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Sample Business ContractsHome: Sample Business Contracts:
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$3,000,000,000
CREDIT AGREEMENT
DATED AS OF APRIL 8, 1997
AMONG
SAFEWAY INC.,
THE VONS COMPANIES, INC.
AND
CANADA SAFEWAY LIMITED,
AS BORROWERS,
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT,
THE CHASE MANHATTAN BANK,
AS SYNDICATION AGENT,
THE BANK OF NOVA SCOTIA
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS DOCUMENTATION AGENTS,
THE AGENTS LISTED HEREIN,
AS AGENTS,
AND
THE LENDERS LISTED HEREIN,
AS LENDERS
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SAFEWAY INC.
THE VONS COMPANIES, INC.
CANADA SAFEWAY LIMITED
CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS............................................................... 2
1.1 Certain Defined Terms..................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.............................................. 33
1.3 Other Definitional Provisions............................................. 33
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................ 33
2.1 Commitments; Making of Loans; the Register; Notes......................... 33
2.2 Interest on the Loans..................................................... 49
2.3 Fees...................................................................... 55
2.4 Prepayments and Reductions in Commitments; General
Provisions Regarding Payments............................................. 57
2.5 Use of Proceeds........................................................... 63
2.6 Special Provisions Governing Fixed Rate Loans............................. 63
2.7 Extension of Tranche A Termination Date................................... 66
2.8 Extension of Tranche B Revolving Termination Date......................... 68
2.9 Conversion of Tranche B Domestic Loans into Term Loans.................... 69
SECTION 3. LETTERS OF CREDIT......................................................... 69
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein.................................................... 69
3.2 Letter of Credit Fees..................................................... 73
3.3 Drawings and Reimbursement of Amounts Drawn Under Letters
of Credit................................................................. 74
3.4 Obligations Absolute...................................................... 77
3.5 Indemnification; Nature of Issuing Lenders' Duties........................ 78
SECTION 4. ACCEPTANCES............................................................... 79
4.1 Acceptance Commitment..................................................... 79
4.2 Drawing Notice............................................................ 80
4.3 Form of Acceptances....................................................... 81
4.4 Acceptance and Purchase or Delivery of Drafts............................. 81
4.5 Payment of the Drawing Purchase Price..................................... 82
4.6 Average Effective Discount Rate Determination............................. 82
4.7 Acceptance Payment Obligations............................................ 83
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4.8 Presigned Draft Forms..................................................... 84
4.9 Circumstances Making Acceptances Unavailable.............................. 84
4.10 Prepayments............................................................... 85
4.11 Use of Proceeds of Loans and Acceptance Facility.......................... 85
SECTION 5. INCREASED COSTS, TAXES, CAPITAL ADEQUACY, AND
MITIGATION................................................................ 85
5.1 Increased Costs; Taxes; Capital Adequacy.................................. 85
5.2 Obligation of Lenders and Issuing Lenders to Mitigate..................... 91
5.3 Replacement of Lenders.................................................... 92
SECTION 6. CONDITIONS TO LOANS, LETTERS OF CREDIT AND
ACCEPTANCES............................................................... 93
6.1 Conditions to Initial Loans............................................... 93
6.2 Conditions to All Loans................................................... 96
6.3 Conditions to Letters of Credit........................................... 97
6.4 Conditions to Acceptances................................................. 98
SECTION 7. BORROWERS' REPRESENTATIONS AND WARRANTIES................................. 98
7.1 Organization, Powers, Qualification, Good Standing and Business........... 98
7.2 Authorization of Borrowing, etc........................................... 99
7.3 Financial Condition.......................................................100
7.4 No Material Adverse Effect................................................100
7.5 Litigation; Adverse Facts.................................................100
7.6 Payment of Taxes..........................................................100
7.7 Governmental Regulation...................................................101
7.8 Securities Activities.....................................................101
7.9 Employee Benefit Plans....................................................101
7.10 Disclosure................................................................102
7.11 Solvency..................................................................102
SECTION 8. BORROWERS' AFFIRMATIVE COVENANTS..........................................102
8.1 Financial Statements and Other Reports....................................103
8.2 Corporate Existence, etc..................................................106
8.3 Payment of Taxes and Claims...............................................106
8.4 Maintenance of Properties; Insurance......................................106
8.5 Inspection................................................................106
8.6 Compliance with Laws, etc.................................................107
8.7 Completion of Stock Repurchase............................................107
SECTION 9. BORROWERS' NEGATIVE COVENANTS.............................................107
9.1 Liens and Related Matters.................................................107
9.2 Restricted Junior Payments................................................110
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9.3 Financial Covenants.......................................................111
9.4 Restriction on Fundamental Changes; Material Asset Sales..................111
9.5 Transactions with Shareholders and Affiliates.............................112
9.6 Conduct of Business.......................................................113
9.7 Unrestricted Subsidiaries.................................................113
9.8 Vons Merger Agreement and Stock Repurchase Agreement......................114
SECTION 10. EVENTS OF DEFAULT.........................................................114
10.1 Failure to Make Payments When Due.........................................114
10.2 Default in Other Agreements...............................................114
10.3 Breach of Certain Covenants...............................................115
10.4 Breach of Warranty........................................................115
10.5 Other Defaults Under Loan Documents.......................................115
10.6 Involuntary Bankruptcy; Appointment of Receiver, etc......................116
10.7 Voluntary Bankruptcy; Appointment of Receiver, etc........................116
10.8 Judgments and Attachments.................................................116
10.9 Dissolution...............................................................117
10.10 Employee Benefit Plans....................................................117
10.11 Invalidity of Subsidiary Borrower Guaranty................................117
10.12 Change in Control.........................................................117
SECTION 11. AGENTS....................................................................119
11.1 Appointment...............................................................119
11.2 Powers; General Immunity..................................................119
11.3 Representations and Warranties; No Responsibility For Appraisal
of Creditworthiness.......................................................121
11.4 Right to Indemnity........................................................121
11.5 Successor Agent...........................................................122
11.6 Collateral Account Agreement; Subsidiary Borrower Guaranty................123
SECTION 12. COMPANY GUARANTY OF CERTAIN CREDIT FACILITIES.............................123
SECTION 13. MISCELLANEOUS.............................................................126
13.1 Assignments and Participations in Loans and Letters of Credit.............126
13.2 Expenses..................................................................130
13.3 Indemnity.................................................................131
13.4 Set-Off...................................................................132
13.5 Ratable Sharing...........................................................132
13.6 Amendments and Waivers; Replacement of Banks..............................134
13.7 Independence of Covenants.................................................136
13.8 Notices...................................................................136
13.9 Survival of Representations, Warranties and Agreements....................136
13.10 Failure or Indulgence Not Waiver; Remedies Cumulative.....................137
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13.11 Marshalling; Payments Set Aside...........................................137
13.12 Severability..............................................................137
13.13 Obligations Several; Independent Nature of Lenders' Rights and
Borrowers' Obligations....................................................138
13.14 Headings..................................................................138
13.15 Applicable Law............................................................138
13.16 Successors and Assigns....................................................138
13.17 Consent to Jurisdiction and Service of Process............................139
13.18 Waiver of Jury Trial......................................................139
13.19 Confidentiality...........................................................140
13.20 Judgment Currency.........................................................140
13.21 Counterparts; Effectiveness...............................................141
Signature pages ....................................................... S-1
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EXHIBITS
<S> <C>
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV-A FORM OF NOTE (COMPANY)
IV-B FORM OF NOTE (VONS)
IV-C FORM OF NOTE (CANADA SAFEWAY)
V FORM OF COMPLIANCE CERTIFICATE
VI-A FORM OF OPINION OF LATHAM & WATKINS
VI-B FORM OF OPINION OF MICHAEL ROSS
VI-C FORM OF OPINION OF PARLEE MCLAWS
VI-D FORM OF OPINION OF CANADA SAFEWAY GENERAL COUNSEL
VI-E FORM OF OPINION OF DICKINSON, WRIGHT, MOON, VAN DUSEN & FREEMAN
VII FORM OF OPINION OF O'MELVENY & MYERS LLP
VIII FORM OF ASSIGNMENT AGREEMENT
IX FORM OF TRANCHE A EXTENSION REQUEST
X FORM OF TRANCHE B EXTENSION REQUEST
XI FORM OF PRICING LEVEL DETERMINATION CERTIFICATE
XII FORM OF DRAWING NOTICE
XIII FORM OF ACCEPTANCE ENDORSEMENT
XIV FORM OF DRAFT
XV FORM OF CERTIFICATE RE NON-BANK STATUS
XVI FORM OF SPECIAL FUNDING PROCEDURES LETTER
AGREEMENT
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SCHEDULES
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2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1 EXISTING COMPANY LETTERS OF CREDIT
7.2B CERTAIN INDEBTEDNESS OF VONS
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SAFEWAY INC.
THE VONS COMPANIES, INC.
CANADA SAFEWAY LIMITED
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of April 8, 1997 and entered
into by and among SAFEWAY INC., a Delaware corporation ("COMPANY"), THE VONS
COMPANIES, INC., a Michigan corporation ("VONS"; together with Company,
collectively, "DOMESTIC BORROWERS"), and CANADA SAFEWAY LIMITED, an Alberta
corporation ("CANADA SAFEWAY"; and together with Domestic Borrowers,
collectively, "BORROWERS"), BANKERS TRUST COMPANY ("BTCO"), as administrative
agent for the Lenders referred to below (in such capacity, "ADMINISTRATIVE
AGENT"), THE CHASE MANHATTAN BANK ("CHASE"), as the syndication agent for the
Lenders referred to below ("SYNDICATION AGENT"), THE BANK OF NOVA SCOTIA
("SCOTIABANK") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
("BOFA"), as the documentation agents for the Lenders referred to below
("DOCUMENTATION AGENTS"), THE LENDERS LISTED AS AGENTS ON THE SIGNATURE PAGES
HEREOF, as agents ("AGENTS"), and THE LENDERS LISTED ON THE SIGNATURE PAGES
HEREOF (each individually referred to herein as a "LENDER" and collectively as
"LENDERS").
