its obligations under certain real property leases listed on Schedule 6.05 or other leases or obligations entered or undertaken by a Person before it becomes a Subsidiary of the Borrower as permitted hereunder and (h) other transactions approved by a majority of the disinterested members of the Board of Directors of the Borrower so long as such transactions are at least as fair to the Borrower as to the respective Affiliate that is a party to such transaction and, in the case any such transaction involves a consideration equal to or in excess of $10,000,000, the Borrower shall have delivered to the Administrative Agent an opinion as to the fairness of such transaction to the Borrower or the respective Subsidiary from a financial point of view issued by an investment banking firm of national standing with total assets in excess of $1,000,000,000. SECTION 6.06. ACQUISITIONS AND INVESTMENTS. Neither the Borrower nor any Subsidiary will make any acquisition of all or substantially all of the Equity Interest, or property or assets, of any Person, make any Investment or hold any cash or Temporary Cash Investments except: (i) The Borrower and its Subsidiaries may acquire and hold cash and Temporary Cash Investments, PROVIDED that the aggregate amount of cash and Temporary Cash Investments permitted to be held by the Borrower at any time when Revolving Loans or Swingline Loans are outstanding shall not exceed $100,000,000, PROVIDED that for the purposes of calculating the amount of cash and Temporary Cash Investments held by the Borrower and its Subsidiaries for the purposes of compliance with this paragraph all Restricted Cash shall be excluded therefrom; (ii) Investments by the Borrower in any Wholly-Owned Subsidiary and Investments by any Wholly-Owned Subsidiary in the Borrower or in any other Wholly-Owned Subsidiary; -97- (iii) any Acquisition or Investment not constituting Customer Support, to the extent the consideration therefor consists of Equity Interests of the Borrower; (iv) the reclassification of any Investment originally made in the form of Indebtedness as an Investment by way of capital contribution or share purchase or the reclassification of any Investment originally made by way of capital contribution or share purchase as an Investment in the form of Indebtedness so long as any additional amounts paid or contributions made in respect of such reclassification are independently justified under another paragraph of this Section 6.06; (v) Investments deemed to exist as a result of (x) Indebtedness extended as contemplated by Section 6.03(a)(vi) and (y) Guarantees permitted under Section 6.03(a); (vi) Customer Support during any Test Period in an aggregate amount not to exceed 1.75% of the Borrower's Net Sales during such Test Period (determined without any write-downs or write-offs of any such Customer Support occurring on or after the Effective Date but giving effect to any release of any Guarantees constituting Customer Support); PROVIDED that (i) Customer Support of the type described in clause (iv) of the definition thereof shall not be permitted pursuant to this clause (vi) at any time when a Default then exists and (ii) Customer Support to any one customer (also determined without any write-downs or write-offs of any such Customer Support to such customer occurring on or after the Effective Date but giving effect to any release of any Guarantees constituting Customer Support to such customer) shall not at any time exceed $25,000,000 in the aggregate; (vii) other Acquisitions so long as (a) no Specified Default exists at the time of and immediately after giving effect to such Acquisition, (b) in the case of each Significant Acquisitions (except any Significant Acquisition, where all consideration therefor consists of Equity Interests of the Borrower), calculations are made by the Borrower showing compliance with the financial covenants contained in Sections 6.09 and 6.10 for the Test Period most recently ended on a Post-Test Period Pro Forma Basis as if the respective Significant Acquisition, as well as all other Significant Acquisitions and all Significant Asset Dispositions theretofore consummated after the first day of such Test Period had occurred on the first day of such Test Period, (c) immediately after giving effect to each Acquisition (and all payments to be made in connection therewith, including for this purpose (as if paid on the date of the consummation of the respective Acquisition) the aggregate amount paid or reasonably expected to be paid (based on good faith projections prepared by Borrower) on or within one year after the date of the consummation of the Acquisition pursuant to any earn-out, non-compete, consulting or deferred compensation or purchase price adjustment or similar arrangements with respect to such Acquisition as well as any prior Acquisitions) the unused Revolving Commitments shall equal or exceed the sum of the Relevant Amount plus the aggregate amount of all payments not theretofore made with respect to Acquisitions but which are required to be taken into account in accordance with the provisions of the immediately preceding parenthetical (the "Minimum Required Commitment Amount"), and the Borrower shall further be required to establish that if additional Revolving Loans were incurred on such date in an amount equal to the Minimum Required Commitment -98- Amount, the Borrower would remain in compliance with the requirements of Section 6.11 and would comply on a Post-Test Period Pro Forma Basis with Sections 6.09 and 6.10, and (d) the aggregate consideration (other than consideration in the form of common stock of the Borrower) paid in connection with such Acquisition (determined in a manner consistent with the definition of Significant Acquisition) does not exceed $400,000,000; (viii) loans to officers of the Borrower and its Subsidiaries pursuant to the Borrower's officers' stock ownership plan in an aggregate principal amount not to exceed $10,000,000 (without giving effect to any write-downs or write-offs thereof); (ix) Investments arising from the receipt by the Borrower or the respective Subsidiary of non-cash consideration to the extent permitted under Sections 6.02(c) and (d); and (x) Investments not otherwise permitted under clauses (i) through (ix) above so long as the aggregate amount of Investments at any time outstanding (determined without regard to any write-downs or write-offs) pursuant to this clause (x) does not exceed $25,000,000. SECTION 6.07. LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Borrower or any of its Subsidiaries, or pay any Indebtedness owed to the Borrower or any of its Subsidiaries, (b) make loans or advances to the Borrower or any of its Subsidiaries or (c) transfer any of its properties or assets to the Borrower or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Agreement, (iii) the other Loan Documents, (iv) the Existing Note Documents and documentation evidencing Indebtedness incurred to refinance Indebtedness evidenced by any of the Existing Note Documents in compliance with Section 6.03(a)(xii) so long as such restrictions contained in the documentation evidencing such refinancing Indebtedness are no less favorable to the Borrower or the Lenders than the restrictions set forth in the respective Existing Note Document immediately prior to such refinancing, (v) the New Senior Note Indenture as in effect on the date hereof, and restrictions contained in other Indebtedness so long as same are no less favorable to the Borrower or the Lenders than those contained in the New Senior Note Indenture (as in effect on the date hereof), (vi) prior to the earlier of (x) 180th day after the Effective Date and (y) the termination of the Core-Mark Receivables Facility as contemplated in Section 4.01(n), the provisions applicable to CM Capital and the sellers of receivables contained in the Core-Mark Receivables Facility Documents, (vii) customary provisions restricting subletting or assignment of any lease governing any leasehold interest of the Borrower or any of its Subsidiaries, (viii) customary provisions restricting assignment of any licensing agreement (in which the Borrower or any of its Subsidiaries is the licensee) or other contract entered into by the Borrower or any of its Subsidiaries in the ordinary course of business, (ix) restrictions on the transfer of any asset pending the close of the sale of such asset, and (x) restrictions on the -99- transfer of any asset subject to a Lien permitted by Section 6.01(b), (c), (d), (e), (f), (g), (h), (j), (k), (l), (n), (q) or (r). SECTION 6.08. CAPITAL EXPENDITURES. (a) The Borrower will not, and will not permit any of its Subsidiaries to, make any Capital Expenditures (other than Capital Expenditures otherwise permitted under clauses (b) and (c), below), except that during any Test Period ending on or after the Borrower's fiscal quarter ending closest to September 30, 2002, the Borrower and its Subsidiaries may make Capital Expenditures in an aggregate amount during any such Test Period not to exceed 1.50% of the Borrower's Net Sales during such Test Period for such Test Period. (b) In addition to the foregoing, the Borrower and its Subsidiaries may make Capital Expenditures with the amount of Net Proceeds received by the Borrower or any of its Subsidiaries from any Asset Disposition (excluding any Asset Disposition made pursuant to the proviso to Section 6.02(c)) so long as such Net Proceeds are reinvested within 350 days following the date of such Asset Disposition, but only to the extent that such Net Proceeds are not otherwise required to be applied to repay Term Loans or reduce Commitments pursuant to Section 2.12(b). (c) In addition to the foregoing, the Borrower and its Subsidiaries may (x) consummate Acquisitions in accordance with the requirements of Sections 6.06(iii) and (vii) and (y) make additional Capital Expenditures with Net Proceeds received by the Borrower from its issuance of Equity Interests after the Effective Date so long as (and to the extent that) such Net Proceeds are not used to effect (or justify) Acquisitions made pursuant to Section 6.06. SECTION 6.09. CONSOLIDATED FIXED CHARGE COVERAGE RATIO; ADJUSTED CONSOLIDATED FIXED CHARGE COVERAGE RATIO. The Borrower will not permit (a) the Consolidated Fixed Charge Coverage Ratio for any Test Period ending (i) after the Effective Date and on or prior to the Borrower's fiscal quarter ending closest to September 30, 2003, to be less than 1.80:1.00 or (ii) thereafter, to be less than 2.00:1.00 and (b) the Adjusted Consolidated Fixed Charge Coverage Ratio for any Test Period ending after the Effective Date to be less than 1.00:1.00. Except as may be required for purposes of determining compliance with other Sections of this Agreement (e.g., Sections 2.05, 6.03 and 6.06), calculations pursuant to this Section 6.09 shall not be made on a Pro Forma Basis or Post-Test Period Pro Forma Basis. SECTION 6.10. TOTAL LEVERAGE RATIO. The Borrower will not permit the Total Leverage Ratio at any time during any period set forth below to exceed the respective ratio set forth opposite such period below (subject to adjustment as described in the immediately succeeding sentence at any time when same is applicable in accordance with its terms):
Period Ratio ------ ----- From the Effective Date to, but not including, 4.25:1.00 the last day of the Borrower's fiscal year ending closest to December 31, 2003
-100- Thereafter to, but not including, the last day 4.00:1.00 of the Borrower's fiscal year ending closest to December 31, 2004 Thereafter to, but not including, the last day 3.75:1.00 of the Borrower's fiscal year ending closest to December 31, 2005 Thereafter 3.50:1:00
Notwithstanding anything to the contrary contained in the table set forth above, at any time from September 1 to and including December 15 of each year (beginning with the year 2003) the required Total Leverage Ratio as otherwise set forth in the table above for the applicable period shall be adjusted by increasing the numerator by 0.25 (for example, for the period from September 1, 2003 to and including December 15, 2003, the required Total Leverage Ratio would be increased from 4.25:1.00 to 4.50:1.00). SECTION 6.11. ASSET COVERAGE RATIO. The Borrower will not permit the Asset Coverage Ratio to be less than 2.25:1.00 at any time. SECTION 6.12. LIMITATION ON ISSUANCES OF CAPITAL STOCK. (a) The Borrower will not permit any of its Subsidiaries to issue any Equity Interests (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, Equity Interests, except (i) for transfers and replacements of then outstanding shares of Equity Interests, (ii) for stock splits, stock dividends and issuances which do not decrease the percentage ownership of the Borrower or any of its Subsidiaries in any class of the Equity Interests of such Subsidiary, (iii) to qualify directors to the extent required by applicable law, or (iv) for issuances by newly created or acquired Subsidiaries in accordance with the terms of this Agreement. (b) The Borrower will not issue any capital stock which is not common stock or Qualified Preferred Stock. SECTION 6.13. LIMITATION ON MODIFICATIONS OF CERTAIN INDEBTEDNESS. The Borrower will not, and will not permit any of its Subsidiaries to amend or modify, or permit the amendment or modification of, any provision of (i) any Existing Note Document or any New Senior Note Document, except, in any such case, any amendment or modification which is not adverse to the Lenders in any respect, or (ii) any Later Maturing Indebtedness incurred under Section 6.03(a)(iv) or (v) or any Indebtedness incurred pursuant to Section 6.03(a)(xii), in each case except to the extent that after giving effect to any such amendment or modification such Indebtedness continues to comply with the terms initially applicable thereto as set forth in Section 6.03(a)(iv), 6.03(a)(v) or 6.03(a)(xii), respectively, or such amendment or modification is not adverse to the Lenders in any respect. SECTION 6.14. CHANGE OF LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION); JURISDICTION OF -101- ORGANIZATION; ETC. Neither the Borrower nor any Guarantor shall change its legal name, its type of organization, its status as a registered organization (in the case of a registered organization), its jurisdiction of organization, its Location, or its organizational identification number (if any), except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Security Documents and so long as same do not involve (x) a registered organization ceasing to constitute same or (y) the Borrower or any Guarantor changing its jurisdiction of organization or location from the United States or a State thereof to a jurisdiction of organization or location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 10 days' prior written notice of each change to the information listed on Schedule 3.19 (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Schedule 3.19 which shall correct all information contained therein for the Borrower or the respective Guarantor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby pursuant to the Security Documents at all times fully perfected and in full force and effect. Nothing in this Section 6.14 shall be construed to prohibit the Reincorporation Merger so long as same is consummated in accordance with the provisions of 6.02(k). SECTION 6.15. LIMITATION ON CREATION OF SUBSIDIARIES. The Borrower will not, and will not permit any of its Subsidiaries to, establish, create or acquire after the Effective Date any Subsidiary, PROVIDED that the Borrower and its Wholly-Owned Subsidiaries shall be permitted to (A) establish, create and, to the extent permitted by this Agreement, acquire Wholly-Owned Subsidiaries so long as (i) the Equity Interests of each such new Wholly-Owned Subsidiary are pledged pursuant to, and to the extent required by, the Pledge Agreement, (ii) promptly following the establishment, creation or acquisition thereof each such new Wholly-Owned Domestic Subsidiary (and, to the extent required by Section 5.08, each such new Wholly-Owned Foreign Subsidiary) executes a counterpart of the Guarantee Agreement, the Pledge Agreement and the Security Agreement, and (iii) each such new Wholly-Owned Domestic Subsidiary (and, to the extent required by Section 5.08, each such new Wholly-Owned Foreign Subsidiary), to the extent requested by the Administrative Agent or the Required Lenders, takes all actions required pursuant to Section 5.08(c) and (B) establish, create and acquire non-Wholly-Owned Subsidiaries in each case to the extent permitted under Section 6.06 so long as the equity interests of each such non-Wholly-Owned Subsidiary is pledged pursuant to, and to the extent required by, the Pledge Agreement and, if required by Section 5.08, becomes a Guarantor and takes all action described in preceding clause (A). In addition, each such new Subsidiary which is required to become a Loan Party shall execute and deliver, or cause to be executed and delivered, all other relevant documentation of the type described in Article IV as such new Subsidiary would have had to deliver if such new Wholly-Owned Subsidiary were a Credit Party on the Effective Date. SECTION 6.16. CONDUCT OF BUSINESS. The Borrower will not, and will not permit any of its Subsidiaries to, engage (directly or indirectly) in any business other than the same general type of business conducted by the Borrower and its Subsidiaries (taken as a whole) on the Effective Date and reasonably related extensions thereof. -102- SECTION 6.17. NO DESIGNATION OF OTHER INDEBTEDNESS AS "DESIGNATED SENIOR INDEBTEDNESS". The Borrower will not, and will not permit any of its Subsidiaries to, designate any Indebtedness (other than the Obligations) of the Borrower or any such Subsidiary as "Designated Senior Indebtedness" for the purposes of any Subordinated Note Documents, any Later Maturity Indebtedness incurred pursuant to Section 6.03(a)(iv) or any refinancing (or successive refinancings) of any of the foregoing pursuant to Section 6.03(a)(xii); PROVIDED that this Section 6.17 shall not be violated to the extent that, prior to the Effective Date, the Indebtedness of the Borrower and the Guarantors pursuant to the 10-1/8% Senior Note Indenture has been designated as "Designated Senior Indebtedness" for purposes of any outstanding Subordinated Note Documents. ARTICLE VII EVENTS OF DEFAULT If any of the following events ("EVENTS OF DEFAULT") shall occur: (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five days; (c) any representation, warranty, certification or statement made by the Borrower or any other Loan Party in this Agreement or any other Loan Document or in any certificate, financial statement or other document delivered pursuant to this Agreement or any other Loan Document shall prove to have been incorrect or misleading in any material respect when made (or deemed made); (d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.01(g), 5.04 (insofar as it relates to the corporate existence of the Borrower), Section 5.07, Section 5.08 or Article VI; (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent or the Required Lenders to the Borrower; (f) (i) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Indebtedness, when and as the same shall become due and payable or within any applicable grace period or (ii) any event or condition occurs that results in any Indebtedness becoming due -103- prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Indebtedness or any trustee or agent on its or their behalf to cause any Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity (other than as a result of a voluntary sale or transfer of the property or assets securing the respective such Indebtedness); PROVIDED that it shall not be a Default under this paragraph (f) unless the aggregate principal amount of all Indebtedness described in preceding clauses (i) and (ii) is at least $25,000,000; (g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Guarantor or Grantor or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Guarantor or Grantor or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; (h) the Borrower or any Guarantor or Grantor shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (g) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Guarantor or Grantor or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any corporate, limited liability company or partnership action for the purpose of effecting any of the foregoing; (i) the Borrower or any Guarantor or Grantor shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; (j) one or more judgments for the payment of money (to the extent not paid or covered by a reputable and solvent insurance company) in an aggregate amount in excess of $15,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 60 days during which execution shall not be effectively stayed, or any judgment creditor shall legally take possession of or sell any significant assets of the Borrower or any Subsidiary to enforce any such judgment; (k) (i) any ERISA Affiliate shall fail to pay when due an amount or amounts aggregating in excess of $15,000,000 which it shall have become liable to pay under Title IV of ERISA; (ii) or notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate, any plan administrator or any combination of the foregoing; (iii) or the PBGC shall -104- 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; (iv) 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; (v) or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA (a "4219 Default"), with respect to, one or more Multiemployer Plans which could cause the Borrower or one or more Subsidiaries of the Borrower or ERISA Affiliates to incur a current payment obligation in excess of $25,000,000; or (vi) any Plan shall fail to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate has incurred or is likely to incur any liability to or on account of a Plan or Multiemployer Plan under Section 4069 or 4212 of ERISA or Section 4971 or 4975 of the Code, which, individually or in the aggregate, could cause the Borrower or any of the Subsidiary of the Borrower or ERISA Affiliate to incur a liability in excess of $25,000,000; (l) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any Collateral, with the priority required by the applicable Security Document, except as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents; (m) the Guarantee Agreement or any material provision thereof (including in any event the guarantee provisions contained therein) shall cease to be in full force or effect as to any Guarantor, or any Guarantor or any Person acting for or on behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations under the Guarantee Agreement or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Guarantee Agreement; or (n) a Change in Control shall occur; then, and in every such event (other than an event with respect to the Borrower described in clause (g) or (h) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (g) or (h) of this Article, the -105- Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. ARTICLE VIII THE AGENTS SECTION 8.01. APPOINTMENT. Each of the Lenders and the Issuing Lenders hereby designates DBTCA as Administrative Agent (for purposes of this Article VIII and Section 9.01, the term "Administrative Agent" shall include DBTCA in its capacity as Collateral Agent pursuant to the Security Documents) to act as specified herein and in the other Loan Documents. Each of the Lenders and the Issuing Lenders hereby designate JPMorgan Chase and Citi each as a Syndication Agent to act as specified herein and in the other Loan Documents. Each of the Lenders and the Issuing Lenders hereby designate Lehman and Wachovia, each as a Documentation Agent to act as specified herein and in the other Loan Documents. Each of the Lenders and the Issuing Lenders hereby designate DBSI, JPMSI and SSBI as Joint Lead Arrangers to act as specified herein and in the other Loan Documents. Each of the Lenders and the Issuing Lenders hereby designate DBSI and JPMSI as Joint Book Managers to act as specified herein and in the other Loan Documents. Each Lender and each Issuing Lender hereby irrevocably authorizes the Administrative Agent and each other Agent to take such action on its behalf under the provisions of this Agreement, the other Loan Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Administrative Agent or each other Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Administrative Agent and each other Agent may perform any of its duties hereunder by or through its respective officers, directors, agents, employees or affiliates. SECTION 8.02. NATURE OF DUTIES. No Agent shall have any duties or responsibilities except those expressly set forth in this Agreement and in the other Loan Documents. No Agent, nor any of its officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by it or them hereunder or under any other Loan Document or in connection herewith or therewith, unless caused by its or their gross negligence or willful misconduct (as determined in a final and non-appealable decision by a court of competent jurisdiction). The duties of the Agents shall be mechanical and administrative in nature; no Agent shall have by reason of this Agreement or any other Loan Document a fiduciary relationship in respect of any Lender; and nothing in this Agreement or any other Loan Document, expressed or implied, is intended to or shall be so construed as to impose upon any Agent any obligations in respect of this Agreement or any other Loan Document except as expressly set forth herein or therein. SECTION 8.03. LACK OF RELIANCE ON THE AGENTS. Independently and without reliance upon any Agent, each Lender and each Issuing Lender, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Borrower and each of its Subsidiaries in connection with -106- the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of the Borrower and each of its Subsidiaries and, except as expressly provided in this Agreement, no Agent shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. No Agent shall be responsible to any Lender for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of this Agreement or any other Loan Document or the financial condition of the Borrower or any of its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Loan Document, or the financial condition of the Borrower or any of its Subsidiaries or the existence or possible existence of any Default. SECTION 8.04. CERTAIN RIGHTS OF THE AGENTS. If any Agent shall request instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Loan Document, such Agent shall be entitled to refrain from such act or taking such action unless and until such Agent shall have received instructions from the Required Lenders; and no Agent shall incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or refraining from acting hereunder or under any other Loan Document in accordance with the instructions of the Required Lenders. SECTION 8.05. RELIANCE. