CONFORMED COPY
CREDIT AGREEMENT
AMONG
AGRILINK FOODS, INC.,
as Borrower
PRO-FAC COOPERATIVE, INC.
and certain other entities as Guarantors
AND
HARRIS TRUST AND SAVINGS BANK,
Individually and as Administrative Agent
AND
BANK OF MONTREAL, CHICAGO BRANCH,
Individually and as Syndication Agent
AND
THE LENDERS FROM TIME TO TIME PARTIES HERETO
Dated as of September 23, 1998
TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
SECTION 1. DEFINITIONS; INTERPRETATION OF AGREEMENT..............................................................1
Section 1.1. Definitions.......................................................................................1
Section 1.2. Accounting Terms.................................................................................16
SECTION 2. THE CREDIT FACILITIES................................................................................16
Section 2.1. The Revolving Credit.............................................................................16
Section 2.2. The Term Credits.................................................................................22
Section 2.3. Manner of Borrowing..............................................................................23
SECTION 3. INTEREST.............................................................................................24
Section 3.1. Options..........................................................................................24
Section 3.2. Base Rate Portion................................................................................25
Section 3.3. LIBOR Portions...................................................................................25
Section 3.4. Interest on Swing Loans..........................................................................25
Section 3.5. Computation......................................................................................26
Section 3.6. Minimum Amounts..................................................................................26
Section 3.7. Manner of Rate Selection.........................................................................26
Section 3.8. Funding Indemnity................................................................................26
Section 3.9. Change of Law....................................................................................27
Section 3.10. Unavailability of Deposits or Inability to Ascertain, or Inadequacy
of, LIBOR Rate...................................................................................27
Section 3.11. Increased Cost and Reduced Return................................................................28
Section 3.12. Lending Offices..................................................................................28
Section 3.13. Discretion of Banks as to Manner of Funding......................................................28
SECTION 4. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS...............................................29
Section 4.1. Commitment Fee...................................................................................29
Section 4.2. Letter of Credit Fees............................................................................29
Section 4.3. Administrative Agent's Fees......................................................................29
Section 4.4. Prepayments......................................................................................30
Section 4.5. Terminations.....................................................................................31
Section 4.6. Place and Application............................................................................32
Section 4.7. Notations and Requests...........................................................................34
Section 4.8. Capital Adequacy.................................................................................34
Section 4.10. Withholding Taxes................................................................................35
Section 4.11. Bank Replacement.................................................................................36
SECTION 5. THE COLLATERAL.......................................................................................37
Section 5.1. The Collateral...................................................................................37
Section 5.2. Further Assurances...............................................................................38
SECTION 6. REPRESENTATIONS AND WARRANTIES.......................................................................38
Section 6.1. Organization and Power...........................................................................38
Section 6.2. Subsidiaries.....................................................................................38
Section 6.3. Use of Proceeds; Regulation U....................................................................39
Section 6.4. Financial Reports................................................................................39
Section 6.5. Litigation and Taxes.............................................................................40
Section 6.6. Burdensome Contracts with Affiliates.............................................................40
Section 6.7. ERISA............................................................................................40
Section 6.8. Full Disclosure..................................................................................41
Section 6.9. Compliance with Law..............................................................................41
Section 6.10. Certain Contracts................................................................................41
Section 6.11. Stock Purchase Agreement Warranties..............................................................42
Section 6.12. Restrictive Agreements...........................................................................42
Section 6.13. No Default under Other Agreements................................................................42
Section 6.14. Status under Certain Laws........................................................................42
Section 6.15. Year 2000 Compliance.............................................................................42
Section 6.16. Solvency, Etc....................................................................................42
SECTION 7. CONDITIONS PRECEDENT.................................................................................43
Section 7.1. All Advances.....................................................................................43
Section 7.2. Initial Advance..................................................................................43
Section 7.3. Legal Matters....................................................................................46
SECTION 8. COVENANTS............................................................................................47
Section 8.1. Maintenance of Business..........................................................................47
Section 8.2. Maintenance......................................................................................47
Section 8.3. Taxes............................................................................................47