R E C I T A L S
WHEREAS, Company desires that Lenders extend certain credit
facilities to Borrowers for working capital and other general corporate
purposes, including the refinancing of amounts outstanding under existing bank
credit facilities and, in the case of Company, the repurchase of Company's
common stock as provided herein;
WHEREAS, Company will benefit from the extensions of credit to be
provided under such credit facilities and, in order to induce Lenders to provide
such credit facilities, is willing to guaranty the obligations of Vons and
Canada Safeway with respect to such credit facilities;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Vons, Canada
Safeway, Lenders, Syndication Agent, Agents, Documentation Agents and
Administrative Agent agree as follows:
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<PAGE> 8
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACCEPTANCE" has the meaning assigned to that term in
subsection 4.1.
"ACCEPTANCE FACILITY" means the bankers' acceptance facility
established under Section 4.
"ACCEPTANCE USAGE" means, as at any date, the sum (without
duplication) of the aggregate Face Amount of all Acceptances created by Canadian
Lenders pursuant to Section 4 which have not been repaid by Canada Safeway
whether or not due and whether or not held by any Lender. For purposes of this
definition, any Acceptance which has been prepaid in full shall not be deemed to
be outstanding and all Acceptances shall be valued in Dollar Equivalents as of
any date of determination.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Tranche A Domestic
Eurodollar Rate Loan or Tranche B Domestic Eurodollar Rate Loan, as the case may
be, the rate per annum obtained by dividing (i) the arithmetic average (rounded
upward to the nearest 1/16 of one percent) of the offered quotation, if any, to
first class banks in the interbank Eurodollar market by each of the Domestic
Reference Banks for Dollar deposits of amounts in same day funds comparable to
the principal amount of the Tranche A Domestic Eurodollar Rate Loan or Tranche B
Domestic Eurodollar Rate Loan, as the case may be, of that Domestic Reference
Bank for which the Adjusted Eurodollar Rate is then being determined with
maturities comparable to such Interest Period as of approximately 10:00 A.M.
(New York time) on such Interest Rate Determination Date by (ii) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves) applicable on such Interest Rate Determination Date to any
member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D); provided that if any Domestic Reference Bank
fails to provide Primary Documentation Agent with its aforementioned quotation
then the Adjusted Eurodollar Rate shall be determined based on the quotation(s)
provided to Primary Documentation Agent by the other Domestic Reference Bank(s).
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the
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<PAGE> 9
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract or
otherwise.
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 11.5.
"AGENTS" has the meaning assigned to that term in the introduction
to this Agreement.
"AGGREGATE AMOUNTS DUE FROM CANADA SAFEWAY" has the meaning
assigned to that term in subsection 13.5B.
"AGGREGATE AMOUNTS DUE FROM DOMESTIC BORROWERS" has the meaning
assigned to that term in subsection 13.5A.
"AGGREGATE COMMITMENT" means, with respect to any Lender, the sum
of (i) the Tranche A Domestic Commitment plus (ii) the Tranche A Canadian
Commitment plus (iii) the Tranche B Domestic Commitment of such Lender, and
"AGGREGATE COMMITMENTS" means the Aggregate Commitments of all Lenders; provided
that for the purposes of the definition of Aggregate Commitment (i) upon the
termination of the Tranche A Domestic Commitments, the Tranche A Domestic
Commitment of any Lender shall be deemed to be the total outstanding Tranche A
Domestic Loans of such Lender, (ii) upon the termination of the Tranche A
Canadian Commitments, the Tranche A Canadian Commitment of any Lender shall be
deemed to be the total outstanding Tranche A Canadian Loans of such Lender, and
(iii) upon the termination of the Tranche B Domestic Commitments, the Tranche B
Domestic Commitment of any Lender shall be deemed to be the total outstanding
Tranche B Domestic Loans of such Lender.
"AGGREGATE PRO RATA SHARE" means, with respect to any Lender, the
Aggregate Commitment of such Lender as a percentage of the sum of the Aggregate
Commitments of all Lenders.
"AGREEMENT" means this Credit Agreement dated as of April 8, 1997,
as it may be amended, supplemented or otherwise modified from time to time.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit VIII annexed hereto.
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<PAGE> 10
"AUTHORIZED OFFICER" has the meaning assigned to that term in
subsection 6.2A.
"AVERAGE EFFECTIVE DISCOUNT RATE" means, (a) in respect of any
Acceptances to be purchased by a Schedule I Lender pursuant hereto, the
arithmetic average of the discount rates (calculated on an annual basis and
rounded to the nearest one-hundredth of 1%, with five-thousandths of 1% being
rounded up) quoted by each Schedule I Reference Bank at or about 10:00 A.M.
(Toronto time) as the discount rate at which such Schedule I Reference Bank
would purchase, on the relevant Drawing Date, its own bankers' acceptances
having an aggregate Face Amount equal to and with a term to maturity the same as
the Acceptances to be acquired by such Schedule I Reference Bank on such Drawing
Date or (b) in respect of any Acceptances to be purchased by a Schedule II
Lender or any other Person (other than a Schedule I Lender) pursuant hereto, the
arithmetic average of the discount rates (calculated on an annual basis and
rounded to the nearest one-hundredth of 1%, with five-thousandths of 1% being
rounded up) quoted by each Schedule II Reference Bank at or about 10:00 A.M.
(Toronto time) as the discount rate at which such Schedule II Reference Bank
would purchase, on the relevant Drawing Date, its own bankers' acceptances
having an aggregate Face Amount equal to and with a term to maturity the same as
the Acceptances to be acquired by such Schedule II Reference Bank or other
Person on such Drawing Date. If any Schedule I Reference Bank or Schedule II
Reference Bank fails to provide its quotation to Documentation Agent, the
Average Effective Discount Rate shall be determined on the basis of the
quotation(s) by the other Schedule I Reference Bank(s) or Schedule II Reference
Bank(s), as applicable.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"BofA" has the meaning assigned to that term in the introduction
to this Agreement.
"BOOK VALUE" means, with respect to the assets of Company or any
of its Subsidiaries, the value of such Person's assets recorded in the
consolidated balance sheet of Company most recently delivered to Lenders
pursuant to subsection 8.1(i) or 8.1(ii).
"BORROWERS" has the meaning assigned to that term in the
introduction to this Agreement.
"BTCo" has the meaning assigned to that term in the introduction
to this Agreement.
"BTSC" has the meaning assigned to that term in the introduction
to this Agreement.
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<PAGE> 11
"BUSINESS DAY" means any day excluding Saturday and Sunday and
also excluding (i) for all purposes other than as covered by clauses (ii) and
(iii) below, any day which is a legal holiday under the laws of the States of
New York or California or is a day on which banking institutions located in any
such state are authorized or required by law or other governmental action to
close, (ii) with respect to all notices, determinations, fundings and payments
in connection with Tranche A Canadian Loans, Tranche A Canadian Swing Line Loans
and the Acceptance Facility, any day which is a legal holiday under the laws of
the Province of Ontario or Alberta, Canada or is a day on which banking
institutions located in any such Province are authorized or required by law or
other governmental action to close; and (iii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted Eurodollar
Rate, any day which is not a Business Day pursuant to clause (i) or which is not
a day for trading by and between banks in Dollar deposits in the applicable
interbank Eurodollar market and with respect to all notices, determinations,
fundings and payments in connection with the Canadian Eurodollar Rate, any day
which is not a Business Day pursuant to clause (ii) and which is also not a day
for trading by and between banks in Dollar deposits in the applicable interbank
Eurodollar market.
"CANADA SAFEWAY" has the meaning assigned to that term in the
introduction to this Agreement.
"CANADIAN BASE RATE" means as at any date, with respect to any
Tranche A Canadian Loan denominated in Dollars that is to be or has been
advanced to Canada Safeway in Canada, the variable rate of interest per annum
equal to the greater of (a) the rate which Primary Documentation Agent announces
from time to time as its base lending rate per annum with respect to loans
denominated in Dollars advanced to Canadian customers in Canada, as in effect
from time to time and (b) the aggregate of (i) the Federal Funds Effective Rate
per annum for such day and (ii) 3/8 of 1% per annum. As to any loan, the
Canadian Base Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer for loans denominated in
Dollars. Primary Documentation Agent may make commercial loans or other loans
denominated in Dollars at rates of interest at, above or below the Canadian Base
Rate.
"CANADIAN DOLLARS" or "CDN.$" means the lawful money of Canada.
"CANADIAN EURODOLLAR RATE" means, with respect to each Interest
Period to be applicable to a Tranche A Canadian Eurodollar Rate Loan, the rate
per annum obtained by determining the arithmetic average (rounded upward to the
nearest 1/16th of 1%) of the offered quotation to first-class banks in the
interbank Eurodollar market by each Canadian Loan Pricing Reference Bank for
Dollar deposits of an amount in immediately available funds approximately equal
to the principal amount of the Tranche A Canadian Eurodollar Rate Loan to be
made by such Canadian Loan Pricing Reference Bank for a period approximately
equal to such Interest Period determined as of 10:00 a.m. (New York time)
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<PAGE> 12
two Business Days prior to the commencement of such Interest Period. If any
Canadian Loan Pricing Reference Bank fails to provide its offered quotation to
Primary Documentation Agent, the Canadian Eurodollar Rate shall be determined on
the basis of the offered quotation(s) by the other Canadian Loan Pricing
Reference Bank(s).
"CANADIAN FUNDING AND PAYMENT OFFICE" means the office of Primary
Documentation Agent located at Commercial Banking Centre, 240-8th Avenue S.W.,
Calgary, Alberta, or such other location in Canada as may from time to time be
designated in writing by Primary Documentation Agent.
"CANADIAN LENDERS" means any Lender having a Tranche A Canadian
Commitment or, on and after the termination of the Tranche A Canadian
Commitments, Tranche A Canadian Loans outstanding and shall include any U.S.
Affiliate of any such Lender.
"CANADIAN LOAN PRICING REFERENCE BANKS" means Scotiabank, BT Bank
of Canada, and Bank of America Canada.