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that such Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Loan Document and its duties hereunder and thereunder, upon advice of counsel selected by such Agent. SECTION 8.06. INDEMNIFICATION. To the extent any Agent is not reimbursed and indemnified by the Borrower, the Lenders will reimburse and indemnify the Administrative Agent or such Agent, in proportion to their respective "pro rata shares" (determined based upon their respective shares of the total Revolving Exposures, outstanding Term Loans and unused Commitments at such time or if repaid in full or terminated, as the case may be, determined immediately prior to such repayment or termination, as the case may be) for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by such Agent in performing its duties hereunder or under any other Loan Document, or in any way relating to or arising out of this Agreement or any other Loan Document; PROVIDED that to the extent that the respective Agent is reimbursed by the Borrower for amounts paid by the Lenders pursuant to this Section 8.06, such Agent shall reimburse the Lenders for such amounts; PROVIDED FURTHER, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's or the -107- respective Agent's gross negligence or willful misconduct (as determined in a final and non-appealable decision by a court of competent jurisdiction). SECTION 8.07. EACH AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its obligation to make Loans, or issue or participate in Letters of Credit, under this Agreement, each Agent shall have the rights and powers specified herein for a "Lender" and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term "Lenders," "Required Lenders," "Majority Lenders," "Supermajority Lenders" or any similar terms shall, unless the context clearly otherwise indicates, include each Agent in its individual capacity. Each Agent may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, or provide debt financing, equity capital or other services (including financial advisory services) to, any Loan Party or any Affiliate of any Loan Party (or any Person engaged in a similar business with any Loan Party or any Affiliate thereof) as if they were not performing the duties specified herein, and may accept fees and other consideration from the Borrower or any other Loan Party or any Affiliate of any Loan Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders. SECTION 8.08. RESIGNATION. (a) The Administrative Agent may resign from the performance of all its functions and duties hereunder and/or under the other Loan Documents at any time by giving 15 Business Days' prior written notice to the Lenders and the Borrower (provided that no such notice shall be required to be given to the Borrower if a Default of the type described in paragraphs (g) and (h) of Article VII exists with respect to the Borrower). Any such resignation by an Administrative Agent hereunder shall also constitute its resignation as an Issuing Lender and the Swingline Lender, in which case the resigning Administrative Agent (x) shall not be required to issue any further Letters of Credit or make any additional Swingline Loans hereunder and (y) shall maintain all of its rights as Issuing Lender or Swingline Lender, as the case may be, with respect to any Letters of Credit issued by it, or Swingline Loans made by it, prior to the date of such resignation. Such resignation shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below. (b) Upon any such notice of resignation by the Administrative Agent, the Required Lenders shall appoint a successor Administrative Agent hereunder or thereunder who shall be a commercial bank or trust company reasonably acceptable to the Borrower (it being understood and agreed that (i) the Borrower's acceptance of a successor Administrative Agent pursuant to this paragraph (b) shall not be unreasonably withheld, (ii) so long as a Default exists at such time such successor Administrative Agent shall not be required to be reasonably satisfactory to the Borrower and (iii) any Lender is deemed to be acceptable to the Borrower). (c) If a successor Administrative Agent shall not have been so appointed within such 15 Business Day period, the Administrative Agent with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed but shall not be required at any time when a Default exists and is continuing), shall then appoint a successor Administrative Agent who shall serve as Administrative Agent hereunder or thereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above. -108- (d) If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the 30th Business Day after the date such notice of resignation was given by the Administrative Agent, the Administrative Agent's resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Loan Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above. (e) Each of the other Agents may resign from the performance of all their respective functions and duties hereunder by giving five Business Days' notice to the Administrative Agent. Any resignation pursuant to the immediately preceding sentence shall become effective on the 5th Business Day after the respective notice is given to the Administrative Agent. (f) Upon a resignation of any Agent pursuant to this Section 8.08, such Agent shall remain indemnified to the extent provided in this Agreement and the other Loan Documents and the provisions of this Article VIII shall continue in effect for the benefit of such Agent for all of its actions and inactions while serving as an Agent. SECTION 8.09. THE JOINT LEAD ARRANGERS, JOINT BOOK MANAGERS, SYNDICATION AGENTS AND DOCUMENTATION AGENTS. Notwithstanding any other provision of this Agreement or any provision of any other Loan Document, each of the Joint Lead Arrangers, Joint Book Managers, Syndication Agents and Documentation Agents are named as such for recognition purposes only, and in their respective capacities as such shall have no powers, duties, responsibilities or liabilities with respect to this Agreement or the other Loan Documents or the transactions contemplated hereby and thereby; it being understood and agreed that the Joint Lead Arrangers, the Joint Book Managers, the Syndication Agent and the Documentation Agent shall be entitled to all indemnification and reimbursement rights in favor of "Agents" as provided for under Sections 8.06 and 9.03. Without limitation of the foregoing, none of the Joint Lead Arrangers, Joint Book Managers, Syndication Agents or Documentation Agents shall, solely by reason of this Agreement or any other Loan Documents, have any fiduciary relationship in respect of any Lender or any other Person. ARTICLE IX MISCELLANEOUS SECTION 9.01. NOTICES. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: (a) if to the Borrower, to Fleming Companies, Inc. at 1945 Lakepointe Drive, Lewisville, TX 75057, Attention: Treasurer (Telephone No. (972) 906-8000; Telecopy No. (972) 906-1530) with a copy to Legal Department; -109- (b) if to the Administrative Agent, (i) for credit notices, to DBTCA, 31 West 52nd Street, 7th Floor, New York, NY 10019, Attention of Marguerite Sutton, (Telephone No. (646) 324-2206; Telecopy No. (646) 324-7456) and (ii) for operational notices, to DBTCA, 90 Hudson Street, 5th Floor, Jersey City, NJ 07302, Attention of Helaine Griffin-Williams (Telephone No. (201) 593-2712; Telecopy No. (201) 593-2310); (c) if to the Issuing Lenders, to them at (i) DBTCA, 31 West 52nd Street, New York, NY 10019, Attention of Mr. Marco Orlando (Telephone No. (212) 602-1132; Telecopy No. (212) 797-0403); (ii) JPMorgan Chase, 270 Park Avenue, New York, NY 10017, Attention of Mabelyn Vera (Telephone No. (813) 432-0352; Telecopy No. (813) 432-5161) and (iii) Citi, 2 Penns Way, Suite 200, Newcastle, Delaware 19720, Attention of Hilda Zambrano (Telephone No. (302) 894-6047; (Telecopy No. (302) 894-6120); (d) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. SECTION 9.02. WAIVERS; AMENDMENTS. (a) No failure or delay by any Agent, any Joint Book Manager, any Joint Lead Arranger, any Issuing Lender or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Agents, the Joint Book Managers, the Joint Lead Arrangers, the Issuing Lenders and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Agent, any Joint Book Manager, any Joint Lead Arranger, any Lender or any Issuing Lender may have had notice or knowledge of such Default at the time. (b) Neither this Agreement nor any other Loan Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the respective Loan Parties party thereto and the Required Lenders, PROVIDED that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) (with Obligations being directly modified in the case of following clause (i)), (i) extend the Maturity Date of any Loan, or extend the stated expiration date of any Letter of Credit beyond the Revolving Maturity Date, or reduce the rate, or extend the time of payment, of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates), or reduce -110- the principal amount thereof (except to the extent repaid in cash), (ii) release all or substantially all of the Collateral (except as expressly provided in the Loan Documents (x) in connection with the termination of commitments hereunder and repayment in full of amounts owing pursuant hereto and (y) with respect to permitted sales or dispositions of property) under all the Security Documents, or release all or substantially all of the Guarantors from the Guarantee Agreement (except as expressly provided in the Guarantee Agreement in connection with permitted sales or dispositions of Equity Interests in the respective Guarantor or Guarantors being released), (iii) amend, modify or waive any provision of this Section 9.02(b) (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of Required Lenders on substantially the same basis as the extension of Loans and Commitments are included on the Effective Date), (iv) reduce the respective percentage specified in the definition of Required Lenders or Aggregate Supermajority Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders or Aggregate Supermajority Lenders, as the case may be, on substantially the same basis as the extensions of Loans and Commitments are included on the Effective Date), (v) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement (other than a Reincorporation Merger consummated in accordance with Section 6.02(k)), (vi) amend, modify or waive any provisions of Section 2.19(b) or (c) providing for payments to be made to, or shared in, ratably by the Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in determining the ratable shares of payments to which the Lenders are entitled and adjustments to Section 2.19 may be made consistent therewith) or (vii) amend, modify or waive any provisions of Section 2.02(a), 2.06(d), 2.06(e) or 8.06 providing for Loans to be made, participations to be acquired, reimbursement payments to be made and/or indemnity payments to be made ratably by the Lenders (or Lenders of the respective Class, as the case may be) (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in determining any ratable share pursuant to such Sections and adjustments to any such Section may be made consistent therewith); PROVIDED FURTHER, that no such change, waiver, discharge or termination shall (1) increase the Commitment of any Lender over the amount thereof then in effect without the consent of such Lender (it being understood that waivers or modifications of conditions precedent, covenants or Defaults or of a mandatory reduction in the Commitments shall not constitute an increase of the Commitment of any Lender, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase in the Commitment of such Lender), (2) without the consent of each Issuing Lender, amend, modify or waive any provision of Section 2.06 or alter its rights or obligations with respect to Letters of Credit, (3) without the consent of the Administrative Agent, each Joint Lead Arranger and each Joint Book Manager, amend, modify or waive any provision of Article VIII as same applies to any such Person or any other provision as same relates to the rights or obligations of any such Person, (4) without the consent of the Collateral Agent, amend, modify or waive any provision relating to the rights or obligations of the Collateral Agent, (5) without the consent of the Swingline Lender, alter the Swingline Lender's rights or obligations with respect to Swingline Loans, (6) without the consent of the Aggregate Supermajority Lenders, modify Section 6.11 or modify the Collateral Requirement (except the last sentence thereof) or the Guarantee Requirement (or, in each case, release Collateral under the Security Documents or -111- one or more Guarantors under the Guarantee Agreement as a result of which the Collateral Requirement or the Guarantee Requirement, as the case may be, is no longer met, except as expressly provided in the parentheticals contained in clause (ii) above), (7) except in cases where additional extensions of loans are being afforded substantially the same treatment afforded to the Loans pursuant to this Agreement as originally in effect, without the consent of the Majority Lenders of each Class which is being allocated a lesser prepayment, repayment or commitment reduction as a result of the actions described below (or without the consent of the Majority Lenders of each Class in the case of an amendment to the definition of Majority Lenders), amend the definition of Majority Lenders or alter the required application of any prepayments or repayments (or commitment reduction), as between the various Classes, pursuant to Section 2.12 (although the Required Lenders may waive, in whole or in part, any such prepayment, repayment or commitment reduction, so long as the application, as among the various Classes, of any such prepayment, repayment or commitment reduction which is still required to be made is not altered), (8) without the consent of the Supermajority Lenders of the respective Class, reduce the amount of, or extend the date of, any Term Loan Scheduled Repayment, or amend the definition of Supermajority Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Supermajority Lenders on substantially the same basis as the extensions of Loans are included on the Effective Date), (9) in cases where any Class of Incremental Term Loans is being provided pursuant to Section 2.05, without the consent of the Supermajority Lenders of the respective Class (determined before giving effect to the additions to such Class), alter any of the requirements contained in Section 2.05(a), and (10) without the consent of the Majority Lenders of each Class of Term Loans and the Supermajority Lenders of the Class consisting of the Revolving Commitment (and the extensions of credit pursuant thereto), amend or modify the provisions of the proviso appearing in clause (vi) of the second paragraph of Section 2.05(a). SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Agents, the Joint Book Managers and the Joint Lead Arrangers and their respective Affiliates, including the reasonable fees, charges and disbursements of one counsel (plus any local counsel deemed reasonably necessary or desirable by the Administrative Agent) for the Agents, the Joint Book Managers and the Joint Lead Arrangers, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Lenders in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred upon any Specified Default by the Agents, the Joint Book Managers, the Joint Lead Arrangers or any Issuing Lender, including the fees, charges and disbursements of any counsel for the Agents, the Joint Book Managers and the Joint Lead Arrangers or any Issuing Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. (b) The Borrower shall indemnify each Agent, each Joint Book Manager, each Joint Lead Arranger, each Issuing Lender and each Lender, and each Related Party of any of the -112- foregoing Persons (each such Person being called an "INDEMNITEE") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; PROVIDED that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross negligence or willful misconduct of such Indemnitee (as determined in a non-appealable final decision made by a court of competent jurisdiction). (c) To the extent permitted by applicable law, no party to this Agreement shall assert, and each party to this Agreement hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the transactions contemplated hereby, any Loan or Letter of Credit or the use of the proceeds thereof. (d) All amounts due under this Section shall be payable not later than 10 days after written demand therefor. SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; PROVIDED, HOWEVER, that except pursuant to any Reincorporation Merger effected in accordance with Section 6.02(k), the Borrower may not assign or transfer any of its rights, obligations or interest hereunder or under any other Loan Document without the prior written consent of all of the Lenders and, PROVIDED FURTHER, that although any Lender may transfer, assign or grant participations in its rights hereunder, such Lender shall remain a "Lender" for all purposes hereunder (and may not transfer or assign all or any portion of its Commitment hereunder except as provided in Section 9.04(b)) and the transferee, assignee or participant, as the case may be, shall not constitute a "Lender" hereunder and, PROVIDED FURTHER, that no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Loan Document except to the extent such amendment or waiver would (i) extend the Maturity Date of any Loan or extend the expiry date of any Letter of Credit beyond the Revolving Maturity Date, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant's -113- participation over the amount thereof then in effect (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or of a mandatory reduction in the total Commitments shall not constitute a change in the terms of such participation, and that an increase in any Commitment shall be permitted without the consent of any participant if the participant's participation is not increased as a result thereof) or (ii) consent to the assignment or transfer by the Borrower of any of their rights and obligations under this Agreement. In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Loan Documents (the participant's rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation. (b) Notwithstanding the foregoing, any Lender (or any Lender together with one or more other Lenders) may (x) assign all or a portion of its Commitment and related outstanding Obligations hereunder (or, if the Commitments with respect to the relevant Class have terminated, its outstanding Obligations) and/or its outstanding Term Loans to (i) its parent company and/or any affiliate of such Lender which is at least 50% owned by such Lender or its parent company or to one or more other Lenders or (ii) in the case of any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is managed by the same investment advisor of any Lender or by an Affiliate of such investment advisor or (y) assign all, or if less than all, a portion equal to at least $1,000,000 in the aggregate for the assigning Lender or assigning Lenders, of such Commitments and related outstanding Obligations hereunder (or, if the Commitments with respect to the relevant Class have terminated, its outstanding Obligations) to one or more Eligible Transferees (treating any fund that invests in bank loans and any other fund that invests in bank loans and is managed or advised by the same investment advisor of such fund or by an Affiliate of such investment advisor as a single Eligible Transferee), each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement (it being understood that an assignment pursuant to this clause (y) by any Lender described in preceding clause (x)(ii) must meet the $1,000,000 minimum described above unless the respective assignment is of all the Commitments and related outstanding Obligations held by such Lender and any other fund that invests in bank loans and is managed by the same investment advisor of any Lender or by an Affiliate of such investment advisor), provided that (i) at such time Schedule 2.01 shall be deemed modified to reflect the Commitment and/or outstanding Loans, as the case may be, of such new Lender and of the existing Lenders, (ii) at the request of the assignee Lender, and upon surrender of the relevant notes or the provision of a customary lost note indemnification agreement from the assignor or assignee Lender, as the case may be, new promissory notes (in a form approved by the Administrative Agent) will be issued, at the Borrowers' expense, to such new Lender and to the assigning Lender, to the extent needed to reflect the revised Commitments and/or outstanding Loans, as the case may be, (iii) the consent of the Administrative Agent and, at any time after the Syndication Date when no Specified Default is in existence, the Borrower shall be required in connection with any such assignment pursuant to clause (y) above (each of which consents shall not be unreasonably withheld or delayed), (iv) in the case of any assignment of Revolving Commitments and relating outstanding Obligations, the consent of each Issuing Lender shall be required (which consent shall not be unreasonably withheld or delayed) and (v) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500. To the extent of -114- any assignment pursuant to this paragraph (b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned Commitments and/or outstanding Loans, as the case may be. As provided by Section 2.18(e), at the time of each assignment pursuant to this paragraph (b) to a Person which is not already a Lender hereunder and which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective assignee Lender shall provide to the Borrower and the Administrative Agent the appropriate Internal Revenue Service Forms (and, if applicable a Section 2.18(e) Certificate) described in Section 2.18(e). To the extent that an assignment of all or any portion of a Lender's Commitments (and related outstanding Obligations) and/or outstanding Term Loans pursuant to Section 2.20 or this paragraph (b) would, at the time of such assignment, result in increased costs under Section 2.16 or 2.18 greater than those being charged by the respective assigning Lender prior to such assignment, then the Borrower shall not be obligated to pay such greater increased costs (although the Borrower shall be obligated as provided in Sections 2.16 and 2.18 to pay any other increased costs of the type described above resulting from changes after the date of the respective assignment). (c) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans or any promissory notes evidencing such Loans to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank and, with prior notice to the Administrative Agent, any Lender which is a fund may pledge all or any portion of such promissory notes held by it or Loans to its trustee, to a collateral agent or to another creditor providing credit or credit support to such Lender in support of its obligations to its trustee or such collateral agent, as the case may be. No pledge pursuant to this paragraph (c) shall release the transferor Lender from any of its obligations hereunder. (d) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in The City of New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries made in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Lenders and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, any Issuing Lenders and any Lender, at any reasonable time and from time to time upon reasonable prior notice. (e) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. -115- SECTION 9.05. SURVIVAL. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Agent, any Joint Book Manager, any Joint Lead Arranger, any Issuing Lender or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.16, 2.17, 2.18 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof. SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Document and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. SECTION 9.07. SEVERABILITY. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. SECTION 9.08. RIGHT OF SETOFF. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of -116- each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. (b) Each party to this Agreement hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that any Administrative Agent, any Joint Book Manager, any Joint Lead Arranger, any Issuing Lender or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction. (c) Each party to this Agreement hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, -117- AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. SECTION 9.11. HEADINGS. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. SECTION 9.12. CONFIDENTIALITY. Each Agent, each Joint Book Manager, each Joint Lead Arranger, each Issuing Lender and each Lender agrees to maintain the confidentiality of the Information, except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) to any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement so long as such assignee or participant, as the case may be, agrees to treat such Information as provided in this Section, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach by it of this Section or (ii) becomes available to it on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section, "Information" means all information received from the Borrower and relating to the business and affairs of Borrower or any Subsidiary, other than any such information that is available to any Agent, any Joint Book Manager, any Joint Lead Arranger, any Issuing Lender or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary; PROVIDED that, in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. The provisions of this Section shall supersede and replace any confidentiality agreement heretofore delivered to the Borrower by any Agent, any Joint Book Manager, any Joint Lead Arranger, any Issuing Lender or any Lender. SECTION 9.13. INTEREST RATE LIMITATION. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the "Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be -118- increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Rate to the date of repayment, shall have been received by such Lender. SECTION 9.14. EXCEPTED DEFAULT UNDER THE 10-5/8% SENIOR SUBORDINATED NOTE INDENTURES. Notwithstanding anything to the contrary contained in this Agreement, the occurrence of an Excepted Default (for so long as same remains an Excepted Default) shall not result in, or be deemed to be, a breach of any of the representations or warranties contained in this Agreement or constitute Default under this Agreement. -119- 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. FLEMING COMPANIES, INC. By /s/ Carlos M. Hernandez ----------------------------------------------- Name: Carlos M. Hernandez Title: Senior Vice President and Secretary DEUTSCHE BANK TRUST COMPANY AMERICAS, Individually and as Administrative Agent By /s/ Marguerite Sutton ----------------------------------------------- Name: Marguerite Sutton Title: Vice President JPMORGAN CHASE BANK, Individually and as a Syndication Agent By /s/ Teri Streusand ----------------------------------------------- Name: Teri Streusand Title: Vice President CITICORP NORTH AMERICA, INC., Individually and as a Syndication Agent By /s/ Andrew Robinson ----------------------------------------------- Name: Andrew Robinson Title: Vice President -120- LEHMAN COMMERCIAL PAPER INC., Individually and as a Documentation Agent By /s/ Francis J. Chang ----------------------------------------------- Name: Francis J. Chang Title: Authorized Signatory WACHOVIA BANK, NATIONAL ASSOCIATION, Individually and as a Documentation Agent By /s/ T.M. Molitor ----------------------------------------------- Name: T.M. Molitor Title: Director DEUTSCHE BANK SECURITIES INC., as a Joint Book Manager and a Joint Lead Arranger By /s/ Sharon Stern ----------------------------------------------- Name: Sharon Stern Title: Director J.P. MORGAN SECURITIES INC., as a Joint Book Manager and a Joint Lead Arranger By /s/ Lisa Kopft ----------------------------------------------- Name: Lisa Kopft Title: Vice President SALOMON SMITH BARNEY INC., as a Joint Lead Arranger By /s/ Barbara Matas ----------------------------------------------- Name: Barbara Matas Title: Managing Director -2- EX-10.2 9 d97911exv10w2.txt SECURITY AGREEMENT EXHIBIT 10.2 SECURITY AGREEMENT among FLEMING COMPANIES, INC., CERTAIN SUBSIDIARIES OF FLEMING COMPANIES, INC. and DEUTSCHE BANK TRUST COMPANY AMERICAS, as COLLATERAL AGENT -------------------------------- Dated as of June 18, 2002 -------------------------------- SECURITY AGREEMENT SECURITY AGREEMENT, dated as of June 18, 2002, (as amended, modified or supplemented from time to time, this "Agreement"), made by each of the undersigned Grantors (each an "Grantor" and, together with any other entity that becomes a Grantor hereunder pursuant to Section 8.12 hereof, the "Grantors") in favor of DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent (together with any successor Collateral Agent, the "Collateral Agent"), for the benefit of the Secured Creditors (as defined below). Certain capitalized terms as used herein are defined in Article VII hereof. Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined. W I T N E S S E T H: - - - - - - - - - - WHEREAS, FLEMING COMPANIES, INC., an Oklahoma corporation (the "Borrower"), the lenders from time to time party thereto (the "Lenders"), DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent (together with any successor Administrative Agent, the "Administrative Agent"), JPMORGAN CHASE BANK and CITICORP NORTH AMERICA, INC., as Syndication Agents, LEHMAN COMMERCIAL PAPER INC. and WACHOVIA BANK, NATIONAL ASSOCIATION, as Documentation Agents, DEUTSCHE BANK SECURITIES INC. and J.P. MORGAN SECURITIES INC., as Joint Book Managers, and DEUTSCHE BANK SECURITIES INC., J.P. MORGAN SECURITIES INC. and SALOMON SMITH BARNEY INC., as Joint Lead Arrangers, have entered into a Credit Agreement, dated as of June 18, 2002 (as amended, modified or supplemented from time to time, the "Credit Agreement"), providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower as contemplated therein (the Lenders, each Issuing Lender, the Administrative Agent, the Collateral Agent and each other Agent are herein called the "Lender Creditors"); WHEREAS, the Borrower may on the date hereof be party to, and at any time and from time to time on or after the date hereof may enter into, one or more interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, interest rate hedging agreements, foreign currency exchange or hedging agreements or other similar agreements or arrangements (each such agreement or arrangement, an "Interest Rate Protection/Currency Exchange Agreement" and, collectively, the "Interest Rate Protection/Currency Exchange Agreements") with one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns, if any, collectively, the "Other Creditors"; WHEREAS the Borrower, one or more Wholly-Owned Domestic Subsidiaries of the Borrower and JPMorgan Chase Bank (or any successor by merger thereto) and/or one or more of its banking affiliates or another bank reasonably satisfactory to the Administrative Agent (collectively, the "Treasury Service Creditors" and, together with the Lender Creditors and the Other Creditors, the "Secured Creditors") have entered into, or in the future may enter into, a credit arrangement (with any written agreement evidencing such credit arrangement, as amended, modified, supplemented, replaced or refinanced from time to time, herein called the "Treasury Service Agreement"), to provide the Borrower and such Wholly-Owned Domestic Subsidiaries Treasury Services; WHEREAS, pursuant to the Guarantee Agreement, each Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all obligations as described therein; WHEREAS, it is a condition precedent to (i) the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement, (ii) the Other Creditors entering into Interest Rate Protection/Currency Exchange Agreements and (iii) the extension of Treasury Services by the Treasury Service Creditors, that each Grantor shall have executed and delivered to the Collateral Agent this Agreement; and WHEREAS, each Grantor will obtain benefits from the incurrence of Loans by, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement, the entering into by the Borrower of Interest Rate Protection/Currency Exchange Agreements and the continued extension of Treasury Services by the Treasury Service Creditors and, accordingly, each Grantor desires to enter into this Agreement in order to satisfy the condition described in the preceding paragraph; NOW, THEREFORE, in consideration of the benefits accruing to each Grantor, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Creditors and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Creditors as follows: ARTICLE I SECURITY INTERESTS Section 1.1. Grant of Security Interests. (a) As security for the prompt and complete payment and performance when due of all of its Obligations, each Grantor does hereby assign and transfer unto the Collateral Agent for the benefit of the Secured Creditors, and does hereby pledge and grant to the Collateral Agent, for the benefit of the Secured Creditors, a continuing security interest in all of the right, title and interest of such Grantor in, to and under all of the following personal property (and all rights therein) of such Grantor, or in which or to which such Grantor has any rights, in each case whether now existing or hereafter from time to time acquired: (i) each and every Account; (ii) all Inventory; 2 (iii) (x) all Instruments and all Chattel Paper, in each case evidencing any Accounts and (y) all Instruments and Chattel Paper into which any Accounts have been, or are hereafter, converted; (iv) all Documents and all Supporting Obligations relating to any and all of the foregoing; and (v) all Proceeds and products of any and all of the foregoing (all of the above, the "Collateral"). (b) The security interest of the Collateral Agent under this Agreement extends to all Collateral which any Grantor may acquire, or with respect to which any Grantor may obtain rights, at any time during the term of this Agreement. Notwithstanding anything to the contrary contained herein, the Collateral shall at no time include any items which would at such time constitute Excluded Collateral. Section 1.2. Power of Attorney. Each Grantor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Grantor or otherwise) to act, require, demand, receive, compound and give acquaintance for any and all moneys and claims for moneys due or to become due to such Grantor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Collateral Agent may deem to be necessary or advisable to protect the interests of the Secured Creditors, which appointment as attorney is coupled with an interest. ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS Each Grantor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows: Section 2.1. Necessary Filings. All filings, registrations, recordings and other actions necessary or appropriate to create, preserve and perfect the security interest granted by such Grantor to the Collateral Agent hereby in respect of the Collateral have been accomplished and the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral creates a valid and, together with all such filings, registrations, recordings and other actions, a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Liens permitted pursuant to Section 6.01 of the Credit Agreement) and is entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by filing a financing statement under the Uniform Commercial Code as enacted in any relevant jurisdiction. 3 Section 2.2. No Liens. Such Grantor is, and as to all Collateral acquired by it from time to time after the date hereof such Grantor will be, the owner of all Collateral free from any Lien, security interest, encumbrance or other right, title or interest of any Person (other than Liens permitted pursuant to Section 6.01 of the Credit Agreement), and such Grantor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Collateral Agent. Section 2.3. Other Financing Statements. As of the date hereof, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Liens permitted pursuant to Section 6.01 of the Credit Agreement), and so long as the Termination Date has not occurred, such Grantor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Grantor or in connection with Liens permitted pursuant to Section 6.01 of the Credit Agreement. Section 2.4. Chief Executive Office. The chief executive office of such Grantor is, on the date of this Agreement, located at the address indicated on Annex A hereto for such Grantor. During the period of the four calendar months preceding the date of this Agreement, the chief executive office of such Grantor has not been located at any address other than that indicated on Annex A in accordance with the immediately preceding sentence, in each case unless each such other address is also indicated on Annex A hereto for such Grantor. Section 2.5. Location of Inventory. All Inventory held on the date hereof, or held at any time during the four calendar months prior to the date hereof, by each Grantor is located at one of the locations shown on Annex B hereto for such Grantor. Section 2.6. Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility); Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto; etc. The exact legal name of each Grantor, the type of organization of such Grantor, whether or not such Grantor is a Registered Organization, the jurisdiction of organization of such Grantor, such Grantor's Location, the organizational identification number (if any) of each Grantor, and whether or not such Grantor is a Transmitting Utility, is listed on Annex C hereto for such Grantor. No Grantor shall change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its status as a Transmitting Utility or as a Person which is not a Transmitting Utility, as the case may be, its jurisdiction of organization, its Location, or its organizational identification number (if any) from that set forth on Annex C hereto for such Grantor, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) any Grantor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 10 days' prior written notice of each change to the information listed on Annex C (as adjusted for any subsequent changes thereto 4 previously made in accordance with this sentence), together with a supplement to Annex C which shall correct all information contained therein for the respective Grantor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that any Grantor does not have an organizational identification number on the date hereof and later obtains one, such Grantor shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect. Section 2.7. Certain Significant Transactions. During the one year period preceding the date of this Agreement, no Person shall have merged or consolidated with or into any Grantor, and no Person shall have liquidated into, or transferred all or substantially all of its assets to, any Grantor, in each case except as described in Annex D hereto. With respect to any transactions so described in Annex D hereto, the respective Grantor shall have furnished such information with respect to the Person (and the assets of the Person and locations thereof) which merged with or into or consolidated with such Grantor, or was liquidated into or transferred all or substantially all of its assets to such Grantor, and shall have furnished to the Collateral Agent such UCC lien searches as may have been requested with respect to such Person and its assets, to establish that no security interest (excluding Liens permitted pursuant to Section 6.01 of the Credit Agreement) continues perfected on the date hereof with respect to any Person described above (or the assets transferred to the respective Grantor by such Person), including without limitation pursuant to Section 9-316(a)(3) of the UCC. Section 2.8. Collateral in the Possession of a Bailee. If any Inventory is at any time in the possession of a bailee, the respective Grantor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its reasonable best efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of the respective Grantor. The Collateral Agent agrees with the Grantors that the Collateral Agent shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Grantor with respect to any such bailee. Section 2.9. Recourse. This Agreement is made with full recourse to each Grantor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Grantor contained herein, in the other Loan Documents, in the Interest Rate Protection/Currency Exchange Agreements and otherwise in writing in connection herewith or therewith. 5 ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS Section 3.1. Additional Representations and Warranties. As of the time when each of its Accounts constituting Collateral arises, each Grantor shall be deemed to have represented and warranted that each such Account, and all records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the knowledge of such Grantor, represent the genuine, legal, valid and binding obligation of the respective account debtor, (ii) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes), (iii) will, to the knowledge of such Grantor, evidence true and valid obligations, enforceable in accordance with their respective terms, and (iv) will be in compliance and will conform in all material respects with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction. Section 3.2. Maintenance of Records. Each Grantor will keep and maintain at its own cost and expense accurate records of its Accounts, including, but not limited to, originals of all documentation with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Grantor will make the same available on such Grantor's premises to the Collateral Agent for inspection, at such Grantor's own cost and expense, at any and all reasonable times upon prior notice to such Grantor and otherwise in accordance with the Credit Agreement. Upon the occurrence and during the continuance of an Event of Default and at the request of the Collateral Agent, such Grantor shall, at its own cost and expense, deliver all tangible evidence of its Accounts (including, without limitation, all documents evidencing the Accounts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Grantor). Upon the occurrence and during the continuance of an Event of Default and if the Collateral Agent so directs, such Grantor shall legend, in form and manner satisfactory to the Collateral Agent, any Collateral consisting of Chattel Paper, as well as books, records and documents (if any) of such Grantor evidencing or pertaining to such Collateral with an appropriate reference to the fact that such Collateral has been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein. Section 3.3. Direction to Account Debtors; etc. Upon the occurrence and during the continuance of an Event of Default, if the Collateral Agent so directs any Grantor, such Grantor agrees (x) to cause all payments on account of the Accounts to be made directly to the Collateral Agent, (y) that the Collateral Agent may, at its option, directly notify the obligors with respect to any Accounts to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Accounts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Grantor. The reasonable costs and expenses of collection (including reasonable attorneys' fees), whether incurred by a Grantor or the Collateral Agent, shall be borne by the relevant Grantor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Grantor, provided that (x) the failure by the Collateral Agent to so notify such Grantor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3 and (y) no such notice shall be required 6 if an Event of Default of the type described in paragraphs (g) or (h) of Article VII of the Credit Agreement has occurred and is continuing. Section 3.4. Modification of Terms; etc. Except in accordance with such Grantor's ordinary course of business and consistent with its reasonable business judgment or as otherwise permitted pursuant to the Credit Agreement, no Grantor shall rescind or cancel any indebtedness evidenced by any Account, or modify any material term thereof or make any material adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Account, or interest therein, without the prior written consent of the Collateral Agent. Section 3.5. Collection. Each Grantor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Accounts, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Account, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account. Except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Grantor may allow in the ordinary course of business as adjustments to amounts owing under its Accounts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Grantor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which such Grantor finds appropriate in accordance with reasonable business judgment. The reasonable costs and expenses (including, without limitation, reasonable attorneys' fees) of collection, whether incurred by a Grantor or the Collateral Agent, shall be borne by the relevant Grantor. Section 3.6. Grantors Remain Liable Under Accounts. Anything herein to the contrary notwithstanding, the Grantors shall remain liable under each of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to such Accounts. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Account pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times. Section 3.7. Instruments. If any Grantor owns or acquires any Instrument constituting Collateral, such Grantor will within 10 Business Days notify the Collateral Agent 7 thereof, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent. Section 3.8. Chattel Paper. Upon the request of the Collateral Agent made at any time or from time to time, each Grantor shall promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper constituting Collateral held or owned by such Grantor. Furthermore, if requested by the Collateral Agent, each Grantor shall promptly take all actions which are reasonably practicable so that the Collateral Agent has "control" of all Electronic Chattel Paper constituting Collateral in accordance with the requirements of Section 9-105 of the UCC. Each Grantor will promptly (and in any event within 10 days) following any request by the Collateral Agent, deliver all of its Tangible Chattel Paper constituting Collateral to the Collateral Agent. Section 3.9. Further Actions. Each Grantor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps, including any and all actions as may be necessary or required under the Federal Assignment of Claims Act, relating to its Receivables and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require. ARTICLE IV PROVISIONS CONCERNING ALL COLLATERAL Section 4.1. Protection of Collateral Agent's Security. Except as otherwise permitted by the Secured Debt Agreements, each Grantor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Grantor will at all times maintain insurance, at such Grantor's own expense to the extent and in the manner provided in the Secured Debt Agreements. Except to the extent otherwise permitted to be retained by such Grantor or applied by such Grantor pursuant to the terms of the Secured Debt Agreements, the Collateral Agent shall, at the time any proceeds of such insurance are distributed to the Secured Creditors, apply such proceeds in accordance with Section 5.4 hereof. Each Grantor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Grantor to pay the Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Grantor. Section 4.2. Warehouse Receipts Non-Negotiable. To the extent practicable, each Grantor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such Grantor shall request that such warehouse receipt or receipt in the nature thereof shall not be "negotiable" (as such term is used in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under other relevant law). Section 4.3. Additional Information. Each Grantor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 10 days after its receipt of the respective request) furnish to the Collateral Agent such 8 information with respect to the Collateral (including, without limitation, the identity of the Collateral or such components thereof as may have been requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be requested by the Collateral Agent. Without limiting the forgoing, each Grantor agrees that it shall promptly (and in any event within 10 Business Days after its receipt of the respective request) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably requested by the Collateral Agent. Section 4.4. Further Actions. Each Grantor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral. Section 4.5. Financing Statements. Each Grantor agrees to execute and deliver to the Collateral Agent such financing statements, in form reasonably acceptable to the Collateral Agent, as the Collateral Agent may from time to time reasonably request or as are reasonably necessary or desirable in the opinion of the Collateral Agent to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby. Each Grantor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Grantor hereby authorizes the Collateral Agent to file any such financing statements covering the Collateral without the signature of such Grantor. Section 4.6. Trademark License. Each Grantor hereby grants to the Collateral Agent and the Secured Creditors a non-exclusive, perpetual, world-wide, royalty-free license to use any registered or unregistered trademarks, service marks, trade names or brand names (the "Marks") owned by such Grantor, or licensed to such Grantor and used in connection with any Inventory of such Grantor in connection with any Inventory that the Collateral Agent has taken possession of, sold, assigned or otherwise liquidated as provided for under Article V hereof. The Collateral Agent and Secured Creditors acknowledge that the Marks relating to the Inventory are the property of the Grantors, or used subject to a license agreement, and that all uses of the Marks shall inure to the benefit of the Grantors, and that the Collateral Agent and Secured Creditors will not use the Marks except as provided in this Section 4.6. ARTICLE V REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT Section 5.1. Remedies; Obtaining the Collateral Upon Default. Each Grantor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law and under the other provisions of this Agreement, shall have all rights as a secured creditor 9 under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect in all relevant jurisdictions and may: (i) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Grantor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Grantor's premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Grantor; (ii) instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Accounts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Grantor in respect of such Collateral; (iii) sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 5.2 hereof, or direct the relevant Grantor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation; (iv) take possession of the Collateral or any part thereof, by directing the relevant Grantor in writing to deliver the same to the Collateral Agent at any reasonable place or places designated by the Collateral Agent, in which event such Grantor shall at its own expense: (x) forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent; (y) store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 5.2 hereof; and (z) while the Collateral shall be so stored and kept, provide such security and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain it in good condition; (v) apply any monies constituting Collateral or proceeds thereof in accordance with the provisions of Section 5.4; and (vi) take any other action as specified in clauses (1) through (3), inclusive, of Section 9-607 of the UCC; it being understood that each Grantor's obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Grantor of said obligation. By accepting the benefits of this Agreement and each other Security Document, the Secured Creditors expressly acknowledge and agree that this Agreement and each 10 other Security Document may be enforced only by the action of the Collateral Agent acting upon the instructions of the Required Secured Creditors and that no other Secured Creditor shall have any right individually to seek to enforce this Agreement or any other Security Document or to realize upon the security to be granted hereby or thereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Creditors upon the terms of this Agreement and the other Security Documents. Section 5.2. Remedies; Disposition of the Collateral. If any Event of Default shall have occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or pursuant to Section 5.