Section 8.4. Insurance........................................................................................47
Section 8.5. Financial Reports................................................................................48
Section 8.6. Compliance with Laws.............................................................................49
Section 8.7. Nature of Business...............................................................................49
Section 8.8. Liens............................................................................................49
Section 8.9. Indebtedness.....................................................................................50
Section 8.10. Consolidated Net Worth...........................................................................51
Section 8.11. Leverage Ratio...................................................................................51
Section 8.12. Fixed Charge Coverage Ratio......................................................................51
Section 8.13. EBITDA...........................................................................................52
Section 8.14. Interest Coverage Ratio..........................................................................52
Section 8.15. Net Capital Expenditures.........................................................................53
Section 8.16. Rentals..........................................................................................53
Section 8.17. Acquisitions, Investments, Loans and Advances and Guarantees.....................................53
Section 8.18. Restricted Payments..............................................................................55
Section 8.19. Mergers..........................................................................................55
Section 8.20. Sales of Assets..................................................................................56
Section 8.21. Burdensome Contracts with Affiliates.............................................................56
Section 8.22. No Change in Fiscal Year.........................................................................56
Section 8.23. Formation of Subsidiaries........................................................................56
Section 8.24. No Restriction on Subsidiary Dividends...........................................................57
Section 8.25. Interest Rate Protection.........................................................................57
Section 8.26. Concerning the Subordinated Debt.................................................................57
Section 8.27. Concerning the Marketing Agreement...............................................................57
Section 8.28. Year 2000 Assessment.............................................................................57
Section 8.29. Preservation of Cooperative Status...............................................................58
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.......................................................................58
SECTION 10. THE AGENT AND ISSUING BANK...........................................................................60
Section 10.1. Appointment and Authorization....................................................................60
Section 10.2. Rights as a Lender...............................................................................61
Section 10.3. Standard of Care.................................................................................61
Section 10.4. Costs and Expenses...............................................................................62
Section 10.5. Indemnity........................................................................................62
SECTION 11. THE GUARANTEES.......................................................................................63
Section 11.1. The Guarantees...................................................................................63
Section 11.2. Guarantee Unconditional..........................................................................63
Section 11.3. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances....................................................................................64
Section 11.4. Subrogation......................................................................................64
Section 11.5. Waivers..........................................................................................64
Section 11.6. Stay of Acceleration.............................................................................65
SECTION 12. MISCELLANEOUS........................................................................................65
Section 12.1. Waiver of Rights.................................................................................65
Section 12.2. Non-Business Day.................................................................................65
Section 12.3. Documentary Taxes................................................................................65
Section 12.4. Survival of Representations......................................................................65
Section 12.5. Set-off Sharing..................................................................................65
Section 12.6. Notices..........................................................................................66
Section 12.7. Counterparts.....................................................................................66
Section 12.8. Successors and Assigns...........................................................................66
Section 12.9. Participants.....................................................................................66
Section 12.10. Costs and Expenses...............................................................................67
Section 12.11. Construction.....................................................................................67
Section 12.12. Assignment Agreements............................................................................67
Section 12.13. Waivers, Modifications and Amendments............................................................68
Section 12.14. Entire Agreement.................................................................................69
Section 12.15. Headings.........................................................................................69
Section 12.16. Confidentiality..................................................................................69
Section 12.17. Jurisdiction.....................................................................................69
Section 12.18. Waiver of Jury Trial.............................................................................70
Section 12.19. Governing Law....................................................................................70
Exhibit A -- Revolving Credit Note
Exhibit B -- Swing Credit Note
Exhibit C -- A Credit Note
Exhibit D -- B Credit Note
Exhibit E -- C Credit Note
Exhibit F -- Compliance Certificate
Exhibit G -- Additional Guarantor Supplement
Exhibit H -- Subsidiaries
Exhibit I -- Existing Indebtedness
Exhibit J -- Existing Liens
Exhibit K -- Existing Investments, Loans and Advances
Exhibit L -- Scheduled Excluded Assets
Schedule 6.5 -- Disclosed Litigation
AGRILINK FOODS, INC.