"CANADIAN PRIME RATE" means with respect to any Tranche A Canadian
Loan denominated in Canadian Dollars that is to be or has been advanced to
Canada Safeway in Canada as of any date, the greater of (a) the arithmetic
average (rounded to the nearest one-hundredth of 1%, with five-thousandths of 1%
being rounded up) of the variable rates announced by each of the Canadian Loan
Pricing Reference Banks from time to time as the prime lending rate per annum of
such Canadian Loan Pricing Reference Bank for Canadian Dollar loans made by such
Canadian Loan Pricing Reference Bank in Canada, as in effect on such date and
(b) the sum of (i) the arithmetic average (rounded upward to the nearest 1/16th
of 1%) of the rates per annum for Canadian Dollar bankers' acceptances having a
term of 30 days for the Canadian Loan Pricing Reference Banks as of 10:00 A.M.
(Toronto time) on such date, as determined by Primary Documentation Agent, and
(ii) 3/8 of 1% per annum. As to any loan, the Canadian Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Each Canadian Loan Pricing Reference Bank may make commercial
loans or other loans at rates of interest at, above or below the Canadian Prime
Rate. If any Canadian Loan Pricing Reference Bank fails to provide its rate to
Primary Documentation Agent, the Canadian Prime Rate shall be determined on the
basis of the quotation(s) by the other Canadian Loan Pricing Reference Bank(s).
"CANADIAN/U.S. BASE RATE LOANS" means Canadian/U.S. Loans bearing
interest at rates determined by reference to the Domestic Base Rate as provided
in subsection 2.2A.
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"CANADIAN/U.S. EURODOLLAR RATE LOANS" means Canadian/U.S. Loans
bearing interest at rates determined by reference to the Adjusted Eurodollar
Rate as provided in subsection 2.2A.
"CANADIAN/U.S. FUNDING ASSIGNMENT" has the meaning assigned to
that term in subsection 13.1B.
"CANADIAN/U.S. LOANS" means Dollar denominated Tranche A Canadian
Loans advanced to Company by Canadian Lenders pursuant to subsection 2.1A(ii).
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock.
"CASA LEY" means Casa Ley, S.A. de C.V., a Mexican corporation.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially
in the form of Exhibit XV annexed hereto delivered by a Lender to Primary
Documentation Agent pursuant to subsection 5.1B(iii).
"CLOSING DATE" means the date on or before June 3, 1997, on which
the initial Loans are made.
"CO-ARRANGERS" means BT Securities Corporation, Scotiabank, Chase
Securities, Inc. and BancAmerica Securities Inc.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument (which may include a "steamship guaranty" or similar
undertaking issued in connection with such letter of credit or similar
instrument) issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services by Company or
any of its Subsidiaries in the ordinary course of business of Company or such
Subsidiary.
"COMMITMENTS" means the Tranche A Domestic Commitments, the
Tranche A Canadian Commitments or the Tranche B Domestic Commitments, or any
combination thereof.
"COMPANY" has the meaning assigned to that term in the
introduction to this Agreement.
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<PAGE> 14
"COMPANY'S COMMON STOCK" means the common stock, $.01 par value,
of Company.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of Exhibit V annexed hereto delivered to Primary Documentation Agent and
Lenders by Company pursuant to subsection 8.1(iii).
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, Consolidated
Net Income adjusted to exclude (without duplication) the effects of (i) any LIFO
expense or income, (ii) Consolidated Interest Expense, (iii) provisions for
taxes based on income, (iv) depreciation expense, (v) amortization expense, (vi)
equity in earnings or losses of unconsolidated affiliates to the extent not
actually received or paid by Company or its Subsidiaries, and (vii) material
non-cash, non-recurring gains and losses, all of the foregoing as determined on
a consolidated basis for Company and its Subsidiaries (excluding any
Unrestricted Subsidiaries) in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, interest
expense with respect to all outstanding Indebtedness (including, without
limitation, net costs under Interest Rate Agreements and any such expense
attributable to Capital Leases in accordance with GAAP) of Company and its
Subsidiaries (excluding any Unrestricted Subsidiaries) for such period
determined on a consolidated basis in conformity with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the net income
(or loss), before extraordinary items, of Company and its Subsidiaries
(excluding any Unrestricted Subsidiaries) on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness and all guaranties
of Company and its Subsidiaries (excluding any Unrestricted Subsidiaries),
determined on a consolidated basis in conformity with GAAP.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any material indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument to which that Person is a party or by
which it or any of its properties is bound or to which it or any of its
properties is subject.
"DEEMED FLOATING RATE" means (a) with respect to any portion of
the principal amount of any Loan advanced to, or to be advanced to, a Domestic
Borrower, the Domestic Base Rate, (b) with respect to any portion of the
principal amount of any Dollar denominated Loan advanced to, or to be advanced
to, Canada Safeway, the Canadian Base Rate, or (c) with respect to any portion
of the principal amount of any Canadian Dollar
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<PAGE> 15
denominated Loan advanced to, or to be advanced to, Canada Safeway, the Canadian
Prime Rate.
"DOCUMENTATION AGENTS" has the meaning assigned to that term in
the introduction to this Agreement and also means and includes any successor
Documentation Agents appointed pursuant to subsection 11.5.
"DOLLARS", "$" and "U.S.$" mean the lawful money of the United
States of America.
"DOLLAR EQUIVALENTS" means Dollars or, with respect to any amount
of Canadian Dollars, an equivalent amount of Dollars determined at the rate of
exchange quoted by Primary Documentation Agent in New York City, at 9:00 A.M.
(New York time) on the date of determination, to prime banks in New York City
for the spot purchase in the New York foreign exchange market of Dollars with
Canadian Dollars.
"DOMESTIC BASE RATE" means the rate that Primary Documentation
Agent announces from time to time as its prime lending rate in the United States
for Dollar denominated loans, as in effect from time to time. Such prime lending
rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Primary Documentation Agent or any other
Lender may make commercial loans or other loans at rates of interest at, above
or below such prime lending rate.
"DOMESTIC BORROWERS" has the meaning assigned to that term in the
introduction to this Agreement.
"DOMESTIC FUNDING AND PAYMENT OFFICE" means the office of Primary
Documentation Agent located at 600 Peachtree Street, N.E., Atlanta, Georgia
30308, or such other location in the United States of America as may from time
to time be designated in writing by Primary Documentation Agent.
"DOMESTIC LENDERS" means any Lender having a Tranche A Domestic
Commitment or a Tranche B Domestic Commitment or, on and after the termination
of any such Commitments, Domestic Loans outstanding.
"DOMESTIC LOANS" means the Tranche A Domestic Loans and the
Tranche B Domestic Loans, or any combination thereof.
"DOMESTIC REFERENCE BANKS" means BTCo, Scotiabank and BofA.
"DRAFTS" means, at any time, a blank bill of exchange, within the
meaning of the Bills of Exchange Act (Canada), in substantially the form of
Exhibit XIV annexed hereto, drawn by Canada Safeway on a Canadian Lender and
bearing such distinguishing
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<PAGE> 16
letters and numbers as such Canadian Lender may determine, but which at such
time, except as otherwise provided herein, has not been completed or accepted by
such Canadian Lender.
"DRAWING" means the creation of Acceptances by a Canadian Lender
pursuant to Section 4.
"DRAWING DATE" means any Business Day fixed pursuant to subsection
4.1 for a Drawing.
"DRAWING FEE" means, with respect to the Drafts drawn by Canada
Safeway hereunder and accepted by any Canadian Lender as provided herein on any
Drawing Date, an amount equal to the Tranche A Pricing Margin per annum on the
aggregate Face Amount of such Drafts, calculated, in each case, on the basis of
the term to maturity of such Draft and a year of 365 days, as appropriate.
"DRAWING NOTICE" has the meaning assigned to that term in
subsection 4.2.
"DRAWING PURCHASE PRICE" means, in respect of Acceptances to be
purchased by a Canadian Lender, the difference between (i) the result (rounded
to the nearest whole cent, with one-half of one cent being rounded up) obtained
by dividing the aggregate Face Amount of such Acceptances by the sum of one plus
the product of (x) the applicable Average Effective Discount Rate multiplied by
(y) a fraction the numerator of which is the term of maturity of such
Acceptances and the denominator of which is 365 (as appropriate given the number
of days in the current calendar year); and (ii) the applicable Drawing Fee.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies, in each case (under clauses (i) through
(iv) above) to which Administrative Agent and Company have consented (which
consent shall not be unreasonably withheld); and (B) subject to such transfer
not resulting in additional costs being payable by Borrowers under subsection
2.6 or 5.1, any Lender and any Affiliate of any Lender; provided that no
Borrower or Affiliate of Company shall be an Eligible Assignee.
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<PAGE> 17
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is, or was at any time, maintained or
contributed to by Company or any of its ERISA Affiliates.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to (i)
environmental matters, including, without limitation, those relating to fines,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of Hazardous
Materials, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or welfare,
in any manner applicable to Company or any of its Subsidiaries or any of their
respective properties, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. ss. 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. ss. 1801 et seq.),
the Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the
Federal Water Pollution Control Act ( 33 U.S.C. ss. 1251 et seq.), the Clean Air
Act (42 U.S.C. ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
ss. 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7
U.S.C. ss.136 et seq.), the Occupational Safety and Health Act (29 U.S.C. ss.
651 et seq.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. ss. 11001 et seq.), each as amended or supplemented, and any analogous
future or present local, state and federal statutes and regulations promulgated
pursuant thereto, each as in effect as of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA AFFILIATE", as applied to any Person as of any date, means
(i) any corporation which is (or, for the purposes of subsection 10.10 only, was
at any time during the preceding five years) a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is (or was at any time during the preceding five years) a
member; (ii) any trade or business (whether or not incorporated) which is (or,
for the purposes of subsection 10.10 only, was at any time during the preceding
five years) a member of a group of trades or businesses under common control
within the meaning of Section 414(c) of the Internal Revenue Code of which that
Person is (or was at any time during the preceding five years) a member; and
(iii) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is (or, for the purposes of subsection 10.10 only, was at any time during
the preceding five years) a member.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension
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<PAGE> 18
Plan (excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Company or any of its ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting in
liability pursuant to Sections 4063 or 4064 of ERISA; (v) the institution by the
PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Company or any of its ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal by Company or any of its ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by Company or any of its ERISA Affiliates of
notice from any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or
has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an
act or omission which could give rise to the imposition on Company or any of its
ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43
of the Internal Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Company or any of its ERISA Affiliates in connection with any such Employee
Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the
failure of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust forming
part of any Pension Plan to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan; provided, however, that for all purposes
of this Agreement, no event specified in clauses (i) through (xi) above shall
constitute an ERISA Event if Company and its ERISA Affiliates would not
reasonably be expected to incur liabilities aggregating more than $50,000,000 in
connection with such event and all other such events.