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms and upon such notice as the Collateral Agent may, in compliance with any mandatory requirements of applicable law (including the UCC), determine to be commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Grantor which the Collateral Agent shall determine to be commercially reasonable. Any such sale, lease or other disposition may be effected by means of a public disposition or private disposition, effected in accordance with the applicable requirements (in each case if and to the extent applicable) of Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements of applicable law as may apply to the respective disposition. The Collateral Agent may, without notice or publication, adjourn any public or private disposition or cause the same to be adjourned from time to time by announcement at the time and place fixed for the disposition, and such disposition may be made at any time or place to which the disposition may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser (and may pay all or any portion of the purchase price by crediting Obligations against the purchase price) of the Collateral or any item thereof, offered for disposition in accordance with this Section 5.2 without accountability to the relevant Grantor. If, under applicable law, the Collateral Agent shall be permitted to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Grantor as hereinabove specified, the Collateral Agent need give such Grantor only such notice of disposition as shall be required by such applicable law. Each Grantor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such disposition or dispositions of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Grantor's expense. Section 5.3. Waiver of Claims. Except as otherwise provided in this Agreement, EACH GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Grantor hereby further waives, to the extent permitted by law: 11 (i) all damages occasioned by such taking of possession or any such disposition except any damages which are the direct result of the Collateral Agent's gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision); (ii) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent's rights hereunder; and (iii) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Grantor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws. Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Grantor therein and thereto, and shall be a perpetual bar both at law and in equity against such Grantor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Grantor. Section 5.4. Application of Proceeds. (a) All moneys collected by the Collateral Agent (or, to the extent the Pledge Agreement or any other Security Document requires proceeds of collateral under such other Security Document to be applied in accordance with the provisions of this Agreement, the Pledgee or Collateral Agent under such other Security Document) upon any sale or other disposition of the Collateral, together with all other moneys received by the Collateral Agent hereunder, shall be applied as follows. (i) first, to the payment of all amounts owing the Collateral Agent of the type described in clauses (iv), (v) and (vi) of the definition of "Obligations"; (ii) second, to the extent proceeds remain after the application pursuant to the preceding clause (i), to the payment of all amounts owing to any Agent of the type described in clauses (vi) and (vii) of the definition of "Obligations"; (iii) third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Primary Obligations shall be paid to the Secured Creditors as provided in Section 5.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary Obligations or, if the proceeds are insufficient to pay in full all such Primary Obligations, its Pro Rata Share of the amount remaining to be distributed; (iv) fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, an amount equal to the outstanding Secondary Obligations shall be paid to the Secured Creditors as provided in Section 5.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding 12 Secondary Obligations or, if the proceeds are insufficient to pay in full all such Secondary Obligations, its Pro Rata Share of the amount remaining to be distributed; and (v) fifth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iv), inclusive, and following the termination of this Agreement pursuant to Section 8.8(a) hereof, to the relevant Grantor or to whomever may be lawfully entitled to receive such surplus. (b) For purposes of this Agreement, (x) "Pro Rata Share" shall mean, when calculating a Secured Creditor's portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor's Primary Obligations or Secondary Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Primary Obligations or Secondary Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the Loan Document Obligations, all principal of, premium and interest on, all Loans, all unreimbursed LC Disbursements, the stated amount of all outstanding Letters of Credit and all Fees, (ii) in the case of the Other Obligations, all amounts due under the Interest Rate Protection/Currency Exchange Agreements (other than indemnities, fees (including, without limitation, attorneys' fees) and similar obligations and liabilities) and (iii) in the case of Treasury Service Obligations, all principal owed, and interest on, extensions of credit made in respect of the Treasury Services and (without duplication) under the Treasury Service Agreement and (z) "Secondary Obligations" shall mean all Obligations other than Primary Obligations. (c) When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be applied (for purposes of making determinations under this Section 5.4 only) (i) first, to their Primary Obligations and (ii) second, to their Secondary Obligations. If any payment to any Secured Creditor of its Pro Rata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Primary Obligations or Secondary Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Primary Obligations or Secondary Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of all Secured Creditors entitled to such distribution. (d) Each of the Secured Creditors, by their acceptance of the benefits hereof and of the other Security Documents, agrees and acknowledges that if the Lender Creditors receive a distribution on account of undrawn amounts with respect to Letters of Credit issued under the Credit Agreement (which shall only occur after all outstanding Revolving Loans under the Credit Agreement and LC Disbursements have been reimbursed in full), such amounts shall be paid to the Administrative Agent under the Credit Agreement and held by it, for the equal and ratable benefit of the Lender Creditors, as cash security for the repayment of Obligations owing to the Lender Creditors as such. If any amounts are held as cash security pursuant to the immediately preceding sentence, then upon the termination of all outstanding Letters of Credit under the Credit Agreement, and after the application of all such cash security to the repayment of all Obligations owing to the Lender Creditors after giving effect to the termination of all such 13 Letters of Credit, if there remains any excess cash, such excess cash shall be returned by the Administrative Agent to the Collateral Agent for distribution in accordance with Section 5.4(a) hereof. (e) All payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent for the account of the Lender Creditors, (y) if to the Other Creditors, to the trustee, paying agent or other similar representative (each a "Representative") for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors and (z) if to the Treasury Service Creditors directly to the Treasury Service Creditors. (f) For purposes of applying payments received in accordance with this Section 5.4, the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent under the Credit Agreements, (ii) the Representative for the Other Creditors or, in the absence of such a Representative, upon the Other Creditors and (iii) the Treasury Service Creditors, for a determination (which the Administrative Agent, each Representative, the Other Creditors and the Treasury Service Creditors agree (or shall agree) to provide upon request of the Collateral Agent) of the outstanding Primary Obligations and Secondary Obligations owed to the Lender Creditors, the Other Creditors or the Treasury Service Creditors, as the case may be. Unless it has received written notice from a Lender Creditor, an Other Creditor or a Treasury Service Creditor to the contrary, the Administrative Agent and each Representative, in furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to assume that no Secondary Obligations are outstanding. Unless it has written notice from (x) an Other Creditor to the contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume that no Interest Rate Protection/Currency Exchange Agreements are in existence or (y) a Treasury Service Creditor to the contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume that no Treasury Service Agreements are in existence. (g) This Agreement is made with full recourse to each Grantor (including, without limitation, with full recourse to all assets of such Grantor) and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Grantor contained herein, in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith. It is understood that the Grantors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Obligations. Section 5.5. Remedies Cumulative. Each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given to the Collateral Agent under this Agreement, the other Secured Debt Agreements or now or hereafter existing at law, in equity or by statute and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or an 14 acquiescence thereof. No notice to or demand on any Grantor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable expenses, including reasonable attorneys' fees, and the amounts thereof shall be included in such judgment. Section 5.6. Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Grantor, the Collateral Agent and each holder of any of the Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted. ARTICLE VI INDEMNITY Section 6.1. Indemnity. (a) Each Grantor jointly and severally agrees to indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor and their respective successors, assigns, employees, affiliates and agents (hereinafter in this Section 6.1 referred to individually as "Indemnitee," and collectively as "Indemnitees") harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements (including reasonable attorneys' fees and expenses) (for the purposes of this Section 6.1 the foregoing are collectively called "expenses") of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Agreement, any other Secured Debt Agreement or any other document executed in connection herewith or therewith or in any other way connected with the administration of the transactions contemplated hereby or thereby or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 6.1(a) for losses, damages or liabilities to the extent caused by the gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision). Each Indemnitee agrees to use its best efforts to promptly notify the relevant Grantor of any such assertion of which such Indemnitee has knowledge. 15 (b) Without limiting the application of Section 6.1(a) hereof, each Grantor agrees, jointly and severally, to pay or reimburse the Collateral Agent for any and all reasonable fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Collateral Agent's Liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the Collateral Agent's interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral. (c) Without limiting the application of Section 6.1(a) or (b) hereof, each Grantor agrees, jointly and severally, to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation by any Grantor in this Agreement, any other Secured Debt Agreement or in any writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any other Secured Debt Agreement. (d) If and to the extent that the obligations of any Grantor under this Section 6.1 are unenforceable for any reason, such Grantor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. Section 6.2. Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Collateral. The indemnity obligations of each Grantor contained in this Article VI shall continue in full force and effect notwithstanding the full payment of all of the other Obligations and notwithstanding the full payment of all Loans made, under the Credit Agreement, the termination of all Letters of Credit issued under the Credit Agreement, the termination of all Interest Rate Protection/Currency Exchange Agreements entered into with the Other Creditors and all Treasury Services provided by Treasury Service Creditors, and the payment of all other Obligations and notwithstanding the discharge thereof. ARTICLE VII DEFINITIONS The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined. "Account" shall mean any "account" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or 16 otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State. Without limiting the foregoing, the term "account" shall include all Health-Care-Insurance Receivables. "Administrative Agent" shall have the meaning provided in the recitals of this Agreement. "Agreement" shall mean this Security Agreement as the same may be modified, supplemented or amended from time to time in accordance with its terms. "Borrower" shall have the meaning provided in the recitals of this Agreement. "Chattel Paper" shall mean "chattel paper" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. Without limiting the foregoing, the term "Chattel Paper" shall include all Tangible Chattel Paper and all Electronic Chattel Paper. "Class" shall have the meaning provided in Section 8.2 of this Agreement. "Collateral" shall have the meaning provided in Section 1.1(a) of this Agreement. "Collateral Agent" shall have the meaning provided in the first paragraph of this Agreement. "Credit Agreement" shall have the meaning provided in the recitals of this Agreement. "Default" shall mean any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. "Documents" shall mean "documents" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Electronic Chattel Paper" shall mean "electronic chattel paper" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Excluded Collateral" shall mean all assets sold or transferred (or purportedly sold or transferred) to CM Capital pursuant to the Core-Mark Receivables Facility Documents; PROVIDED that five business days following the earlier of (i) the 180th day following the Effective Date and (ii) the date of termination of the Core-Mark Receivables Facility no assets of any Grantor described above shall constitute Excluded Collateral. "Event of Default" shall mean any Specified Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Obligations after the expiration of any applicable grace period. 17 "Fees" shall mean all amounts payable pursuant to or referred to in Section 2.13 of the Credit Agreement. "Grantor" shall have the meaning provided in the first paragraph of this Agreement. "Health-Care-Insurance Receivable" shall mean any "health-care-insurance receivable" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Indemnitee" shall have the meaning provided in Section 6.1(a) of this Agreement. "Instrument" shall mean "instrument" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Interest Rate Protection/Currency Exchange Agreement" shall have the meaning provided in the recitals of this Agreement. "Inventory" shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof and all accessions thereto, wherever located, together with all goods, supplies, incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same, in all stages of production from raw materials through work in process to finished goods, and all products and proceeds of whatever sort and wherever located any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Grantor's customers, and shall specifically include all "inventory" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Lender Creditors" shall have the meaning provided in the recitals of this Agreement. "Lenders" shall have the meaning provided in the recitals of this Agreement. "Letter-of-Credit Rights" shall mean "letter-of-credit rights" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Liens" shall mean any security interest, mortgage, pledge, lien, claim, charge, encumbrance, title retention agreement, lessor's interest in a financing lease or analogous instrument, in, of, or on any Grantor's property. "Loan Document Obligations" shall have the meaning provided in the definition of "Obligations" in this Article VII. "Location" of any Grantor, shall mean such Grantor's "location" as determined pursuant to Section 9-307 of the UCC. "Obligations" shall mean and include all of the following: (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, with- 18 out limitation, principal, premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Grantor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), reimbursement obligations under Letters of Credit, fees, costs and indemnities) of each Grantor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Loan Documents to which such Grantor is a party (including, in the case of each Grantor that is a Guarantor, all such obligations, liabilities and indebtedness of such Grantor under the Guarantee Agreement) and the due performance and compliance by such Grantor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Loan Documents (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Interest Rate Protection/Currency Exchange Agreements or Treasury Service Obligations, being herein collectively called the "Loan Document Obligations"); (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Grantor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Grantor to the Other Creditors under, or with respect to (including, in the case of each Grantor that is a Guarantor, all such obligations, liabilities and indebtedness of such Grantor under the Guarantee Agreement), each Interest Rate Protection/Currency Exchange Agreement, whether such Interest Rate Protection/Currency Exchange Agreement is now in existence or hereafter arising, and the due performance and compliance by such Grantor with all of the terms, conditions and agreements contained therein (all such obligations, liabilities and indebtedness described in this clause (ii) being herein collectively called the "Other Obligations"); (iii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Grantor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Grantor to the Treasury Service Creditors under, or with respect to Treasury Services (including, in the case of each Grantor that is a Guarantor, all such obligations, liabilities and indebtedness of such Grantor under the Guarantee Agreement) (all such obligations, liabilities and indebtedness described in this clause (iii) being herein collectively called the "Treasury Service Obligations"); (iv) any and all sums advanced by the Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral; 19 (v) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Grantor referred to in clauses (i), (ii) and (iii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable attorneys' fees and court costs; (vi) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 6.1 of this Agreement; and (vii) all amounts owing to any Agent pursuant to any of the Loan Documents in its capacity as such; it being acknowledged and agreed that the "Obligations" shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. "Other Creditors" shall have the meaning provided in the recitals of this Agreement. "Other Obligations" shall have the meaning provided in the definition of "Obligations" in this Article VII. "Primary Obligations" shall have the meaning provided in Section 5.4(b) of this Agreement. "Pro Rata Share" shall have the meaning provided in Section 5.4(b) of this Agreement. "Proceeds" shall mean all "proceeds" as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof and, in any event, shall also include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Grantor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or on account of any of the Collateral. "Registered Organization" shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York. "Representative" shall have the meaning provided in Section 5.4(e) of this Agreement. "Required Secured Creditors" shall mean (i) except as provided in clauses (ii) and (iii) below in this definition, the Required Lenders (or, to the extent provided in Section 9.02 of the Credit Agreement, each of the Lenders), (ii) after all of the Loan Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments may be provided thereunder, the holders of a majority of the Other Obligations and (iii) after the payment in full of all Loan Document Obligations and Other Obligations, the holders of a majority of the outstanding principal amount of Overdraft Obligations. 