CREDIT AGREEMENT
To the Agents and each of
the Lenders which are or
become Lenders under
this Agreement
Gentlemen:
The undersigned, Agrilink Foods, Inc., a New York corporation (the
"Company") applies to you for your several commitments, subject to all of the
terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth, to extend credit to the Company, all as more
fully hereinafter set forth.
SECTION 1. DEFINITIONS; INTERPRETATION OF AGREEMENT.
Section 1.1. Definitions. The following terms when used herein
shall have the following meanings, such terms to be equally applicable to both
the singular and the plural of the terms defined:
"A Credit Commitments" is defined is Section 2.2(a) hereof.
"A Credit Lenders" shall mean the Lenders which at the time have
unfunded A Credit Commitments or outstanding A Loans.
"A Credit Notes" defined in Section 2.2(a) hereof.
"Acquisition" shall mean the acquisition by the Company of all of the
outstanding capital stock of DFVC and BEMSA Holding, Inc., a Delaware
corporation ("BEMSA") and of the trademarks used in the businesses of DFVC and
BEMSA, the transfer by the Company to Dean Foods or a subsidiary thereof of the
asceptic business of the Company and the assets used in connection therewith and
the related transactions provided for in the Stock Purchase Agreement and the
Asset Transfer Agreement.
"Acquisition Closing Date" shall mean the date the Acquisition is
actually consummated.
"Additional Guarantor Documentation" shall mean the following, each
which shall be satisfactory in form and substance to the Administrative Agent:
(i) stock certificates representing 100% of the issued and
outstanding capital stock of such Guarantor which is owned by the
Parent or another Subsidiary, together with blank stock powers
therefor;
(ii) good standing certificates for such Guarantor issued by
its state of organization, issued not more than 30 days before the date
of its Additional Guarantor Supplement;
(iii) copies of the Certificates of Incorporation, and all
amendments thereto, of such Guarantor, certified by the Secretary of
State of its state of incorporation not more than 30 days before the
date of its Additional Guarantor Supplement;
(iv) copies of the by-laws, and all amendments thereto, of
such Guarantor, certified as true, correct and complete on the
effective date of its Additional Guarantor Supplement by the Secretary
or Assistant Secretary of such Guarantor;
(v) copies, certified as true, correct and complete by the
Secretary or Assistant Secretary of such Guarantor, of resolutions
regarding the transactions contemplated by this Agreement, duly adopted
by the Board of Directors or other governing body of such Guarantor;
(vi) an incumbency and signature certificate for such Guarantor;
(vii) evidence satisfactory to the Administrative Agent that
the Administrative Agent's security interests in the Collateral to be
provided by such Guarantor is prior to all other liens, security
interests and encumbrances thereon not permitted hereby or approved by
the Administrative Agent; and
(viii) legal matters incident to the execution and delivery of
the Additional Guarantor Supplement shall be satisfactory to the
Administrative Agent and its counsel and the Administrative Agent shall
have received the favorable written opinion of counsel for such
Guarantor in form and substance satisfactory to the Administrative
Agent.
"Additional Guarantor Supplement" is defined in Section 8.23.
"Adjusted LIBOR Rate" shall mean a rate per annum determined pursuant
to the following formula:
Adjusted LIBOR Rate = LIBOR Rate
100% - Reserve Percentage
"Administrative Agent" shall mean Harris and its successors as
administrative agent hereunder.
"Affiliate" shall mean, for any Person, any other Person (including all
directors and officers of such Person) that directly or indirectly controls, or
is under common control with, or is controlled by, such Person. As used in this
definition, "control" means the power, directly or indirectly, to direct or
cause the direction of the management or policies of a Person (through ownership
of voting securities, by contract or otherwise), provided that, in any event for
purposes of the definition any Person that owns directly or indirectly 10% or
more of the securities or other interests having ordinary voting power for the
election of directors of a corporation or 10% or more of the partnership or
other ownership interests of any other Person will be deemed to control such
corporation or other Person.
"Agents" shall mean the Administrative Agent and the Syndication Agent
and their successors hereunder.
"Aggregate Percentage" shall mean as to each Lender and as to each time
same is to be determined the percentage which the sum of its unutilized
Revolving Credit Commitment, outstanding balance of Revolving Credit Loans,
share of the risk incident to outstanding Letters of Credit, outstanding A
Loans, outstanding B Loans and outstanding C Loans bears to the aggregate of all
of the foregoing for all Lenders.