"EVENT OF DEFAULT" means each of the events set forth in
Section 10.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCLUDED TAXES" means with respect to any Person (i) any Tax
imposed by the jurisdiction in which that Person's principal office (and/or, in
the case of a Lender, its lending office) is located or in which that Person is
deemed to be organized, resident or doing business on all or part of the net
income, profits or gains of that Person (whether worldwide, or only insofar as
such income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise), (ii) any Taxes imposed pursuant to
provisions of any laws, treaties, notices or regulations in effect on (and as
interpreted by any relevant taxing authority or agency on) the Closing Date in
the United States of America or Canada or any state or province thereof or
political subdivision of any of the foregoing that are applicable to any of the
Obligations or to any payments thereof made by any Borrower to any Lender except
(a) any such Taxes that are applicable to the Obligations or any such payment
solely by reason of the fact Canada Safeway is doing business in the United
States of America or (b) any withholding tax payable during the continuance of
any Event of Default and (iii) Taxes which a Lender could have avoided in the
ordinary course of business (including by payments of its taxes) without the
incurrence of additional expense.
"EXISTING COMPANY LETTERS OF CREDIT" means those certain Letters
of Credit issued and outstanding pursuant to the Existing Credit Agreement and
described on Schedule 3.1 annexed hereto.
"EXISTING CREDIT AGREEMENT" means the Credit Agreement dated as of
May 24, 1995 among Company, Canada Safeway, Lucerne Foods Ltd., the lenders
named therein, BTCo, as administrative agent, Scotiabank, as documentation
agent, the co-agents named therein, and the lead managers named therein.
"FACE AMOUNT" means, in respect of a Draft or an Acceptance, as
the case may be, the amount payable to the holder thereof on its maturity.
"FEDERAL FUNDS EFFECTIVE 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 Primary Documentation Agent from three Federal
funds brokers of recognized standing selected by Primary Documentation Agent.
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<PAGE> 20
"FISCAL YEAR" means, for any purpose, any of the 52-week or
53-week reporting periods used by Company in the financial reports it prepares
for external reporting purposes.
"FIXED RATE LOANS" means Tranche A Domestic Eurodollar Rate Loans,
Tranche A Canadian Eurodollar Rate Loans, Canadian/U.S. Eurodollar Rate Loans or
Tranche B Domestic Eurodollar Rate Loans, or any combination thereof.
"FLOATING RATE LOANS" means Tranche A Domestic Base Rate Loans,
Tranche B Domestic Base Rate Loans, Tranche A Canadian Prime Rate Loans, Tranche
A Canadian Base Rate Loans or Canadian/U.S. Base Rate Loans, or any combination
thereof.
"FUNDING DATE" means the date any Loan is funded or any Acceptance
is created, as applicable.
"GAAP" means generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "restricted hazardous waste", "infectious waste", "toxic substances" or
any other formulations intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
publications promulgated pursuant thereto; (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any flammable
substances or explosives; (v) any radioactive materials; (vi) asbestos in any
form; (vii) urea formaldehyde foam insulation; (viii) electrical equipment which
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million; and (ix) pesticides.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred
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<PAGE> 21
under ERISA), which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, and (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person.
"INDEMNITEE" has the meaning assigned to that term in subsection
13.3.
"INDEMNITY" means the Indemnity dated as of April 8, 1997 from the
Canadian Lenders hereunder to the Old Syndicate Lenders (as defined in the
Indemnity).
"INSOLVENCY LAWS" means the Bankruptcy Code, the Bankruptcy and
Insolvency Act (Canada) or any comparable law of Canada or any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect in the United
States of America or any state thereof or Canada or any province thereof.
"INTEREST COVERAGE RATIO" means, as at any date of determination,
the ratio (rounded down to the nearest one-hundredth) of (i) Consolidated
Adjusted EBITDA to (ii) Consolidated Interest Expense, in each case for the four
fiscal quarter period ending with the most recently completed fiscal quarter of
Company.
"INTEREST PAYMENT DATE" means (i) with respect to any Floating
Rate Loan, each Quarterly Payment Date; (ii) with respect to any Swing Line
Loan, the last day of each month; (iii) with respect to any Fixed Rate Loan, the
last day of each Interest Period applicable to such Loan; provided that in the
case of each Interest Period of longer than three months "Interest Payment Date"
shall also include each date that is three months, or an integral multiple
thereof, after the commencement of such Interest Period, and (iv) in the case of
any Negotiated Rate Loan, the dates mutually agreed upon by the applicable
Domestic Borrower and the applicable Lender.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect Company or any of its Subsidiaries
against fluctuations in interest rates.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as amended to the date hereof and from time to time hereafter.
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<PAGE> 22
"INVESTMENT" means any loans, advances, capital contributions
and transfers of assets (except for transfers for cash and/or other property
other than securities in an amount or having a fair value, in the opinion of
the board of directors of Company, equal to the fair value of the assets
transferred), and all purchases and other acquisitions for consideration by
Company or any of its Subsidiaries of evidences of indebtedness, capital stock
or other securities.
"ISSUING LENDER" means, with respect to any Letter of Credit,
the Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"KKR" means Kohlberg Kravis Roberts & Co., L.P., a Delaware
limited partnership.
"KKR ASSOCIATES" means KKR Associates, a New York limited
partnership under common control with KKR.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 13.1 (including,
without limitation, any U.S. Affiliate).
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by
Issuing Lenders for the account of Company or Vons pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date, (1) with
respect to all Domestic Lenders, the sum of (i) the maximum aggregate amount
which is or at any time thereafter may become available for drawing under all
Letters of Credit then outstanding plus (ii) the aggregate amount of all
drawings under Letters of Credit honored by Issuing Lenders and not theretofore
reimbursed by Company (including any such reimbursement out of the proceeds of
Loans pursuant to subsection 3.3B) and (2) with respect to any Domestic Lender,
such Domestic Lender's Tranche A Domestic Pro Rata Share of the sum of the
amounts described in the preceding clauses (i) and (ii). For purposes of this
definition, any amount described in clauses (i) or (ii) of the preceding
sentence which is denominated in Canadian Dollars shall be valued in Dollar
Equivalents as of such date.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest).
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<PAGE> 23
"LOAN DOCUMENTS" means this Agreement (including the
Subsidiary Borrower Guaranty), the Notes, the Letters of Credit (and any
applications for, or reimbursement agreements or other documents or
certificates executed by Company in favor of an Issuing Lender relating to, the
Letters of Credit), the Drafts, the Acceptances, any collateral account
agreement executed and delivered pursuant to Section 10, the Special Funding
Procedures Letter Agreement and any other agreements or instruments executed
and delivered by any Borrower hereunder or thereunder or in connection herewith
or therewith.
"LOAN PARTIES" means each of the Borrowers.
"LOANS" means Domestic Loans made by Domestic Lenders to
Domestic Borrowers pursuant to subsections 2.1A(i), 2.1A(iii), 2.1A(iv) and
2.1A(v) or Tranche A Canadian Loans made by Canadian Lenders to any Borrower
pursuant to subsections 2.1A(ii) and 2.1A(iv), or any combination thereof.
"MANAGEMENT INVESTORS" means each senior management officer or
employee, or prospective senior management officer or employee, of Company, any
Unrestricted Subsidiary, any Affiliate of Company or any of their respective
Subsidiaries who owns or will own or will have the right to acquire Company's
Common Stock.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets or condition (financial or
otherwise) of Company and its Subsidiaries (other than Unrestricted
Subsidiaries), taken as a whole, or (ii) the material impairment of the ability
of Company to perform, or of any Primary Agent or Lender to enforce, the
Obligations in the aggregate.
"MATERIAL ASSET SALE" means the sale, in a single transaction
or series of related transactions, by Company or any of its Subsidiaries (other
than Unrestricted Subsidiaries) to any Person other than Company or any of its
Wholly-Owned Subsidiaries of (i) any of the stock of any of Company's
Subsidiaries, or (ii) any other assets (whether tangible or intangible) of
Company or any of its Subsidiaries outside of the ordinary course of business
provided that the aggregate Book Value of all assets transferred in such sale
(including, without limitation, the assets of any Subsidiary the stock of which
is so transferred) equals or exceeds 20% of the Book Value of the consolidated
assets of Company and its Subsidiaries (other than Unrestricted Subsidiaries)
after giving effect to the Vons Merger and the Stock Repurchase.
"MATERIAL SUBSIDIARY" means, at any date, any domestic
Subsidiary of Company (other than any Unrestricted Subsidiary) whose tangible
assets have a Book Value
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<PAGE> 24
equal to or exceeding 5% of the Book Value of the consolidated tangible assets
of Company and its Subsidiaries.
"MOODYS" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
in Section 3(37) of ERISA, to which Company or any of its ERISA Affiliates is
contributing, or ever has contributed, or to which Company or any of its ERISA
Affiliates has, or ever has had, an obligation to contribute.
"NEGOTIATED RATE" means, with respect to any Negotiated Rate
Loan, the fixed rate of interest per annum agreed upon by the applicable
Domestic Borrower and the Domestic Lender funding such Loan.
"NEGOTIATED RATE LOAN" has the meaning set forth in subsection
2.1A(v).