20 "Requisite Creditors" shall have the meaning provided in Section 8.2 of this Agreement. "Secondary Obligations" shall have the meaning provided in Section 5.4(b) of this Agreement. "Secured Creditors" shall have the meaning provided in the recitals of this Agreement. "Secured Debt Agreements" shall mean and include this Agreement, the other Loan Documents, the Interest Rate Protection/Currency Exchange Agreements entered into with an Other Creditor and the Treasury Service Agreement. "Supporting Obligations" shall mean any "supporting obligation" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York relating to any Account or Document, now or hereafter owned by any Grantor, or in which any Grantor has any rights, and, in any event, shall include, but shall not be limited to all of such Grantor's rights in any Letter-of-Credit Right or secondary obligation that supports the payment or performance of, and all security for, any Account or Document related thereto. "Tangible Chattel Paper" shall mean "tangible chattel paper" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Termination Date" shall have the meaning provided in Section 8.8(a) of this Agreement. "Transmitting Utility" shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York. "Treasury Service Agreement" shall have the meaning provided in the recitals of this Agreement. "Treasury Service Creditors" shall have the meaning provided in the recitals of this Agreement. "Treasury Service Obligations" shall have the meaning provided in the definition of "Obligations" in this Article VII. "Treasury Services" shall mean treasury, depositary or cash management services (including, without limitation overnight overdraft services) provided to the Borrower and its Wholly-Owned Subsidiaries by the Treasury Service Creditors, and automated clearinghouse transfers of funds to, the Treasury Service Creditors, in each case pursuant to uncommitted lines of credit. "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction. ARTICLE VIII MISCELLANEOUS Section 8.1. Notices. Except as otherwise specified herein, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 21 (a) if to any Grantor, c/o: Fleming Companies, Inc. 1945 Lakepointe Drive Lewisville, Texas 75057 Attention: Treasurer Telephone No.: (972) 906-8000 Telecopier No.: (972) 906-1530 (b) if to the Collateral Agent, at: Deutsche Bank Trust Company Americas 31 West 52nd Street New York, NY 10019 Attention: Marguerite Sutton Telephone No.: (646) 324-2206 Telecopier No.: (646) 324-7456 (c) if to any Lender Creditor other than the Collateral Agent, at such address as such Lender Creditor shall have specified in the Credit Agreement; (d) if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to each Grantor and the Collateral Agent; (e) if to any Treasury Service Creditor, at such address as such Treasury Service Creditor shall have specified in writing to each Grantor and the Collateral Agent; or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. All notices and other communication given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. Section 8.2. Waiver; Amendment. Except as provided in Sections 8.8 and 8.13, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Grantor directly affected thereby (it being understood and agreed that, for this purpose, the release or modification of liabilities of any Grantor hereunder shall be deemed not to affect the remaining, or other, Grantors) and the Collateral Agent (with the written consent of the Required Secured Creditors); provided, however, that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) also shall require the written consent of the Requisite Creditors of such affected Class. For the purpose of this Agreement, the term "Class" shall mean each class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Loan Document Obligations, (y) the Other Creditors as the holders of the Other Obligations or (z) the Treasury Service Creditors as holders of the Treasury Service Obligations. For the purpose of this Agreement, the term "Requisite Creditors" of any Class shall mean each of (i) with respect to the Loan Document Obligations, the Required Lenders (or, to the extent provided in Section 9.02 of the Credit Agreement, each of the Lenders), (ii) with respect to the Other Obligations, the holders of at least 22 a majority of all Other Obligations outstanding from time to time and (iii) with respect to the Treasury Service Obligations, the holders of at least a majority of the outstanding Treasury Service Obligations. Section 8.3. Obligations Absolute. The obligations of each Grantor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such Grantor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Secured Debt Agreement; or (c) any amendment to or modification of any Secured Debt Agreement or any security for any of the Obligations; whether or not such Grantor shall have notice or knowledge of any of the foregoing. Section 8.4. Successors and Assigns. This Agreement shall be binding upon each Grantor, the Collateral Agent and the other Secured Creditors and their respective successors and assigns (although no Grantor may assign its rights and obligations hereunder except in accordance with the provisions of the Secured Debt Agreements) and shall inure to the benefit of each Grantor, the Collateral Agent and the other Secured Creditors and their respective successors and assigns. All agreements, statements, representations and warranties made by each Grantor herein or in any certificate or other instrument delivered by such Grantor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf. Section 8.5. Headings Descriptive. The headings of the several sections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. Section 8.6. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH GRANTOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH GRANTOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH GRANTOR. EACH GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY 23 REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH GRANTOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 8.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY GRANTOR IN ANY OTHER JURISDICTION. (b) EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. Section 8.7. Grantor's Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Grantor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement except as expressly provided otherwise under Article 9 of the UCC in connection with its enforcement of the Collateral Agent's rights with respect to the Collateral, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Grantor under or with respect to any Collateral. Section 8.8. Termination; Release. (a) On the Termination Date, this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation in Section 6.1 hereof, shall survive such termination) and the Collateral Agent, at the request and expense of the respective Grantor, will promptly execute and deliver to such Grantor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Grantor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement. As used in this Agreement, "Termination Date" shall mean the date upon which all of the Commitments 24 under the Credit Agreement have been terminated and no further Commitments may be provided pursuant thereto and all Interest Rate Protection/Currency Exchange Agreements entered into with any Other Creditor have been terminated, no promissory notes issued pursuant to the Credit Agreement are outstanding, all Loans thereunder have been repaid in full, all Letters of Credit issued under the Credit Agreement have been terminated, all Treasury Services have been terminated and all outstanding obligations thereunder and under the Treasury Service Agreement have been repaid in full and all Obligations then due and payable have been paid in full. (b) In the event that any part of the Collateral is sold, transferred or otherwise disposed of (other than to the Borrower or a Guarantor) in accordance with the Credit Agreement or is otherwise released with the consent of the Required Secured Creditors and the proceeds of such sale, transfer or other disposition, or from such release, are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, such Collateral will be sold, transferred or otherwise disposed of free and clear of the Liens created by this Agreement, and the Collateral Agent, at the request and expense of the relevant Grantor, will duly and promptly assign, transfer and deliver to such Grantor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold, transferred or otherwise disposed of, or released, and as may be in the possession of the Collateral Agent and has not theretofore been released pursuant to this Agreement. Furthermore, upon the release of any Guarantor from the Guarantee Agreement in accordance with the provisions thereof, such Grantor (and the Collateral at such time assigned by the respective Grantor pursuant hereto) shall be released from this Agreement. (c) At any time that a Grantor desires that the Collateral Agent take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 8.8(a) or (b), such Grantor shall deliver to the Collateral Agent a certificate signed by a Financial Officer stating that the release of the respective Collateral is permitted pursuant to such Section 8.8(a) or (b). At any time that the Borrower or the respective Grantor desires that a Subsidiary of the Borrower which has been released from the Guarantee Agreement be released hereunder as provided in the last sentence of Section 8.8(b), it shall deliver to the Collateral Agent a certificate signed by a Financial Officer stating that the release of the respective Grantor (and its Collateral) is permitted pursuant to such Section 8.8(b). Section 8.9. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with each Grantor and the Collateral Agent. Section 8.10. Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 8.11. The Collateral Agent. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is 25 expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Annex E hereto. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in Annex E hereto. Section 8.12. Additional Grantors. It is understood and agreed that any Guarantor that desires to become a Grantor hereunder, or is required to execute a counterpart of this Agreement after the date hereof pursuant to the requirements of the Credit Agreement or any other Loan Document, shall become a Grantor hereunder by executing a counterpart hereof and delivering same to the Collateral Agent, or by executing a joinder agreement in form and substance satisfactory to the Administrative Agent, (y) delivering supplements to Annexes A through D, inclusive, hereto as are necessary to cause such Annexes to be complete and accurate with respect to such additional Grantor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Grantor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken to the reasonable satisfaction of the Collateral Agent. Section 8.13. Acknowledgment. It is understood and agreed that in order for a Treasury Service Creditor to receive the benefits of the Security Documents, such Treasury Service Creditor shall have executed an acknowledgment of the terms and conditions of the Security Documents and delivered same to the Collateral Agent. * * * 26 IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be executed and delivered by their duly authorized officers as of the date first above written. FLEMING COMPANIES, INC., as a Grantor By: /s/ Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Senior Vice President and Secretary ABCO FOOD GROUP, INC., as a Grantor By: /s/ James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President ABCO MARKETS INC., as a Grantor By: /s/ Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary ABCO REALTY CORP., as a Grantor By: /s/ Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary i AG, L.L.C., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary ii AMERICAN LOGISTICS GROUP, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary BAKER'S FOOD GROUP, INC., as a Grantor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President CARDINAL WHOLESALE, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary iii DUNIGAN FUELS, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FAVAR CONCEPTS, LTD., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING FOODS MANAGEMENT CO., L.L.C., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING FOODS OF TEXAS, L.P., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary iv FLEMING INTERNATIONAL LTD., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary v FLEMING SUPERMARKETS OF FLORIDA, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING TRANSPORTATION SERVICE, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING WHOLESALE, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FOOD 4 LESS BEVERAGE COMPANY, INC., as a Grantor By: /s/Charles Hall -------------------------------- Name: Charles Hall Title: President vi FUELSERV, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary vii GATEWAY INSURANCE AGENCY, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary HEAD DISTRIBUTING COMPANY, as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary LAS, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary MINTER-WEISMAN CO., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary PIGGLY WIGGLY COMPANY, as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary viii PROGRESSIVE REALTY, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary RAINBOW FOOD GROUP, INC., as a Grantor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President RETAIL INVESTMENTS, INC., as a Grantor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President RETAIL SUPERMARKETS, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary ix RFS MARKETING SERVICES, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary RICHMAR FOODS, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary SCRIVNER TRANSPORTATION, INC., as a Grantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary x CORE-MARK INTERNATIONAL, INC., as a Grantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary CORE-MARK INTERRELATED COMPANIES, INC., as a Grantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary CORE-MARK MIDCONTINENT, INC., as a Grantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary C/M PRODUCTS, INC., as a Grantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary xi ASI OFFICE AUTOMATION, INC., as a Grantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary EA MORRIS DISTRIBUTORS, LTD., as a Grantor By: /s/Bill Prokop -------------------------------- Name: Bill Prokop Title: President GENERAL ACCEPTANCE CORPORATION, as a Grantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary MARQUISE VENTURES COMPANY, INC., as a Grantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary xii Accepted and Agreed to: DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent By: /s/ Marguerite Sutton -------------------------------------- Name: Marguerite Sutton Title: Vice President Acknowledged and Agreed (with respect to the Security Documents): JPMORGAN CHASE BANK, as the initial Treasury Service Creditor By: /s/ Teri Streusand -------------------------------- Name: Teri Streusand Title: Vice President xiii EX-10.3 10 d97911exv10w3.txt GUARANTEE AGREEMENT EXHIBIT 10.3 GUARANTEE AGREEMENT GUARANTEE AGREEMENT, dated as of June 18, 2002 (as amended, modified or supplemented from time to time, this "Guaranty"), made by each of the undersigned guarantors (each a "Guarantor," and together with any other entity that becomes a guarantor hereunder pursuant to Section 26 hereof, the "Guarantors"). Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined. W I T N E S S E T H : - - - - - - - - - - WHEREAS, Fleming Companies, Inc. (the "Borrower"), the lenders from time to time party thereto (the "Lenders"), Deutsche Bank Trust Company Americas, as Administrative Agent (together with any successor Administrative Agent, (the "Administrative Agent"), JPMorgan Chase Bank and Citicorp North America, Inc., as Syndication Agents, Lehman Commercial Paper Inc. and Wachovia Bank, National Association, as Documentation Agents, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as Joint Book Managers and Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as Joint Lead Arrangers, have entered into a Credit Agreement, dated as of June 18, 2002 (as amended, modified, or supplemented from time to time, the "Credit Agreement"), providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower as contemplated therein (the Lenders, the Collateral Agent, the Issuing Lender and the Administrative Agent are herein called the "Lender Creditors"); WHEREAS, the Borrower may on the date hereof be party to, or at any time and from time to time on or after the date hereof enter into, one or more interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, interest rate hedging agreements, foreign currency exchange or hedging agreements or other similar agreement or arrangements (each such agreement or arrangement, an "Interest Rate Protection/Currency Exchange Agreement" and, collectively, the "Interest Rate Protection/Currency Exchange Agreements") with one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns, if any, collectively, the "Other Creditors," and together with the Lender Creditors, the "Secured Creditors"); WHEREAS, the Borrower, one or more Wholly-Owned Domestic Subsidiaries of the Borrower and JPMorgan Chase Bank (or any successor by merger thereto) and/or one or more of its banking affiliates or another bank reasonably satisfactory to the Administrative Agent (collectively, the "Treasury Service Creditors" and, together with the Lender Creditors and the Other Creditors, the "Secured Creditors") have entered into, or in the future may enter into, a credit arrangement (with any written agreement evidencing such credit arrangement, as amended, modified, supplemented, replaced or refinanced from time to time, herein called the "Treasury Service Agreement") providing for treasury, depositary or cash management services (including, without limitation, overnight overdraft services) to the Borrower and such Wholly-Owned Subsidiaries by the Treasury Service Creditors, and automated clearinghouse transfers of funds to the Treasury Service Creditors, in each case pursuant to uncommitted lines of credit (collectively, "Treasury Services"); WHEREAS, each Guarantor is a direct or indirect Subsidiary of the Borrower; WHEREAS, it is a condition precedent to (i) the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement, (ii) the Other Creditors maintaining and/or entering into Interest Rate Protection/Currency Exchange Agreements with the Borrower and (iii) the continued extension of Treasury Services by the Treasury Service Creditors that each Pledgor shall have executed and delivered to the Administrative Agent this Guaranty; and WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement, the entering into by the Borrower of Interest Rate Protection/Currency Exchange Agreements and the extension of Treasury Services and, accordingly, desires to execute this Guaranty in order to satisfy the conditions described in the preceding paragraph; NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Guarantor, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby makes the following representations and warranties to the Secured Creditors and hereby covenants and agrees with each Secured Creditor as follows: 1. Each Guarantor, jointly and severally, irrevocably, absolutely and unconditionally guarantees: (i) to the Lender Creditors the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of (x) the principal of, premium, if any, and interest on the Loans made to, the Borrower under the Credit Agreement, and all reimbursement obligations with respect to Letters of Credit issued under the Credit Agreement and (y) all other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due), liabilities and indebtedness owing by the Borrower to the Lender Creditors under the Credit Agreement and each other Loan Document to which the Borrower is a party (including, without limitation, indemnities, fees and interest thereon), whether now existing or hereafter incurred under, arising out of or in connection with the Credit Agreement and any such other Loan Document and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in all such Loan Documents (all such principal, premium, interest, liabilities, indebtedness and obligations being herein collectively called the "Loan Document Obligations"), (ii) to each Other Creditor the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due), liabilities and indebtedness owing by the Borrower under any Interest Rate Protection/Currency Exchange Agreement, whether now in existence or hereafter arising, and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in each Interest Rate Protection/Currency Exchange Agreement (all such obligations, liabilities and 2 indebtedness described in this clause (ii) being herein collectively called the "Other Obligations") and (iii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Guarantor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Guarantor to the Treasury Service Creditors under, or with respect to, Treasury Services (all such obligations, liabilities and indebtedness being herein collectively called the "Treasury Service Obligations," and together with the Loan Document Obligations and the Other Obligations, the "Guaranteed Obligations"). Each Guarantor understands, agrees and confirms that the Secured Creditors may enforce this Guaranty up to the full amount of the Guaranteed Obligations against such Guarantor without proceeding against any other Guarantor, the Borrower, against any security for the Obligations, or under any other guaranty covering all or a portion of the Guaranteed Obligations. 2. Additionally, each Guarantor, jointly and severally, unconditionally, absolutely and irrevocably, guarantees the payment of any and all Guaranteed Obligations whether or not due or payable by the Borrower upon the occurrence in respect of the Borrower of any of the events specified in clauses (g) or (h) or Article VII of the Credit Agreement, and unconditionally and irrevocably, jointly and severally, promises to pay such Guaranteed Obligations to the Secured Creditors, or order, on demand, in legal tender of the United States. This Guaranty shall constitute a guaranty of payment, and not of collection. 3. The liability of each Guarantor hereunder is primary, absolute and unconditional and is exclusive and independent of any security for or other guaranty of the indebtedness of the Borrower whether executed by such Guarantor, any other Guarantor, any other guarantor or by any other party, and the liability of each Guarantor hereunder shall not be affected or impaired by any circumstance or occurrence whatsoever, including, without limitation: (a) any direction as to application of payment by the Borrower or by any other party, (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Guaranteed Obligations, (c) any payment on or in reduction of any such other guaranty or undertaking, (d) any dissolution, termination or increase, decrease or change in personnel by the Borrower, (e) any payment made to any Secured Creditor on the indebtedness which any Secured Creditor repays the Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, (f) any action or inaction by the Secured Creditors as contemplated in Section 6 hereof or (g) any invalidity, irregularity or unenforceability of all or any part of the Guaranteed Obligations or of any security therefor. 4. The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor, any other guarantor or the Borrower, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor, any other guarantor or the Borrower and whether or not any other Guarantor, any other guarantor or the Borrower be joined in any such action or actions. Each 3 Guarantor waives, to the fullest extent permitted by law, the benefits of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by the Borrower or other circumstance which operates to toll any statute of limitations as to the Borrower shall operate to toll the statute of limitations as to each Guarantor. 5. Each Guarantor hereby waives notice of acceptance of this Guaranty and notice of any liability to which it may apply, and waives promptness, diligence, presentment, demand of payment, protest, notice of dishonor or nonpayment of any such liabilities, suit or taking of other action by the Administrative Agent or any other Secured Creditor against, and any other notice to, any party liable thereon (including such Guarantor, any other Guarantor, any other guarantor or the Borrower). 6. Any Secured Creditor may at any time and from time to time without the consent of (except as provided below), or notice to, any Guarantor, without incurring responsibility to such Guarantor, without impairing or releasing the obligations of such Guarantor hereunder, upon or without any terms or conditions and in whole or in part: (a) change, in accordance with the provisions of the Credit Agreement, the manner, place or terms of payment of, and/or change, increase or extend the time of payment of, renew or alter, any of the Guaranteed Obligations (including any increase or decrease in the rate of interest thereon or the principal amount thereof), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered; (b) take and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, surrender, impair, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst; (c) exercise or refrain from exercising any rights against the Borrower, any Subsidiary thereof or otherwise act or refrain from acting; (d) release or substitute any one or more endorsers, Guarantors, other guarantors, the Borrower or other obligors; (e) settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the Borrower to creditors of the Borrower other than the Secured Creditors; (f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrower to the Secured Creditors regardless of what liabilities of the Borrower remain unpaid; 4 (g) consent to or waive any breach of, or any act, omission or default under, any of the Interest Rate Protection/Currency Exchange Agreements, the Loan Documents, the Treasury Service Agreement or any of the instruments or agreements referred to therein, or otherwise amend, modify or supplement any of the Interest Rate Protection/Currency Exchange Agreements, the Loan Documents, the Treasury Service Agreement or any of such other instruments or agreements; (h) act or fail to act in any manner referred to in this Guaranty which may deprive such Guarantor of its right to subrogation against the Borrower to recover full indemnity for any payments made pursuant to this Guaranty; and/or (i) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of such Guarantor from its liabilities under this Guaranty. 7. This Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. No failure or delay on the part of any Secured Creditor in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly specified are cumulative and not exclusive of any rights or remedies which any Secured Creditor would otherwise have. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Secured Creditor to any other or further action in any circumstances without notice or demand. It is not necessary for any Secured Creditor to inquire into the capacity or powers of the Borrower or the officers, directors, partners or agents acting or purporting to act on its behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 8. Any indebtedness of the Borrower now or hereafter held by any Guarantor is hereby subordinated to the indebtedness of the Borrower to the Secured Creditors, and such indebtedness of the Borrower to any Guarantor, if the Administrative Agent or the Collateral Agent, after the occurrence and during the continuance of an Event of Default, so requests, shall be collected, enforced and received by such Guarantor as trustee for the Secured Creditors and be paid over to the Secured Creditors on account of the indebtedness of the Borrower to the Secured Creditors, but without affecting or impairing in any manner the liability of such Guarantor under the other provisions of this Guaranty. Without limiting the generality of the foregoing, each Guarantor hereby agrees with the Secured Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash. 9. (a) Each Guarantor waives any right (except as shall be required by applicable law and cannot be waived) to require the Secured Creditors to: (i) proceed against the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; (ii) 5 proceed against or exhaust any security held from the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any other remedy in the Secured Creditors' power whatsoever. Each Guarantor waives any defense based on or arising out of any defense of the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party other than payment in full of the Guaranteed Obligations, including, without limitation, any defense based on or arising out of the disability of the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower other than payment in full of the Guaranteed Obligations. The Secured Creditors may, at their election, foreclose on any security held by the Administrative Agent, the Collateral Agent or the other Secured Creditors by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, or exercise any other right or remedy the Secured Creditors may have against the Borrower or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations have been paid in full in cash. Each Guarantor waives any defense arising out of any such election by the Secured Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other party or any security. (b) Each Guarantor waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional indebtedness. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which such Guarantor assumes and incurs hereunder, and agrees that the Secured Creditors shall have no duty to advise any Guarantor of information known to them regarding such circumstances or risks. 6 10. The Secured Creditors agree that this Guaranty may be enforced only by the action of the Administrative Agent or the Collateral Agent, in each case acting upon the instructions of the Required Secured Creditors (as defined in the Security Agreement) and that no other Secured Creditors shall have any right individually to seek to enforce or to enforce this Guaranty or to realize upon the security to be granted by the Security Documents. The Secured Creditors further agree that this Guaranty may not be enforced against any director, officer, employee, partner, member or stockholder of any Guarantor (except to the extent such partner, member or stockholder is also a Guarantor hereunder). 11. In order to induce the Lenders to make Loans to, and issue Letters of Credit for the account of, the Borrower pursuant to the Credit Agreement, to induce the Other Creditors to execute, deliver and perform the Interest Rate Protection/Currency Exchange Agreements and to induce the Treasury Services Creditors to provide Treasury Services, each Guarantor represents, warrants and covenants that: (a) Each Guarantor is a corporation or other business entity duly incorporated or organized (as the case may be), validly existing and in good standing under the laws of its jurisdiction of incorporation or organization (as the case may be), and has all corporate or other relevant organizational powers and all materials licenses, authorizations, consents and approvals of Governmental Authorities required to carry on its business as now conducted. The execution, delivery and performance by each Guarantor of this Guaranty are within such Guarantor's corporate or other relevant organizational powers, have been duly authorized by all corporate or other organizational action, require no action by or in respect of, or filing with, any Governmental Authority and do no not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws (or equivalent organizational documents) of any such Guarantor or of any judgment, injunction, order or decree or any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement or material instrument binding upon such Guarantor or any of its Subsidiaries, and will not result in the creation or imposition of any Lien (other than those contemplated by the Security Documents) on such Guarantor or any of its Subsidiaries. (b) Each Guarantor has duly executed and delivered this Guaranty and this Guaranty constitutes each such Guarantor's legal, valid and binding obligation enforceable in accordance with its terms. (c) There are no actions, suits or proceedings pending or, to such Guarantor's knowledge, threatened (i) with respect to this Guaranty or any other Loan Document to which such Guarantor is a party or (ii) with respect to such Guarantor or any of its Subsidiaries that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 12. Each Guarantor covenants and agrees that on and after the Effective Date and until the termination of the total Commitments (and the date on which no further Commitments may be provided under the Credit Agreement), all Interest Rate Protection/Currency Exchange Agreements and all Treasury Services and until such time as no amount under any promissory notes (if any) issued pursuant to the Credit Agreement or Letter of Credit remains outstanding 7 and all Guaranteed Obligations have been paid in full, such Guarantor will comply, and will cause each of its Subsidiaries to comply, with all of the applicable provisions, covenants and agreements contained in Articles V and VI of the Credit Agreement, and will take, or will refrain from taking, as the case may be, all actions that are necessary to be taken or not taken so that it is not in violation of any provision, covenant or agreement contained in Articles V or VI of the Credit Agreement, and so that no Default is caused by the actions of such Guarantor or any of its Subsidiaries. 13. The Guarantors hereby jointly and severally agree to pay all reasonable out-of-pocket costs and expenses of incurred by (i) the Agents, the Joint Book Managers, the Joint Lead Arrangers or any Issuing Lender while any Specified Default exists (including the fees, charges and disbursements of each such Person) in connection with the enforcement of this Guaranty and (ii) by the Agents, the Joint Book Managers and the Joint Lead Arrangers in connection with any amendment, waiver or consent relating hereto (including fees, charges and disbursements of one counsel (plus any local counsel deemed reasonably necessary or desirable by the Administrative Agent) for the Agents, the Joint Book Managers and the Joint Lead Arrangers). 14. This Guaranty shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the Secured Creditors and their successors and assigns. 15. Neither this Guaranty nor any provision hereof may be changed, waived, discharged or terminated except with the written consent of each Guarantor directly affected thereby (it being understood and agreed that, for this purpose, the release or modification of liabilities of any Guarantor hereunder shall be deemed not to affect the remaining, or other, Guarantors) and with the written consent of the Required Secured Creditors; provided, that any change, waiver, modification or variance affecting the rights and benefits of a single Class (as defined below) of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall also require the written consent of the Requisite Creditors (as defined below) of such Class of Secured Creditors. For the purpose of this Guaranty, the term "Class" shall mean each class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Loan Document Obligations, (y) the Other Creditors as the holders of the Other Obligations or (z) the Treasury Service Creditors as holders of the Treasury Service Obligations. For the purpose of this Guaranty, the term "Requisite Creditors" of any Class shall mean (x) with respect to the Loan Document Obligations, the Required Lenders, (y) with respect to the Other Obligations, the holders of at least a majority of all Other Obligations outstanding from time to time and (z) with respect to Treasury Service Obligations, the holders of at least a majority of the Treasury Service Obligations outstanding from time to time. 16. Each Guarantor acknowledges that an executed (or conformed) copy of each of the Loan Documents has been made available to a senior officer of such Guarantor and such officer is familiar with the contents thereof. 17. In addition to any rights now or hereafter granted under applicable law (including, without limitation, Section 151 of the New York Debtor and Creditor Law) and not 8 by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default (such term to mean and include any "Event of Default" as defined in the Credit Agreement and any payment default under any Interest Rate Protection/Currency Exchange Agreement or the Treasury Service Agreement, in either case continuing after any applicable grace period), each Secured Creditor is hereby authorized, at any time or from time to time, without notice to any Guarantor or to any other Person, any such notice being expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Secured Creditor to or for the credit or the account of such Guarantor, against and on account of the obligations and liabilities of such Guarantor to such Secured Creditor under this Guaranty, irrespective of whether or not such Secured Creditor shall have made any demand hereunder and although said obligations, liabilities, deposits or claims, or any of them, shall be contingent or unmatured. 18. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, addressed to the relevant party at (i) in the case of any Lender Creditor, as provided in the Credit Agreement, (ii) in the case of any Guarantor, as provided in the Security Agreement and (iii) in the case of any Other Creditor and any Treasury Service Creditor, at such address as such Other Creditor or such Treasury Service Creditor, as the case may be, shall have specified in writing to the Guarantors; or in any case at such other address as any of the Persons listed above may hereafter notify the others in writing. All notices and other communication given to any party hereto in accordance with the provisions of this Guaranty shall be deemed to have been given on the date of receipt. 19. If claim is ever made upon any Secured Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including the Borrower) then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Guarantor, notwithstanding any revocation hereof or other instrument evidencing any liability of the Borrower, and such Guarantor shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee. 20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this Guaranty or any other Loan Document to which any Guarantor is a party may be brought in the courts of the State of New York or of the United States of America for the Southern District of New York in each case which are located in the County of New York, and, by execution and delivery of this Guaranty, each Guarantor hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby further irrevocably waives any claim that any such court lacks personal jurisdiction over such Guarantor, 9 and agrees not to plead or claim in any legal action or proceeding with respect to this Guaranty or any other Loan Document to which such Guarantor is a party brought in any of the aforesaid courts that any such court lacks personal jurisdiction over such Guarantor. Each Guarantor further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Guarantor at its address set forth in the Security Agreement, such service to become effective 30 days after such mailing. Each Guarantor hereby irrevocably waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any action or proceeding commenced hereunder or under any other Loan Document to which such Guarantor is a party that such service of process was in any way invalid or ineffective. Nothing herein shall affect the right of any of the Secured Creditors to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against each Guarantor in any other jurisdiction. (b) Each Guarantor hereby irrevocably waives (to the fullest extent permitted by applicable law) any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Guaranty or any other Loan Document to which such Guarantor is a party brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that such action or proceeding brought in any such court has been brought in an inconvenient forum. (c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER LOAN DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 21. In the event that all of the Equity Interests of one or more Guarantors are sold or otherwise disposed of (to one or more Persons other than the Borrower and any Subsidiaries thereof) in a transaction that is permitted under the Credit Agreement (or such sale or other disposition has been approved in writing by the Required Lenders) and the proceeds of such sale or disposition are applied in accordance with the provisions of the Credit Agreement, to the extent applicable, such Guarantor shall upon consummation of such sale or other disposition (to one or more Persons other than the Borrower and any Subsidiaries thereof) be released from this Guaranty automatically and without further action and this Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no further force or effect (it being understood and agreed that the sale of one or more Persons that own, directly or indirectly, all of the Equity Interests of any Guarantor (to one or more Persons other than the Borrower and any Subsidiaries thereof) shall be deemed to be a sale of such Guarantor for the purposes of this Section 21). Upon the request, and at the expense, of the Borrower, the Collateral Agent shall deliver an acknowledgment of a release of a Guarantor or Guarantors pursuant to the preceding sentence; PROVIDED the Borrower shall have delivered a certificate signed by a Financial Officer certifying that such release is permitted pursuant to the provisions of such preceding sentence. 10 22. At any time a payment in respect of the Guaranteed Obligations is made under this Guaranty, the right of contribution of each Guarantor against each other Guarantor shall be determined as provided in the immediately following sentence, with the right of contribution of each Guarantor to be revised and restated as of each date on which a payment (a "Relevant Payment") is made on the Guaranteed Obligations under this Guaranty. At any time that a Relevant Payment is made by a Guarantor that results in the aggregate payments made by such Guarantor in respect of the Guaranteed Obligations to and including the date of the Relevant Payment exceeding such Guarantor's Contribution Percentage (as defined below) of the aggregate payments made by all Guarantors in respect of the Guaranteed Obligations to and including the date of the Relevant Payment (such excess, the "Aggregate Excess Amount"), each such Guarantor shall have a right of contribution against each other Guarantor who has made payments in respect of the Guaranteed Obligations to and including the date of the Relevant Payment in an aggregate amount less than such other Guarantor's Contribution Percentage of the aggregate payments made to and including the date of the Relevant Payment by all Guarantors in respect of the Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate Deficit Amount") in an amount equal to (x) a fraction the numerator of which is the Aggregate Excess Amount of such Guarantor and the denominator of which is the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate Deficit Amount of such other Guarantor. A Guarantor's right of contribution pursuant to the preceding sentences shall arise at the time of each computation, subject to adjustment at the time of each computation; provided, that no Guarantor may take any action to enforce such right until the Guaranteed Obligations have been irrevocably paid in full in cash, it being expressly recognized and agreed by all parties hereto that any Guarantor's right of contribution arising pursuant to this Section 22 against any other Guarantor shall be expressly junior and subordinate to such other Guarantor's obligations and liabilities in respect of the Guaranteed Obligations and any other obligations owing under this Guaranty. As used in this Section 22: (i) each Guarantor's "Contribution Percentage" shall mean the percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net Worth" of each Guarantor shall mean the greater of (x) the Net Worth (as defined below) of such Guarantor and (y) zero; and (iii) the "Net Worth" of each Guarantor shall mean the amount by which the fair salable value of such Guarantor's assets on the date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent liabilities, but without giving effect to any Guaranteed Obligations arising under this Guaranty) on such date. Notwithstanding anything to the contrary contained above, any Guarantor that is released from this Guaranty pursuant to Section 21 hereof shall thereafter have no contribution obligations, or rights, pursuant to this Section 22, and at the time of any such release, if the released Guarantor had an Aggregate Excess Amount or an Aggregate Deficit Amount, same shall be deemed reduced to $0, and the contribution rights and obligations of the remaining Guarantors shall be recalculated on the respective date of release (as otherwise provided above) based on the payments made hereunder by the remaining Guarantors. All parties hereto recognize and agree that, except for any right of contribution arising pursuant to this Section 22, each Guarantor who makes any payment in respect of the Guaranteed Obligations shall have no right of contribution or subrogation against any other Guarantor in respect of such payment until all of the Guaranteed Obligations have been irrevocably paid in full in cash. Each of the Guarantors recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the party entitled to such contribution. In this connection, each Guarantor has the right to waive 11 its contribution right against any Guarantor to the extent that after giving effect to such waiver such Guarantor would remain solvent, in the determination of the Required Lenders. 23. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby confirms that it is its intention that this Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar Federal or state law. To effectuate the foregoing intention, each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such Guarantor shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws (excluding, to the maximum extent permitted by law, any guarantee by such Guarantor of any Indebtedness (other then the Guaranteed Obligations) of the Borrower), and after giving effect to any rights to contribution pursuant to any agreement providing for an equitable contribution among such Guarantor and other Guarantors, result in the Guaranteed Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent transfer or conveyance. 24. This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Guarantors and the Administrative Agent. 25. All payments made by any Guarantor hereunder will be made without setoff, counterclaim or other defense and on the same basis as payments are made by the Borrower under Sections 2.18 and 2.19(a) of the Credit Agreement. 26. It is understood and agreed that any Subsidiary of the Borrower that is required to become a party to this Guaranty after the date hereof pursuant to the requirements of the Credit Agreement shall become a Guarantor hereunder by (x) executing a counterpart hereof and/or joinder agreement, in each case in form and substance satisfactory to the Administrative Agent, and (y) taking all actions as specified in this Guaranty as would have been taken by such Guarantor had it been an original party to this Guaranty, in each case with all documents and actions required to be taken above to be to the reasonable satisfaction of the Administrative Agent. * * * 12 IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of the date first above written. ABCO FOOD GROUP, INC., as a Guarantor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President ABCO MARKETS INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary ABCO REALTY CORP., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary AG, L.L.C., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary AMERICAN LOGISTICS GROUP, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary BAKER'S FOOD GROUP, INC., as a Guarantor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President CARDINAL WHOLESALE, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary DUNIGAN FUELS, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FAVAR CONCEPTS, LTD., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING FOODS MANAGEMENT CO., L.L.C., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING FOODS OF TEXAS, L.P., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING INTERNATIONAL LTD., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING SUPERMARKETS OF FLORIDA, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING TRANSPORTATION SERVICE, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING WHOLESALE, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FOOD 4 LESS BEVERAGE COMPANY, INC., as a Guarantor By: /s/Charles Hall -------------------------------- Name: Charles Hall Title: President FUELSERV, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary GATEWAY INSURANCE AGENCY, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary HEAD DISTRIBUTING COMPANY, as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary LAS, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary MINTER-WEISMAN CO., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary PIGGLY WIGGLY COMPANY, as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary PROGRESSIVE REALTY, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary RAINBOW FOOD GROUP, INC., as a Guarantor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President RETAIL INVESTMENTS, INC., as a Guarantor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President RETAIL SUPERMARKETS, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary RFS MARKETING SERVICES, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary RICHMAR FOODS, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary SCRIVNER TRANSPORTATION, INC., as a Guarantor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary CORE-MARK INTERNATIONAL, INC., as a Guarantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary CORE-MARK INTERRELATED COMPANIES, INC., as a Guarantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary CORE-MARK MIDCONTINENT, INC., as a Guarantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary C/M PRODUCTS, INC., as a Guarantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary ASI OFFICE AUTOMATION, INC., as a Guarantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary EA MORRIS DISTRIBUTORS, LTD., as a Guarantor By: /s/Bill Prokop -------------------------------- Name: Bill Prokop Title: President GENERAL ACCEPTANCE CORPORATION, as a Guarantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary MARQUISE VENTURES COMPANY, INC., as a Guarantor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary Agreed and accepted by: DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent By: /s/ Marguerite Sutton ------------------------------ Name: Marguerite Sutton Title: Vice President EX-10.4 11 d97911exv10w4.txt PLEDGE AGREEMENT EXHIBIT 10.4 PLEDGE AGREEMENT PLEDGE AGREEMENT (as amended, modified or supplemented from time to time, this "Agreement"), dated as of June 18, 2002, made by each of the undersigned pledgors (each a "Pledgor" and, together with any other entity that becomes a pledgor hereunder pursuant to Section 25 hereof, the "Pledgors") to DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent (together with any successor Collateral Agent, the "Pledgee"), for the benefit of the Secured Creditors (as defined below). Certain capitalized terms used herein are defined in Section 2 hereof. Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined. W I T N E S S E T H : - - - - - - - - - - WHEREAS, Fleming Companies, Inc. (the "Borrower"), the lenders from time to time party thereto (the "Lenders"), Deutsche Bank Trust Company Americas, as Administrative Agent (together with any successor Administrative Agent, the "Administrative Agent"), JP Morgan Chase Bank and Citicorp North America, Inc., as Syndication Agents, Lehman Commercial Paper Inc. and Wachovia Bank, National Association, as Documentation Agents, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as Joint Book Managers, and Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Salomon Smith Barney Inc., as Joint Lead Arrangers have entered into a Credit Agreement, dated as of June 18, 2002 (as amended, modified or supplemented from time to time, the "Credit Agreement"), providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower, in each case as contemplated therein (the Lenders, the Administrative Agent, the Syndication Agents, the Documentation Agents, each Issuing Lender and the Pledgee are herein called the "Lender Creditors"); WHEREAS, the Borrower may on the date hereof be party to, and at any time and from time to time on or after the date hereof may enter into, one or more interest rate swap agreements, interest rate cap agreements, interests rate collar agreements, interest rate hedge agreements, foreign currency exchange or hedging agreements or other similar agreements or arrangements (each such agreement or arrangement, an "Interest Rate Protection/Currency Exchange Agreement" and, collectively, the "Interest Rate Protection/Currency Exchange Agreements") with one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns, if any, collectively, the "Other Creditors"); WHEREAS, the Borrower, one or more Wholly-Owned Domestic Subsidiaries of the Borrower and JPMorgan Chase Bank (or any successor by merger thereto) and/or one or more of its banking affiliates or another bank reasonably satisfactory to the Administrative Agent (collectively, the "Treasury Service Creditors" and, together with the Lender Creditors and the Other Creditors, the "Secured Creditors") have entered into, or in the future may enter into, a credit arrangement (with any written agreement evidencing such credit arrangement, as amended, modified, supplemented, replaced or refinanced from time to time, herein called the "Treasury Service Agreement"), providing for Treasury Services; WHEREAS, pursuant to the Guarantee Agreement, each Pledgor that is a party thereto has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations as described therein; WHEREAS, it is a condition precedent to (i) the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement, (ii) the Other Creditors entering into Interest Rate Protection/Currency Exchange Agreements and (iii) the continued extension of Treasury Services by the Treasury Service Creditors that each Pledgor shall have executed and delivered to the Pledgee this Agreement; and WHEREAS, each Pledgor will obtain benefits from the incurrence of Loans by, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement, the entering into by the Borrower of Interest Rate Protection/Currency Exchange Agreements and the extension of Treasury Services to the Borrower and its respective Wholly-Owned Domestic Subsidiaries and, accordingly, each Pledgor desires to enter into this Agreement in order to satisfy the condition described in the preceding paragraph; NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Pledgee for the benefit of the Secured Creditors and hereby covenants and agrees with the Pledgee for the benefit of the Secured Creditors as follows: 1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor to the Pledgee for the benefit of the Secured Creditors to secure: (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, principal, premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), reimbursement obligations under Letters of Credit, Fees, costs and indemnities) of such Pledgor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Loan Documents to which such Pledgor is a party (including, in the case of each Pledgor that is a Guarantor, all such obligations, liabilities and indebtedness of such Pledgor under the Guarantee Agreement) and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Loan Documents (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Interest Rate 2 Protection/Currency Exchange Agreements or Treasury Services, being herein collectively called the "Loan Document Obligations"); (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Pledgor to the Treasury Service Creditors under, or with respect to Treasury Services (including, in the case of a Pledgor that is a Guarantor, all such obligations, liabilities and indebtedness of such Pledgor under the Guarantee Agreement) (all such obligations, liabilities and indebtedness described in this clause (iii) being herein collectively called the "Treasury Service Obligations"); (iii) any and all sums advanced by the Pledgee in order to preserve the Collateral (as hereinafter defined) or preserve its security interest in the Collateral; (iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of such Pledgor referred to in clauses (i), (ii) and (iii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable attorneys' fees and court costs; (v) all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under Section 11 of this Agreement; and (vi) all amounts owing to any Agent pursuant to any of the Loan Documents in its capacity as such; all such obligations, liabilities, sums and expenses set forth in clauses (i) through (vii) of this Section 1 being herein collectively called the "Obligations," it being acknowledged and agreed that the "Obligations" shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. 2. DEFINITIONS. (a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa. (b) The following capitalized terms used herein shall have the definitions specified below: "Administrative Agent" has the meaning set forth in the Recitals hereto. 3 "Adverse Claim" has the meaning given such term in Section 8-102(a)(1) of the UCC. "Agreement" has the meaning set forth in the first paragraph hereof. "Borrower" shall have the meaning provided in the Recitals hereto. "Certificated Security" has the meaning given such term in Section 8-102(a)(4) of the UCC but shall exclude securities that do not constitute Equity Interests or Proceeds thereof. "Class" has the meaning set forth in Section 22 hereof. "Clearing Corporation" has the meaning given such term in Section 8-102(a)(5) of the UCC. "Collateral" has the meaning set forth in Section 3.1 hereof. "Collateral Accounts" means any and all accounts established and maintained by the Pledgee in the name of any Pledgor to which Collateral may be credited. "Credit Agreement" has the meaning set forth in the Recitals hereto. "Domestic Corporation" has the meaning set forth in the definition of "Stock." "Equity Interests" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, any limited or general partnership interest and any limited liability company membership interest. "Event of Default" means any Event of Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Obligations after the expiration of any applicable grace period. "Excluded Collateral" at any time, means any property which is expressly excluded from the requirement that it be pledged pursuant to this Agreement at such time pursuant to the express provisions of the penultimate sentence of Section 3.1. "Excluded Entity" means, at any time, a Person in which the Pledgors collectively own 50% or less of the Equity Interests of such Person. "Excluded Equity Interests" has the meaning assigned to that term in the penultimate sentence of Section 3.1. "Fees" means all amounts payable pursuant to, or referred to in, Section 2.13 of the Credit Agreement. "Financial Asset" has the meaning given such term in Section 8-102(a)(9) of the UCC but shall exclude Securities and any other share, participation or other interest or any other property that does not constitute an Equity Interest or Proceeds thereof. 4 "Foreign Corporation" has the meaning set forth in the definition of "Stock." "Indemnitees" has the meaning set forth in Section 11 hereof. "Investment Property" has the meaning given such term in Section 9-102(a)(49) of the UCC but shall exclude any Security, and any other share, participation or other interest or any other property, that does not constitute an Equity Interest or Proceeds thereof. "Lender Creditors" has the meaning set forth in the Recitals hereto. "Lenders" has the meaning set forth in the Recitals hereto. "Limited Liability Company Assets" means all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned or represented by any Limited Liability Company Interest. "Limited Liability Company Interests" means the entire limited liability company membership interest at any time owned by any Pledgor in any limited liability company. "Loan Document Obligations" has the meaning set forth in Section 1 hereof. "Location" of any Pledgor has the meaning given such term in Section 9-307 of the UCC. "Non-Voting Stock" means all capital stock which is not Voting Stock. "Obligations" has the meaning set forth in Section 1 hereof. "Other Creditors" has the meaning set forth in the Recitals hereto. "Other Obligations" has the meaning set forth in Section 1 hereof. "Partnership Assets" means all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned or represented by any Partnership Interest. "Partnership Interest" means the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership. "Pledgee" has the meaning set forth in the first paragraph hereof. "Pledgor" has the meaning set forth in the first paragraph hereof. "Proceeds" has the meaning given such term in Section 9-102(a)(64) of the UCC. "Registered Organization" has the meaning given such term in Section 9-102(a)(70) of the UCC. 5 "Required Secured Creditors" has the meaning given such term in the Security Agreement. "Secured Creditors" has the meaning set forth in the Recitals hereto. "Secured Debt Agreements" has the meaning set forth in Section 5 hereof. "Securities Account" has the meaning given such term in Section 8-501(a) of the UCC. "Securities Act" means the Securities Act of 1933, as amended, as in effect from time to time. "Security" and "Securities" has the meaning given such term in Section 8-102(a)(15) of the UCC and shall in any event also include all Stock but shall not include any obligation or any share, participation or interest not constituting an Equity Interest or Proceeds thereof. "Security Entitlement" has the meaning given such term in Section 8-102(a)(17) of the UCC but shall not include any right or property interest in, or arising from, any obligation or any share, participation or interest not constituting an Equity Interest or Proceeds thereof. "Stock" means (x) with respect to corporations incorporated under the laws of the United States or any State or territory thereof or the District of Columbia (each a "Domestic Corporation"), all of the issued and outstanding shares of capital stock of any corporation at any time owned by any Pledgor of any Domestic Corporation and (y) with respect to corporations not Domestic Corporations (each a "Foreign Corporation"), all of the issued and outstanding shares of capital stock at any time owned by any Pledgor of any Foreign Corporation. "Termination Date" has the meaning set forth in Section 20 hereof. "Transmitting Utility" has the meaning given such term in Section 9-102(a)(80) of the UCC. "Treasury Service Agreement" has the meaning provided in the recitals of this Agreement. "Treasury Service Creditors" has the meaning provided in the recitals of this Agreement. "Treasury Service Obligations" has the meaning set forth in Section 1 hereof. "Treasury Services" means treasury, depositary or cash management services (including, without limitation overnight overdraft services) provided to the Borrower and its Wholly-Owned Subsidiaries by the Treasury Service Creditors, and automated clearinghouse transfers of funds to, the Treasury Service Creditors, in each case pursuant to uncommitted lines of credit. 6 "UCC" means the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific sections or subsections of the UCC are references to such sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof. "Uncertificated Security" means any Security that is not represented by a certificate. "Voting Stock" means all classes of capital stock of any Foreign Corporation entitled to vote. 3. PLEDGE OF SECURITIES, ETC. 3.1 Pledge. To secure the Obligations now or hereafter owed or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to the Pledgee for the benefit of the Secured Creditors, and does hereby create a continuing security interest in favor of the Pledgee for the benefit of the Secured Creditors in, all of the right, title and interest in and to the following, whether now existing or hereafter from time to time acquired (collectively, the "Collateral"): (a) each of the Collateral Accounts, including any and all assets of whatever type or kind deposited by such Pledgor in such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, Securities or interests therein of any type or nature deposited or required by the Credit Agreement or any other Secured Debt Agreement to be deposited in such Collateral Account, and all investments and all certificates (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; (b) all Securities owned by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities; (c) all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such interest relates, whether now existing or hereafter acquired, including, without limitation: (A) all the capital thereof and its interest in all profits, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests; (B) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; 7 (C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests; (D) all of such Pledgor's rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and (E) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; (d) all Partnership Interests owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such interest relates, whether now existing or hereafter acquired, including, without limitation: (A) all the capital thereof and its interest in all profits, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests; (B) all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; (C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests; (D) all of such Pledgor's rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership 8 agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and (E) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; (e) all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing; (f) all Financial Assets and Investment Property owned by such Pledgor from time to time; and (g) all Proceeds of any and all of the foregoing. Notwithstanding anything to the contrary contained in this Agreement, (w) unless there has been a Change of Law as a result of which the granting of the pledge of more than 66 2/3% of the Voting Stock of any Foreign Corporation will not give rise to adverse "deemed dividend" tax consequences to the Borrower under Section 956 of the Code, no Pledgor shall be required to pledge hereunder more than 65% of the Voting Stock of any Foreign Corporation (and such Voting Stock in excess of 65% shall not constitute "Collateral,") (x) each Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at any time and from time to time acquired by such Pledgor of any Foreign Corporation, (y) the Pledgors shall not be required to pledge Equity Interests of any Excluded Entities (and such Equity Interests shall not constitute "Collateral") unless the aggregate fair market value (as determined in good faith by the Borrower) of any and all such Equity Interests not pledged pursuant to this clause (y) exceeds $10,000,000, in which case the Pledgors shall cause an amount of such Equity Interests otherwise excluded from the pledge pursuant to this Agreement by operation of this clause (y) to be pledged hereunder so that the aforementioned threshold is not exceeded (with all Equity Interests not required to be pledged hereunder at any time pursuant to the provisions of this clause (y) being herein called the "Excluded Equity Interests") and (z) the Borrower and its Subsidiaries shall not be required to pledge any of the Equity Interests of Chouteau so long as Chouteau is not treated as a Subsidiary pursuant to the proviso contained in the first sentence of the definition of Subsidiary contained in the Credit Agreement. If any property is not pledged hereunder, in accordance with the provisions of the immediately preceding sentence, but is at any time after the date of this Agreement required to be pledged hereunder (whether because of a Change of Law, the aggregate value of Equity Interests of Excluded Entities exceeding the threshold amount described above, Chouteau ceasing to meet the requirements described above 9 or otherwise), then the security interests created under this agreement shall automatically and immediately attach and apply to, and cover, all such property which is required to be pledged hereunder, without the necessity of the taking of any further action by any Pledgor, although the Pledgors shall not be excused from following the procedures, and taking the actions, otherwise required with respect to such property or assets pursuant to the other provisions of this Agreement. 3.2 Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by the respective Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral) for the benefit of the Pledgee and the other Secured Creditors: (i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall deliver such Certificated Security to the Pledgee, indorsed to the Pledgee or indorsed in blank; (ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall cause the issuer of such Uncertificated Security (or, in the case of an issuer that is not a Subsidiary of such Pledgor, will use its commercially reasonable efforts (which shall not include the payment of any amount other than nominal amounts) to cause such issuer) to duly authorize and execute, and deliver to the Pledgee, an agreement for the benefit of the Pledgee and the other Secured Creditors substantially in the form of Annex G hereto (appropriately completed to the satisfaction of the Pledgee and with such modifications, if any, as shall be satisfactory to the Pledgee) pursuant to which such issuer agrees to comply with any and all instructions originated by the Pledgee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction; (iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), the respective Pledgor shall promptly notify the Pledgee thereof and shall promptly take all actions required (i) to comply with the applicable rules of such Clearing Corporation and (ii) to perfect the security interest of the Pledgee under applicable law (including, in any event, under Sections 9-314(a) and (b), 9-106 and 8-106 (d) of the UCC). Each such Pledgor further agrees to take such actions as the Pledgee deems necessary or desirable to effect the foregoing; (iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Interest credited 10 on the books of a Clearing Corporation), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii) hereof; and (v) with respect to cash Proceeds, (i) to the extent requested by the Pledgee after a Specified Default has occurred and is continuing, establishment by the Pledgee of a cash account in the name of such Pledgor over which the Pledgee shall have exclusive and absolute control and dominion (and no withdrawals or transfers may be made therefrom by any Person except with the prior written consent of the Pledgee) and (ii) deposit of such cash in such cash account. (b) In addition to the actions required to be taken pursuant to preceding Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Securities and Collateral: (i) with respect to all Collateral of such Pledgor whereby or with respect to which the Pledgee may obtain "control" thereof within the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), the respective Pledgor shall take all actions as may be requested from time to time by the Pledgee so that "control" of such Collateral is obtained and at all times held by the Pledgee; and (ii) each Pledgor shall from time to time cause appropriate financing statements (on Form UCC-1 or other appropriate form) under the Uniform Commercial Code as in effect in the various relevant States, on form covering all Collateral hereunder (with the form of such financing statements to be satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all times the Pledgee has a security interest in all Investment Property and other Collateral which is perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-312(a) of the UCC). 3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend or otherwise) any additional Collateral at any time or from time to time after the date hereof, such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, the Pledgor will promptly thereafter take (or cause to be taken) all action with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Pledgee (i) a certificate executed by a Financial Officer describing such Collateral and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors) hereunder and (ii) supplements to Annexes B through G hereto as are necessary to cause such annexes to be complete and accurate at such time. 11 3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral. 3.5 Certain Representations and Warranties Regarding the Collateral. Each Pledgor represents and warrants that on the date hereof: (i) the exact legal name of such Pledgor, the type of organization of such Pledgor, the jurisdiction of organization of such Pledgor, such Pledgor's Location, and such Pledgor's organizational identification number, is listed on Annex A hereto; (ii) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex B hereto; (iii) the Stock held by such Pledgor (exclusive of any Excluded Collateral) consists of the number and type of shares of the stock of the corporations as described in Annex C hereto; (iv) such Stock constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex C hereto; (v) the Limited Liability Company Interests held by such Pledgor (exclusive of any Excluded Collateral) consist of the number and type of interests of the Persons described in Annex D hereto; (vi) each such Limited Liability Company Interest constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex D hereto; (vii) the Partnership Interests held by such Pledgor (exclusive of any Excluded Collateral) consist of the number and type of interests of the Persons described in Annex E hereto; (viii) each such Partnership Interest constitutes that percentage or portion of the entire partnership interest of the Partnership as set forth in Annex E hereto; (ix) the exact address of each chief executive office of such Pledgor is listed on Annex F hereto; (x) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) with respect to each item of Collateral described in Annexes C through E hereto; (xi) the Borrower in good faith believes that the aggregate value of all Equity Interests of all Excluded Entities owned by the Borrower and its Subsidiaries does not exceed $10,000,000; and (xii) such Pledgor owns no other Securities, Limited Liability Company Interests or Partnership Interests (exclusive of any Excluded Collateral). 4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. If and to the extent necessary to enable the Pledgee to perfect its security interest in any of the Collateral or to exercise any of its remedies hereunder, the Pledgee shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held (in the discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee. 5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there shall have occurred and be continuing an Event of Default, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate or be inconsistent with any of the terms of this Agreement, the Credit Agreement, any other Loan Document, any Interest Rate Protection/Currency Exchange Agreement or any Treasury Service Agreement (collectively, the "Secured Debt Agreements"), or which would have the effect of impairing the value of the Collateral or any part thereof or the position or interests of the Pledgee or any other Secured Creditor in the Collateral. All such 12 rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable. 6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall have occurred and be continuing a Specified Default, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor, and such Pledgor shall be entitled to receive, retain and utilize such cash amounts free and clear of the Lien created by this Agreement. The Pledgee shall be entitled to receive directly, and to retain as part of the Collateral: (i) all other or additional stock, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash dividends other than as set forth above) paid or distributed by way of dividend or otherwise in respect of the Collateral; (ii) all other or additional stock, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and (iii) all other or additional stock, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate reorganization. Nothing contained in this Section 6 shall limit or restrict in any way the Pledgee's right to receive proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. All dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 and Section 7 hereof shall be received in trust for the benefit of the Pledgee, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the same form as so received (with any necessary endorsement). 7. REMEDIES IN CASE OF EVENT OF DEFAULT. If there shall have occurred and be continuing an Event of Default (or in the case of following clause (i), in the case any Specified Default shall have occurred and be continuing), then and in every such case, the Pledgee shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Pledgee shall be entitled to exercise all the rights and remedies of a secured party under the Uniform Commercial Code as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable: (i) to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor; 13 (ii) to transfer all or any part of the Collateral into the Pledgee's name or the name of its nominee or nominees; (iii) to vote all or any part of the Collateral (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so); (iv) at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Pledgee in its absolute discretion may determine, provided that at least 10 days' written notice of the time and place of any such sale shall be given to the respective Pledgor. The Pledgee shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security for the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of the Secured Creditors may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and (v) to set-off any and all Collateral against any and all Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Obligations. 8. REMEDIES, CUMULATIVE, ETC. Each and every right, power and remedy of the Pledgee provided for in this Agreement or in any other Secured Debt Agreement, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or any other Secured Debt Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Pledgee or any other Secured Creditor to any other or further action in any circumstances without notice or demand. The Secured Creditors agree that this Agreement may be enforced 14 only by the action of the Pledgee, in each case acting upon the instructions of the Required Secured Creditors, and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Pledgee for the benefit of the Secured Creditors upon the terms of this Agreement. 