"Agreement" shall mean this Credit Agreement, as the same may be
amended, modified or restated from time to time.
"A Loans" is defined in Section 2.2(a) hereof.
"Applicable Margin" shall mean the rate per annum specified below for
the Leverage Ratio and type of Loan, Portion or fee for which the Applicable
Margin is being determined:
(a) with respect to the commitment fee, the Letter of Credit
fee called for by Section 4.2(a) hereof and each type of Portion of the
Revolving Credit Loans and the A
Loans described below, the rate per annum shown below for the range of
Leverage Ratio specified below:
LEVEL I LEVEL II LEVEL III LEVEL IV
Leverage Ratio 3.5 to 1 3.5 to 1 but 4.0 to 1 but 4.5 to 1
4.0 to 1 4.5 to 1
Base Rate Portion 0.00% 0.25% 0.75% 1.00%
LIBOR Portion & L/C Fee 1.75% 2.00% 2.50% 2.75%
Commitment Fee 0.40% 0.45% 0.50% 0.50%
(b) with respect to the B Loans, the Applicable Margin for
LIBOR Portions shall be 3.25% and for the Base Rate Portion shall be
2.25%; and
(c) with respect to the C Loans, the Applicable Margin for
LIBOR Portions shall be 3.50% and for the Base Rate Portion shall be
2.50%;
provided, however that the foregoing are subject to the following:
(i) the Leverage Ratio shall be determined as of the last day
of each fiscal quarter of the Parent commencing with the third fiscal
quarter of fiscal 1999, with any adjustment in the Applicable Margins
resulting from a change in such Leverage Ratio to be effective 5
Business Days after receipt by the Administrative Agent of the
financial statements for such quarter called for by Section 8.5(a),
provided that the Applicable Margins shall be those specified for Level
IV above for each day from and after the last date when such financial
statements were required to be delivered pursuant to Section 8.5(a) to
and including the date when such financial statements are actually
delivered pursuant to such section;
(ii) if and so long as any Event of Default has occurred and
is continuing, the Applicable Margins other than the Applicable Margin
for the commitment fee as otherwise computed hereunder shall be
increased by adding the rate of 2% per annum thereto; and
(iii) anything contained hereinabove to the contrary
notwithstanding, the Applicable Margins for the period from the
Acquisition Closing Date to the effective date (determined pursuant to
clause (a) above) of an adjustment in the Applicable Margins resulting
from a determination of the Leverage Ratio as of the last day of the
third fiscal quarter of fiscal 1999 shall be those specified above for
Level IV.
"Applications" is defined in Section 2.1(c)(iii) hereof.
"Asset Transfer Agreement" shall mean the Asset Transfer Agreement
dated as of July 24, 1998 by and between Dean Foods and the Company, as
amended as permitted hereby.
"Assignment Agreement" is defined in Section 12.12 hereof.
"Auditors" is defined in Section 8.5(b) hereof.
"Authorized Representative" shall mean those persons shown on the list of
officers provided by the Company pursuant to Section 7.2(a)(ii) hereof or on any
update of any such list provided by the Company to the Administrative Agent, or
any further or different officer of the Company so named by any Authorized
Representative of the Company in a written notice to the Administrative Agent.
"B Credit Commitments" is defined is Section 2.2(b) hereof.
"B Credit Lenders" shall mean the Lenders which at the time have unfunded B
Credit Commitments or outstanding B Loans.
"B Credit Notes" is defined in Section 2.2(b) hereof.
"Base Rate" shall mean for any day the rate of interest announced by Harris
from time to time as its prime commercial rate as in effect on such day, with
any change in the Base Rate resulting from a change in said prime commercial
rate to be effective as of the date of the relevant change in said prime
commercial rate (the "Harris Prime Rate"), provided that if the rate per annum
determined by adding 1/2 of 1% to the rate at which Harris would offer to sell
federal funds in the interbank market on or about 10:00 a.m. (Chicago time) on
any day (the "Fed Funds Rate") shall be higher than the Harris Prime Rate on
such day, then the Base Rate for such day and for any succeeding day which is
not a Business Day shall be such Fed Funds Rate. The determination of the Fed
Funds Rate by the Administrative Agent shall be final and conclusive provided it
has acted in good faith in connection therewith.