"NOTES" means any promissory notes issued by Company, Vons or
Canada Safeway pursuant to subsection 2.1E, substantially in the form of
Exhibit IV-A, IV-B or IV-C annexed hereto, respectively, to evidence the Loans
of any Lenders, as notes may be amended, supplemented or otherwise modified
from time to time.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by a Borrower to Primary Documentation
Agent pursuant to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by a Borrower
to Primary Documentation Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for determining the
interest rate with respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of Exhibit III annexed hereto delivered by Company to
Primary Documentation Agent pursuant to subsection 3.1B(i) with respect to the
proposed issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of
Borrowers from time to time owed to Primary Agents, Lenders or any of them
under the Loan Documents, whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnification or
otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by any of its executive
officers and by any of its vice presidents; provided that every Officers'
Certificate with respect to the compliance
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<PAGE> 25
with a condition precedent to the making of any Loans hereunder shall include
(i) a statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PDA" means Property Development Associates, a California
general partnership.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(other than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 8.3;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by law
incurred in the ordinary course of business for sums not yet delinquent
or being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security (and related standby
letters of credit), or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return- of-money bonds and
other similar obligations (exclusive of obligations for the payment of
borrowed money);
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 10.8;
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<PAGE> 26
(v) leases or subleases or licenses of occupancy granted
to others not interfering in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor
under any lease, (b) restriction or encumbrance that the interest or
title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding
clause (b);
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual or warranty
requirements of Company and its Subsidiaries (excluding deposits
securing the repayment of Indebtedness);
(xi) Liens encumbering customary initial deposits and
margin deposits, and other Liens incurred in the ordinary course of
business and which are within the general parameters customary in the
industry securing obligations under commodities agreements; and
(xii) Liens securing reimbursement obligations under
Commercial Letters of Credit or bankers' acceptance facilities, which
Liens encumber documents and other property to be acquired by drawings
under such Commercial Letters of Credit or drafts accepted under such
bankers' acceptance facilities.
"PERMITTED INVESTMENTS" means Investments in Unrestricted
Subsidiaries in an aggregate amount not to exceed the sum of (i) $50,000,000
plus (ii) any amounts received by Company or any Subsidiary from any
Unrestricted Subsidiary which represents a repayment of the principal portion
of any loan or advance or any return of contributed capital in respect of any
previous Permitted Investment.
20
<PAGE> 27
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies,
limited liability partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PRICING LEVEL" means as of any date, the higher Pricing Level,
whether (in descending order from the highest Pricing Level to the lowest
Pricing Level) Pricing Level A, Pricing Level B, Pricing Level C, Pricing Level
D, Pricing Level E, Pricing Level F, or Pricing Level G, that corresponds to
either (a) Company's unsecured senior debt ratings from Moodys or S&P (the more
creditworthy of such ratings being used in the case of a split rating) or (b)
Company's Interest Coverage Ratio as set forth in the most recent effective
Pricing Level Determination Certificate delivered in accordance with the
provisions of subsection 8.1(iv); provided that, notwithstanding anything
herein to the contrary, from the Closing Date to the date on which the first
Pricing Level Determination Certificate is delivered with respect to Company's
financial statements for the third fiscal quarter of 1997, the applicable
Pricing Level shall be Pricing Level D:
<TABLE>
<CAPTION>
Debt Ratings/Interest
Pricing Level Coverage Ratio
------------- ---------------------
<S> <C>
Pricing Level A: Aa2 or better by Moodys or AA or better by S&P
or Interest Coverage Ratio of 8.00:1.00 or higher
Pricing Level B: Aa3 by Moodys or AA- by S&P or Interest Coverage Ratio
of at least 7.00:1.00 but less than 8.00:1.00
Pricing Level C: A1 by Moodys or A+ by S&P or Interest Coverage Ratio
of at least 6.25:1.00 but less than 7.00:1.00
Pricing Level D: A2 by Moodys or A by S&P or Interest Coverage Ratio
of at least 5.75:1.00 but less than 6.25:1.00
</TABLE>
21
<PAGE> 28
<TABLE>
<S> <C>
Pricing Level E: A3 by Moodys or A- by S&P or Interest Coverage Ratio
of at least 5.25:1.00 but less than 5.75:1.00
Pricing Level F: Baa1 by Moodys or BBB+ by S&P or Interest Coverage Ratio
of at least 4.75:1.00 but less than 5.25:1.00
Pricing Level G: Baa2 or below by Moodys or BBB or below by S&P or
Interest Coverage Ratio below 4.75:1.00
</TABLE>
For the purposes of determining the Pricing Level, a Pricing Level
Determination Certificate shall be deemed effective on the next Business Day
following Primary Documentation Agent's receipt thereof, and the Pricing Level
shall change on such Business Day to the extent necessary to reflect Company's
debt rating and Interest Coverage Ratio as set forth in such Pricing Level
Determination Certificate.
"PRICING LEVEL DETERMINATION CERTIFICATE" means a certificate
substantially in the form of Exhibit XI annexed hereto delivered to Primary
Documentation Agent and Lenders by Company pursuant to subsection 8.1(iv).
"PRIMARY AGENT" and "PRIMARY AGENTS" means Primary
Documentation Agent and Administrative Agent and also means and includes any
successor Primary Documentation Agent or Administrative Agent appointed
pursuant to subsection 11.5.
"PRIMARY DOCUMENTATION AGENT" means Scotiabank as a
Documentation Agent and also means and includes any successor Primary
Documentation Agent appointed pursuant to subsection 11.5.
"QUARTERLY PAYMENT DATE" means the last Business Day of March,
June, September and December in each calendar year.
"REGISTER" has the meaning assigned to that term in subsection
2.1D.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
22
<PAGE> 29
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Material through the air,
soil, surface water, groundwater or property.
"REPURCHASED STOCK" has the meaning assigned to that term in
subsection 9.1A.
"REQUISITE LENDERS" means Lenders having or holding 51% or more
of the aggregate Tranche A Domestic Loan Exposure, Tranche A Canadian Loan
Exposure and Tranche B Domestic Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENTS" has the meaning assigned to that
term in subsection 9.2.
"SCHEDULE I LENDER" means any Canadian Lender that is a bank
referred to in Schedule I to the Bank Act (Canada), S.C. 1991, c.46, as
amended.
"SCHEDULE I REFERENCE BANKS" means Scotiabank, Royal Bank of
Canada and Bank of Montreal.
"SCHEDULE II LENDER" means any Canadian Lender that is not a
Schedule I Lender.
"SCHEDULE II REFERENCE BANKS" means BT Bank of Canada, Bank of
America Canada and The Sumitomo Bank of Canada.
"SCOTIABANK" has the meaning assigned to that term in the
introduction to this Agreement.
"SEC" means the Securities and Exchange Commission or any
successor thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SPECIAL FUNDING PROCEDURES LETTER AGREEMENT" means a letter
agreement substantially in the form of Exhibit XVI annexed hereto.
23
<PAGE> 30
"SOLVENT" means, with respect to any Person, that as of the
date of determination, (i) the then fair saleable value of the property of such
Person is (a) greater than the total amount of liabilities (including
reasonably anticipated liabilities with respect to contingent obligations) of
such Person and (b) greater than the amount that will be required to pay the
probable liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person, and (ii) such person has not
incurred and does not intend to incur, or does not believe that it will incur,
debts beyond its ability to pay such debts as they become due.
"S&P" means Standard & Poors Ratings Services, a division of
The McGraw-Hill Companies, Inc.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument issued for the purpose of supporting (i) Indebtedness
incurred by any joint venture to which Company or any of its Subsidiaries is a
party for working capital and general business purposes, (ii) obligations of
Company or any of its Subsidiaries with respect to capital calls or similar
requirements in respect of joint ventures to which Company or such Subsidiary
is a party, (iii) workers' compensation liabilities and directors and officers
insurance of Company or any of its Subsidiaries, (iv) the obligations of third
party insurers of Company or any of its Subsidiaries arising by virtue of the
laws of any jurisdiction requiring third party insurers, (v) Indebtedness of
Company or any of its Subsidiaries or Casa Ley in respect of industrial revenue
or development bonds or financings, (vi) obligations with respect to capital or
operating leases, (vii) performance, payment, deposit or surety obligations of
Company or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice in
the industry, (viii) the performance of obligations of Company and its
Subsidiaries incurred in connection with the sale of any asset of Company or
any of its Subsidiaries, (ix) the payment of trade payables of Company or any
of its Subsidiaries which payables are incurred on terms customary in the
industry, (x) indebtedness (other than Subordinated Indebtedness) which was
previously secured in whole or in part by assets which were but are no longer
owned by Company and its Subsidiaries, (xi) the obligations of Company or any
of its Subsidiaries with respect to any judgments that are stayed pending
appeal (including, any appeal bonds or other security required to obtain a stay
pending appeal), or (xii) other obligations approved by Administrative Agent,
in its reasonable discretion.
"STOCK REPURCHASE" means the repurchase by Company of thirty
two million shares of Company's Common Stock for $43.00 per share during the
period beginning on the Closing Date (immediately after the consummation of the
Vons Merger) and ending on the date that is two Business Days after the Closing
Date pursuant to the terms and conditions set forth in the Stock Repurchase
Agreement.
24
<PAGE> 31
"STOCK REPURCHASE AGREEMENT" means the Amended and Restated
Stock Repurchase Agreement dated as of January 8, 1997 between Company and SSI
Associates, L.P., a Delaware partnership.
"SUBORDINATED INDEBTEDNESS" means (i) the Indebtedness of
Company evidenced by the Subordinated Securities and (ii) any other
Indebtedness of Company subordinated in right of payment to the Obligations.
"SUBORDINATED SECURITIES" means Company's 10% Senior
Subordinated Notes due 2001, 9.875% Senior Subordinated Debentures due 2007,
9.65% Senior Subordinated Debentures due 2004, and 9.35% Senior Subordinated
Notes due 1999.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of capital stock or
other ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"SUBSIDIARY BORROWER GUARANTY" means the guaranty by Company of
the Subsidiary Borrower Obligations set forth in Section 12.
"SUBSIDIARY BORROWER OBLIGATIONS" has the meaning assigned to
that term in Section 12.
"SWING LINE LENDER" means Scotiabank or any Lender succeeding
Scotiabank as the Primary Documentation Agent hereunder.
"SWING LINE LOANS" means any Tranche A Domestic Swing Line
Loans, any Tranche A Canadian Swing Lines Loans or any combination thereof.
"SYNDICATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"TAX" or "TAXES" means any present or future governmental tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed.