9. APPLICATION OF PROCEEDS. (a) All monies collected by the Pledgee upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies received by the Pledgee hereunder, shall be applied in the manner provided in Section 5.4 of the Security Agreement. (b) It is understood and agreed that the Pledgors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral hereunder and the aggregate amount of the Obligations. 10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof. 11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify and hold harmless the Pledgee in such capacity and each other Secured Creditor and their respective successors, assigns, employees, agents and affiliates (individually an "Indemnitee," and collectively the "Indemnitees") from and against any and all claims, demands, losses, judgments and liabilities (including liabilities for penalties) of whatsoever kind or nature, and (ii) to reimburse each Indemnitee for all costs and expenses, including reasonable attorneys' fees, in each case growing out of or resulting from this Agreement or the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding, in each case, any claims, demands, losses, judgments and liabilities or expenses to the extent incurred by reason of gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision)). In no event shall the Pledgee be liable, in the absence of gross negligence or willful misconduct on its part (as determined by a court of competent jurisdiction in a final and non-appealable decision), for any matter or thing in connection with this Agreement other than to account for monies actually received by it in accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. 12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or as a partner of any partnership 15 and neither the Pledgee nor any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor, any Pledgor and/or any other Person. (b) Except as provided in the last sentence of paragraph (a) of this Section 12, the Pledgee, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor, any limited liability company, partnership and/or any other Person either before or after an Event of Default shall have occurred. The Pledgee shall have only those powers set forth herein and in Annex E to the Security Agreement, and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12. (c) The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected. (d) The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral. 13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees to execute and deliver to the Pledgee such financing statements, in form reasonably acceptable to the Pledgee as the Pledgee may from time to time reasonably request or as are reasonably necessary or desirable in the opinion of the Pledgee to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights, powers and security contemplated hereby. Each Pledgor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Pledgor hereby authorizes the Pledgee to file any such financing statements covering the Collateral without the signature of such Pledgor. (b) Each Pledgor hereby constitutes and appoints the Pledgee its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Pledgor or otherwise) to act, require, demand, receive, compound and give acquaintance for any and all monies and claims for monies due or to become due to such Pledgor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Pledgee may deem to be necessary or advisable to protect the interests of the Secured Creditors, which appointment as attorney is coupled with an interest. 16 14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Annex E to the Security Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Annex E to the Security Agreement. 15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein (except as may be permitted in accordance with the terms of the Credit Agreement). 16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants that: (i) it is the legal, beneficial and record owner of, and has good and marketable title to, all Collateral consisting of one or more Securities and that it has sufficient interest in all Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement); (ii) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement; (iii) each Pledgor has duly executed and delivered this Agreement and this Agreement constitutes each such Pledgor's legal, valid and binding obligation enforceable in accordance with its terms; (iv) except to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder, partner, member or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement, (b) the validity or enforceability of this Agreement, (c) the perfection or enforceability of the Pledgee's security interest in the Collateral or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Pledgee of any of its rights or remedies provided herein; (v) the execution, delivery and performance of this Agreement will not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to such Pledgor, or of the certificate of incorporation, operating agreement, 17 limited liability company agreement, partnership agreement or by-laws of such Pledgor or of any securities issued by such Pledgor or any of its Subsidiaries, or of any mortgage, deed of trust, indenture, lease, loan agreement, credit agreement or other material contract, agreement or instrument or undertaking to which such Pledgor or any of its Subsidiaries is a party or which purports to be binding upon such Pledgor or any of its Subsidiaries or upon any of their respective assets and will not result in the creation or imposition of (or the obligation to create or impose) any lien or encumbrance on any of the assets of such Pledgor or any of its Subsidiaries except as contemplated by this Agreement; (vi) all of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests in Subsidiaries has been duly and validly issued and acquired, is fully paid and non-assessable (except as required by applicable law) and is subject to no options to purchase or similar rights; (vii) the pledge and collateral assignment to, and possession by, the Pledgee of the Collateral consisting of Certificated Securities pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated Securities, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities and the Pledgee is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and (viii) "control" (as defined in Section 8-106 of the UCC) has been obtained by the Pledgee over all Collateral consisting of Securities with respect to which such "control" may be obtained pursuant to Section 8-106 of the UCC; provided that in the case of the Pledgee obtaining "control" over Collateral consisting of a Security Entitlement, such Pledgor shall have taken all steps in its control so that the Pledgee obtains "control" over such Security Entitlement. (b) Each Pledgor covenants and agrees that it will defend the Pledgee's right, title and security interest in and to the Securities and the proceeds thereof against the claims and demands of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Pledgee as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Pledgee and the other Secured Creditors. (c) If at any time any Pledgor acquires additional Equity Interests of any Excluded Entity, the Borrower shall determine whether or not all Equity Interests of the Pledgors in Excluded Entities constitute Excluded Equity Interests and shall deliver a written notice to the Pledgee if, and to the extent, any such Equity Interests do not constitute Excluded Equity Interests (which written notice shall describe in reasonable detail the Equity Interests of all Excluded Entities being pledged hereunder as a result thereof and any related actions being taken as required by this Agreement as a result thereof). Furthermore, in connection with each certificate provided by the Borrower pursuant to Section 5.01(c) of the Credit Agreement, the Borrower shall determine whether (x) any Equity Interests which theretofore constitute Excluded 18 Equity Interests no longer constitute same and (y) whether any changes to the Annexes to this Pledge Agreement are required (whether as a result of circumstances described in preceding clause (x) or otherwise), and together with the respective such certificate delivered pursuant to Section 5.01(c) of the Credit Agreement, the Borrower shall deliver to the Pledgee (i) if it determines that any Equity Interests which theretofore constitute an Excluded Equity Interests no longer constitute same, a written notice to such effect (which written notice shall describe in reasonable detail the Equity Interests of all Excluded Entities being pledged hereunder as a result thereof and any related actions being taken as required by this Agreement as a result thereof) and (ii) any updated Annexes required as a result of any change as described in preceding clauses (x) and (y). (d) Each Pledgor covenants and agrees that it will take no action which would violate any of the terms of any Secured Debt Agreement; it being understood that a violation of the terms of an Interest Rate Protection/Currency Exchange Agreement or the Treasury Service Agreement shall not, in and of itself, constitute a Default under paragraph (e) of Article VII of the Credit Agreement. 17. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC. The exact legal name of each Pledgor, the type of organization of such Pledgor, whether or not such Pledgor is a Registered Organization, the jurisdiction of organization of such Pledgor, such Pledgor's Location, the organizational identification number (if any) of each Pledgor, and whether or not such Pledgor is a Transmitting Utility, is listed on Annex A hereto for such Pledgor. No Pledgor shall change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its status as a Transmitting Utility or as a Person which is not a Transmitting Utility, as the case may be, its jurisdiction of organization, its Location, or its organizational identification number (if any), except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) any Pledgor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 10 days' prior written notice of each change to the information listed on Annex A (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex A which shall correct all information contained therein for the respective Pledgor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that any Pledgor does not have an organizational identification number on the date hereof and later obtains one, such Pledgor shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect. 19 18. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (i) any renewal, extension, amendment or modification of or addition or supplement to or deletion from any Secured Debt Agreement or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; (ii) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement; (iii) any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee; (iv) any limitation on any party's liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in part, of any such instrument or agreement or any term thereof; or (v) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any other Pledgor or any Subsidiary of any other Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such other Pledgor shall have notice or knowledge of any of the foregoing. 19. REGISTRATION, ETC. (a) If there shall have occurred and be continuing an Event of Default then, and in every such case, upon receipt by any Pledgor from the Pledgee of a written request or requests that such Pledgor cause any registration, qualification or compliance under any Federal or state securities law or laws to be effected with respect to all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests, such Pledgor as soon as practicable and at its expense will cause such registration to be effected (and be kept effective) and will cause such qualification and compliance to be declared effected (and be kept effective) as may be so requested and as would permit or facilitate the sale and distribution of such Collateral, including, without limitation, registration under the Securities Act, as then in effect (or any similar statute then in effect), appropriate qualifications under applicable blue sky or other state securities laws and appropriate compliance with any other government requirements, provided that the Pledgee shall furnish to such Pledgor such information regarding the Pledgee as such Pledgor may reasonably request in writing and as shall be required in connection with any such registration, qualification or compliance. Such Pledgor will cause the Pledgee to be kept advised in writing as to the progress of each such registration, qualification or compliance and as to the completion thereof, will furnish to the Pledgee such number of prospectuses, offering circulars or other documents incident thereto as the Pledgee from time to time may reasonably request, and will indemnify the Pledgee, each other Secured Creditor and all others participating in the distribution of such Collateral against all claims, losses, damages and liabilities caused by any untrue statement (or alleged untrue statement) of a material fact contained therein (or in any related registration statement, notification or the like) or by any omission (or alleged omission) to state therein (or in any related registration statement, notification or the like) a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same may have been caused by an untrue statement or omission based upon information furnished in writing to such Pledgor by the Pledgee or such other Secured Creditor expressly for use therein. 20 (b) If at any time when the Pledgee shall determine to exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and the Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such Collateral, as the case may be, or part thereof by private sale in such manner and under such circumstances as the Pledgee may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Pledgee, in its sole and absolute discretion (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Pledgee, in its sole and absolute discretion, in good faith deems reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until after registration as aforesaid. 20. TERMINATION; RELEASE. (a) On the Termination Date, this Agreement and the security interest created hereby shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive any such termination), and the Pledgee, at the request and expense of any Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any monies at the time held by the Pledgee or any of its sub-agents hereunder. As used in this Agreement, "Termination Date" shall mean the date upon which the total Commitments and all Interest Rate Protection/Currency Exchange Agreements have been terminated (and no further Commitments may be provided), all Loans under the Credit Agreement have been repaid in full, all Letters of Credit have been terminated, all Treasury Services have been terminated and all outstanding obligations thereunder and under the Treasury Service Agreement have been repaid in full and all Obligations then due and payable have been paid in full. (b) In the event that any part of the Collateral is sold in connection with a sale permitted by Section 6.02 of the Credit Agreement (other than a sale to any Pledgor or any Subsidiary thereof) or is otherwise released at the direction of the Required Secured Creditors and the proceeds of such sale or sales or from such release are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, the Pledgee, at the request and expense of any Pledgor, will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral (and releases therefor) as is then being (or has been) so sold or released and has not theretofore been released pursuant to this Agreement. 21 (c) At any time that a Pledgor desires that the Pledgee assign, transfer and deliver Collateral (and releases therefor) as provided in Section 20(a) or (b) hereof, it shall deliver to the Pledgee a certificate signed by a Financial Officer of the Borrower stating that the release of the respective Collateral is permitted pursuant to such Section 20(a) or (b). (d) The Pledgee shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with this Section 20. 21. NOTICES, ETC. Except as otherwise specified herein, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: (a) if to any Pledgor, at: Fleming Companies, Inc. 1945 Lakepointe Drive Lewisville, Texas 75057 Attention: Treasurer Telephone No.: (972) 906-8000 Telecopier No.: (972) 906-1530; (b) if to the Pledgee, at: Deutsche Bank Trust Company Americas 31 West 52nd Street New York, New York 10019 Attention: Marguerite Sutton Telephone No.: (646) 324-2206 Telecopier No.: (646) 324-7456; (c) if to any Lender Creditor, either (x) to the Administrative Agent, at the address of the Administrative Agent specified in the Credit Agreement, or (y) at such address as such Lender Creditor shall have specified in the Credit Agreement; (d) if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to the Pledgors and the Pledgee; (e) if to any Treasury Service Creditor, at such address as such Treasury Service Creditor shall have specified in writing to each Pledgor and the Collateral Agent; or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. All notices and other communication given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. 22. WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever, except in 22 accordance with the terms of the Security Agreement or as otherwise contemplated in Section 25 hereof. 23. MISCELLANEOUS. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and assigns, provided that no Pledgor may assign any of its rights or obligations under this Agreement without the prior consent of the Collateral Agent. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. EACH PLEDGOR IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The headings in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto. 24. RECOURSE. This Agreement is made with full recourse to the Pledgors and pursuant to and upon all the representations, warranties, covenants and agreements on the part of the Pledgors contained herein and in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith. 25. ADDITIONAL PLEDGORS. It is understood and agreed that any Guarantor that desires to become a Pledgor hereunder, or is required to execute a counterpart of this Agreement after the date hereof pursuant to the requirements of the Credit Agreement or any other Loan Document, shall become a Pledgor hereunder by (x) executing (i) a counterpart hereof and delivering same to the Collateral Agent, or (ii) a joinder agreement in form and substance satisfactory to the Collateral Agent, (y) delivering supplements to Annexes A through F, inclusive, hereto as are necessary to cause such Annexes to be complete and accurate with respect to such additional Pledgor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken to the reasonable satisfaction of the Collateral Agent. * * * * 23 IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written. FLEMING COMPANIES, INC., as a Pledgor By: /s/ Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Senior Vice President and Secretary ABCO FOOD GROUP, INC., as a Pledgor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President ABCO MARKETS INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary ABCO REALTY CORP., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary AG, L.L.C., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary 2 AMERICAN LOGISTICS GROUP, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary BAKER'S FOOD GROUP, INC., as a Pledgor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President CARDINAL WHOLESALE, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary 3 DUNIGAN FUELS, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FAVAR CONCEPTS, LTD., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING FOODS MANAGEMENT CO., L.L.C., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING FOODS OF TEXAS, L.P., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING INTERNATIONAL LTD., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary 4 FLEMING SUPERMARKETS OF FLORIDA, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING TRANSPORTATION SERVICE, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FLEMING WHOLESALE, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary FOOD 4 LESS BEVERAGE COMPANY, INC., as a Pledgor By: /s/Charles Hall -------------------------------- Name: Charles Hall Title: President FUELSERV, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary 5 GATEWAY INSURANCE AGENCY, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary HEAD DISTRIBUTING COMPANY, as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary LAS, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary MINTER-WEISMAN CO., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary PIGGLY WIGGLY COMPANY, as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary 6 PROGRESSIVE REALTY, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary RAINBOW FOOD GROUP, INC., as a Pledgor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President RETAIL INVESTMENTS, INC., as a Pledgor By: /s/James R. Vaughan -------------------------------- Name: James R. Vaughan Title: President RETAIL SUPERMARKETS, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary 7 RFS MARKETING SERVICES, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary RICHMAR FOODS, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary SCRIVNER TRANSPORTATION, INC., as a Pledgor By: /s/Carlos M. Hernandez -------------------------------- Name: Carlos M. Hernandez Title: Secretary 8 CORE-MARK INTERNATIONAL, INC., as a Pledgor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary CORE-MARK INTERRELATED COMPANIES, INC., as a Pledgor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary CORE-MARK MIDCONTINENT, INC., as a Pledgor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary C/M PRODUCTS, INC., as a Pledgor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary 9 ASI OFFICE AUTOMATION, INC., as a Pledgor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary EA MORRIS DISTRIBUTORS, LTD., as a Pledgor By: /s/Bill Prokop -------------------------------- Name: Bill Prokop Title: President GENERAL ACCEPTANCE CORPORATION, as a Pledgor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary MARQUISE VENTURES COMPANY, INC., as a Pledgor By: /s/Leo F. Korman -------------------------------- Name: Leo F. Korman Title: Senior Vice President, Chief Financial Officer and Secretary 10 Agreed and accepted by: DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent By: /s/ Marguerite Sutton -------------------------------------- Name: Marguerite Sutton Title: Vice President 11 EX-99.1 12 d97911exv99w1.txt PRESS RELEASE EXHIBIT 99.1 FLEMING COMPLETES CORE-MARK ACQUISITION, CREATING NATIONAL DISTRIBUTION FOOTPRINT FOR CONVENIENCE-ORIENTED RETAIL Fleming Extends Position as Industry's #1 Supplier With National, Multi-Tier Network to Serve Any Retail Format Dallas, Texas, June 18, 2002 - Fleming (NYSE: FLM) today announced that the acquisition of Core-Mark International, Inc., has been completed. This represents the culmination of Fleming's long-standing strategy to create a national piece-pick network that complements the company's national case-pick and flow-through network. "Fleming has created a supplier network capable of efficiently distributing products by the individual item, by the case, by the pallet, or by the truckload, to any retail format," said Mark Hansen, Fleming chairman and chief executive officer. "The acquisition of Core-Mark continues our drive to amass scale in an industry that benefits greatly from size. It further diversifies our customer base across a wide spectrum of retail formats. Additionally, it presents meaningful sales opportunities for our customers, our vendors and our company." Concurrent with the completion of the Core-Mark acquisition, Fleming has completed its offering of $200 million of 9 1/4% Senior Notes due 2010, and 8 million shares of its common stock, plus an additional 1.2 million shares exercised by the underwriters under their over-allotment option. Additionally, the company entered into a new $975 million bank credit facility which consists of a $550 million revolving facility and a $425 million B term loan. Pro-forma for these transactions, Fleming's total share count is approximately 53.8 million shares, and its debt-to-total capital ratio improves from approximately 79% to approximately 76% at the end of the first quarter. The company will have no material maturities of debt until 2007. About Fleming With its national, multi-tier supply chain network, Fleming is the #1 supplier of consumer package goods to retailers of all sizes and formats in the United States. Fleming serves nearly 50,000 retail locations, including supermarkets, convenience stores, supercenters, discount stores, concessions, limited assortment, drug, specialty, casinos, gift shops, military commissaries and exchanges, and more. Fleming serves more than 600 North American stores of global supermarketer IGA. In addition, Fleming is the nation's leading distributor to Hispanic markets. Fleming also has a growing presence in value retailing, operating 109 stores under the Food4Less and Rainbow Foods banners and 17 stores under the Yes!Less banner. To learn more about Fleming, visit our Web site at http://www.fleming.com. Forward-Looking Statement Any statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. For a description of important factors which could cause actual results to differ from those contained in the forward-looking statements, see the reports and documents Fleming files from time to time with the Securities and Exchange Commission. Fleming is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. Congratulations to those associates who lead the efforts to ensure the completion of this acquisition was a success! -----END PRIVACY-ENHANCED MESSAGE-----