"TOTAL UTILIZATION OF TRANCHE A CANADIAN COMMITMENTS" means,
(i) as to Canadian Lenders at any date, the sum of (a) the aggregate principal
amount of all
25
<PAGE> 32
outstanding Tranche A Canadian Loans, with all Tranche A Canadian Loans
denominated in Canadian Dollars valued in Dollar Equivalents, plus (b) the
aggregate Acceptance Usage; or (ii) as to any Canadian Lender at any date of
determination, the sum of (x) the aggregate principal amount of all outstanding
Tranche A Canadian Loans (other than Tranche A Canadian Swing Line Loans) made
by such Lender (and its U.S. Affiliate) with all such Loans denominated in
Canadian Dollars valued in Dollar Equivalents plus (y) the Acceptance Usage of
such Lender, plus (z) the aggregate principal amount of such Lender's
participations (if any) in Tranche A Canadian Swing Line Loans with all such
Loans denominated in Canadian Dollars valued in Dollar Equivalents.
"TOTAL UTILIZATION OF TRANCHE A DOMESTIC COMMITMENTS" means,
(i) as to Domestic Lenders at any date, the sum of (a) the aggregate principal
amount of all outstanding Tranche A Domestic Loans plus (b) the Letter of
Credit Usage or (ii) as to any Domestic Lender at any date of determination,
the sum of (x) the aggregate principal amount of all outstanding Tranche A
Domestic Loans (other than Tranche A Domestic Swing Line Loans and Negotiated
Rate Loans) made by such Lender plus (y) the Letter of Credit Usage of such
Lender plus (z) the aggregate principal amount of such Lender's participations
(if any) in Tranche A Domestic Swing Line Loans.
"TOTAL UTILIZATION OF TRANCHE B DOMESTIC COMMITMENTS" means,
(i) as to Domestic Lenders at any date, the aggregate principal amount of all
outstanding Tranche B Domestic Loans or (ii) as to any Domestic Lender at any
date of determination, the aggregate principal amount of all outstanding
Tranche B Domestic Loans made by such Lender.
"TRANCHE A CANADIAN BASE RATE LOANS" means Tranche A Canadian
Loans (other than Tranche A Canadian Swing Line Loans) denominated in Dollars
advanced to Canada Safeway and bearing interest at rates determined by
reference to the Canadian Base Rate as provided in subsection 2.2A.
"TRANCHE A CANADIAN COMMITMENT" means the commitment of a
Canadian Lender to make Tranche A Canadian Loans to Company or Canada Safeway
pursuant to subsection 2.1A(ii), and "TRANCHE A CANADIAN COMMITMENTS" means
such commitments of all Canadian Lenders in the aggregate.
"TRANCHE A CANADIAN EURODOLLAR RATE LOANS" means any Tranche A
Canadian Loans denominated in Dollars advanced to Canada Safeway and bearing
interest at rates determined by reference to the Canadian Eurodollar Rate as
provided in subsection 2.2A.
"TRANCHE A CANADIAN LOAN EXPOSURE" means, with respect to any
Canadian Lender as of any date, (a) prior to the termination of the Tranche A
Canadian Commitments, that Lender's Tranche A Canadian Commitment, and (b)
after the
26
<PAGE> 33
termination of the Tranche A Canadian Commitments, the sum of (x) the aggregate
outstanding principal amount of the Tranche A Canadian Loans of such Canadian
Lender (it being understood and agreed for the purposes hereof that the
Canadian/U.S. Loans of any U.S. Affiliate of any Canadian Lender are Tranche A
Canadian Loans of such Canadian Lender and not Tranche A Domestic Loans of such
U.S. Affiliate) plus (y) without duplication, the aggregate outstanding amount
of Acceptances created by such Canadian Lender, as measured by the Face Amounts
of the applicable Drafts (with all such Loans denominated in Canadian Dollars
and all such Face Amounts valued in Dollar Equivalents) plus (z) the aggregate
principal amount of such Lender's participations (if any) in Tranche A Canadian
Swing Line Loans with all such Loans denominated in Canadian Dollars valued in
Dollar Equivalents.
"TRANCHE A CANADIAN LOANS" means the Tranche A Canadian Loans
made by Canadian Lenders pursuant to their Tranche A Canadian Commitments to
Company or Canada Safeway (including, without limitation, any Canadian/U.S.
Loans) pursuant to subsection 2.1A(ii) and the Tranche A Canadian Swing Line
Loans, or any combination thereof.
"TRANCHE A CANADIAN PRIME RATE LOANS" means Tranche A Canadian
Loans (other than Tranche A Canadian Swing Line Loans) advanced to Canada
Safeway and denominated in Canadian Dollars and bearing interest at rates
determined by reference to the Canadian Prime Rate as provided in subsection
2.2A.
"TRANCHE A CANADIAN PRO RATA SHARE" means, with respect to any
Canadian Lender, (a) prior to the termination of the Tranche A Canadian
Commitments, the Tranche A Canadian Commitment of such Canadian Lender as a
percentage of the sum of the Tranche A Canadian Commitments of all Canadian
Lenders, and (b) after the termination of the Tranche A Canadian Commitments,
the outstanding Tranche A Canadian Loans made by such Canadian Lender (it being
understood and agreed for the purposes hereof that the Canadian/U.S. Loans of
any U.S. Affiliate of any Canadian Lender are Tranche A Canadian Loans of such
Canadian Lender and not Tranche A Domestic Loans of such U.S. Affiliate) as a
percentage of the sum of the Tranche A Canadian Loans made by all Canadian
Lenders.
"TRANCHE A CANADIAN SWING LINE COMMITMENT" means the commitment
of Swing Line Lender to make Tranche A Canadian Swing Line Loans pursuant to
subsection 2.1A(iv).
"TRANCHE A CANADIAN SWING LINE LOANS" has the meaning assigned
to that term in subsection 2.1A(iv).
"TRANCHE A DOMESTIC BASE RATE LOANS" means Tranche A Domestic
Loans advanced to Domestic Borrowers (excluding Tranche A Domestic Swing Line
Loans)
27
<PAGE> 34
bearing interest at rates determined by reference to the Domestic Base Rate as
provided in subsection 2.2A.
"TRANCHE A DOMESTIC COMMITMENT" means the commitment of a
Domestic Lender to make Tranche A Domestic Loans to Company or Vons pursuant to
subsection 2.1A(i), and "TRANCHE A DOMESTIC COMMITMENTS" means such commitments
of all Domestic Lenders in the aggregate.
"TRANCHE A DOMESTIC EURODOLLAR RATE LOANS" means Tranche A
Domestic Loans (excluding any Negotiated Rate Loans) denominated in Dollars,
advanced to Domestic Borrowers and bearing interest at rates determined by
reference to the Adjusted Eurodollar Rate as provided in subsection 2.2A.
"TRANCHE A DOMESTIC LOAN EXPOSURE" means, with respect to any
Domestic Lender as of any date, (a) prior to the termination of the Tranche A
Domestic Commitments, that Lender's Tranche A Domestic Commitment, and (b)
after the termination of the Tranche A Domestic Commitments, the sum of (w) the
aggregate outstanding principal amount of the Tranche A Domestic Loans of that
Lender (it being understood and agreed for the purposes hereof that the
Canadian/U.S. Loans of any U.S. Affiliate of any Canadian Lender are Tranche A
Canadian Loans of such Canadian Lender and not Tranche A Domestic Loans of such
U.S. Affiliate) plus (x) in the event that Lender is an Issuing Lender, the
aggregate Letter of Credit Usage in respect of all Letters of Credit issued by
that Lender (in each case net of any participations purchased by other Lenders
in any such Letter of Credit or any unreimbursed drawings under such Letters of
Credit) plus (y) the aggregate amount of all participations purchased by that
Lender in Letters of Credit or in any drawings thereunder honored by Issuing
Lenders and not theretofore reimbursed by Company plus (z) the aggregate
principal amount of that Lender's participations (if any) in Tranche A Domestic
Swing Line Loans.
"TRANCHE A DOMESTIC LOANS" means the Tranche A Domestic Loans
made by Domestic Lenders pursuant to their Tranche A Domestic Commitments, to
Domestic Borrowers pursuant to subsection 2.1A(i), the Tranche A Domestic Swing
Line Loans and the Negotiated Rate Loans, or any combination thereof.
"TRANCHE A DOMESTIC PRO RATA SHARE" means, with respect to any
Domestic Lender, (a) prior to the termination of the Tranche A Domestic
Commitments, the Tranche A Domestic Commitment of such Domestic Lender as a
percentage of the sum of the Tranche A Domestic Commitments of all Domestic
Lenders, and (b) after the termination of the Tranche A Domestic Commitments,
the outstanding Tranche A Domestic Loans made by such Domestic Lender (it being
understood and agreed for the purposes hereof that the Canadian/U.S. Loans of
any U.S. Affiliate of any Canadian Lender are Tranche A Canadian Loans of such
Canadian Lender and not Tranche A Domestic Loans
28
<PAGE> 35
of such U.S. Affiliate) as a percentage of the sum of the Tranche A Domestic
Loans made by all Domestic Lenders.
"TRANCHE A DOMESTIC SWING LINE COMMITMENT" means the commitment
of Swing Line Lender to make Tranche A Domestic Swing Line Loans pursuant to
subsection 2.1A(iv).
"TRANCHE A DOMESTIC SWING LINE LOANS" has the meaning assigned
to that term in subsection 2.1A(iv).
"TRANCHE A EXTENSION REQUEST" means written notice
substantially in the form of Exhibit IX annexed hereto to be delivered by
Company in accordance with the provisions of subsection 2.7 to request a
one-year extension of the Tranche A Termination Date then in effect.
"TRANCHE A FACILITY FEE PERCENTAGE" means, as of any date, the
percentage per annum set forth below that corresponds to the Pricing Level in
effect on such date:
<TABLE>
<CAPTION>
Tranche A Facility
Fee Percentage
Pricing Level (in basis points)
------------- ------------------------
<S> <C>
Pricing Level A: 7.00
Pricing Level B: 7.50
Pricing Level C: 8.00
Pricing Level D: 10.00
Pricing Level E: 10.00
Pricing Level F: 12.50
Pricing Level G: 15.00
</TABLE>
The Tranche A Facility Fee Percentage shall change as of the opening of
business on any day that the Pricing Level changes pursuant to the definition
of "Pricing Level."
"TRANCHE A PRICING MARGIN" means, as of any date, the Tranche A
Pricing Margin set forth below that corresponds to the Pricing Level in effect
on such date:
29
<PAGE> 36
<TABLE>
<CAPTION>
Tranche A
Pricing Margin
Pricing Level (in basis points)
------------- ------------------------
<S> <C>
Pricing Level A: 8.00
Pricing Level B: 10.00
Pricing Level C: 12.00
Pricing Level D: 12.50
Pricing Level E: 15.00
Pricing Level F: 17.50
Pricing Level G: 20.00
</TABLE>
The Tranche A Pricing Margin shall change as of the opening of business on any
day that the Pricing Level changes pursuant to the definition of "Pricing
Level."
"TRANCHE A TERMINATION DATE" means April 8, 2002 or, with
respect to each Lender, such subsequent date to which the Tranche A Termination
Date is extended by such Lender pursuant to subsection 2.7 (it being understood
that the Tranche A Termination Date of any Lender not consenting to such
extension shall not be extended beyond the Tranche A Termination Date then in
effect for such Lender).
"TRANCHE B DOMESTIC BASE RATE LOANS" means Tranche B Domestic
Loans advanced to Domestic Borrowers (excluding Tranche B Domestic Swing Line
Loans) bearing interest at rates determined by reference to the Domestic Base
Rate as provided in subsection 2.2A.
"TRANCHE B DOMESTIC COMMITMENT" means the commitment of a
Domestic Lender to make Tranche B Domestic Loans to Company or Vons pursuant to
subsection 2.1A(iii), and "TRANCHE B DOMESTIC COMMITMENTS" means such
commitments of all Domestic Lenders in the aggregate.
"TRANCHE B DOMESTIC EURODOLLAR RATE LOANS" means Tranche B
Domestic Loans (excluding any Negotiated Rate Loans) denominated in Dollars,
advanced to Domestic Borrowers and bearing interest at rates determined by
reference to the Adjusted Eurodollar Rate as provided in subsection 2.2A.
"TRANCHE B DOMESTIC LOAN EXPOSURE" means, with respect to any
Domestic Lender as of any date, (a) prior to the termination of the Tranche B
Domestic Commitments, that Lender's Tranche B Domestic Commitment, and (b)
after the termination of the Tranche B Domestic Commitments, the aggregate
outstanding principal amount of the Tranche B Domestic Loans of that Lender.
30
<PAGE> 37
"TRANCHE B DOMESTIC LOANS" means the Tranche B Domestic Loans
made by Domestic Lenders pursuant to their Tranche B Domestic Commitments to
Domestic Borrowers pursuant to subsection 2.1A(iii).
"TRANCHE B DOMESTIC PRO RATA SHARE" means, with respect to any
Domestic Lender, (a) prior to the termination of the Tranche B Domestic
Commitments, the Tranche B Domestic Commitment of such Domestic Lender as a
percentage of the sum of the Tranche B Domestic Commitments of all Domestic
Lenders, and (b) after the termination of the Tranche B Domestic Commitments,
the outstanding Tranche B Domestic Loans made by such Domestic Lender as a
percentage of the sum of the Tranche B Domestic Loans made by all Domestic
Lenders.
"TRANCHE B EXTENSION REQUEST" means written notice
substantially in the form of Exhibit X annexed hereto to be delivered by
Company in accordance with the provisions of subsection 2.8 to request a
364-day extension of the Tranche B Revolving Termination Date then in effect.
"TRANCHE B FACILITY FEE PERCENTAGE" means, as of any date, the
percentage per annum set forth below that corresponds to the Pricing Level in
effect on such date:
<TABLE>
<CAPTION>
Tranche B Facility
Fee Percentage
Pricing Level (in basis points)
------------- ------------------------
<S> <C>
Pricing Level A: 6.00
Pricing Level B: 6.50
Pricing Level C: 7.00
Pricing Level D: 7.50
Pricing Level E: 8.00
Pricing Level F: 10.00
Pricing Level G: 12.50
</TABLE>
The Tranche B Facility Fee Percentage shall change as of the opening of
business on any day that the Pricing Level changes pursuant to the definition
of "Pricing Level."
"TRANCHE B PRICING MARGIN" means, as of any date, the Tranche B
Pricing Margin set forth below that corresponds to the Pricing Level in effect
on such date:
31
<PAGE> 38
<TABLE>
<CAPTION>
Tranche B
Pricing Margin
Pricing Level (in basis points)
------------- ------------------------
<S> <C>
Pricing Level A: 9.00
Pricing Level B: 11.00
Pricing Level C: 13.00
Pricing Level D: 15.00
Pricing Level E: 17.00
Pricing Level F: 20.00
Pricing Level G: 22.50
</TABLE>
The Tranche B Pricing Margin shall change as of the opening of business on any
day that the Pricing Level changes pursuant to the definition of "Pricing
Level."
"TRANCHE B REVOLVING TERMINATION DATE" means April 6, 1998 or,
with respect to each Lender, such subsequent date to which the Tranche B
Revolving Termination Date is extended by such Lender pursuant to subsection
2.8 (it being understood that the Tranche B Revolving Termination Date of any
Lender not consenting to such extension shall not be extended beyond the
Tranche B Revolving Termination Date then in effect for such Lender).
"TRANCHE B TERM TERMINATION DATE" has the meaning assigned to
that term in subsection 2.9.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary designated by
Company as an Unrestricted Subsidiary in accordance with the provisions of
subsection 9.7.
"U.S. AFFILIATE" means, with respect to any Canadian Lender (i)
that is not resident in the United States of America for withholding tax
purposes, or (ii) with respect to which an election under Section 1504(d) of
the Internal Revenue Code has been made, in each case, the Affiliate of such
Canadian Lender that is resident in the United States of America for
withholding tax purposes with respect to which such Canadian Lender shall have
assigned its obligation to fund Canadian/U.S. Loans in accordance with the
provisions of subsections 2.1A(ii) and 13.1.
"U.S./CDN.$" means Dollars or Canadian Dollars, as the case may
be.
"VONS MERGER" means the merger of SSCI Merger Sub, Inc. with
and into Vons pursuant to the Vons Merger Agreement.
"VONS MERGER AGREEMENT" means the Agreement and Plan of Merger
by and among Company, Vons and SSCI Merger Sub, Inc. dated as of December 15,
1996, as
32
<PAGE> 39
amended as of January 8, 1997 by the First Amendment to the Agreement and Plan
of Merger, as it may be further amended, supplemented or otherwise modified
from time to time.
"VONS CREDIT AGREEMENT" means the Revolving Loan Agreement
dated as of February 17, 1995 among Vons and the lenders and other parties
thereto.
"WHOLLY-OWNED SUBSIDIARY" means, with respect to any Person,
any Subsidiary of such Person that is directly or indirectly wholly-owned by
such Person.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements, determinations relating
to covenants, and other information required to be delivered or determined by
Company pursuant to this Agreement shall be prepared or determined in
conformity with GAAP as in effect at the time of such preparation or
determination.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS AND LOANS. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of
Borrowers herein set forth:
(i) Tranche A Domestic Loans. Each Domestic Lender
severally agrees, subject to the limitations set forth below with
respect to the maximum amount of Tranche A Domestic Loans permitted to
be outstanding from time to time, to lend to Domestic Borrowers from
time to time during the period from the Closing Date to but excluding
such Lender's Tranche A Termination Date an aggregate amount not
exceeding its Tranche A Domestic Pro Rata Share of the aggregate amount
of the Tranche A Domestic Commitments to be used for the purposes
identified in subsection 2.5A. The original amount of each Domestic
Lender's Tranche A Domestic
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Commitment is set forth opposite its name on Schedule 2.1 annexed
hereto and the aggregate original amount of the Tranche A Domestic
Commitments is $1,600,000,000; provided that the Tranche A Domestic
Commitments of Lenders shall be adjusted to give effect to any
assignments of the Tranche A Domestic Commitments pursuant to
subsection 13.1B; and provided, further that the amount of the Tranche
A Domestic Commitments shall be reduced from time to time by the amount
of any reductions thereto made pursuant to subsection 2.4A(ii). Each
Domestic Lender's Tranche A Domestic Commitment shall expire on such
Lender's Tranche A Termination Date and all Tranche A Domestic Loans
and all other amounts owed hereunder with respect to the Tranche A
Domestic Loans and the Tranche A Domestic Commitment of such Lender
shall be paid in full no later than that date; provided that each
Domestic Lender's Tranche A Domestic Commitment shall expire
immediately and without further action on June 3, 1997 if the Closing
Date shall not have occurred on or before that date. Amounts borrowed
under this subsection 2.1A(i) may be repaid and reborrowed to but
excluding the Tranche A Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Tranche A Domestic Loans and the Tranche A
Domestic Commitments shall be subject to the limitation that in no
event shall the Total Utilization of Tranche A Domestic Commitments at
any time exceed the Tranche A Domestic Commitments then in effect. All
Tranche A Domestic Loans shall be denominated and funded in Dollars.
(ii) Tranche A Canadian Loans. Each Canadian Lender
severally agrees, subject to the limitations set forth below with
respect to the maximum amount of Tranche A Canadian Loans permitted to
be outstanding from time to time, to lend to Company and Canada Safeway
from time to time during the period from the Closing Date to but
excluding such Lender's Tranche A Termination Date an aggregate amount
not exceeding its Tranche A Canadian Pro Rata Share of the aggregate
amount of the Tranche A Canadian Commitments to be used for the
purposes identified in subsection 2.5A. The original amount of each
Canadian Lender's Tranche A Canadian Commitment is set forth opposite
its name on Schedule 2.1 annexed hereto and the aggregate original
amount of the Tranche A Canadian Commitments is $400,000,000; provided
that the Tranche A Canadian Commitments of Lenders shall be adjusted to
give effect to any assignments of the Tranche A Canadian Commitments
pursuant to subsection 13.1B; and provided, further that the amount of
the Tranche A Canadian Commitments shall be reduced from time to time
by the amount of any reductions thereto made pursuant to subsection
2.4A(ii). Each Canadian Lender's Tranche A Canadian Commitment shall
expire on such Lender's Tranche A Termination Date and all Tranche
ACanadian Loans and all other amounts owed hereunder with respect to
the Tranche A Canadian Loans and the Tranche A Canadian Commitment of
such Lender shall
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be paid in full no later than that date; provided that each Canadian
Lender's Tranche A Canadian Commitment shall expire immediately and
without further action on June 3, 1997 if the Closing Date shall not
have occurred on or before that date. Amounts borrowed under this
subsection 2.1A(ii) may be repaid and reborrowed to but excluding the
Tranche A Termination Date.
Upon receipt of a Notice of Borrowing from the Company with
respect to a Canadian/U.S. Loan, each Canadian Lender that is not
resident in the United States of America for withholding tax purposes,
may, in accordance with the provisions of subsection 13.1, assign its
obligations under this subsection 2.1A(ii) to fund such Canadian/U.S.
Loan (together with all of its outstanding Canadian/U.S. Loans) to a
U.S. Affiliate. Notwithstanding any provisions of this Agreement to
the contrary, no U.S. Affiliate shall be deemed to have a Tranche A
Canadian Commitment under this Agreement. For the purposes of
determining whether the Total Utilization of Tranche A Canadian
Commitments of any Canadian Lender exceeds its Tranche A Canadian
Commitments, the outstanding principal amount of its U.S. Affiliate's
Canadian/U.S. Loans shall be considered to be outstanding from such
Canadian Lender hereunder.
Anything contained in this Agreement to the contrary
notwithstanding, the Tranche A Canadian Loans and the Tranche A
Canadian Commitments shall be subject to the limitation that in no
event shall the Total Utilization of Tranche A Canadian Commitments at
any time exceed the Tranche A Canadian Commitments then in effect.
Tranche A Canadian Loans advanced to Canada Safeway may, at Canada
Safeway's option, be denominated and funded in Dollars or Canadian
Dollars; Tranche A Canadian Loans advanced to Company (otherwise
referred to herein as "Canadian/U.S. Loans") shall be denominated and
funded in Dollars only.
(iii) Tranche B Domestic Loans. Each Domestic Lender
severally agrees, subject to the limitations set forth below with
respect to the maximum amount of Tranche B Domestic Loans permitted to
be outstanding from time to time, to lend to Domestic Borrowers from
time to time during the period from the Closing Date to but excluding
such Lender's Tranche B Revolving Termination Date an aggregate amount
not exceeding its Tranche B Domestic Pro Rata Share of the aggregate
amount of the Tranche B Domestic Commitments to be used for the
purposes identified in subsection 2.5A. The original amount of each
Domestic Lender's Tranche B Domestic Commitment is set forth opposite
its name on Schedule 2.1 annexed hereto and the aggregate original
amount of the Tranche B Domestic Commitments is $1,000,000,000;
provided that the Tranche B Domestic Commitments of Lenders shall be
adjusted to give effect to any assignments of the Tranche B Domestic
Commitments pursuant to subsection 13.1B; and provided, further that
the amount of the Tranche B Domestic Commitments shall be reduced from
time to time by the amount of any reductions thereto made pursuant to
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subsection 2.4A(ii). The unused portion of each Domestic Lender's
Tranche B Domestic Commitment shall expire on such Lender's Tranche B
Revolving Termination Date and Tranche B Domestic Loans may not be made
after that date; provided that each Domestic Lender's Tranche B
Domestic Commitment shall expire immediately and without further action
on June 3, 1997 if the Closing Date shall not have occurred on or
before that date. Each Domestic Lender's Tranche B Domestic Commitment
shall expire on such Lender's Tranche B Term Termination Date and all
Tranche B Domestic Loans and all other amounts owed hereunder with
respect to the Tranche B Domestic Loans and the Tranche B Domestic
Commitment of such Lender shall be paid in full no later than such
Lender's Tranche B Term Termination Date. Amounts borrowed under this
subsection 2.1A(iii) may be repaid and reborrowed to but excluding the
Tranche B Revolving Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Tranche B Domestic Loans and the Tranche B
Domestic Commitments shall be subject to the limitation that in no
event shall the Total Utilization of Tranche B Domestic Commitments at
any time exceed the Tranche B Domestic Commitments then in effect. All
Tranche B Domestic Loans shall be denominated and funded in Dollars.
(iv) Swing Line Commitments and Swing Line Loans. Subject
to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Borrowers set forth herein, Swing
Line Lender hereby agrees, from time to time during the period from the
Closing Date through but excluding such Lender's Tranche A Termination
Date, (a) to make a portion of the Tranche A Domestic Commitments
available to Domestic Borrowers in an aggregate amount not exceeding
$50,000,000 by making Swing Line Loans denominated in Dollars to
Domestic Borrowers ("TRANCHE A DOMESTIC SWING LINE LOANS") and (b) to
make a portion of the Tranche A Canadian Commitments available to
Canada Safeway in an aggregate principal amount of up to $25,000,000 by
making Swing Line Loans, denominated in Canadian Dollars or Dollars, to
Canada Safeway ("TRANCHE A CANADIAN SWING LINE LOANS"), notwithstanding
the fact that such Swing Line Loans, when aggregated with the Total
Utilization of Tranche A Domestic Commitments or Total Utilization of
Tranche A Canadian Commitments, as the case may be, of Swing Line
Lender may exceed Swing Line Lender's Tranche A Domestic Commitment or
Tranche A Canadian Commitment, respectively. Swing Line Lender's
commitment to make Tranche A Domestic Swing Line Loans pursuant to this
subsection 2.1A(iv) is hereby called its "TRANCHE A DOMESTIC SWING LINE
COMMITMENT," and Swing Line Lender's commitment to make Tranche A
Canadian Swing Line Loans pursuant to this subsection 2.1A(iv) is
hereby called its "TRANCHE A CANADIAN SWING LINE COMMITMENT". In no
event shall the aggregate principal amount of Tranche A Domestic Swing
Line Loans outstanding at any time exceed the Tranche A Domestic Swing
Line Commitment nor shall the
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aggregate principal amount of Tranche A Canadian Swing Line Loans
outstanding at any time exceed the Tranche A Canadian Swing Line
Commitment (with all Tranche A Canadian Swing Line Loans denominated in
Canadian Dollars valued in Dollar Equivalents), and in no event shall
the Total Utilization of Tranche A Domestic Commitments at any time
exceed the Tranche A Domestic Commitments then in effect nor shall the
Total Utilization of Tranche A Canadian Commitments at any time exceed
the Tranche A Canadian Commitments then in effect. In no event shall
the Tranche A Domestic Swing Line Commitment exceed the Tranche A
Domestic Commitments nor shall the Tranche A Canadian Swing Line
Commitment exceed the Tranche A Canadian Commitments, and any voluntary
reduction of the Tranche A Domestic Commitments or Tranche A Canadian
Commitments made pursuant to subsection 2.4A which reduces the Tranche
A Domestic Commitments or Tranche A Canadian Commitments below the then
current amount of the Tranche A Domestic Swing Line Commitment or the
Tranche A Canadian Swing Line Commitment, respectively, shall result in
an automatic corresponding reduction of the Tranche A Domestic Swing
Line Commitment or the Tranche A Canadian Swing Line Commitment,
respectively, to the amount of the Tranche A Domestic Commitments or
the Tranche A Canadian Commitments, respectively, as so reduced,
without any further action on the part of Swing Line Lender.
The Tranche A Domestic Swing Line Commitment and Tranche A
Canadian Swing Line Commitment shall expire on Swing Line Lender's
Tranche A Termination Date and all Swing Line Loans shall be paid in
full no later than that date.
Amounts borrowed under this subsection 2.1A(iv) may be repaid
and, through but excluding Swing Line Lender's Tranche A Termination
Date, reborrowed. All Swing Line Loans shall bear interest as provided
in subsection 2.2A(vi). Swing Line Loans made on any Funding Date
shall be in an aggregate minimum amount of U.S./Cdn.$1,000,000 and
integral multiples of U.S/Cdn.$500,000 in excess of that amount.
Swing Line Lender, at any time in its sole and absolute
discretion may, and on the fifth Business Day after the making of a
Swing Line Loan which has not been voluntarily prepaid by the
applicable Borrower pursuant to subsection 2.4A(i) shall, on one
Business Day's notice, so long as amounts are available to be borrowed
under the Tranche A Domestic Commitments or Tranche A Canadian
Commitments, as the case may be, require each Domestic Lender or
Canadian Lender (including, in either case, Swing Line Lender), as the
case may be, and each Lender hereby agrees, subject to this subsection
2.1A(iv), to make a Tranche A Domestic Loan or Tranche A Canadian Loan,
as the case may be (which shall initially bear interest at the
applicable Deemed Floating Rate), in an amount equal to such Lender's
Tranche A Domestic Pro Rata Share or Tranche A Canadian Pro Rata Share
of the amount of
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the Tranche A Domestic Swing Line Loans or Tranche A Canadian Swing
Line Loans, respectively ("REFUNDED TRANCHE A DOMESTIC SWING LINE
LOANS" and "REFUNDED TRANCHE A CANADIAN SWING LINE LOANS,"
respectively) outstanding on the date notice is given by Swing Line
Lender; provided, however, that, any provision of subsection 2.1C(iii)
or any other subsection of this Agreement to the contrary
notwithstanding, the obligation of each Lender to make any such Loan is
subject to the condition that (i) Swing Line Lender believed in good
faith that all conditions under subsection 6.2 to the making of such
Refunded Tranche A Domestic Swing Line Loan or Refunded Tranche A
Canadian Swing Line Loan were satisfied at the time such Swing Line
Loan was made, or (ii) such Lender shall have actual knowledge, by
receipt of the statements required pursuant to subsection 8.1 or
otherwise, that any such condition has not been satisfied and shall
have failed to notify Swing Line Lender and Administrative Agent in
writing prior to the time such Swing Line Loan was made that it has no
obligation to make Loans until such condition has been satisfied (which
notice shall be effective as of the date of receipt by Swing Line
Lender and Administrative Agent), or (iii) the satisfaction of any such
condition not satisfied had been waived by Requisite Lenders prior to
or at the time such Swing Line Loan was made. In the event that Loans
are made by Lenders other than Swing Line Lender under the immediately
preceding sentence, each such Lender shall make the amount of its Loan
available to Primary Documentation Agent, in same day funds and the
applicable currency (whether Dollars or Canadian Dollars), at the
Domestic Funding and Payment Office (in the case of Refunded Tranche A
Domestic Swing Line Loans) or the Canadian Funding and Paying Office
(in the case of Refunded Tranche A Cana |