"Base Rate Portions" is defined in Section 3.1 hereof.
"B Loans" is defined in Section 2.2(b) hereof.
"Borrowing" shall mean the total of Loans of a single type made by all
the Lenders on a single date and, if such Loans are to be part of a LIBOR
Portion, for a single Interest Period.
"Business Day" shall mean any day (other than a Saturday or Sunday) on
which banks are open for business in Chicago, Illinois and, when used with
reference to LIBOR Portions, a day on which banks are also open for business and
dealing in United States Dollar deposits in London, England and Nassau, Bahamas.
"C Credit Commitments" is defined is Section 2.2(c) hereof.
"C Credit Lenders" shall mean the Lenders which at the time have
unfunded C Credit Commitments or outstanding C Loans.
"C Credit Notes" is defined in Section 2.2(c) hereof.
"Capitalized Lease" shall mean any lease or other agreement for the use
or possession of real or personal property the obligation for Rentals with
respect to which is required to be capitalized on a balance sheet of the lessee
in accordance with GAAP.
"Capitalized Rentals" shall mean as of the date of any determination
the amount at which the aggregate Rentals due and to become due under
Capitalized Leases under which the Company or any Subsidiary is a lessee will be
reflected as a liability on a consolidated balance sheet of the Company and its
Subsidiaries prepared in accordance with GAAP.
"Change of Control" shall mean the occurrence of either of the
following events: (i) any of the capital stock of the Company shall be owned,
either legally or beneficially, by any Person other than the Parent; or (ii) the
number of the directors of the Company who are not employees, shareholders (at
the time of becoming directors) or otherwise Affiliates (other than by reason of
being a director of the Company) of the Company or the Parent ("Disinterested
Directors") shall not at least equal the number of directors of the Company who
are not Disinterested Directors or (iii) more than 20% of the capital stock of
the Parent entitled at the time to vote for the election of directors shall be
owned or controlled by a Person or group of Persons acting in concert.
"Class of Notes" shall mean the Revolving Credit Notes as a group, the
A Credit Notes as a group, the B Credit Notes as a group, the C Credit Notes as
a group or the Swing Credit Note.
"C Loans" is defined in Section 2.2(c) hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean all properties, rights, interests and
privileges from time to time subject to the liens and security interests granted
to the Administrative Agent for the benefit of the Lenders by the Collateral
Documents.
"Collateral Documents" shall mean all mortgages, deeds of trust,
security agreements, assignments and other instruments and documents as shall
from time to time be executed and delivered by the Parent, the Company and/or
the Pledging Guarantors as collateral security for obligations of the Company
and/or the Guarantors under the Loan Documents.
"Commitments" shall mean the Revolving Credit Commitments, the A Credit
Commitments, the B Credit Commitments and the C Credit Commitments.
"Company" is defined in the introductory paragraph of this Agreement.
"Consolidated Net Income" for any period shall mean the gross revenues
from any source of the Parent and its Subsidiaries for such period less all
expenses and other proper charges determined for the Parent and its Subsidiaries
on a consolidated basis in accordance with GAAP but computed prior to giving
effect to gains and losses on the disposition of capital assets and other
extraordinary gains and losses (including the write off of debt issuance costs,
the payment of premiums on the retirement of Indebtedness and gains resulting
from pension reversions) as determined in accordance with GAAP.
Consolidated Net Working Capital" shall mean as of any time the same is
to be determined, the excess for the Parent and its Subsidiaries on a
consolidated basis of current assets over current liabilities as determined and
computed in accordance with GAAP.
"Consolidated Net Worth" shall mean, as of any date, the common stock
and the total shareholders' and members' capitalization of the Parent and its
Subsidiaries each computed on a consolidated basis in a manner consistent with
that used in the preparation of the Parents' audited consolidated balance sheet
for the fiscal year ended June 27, 1998 and heretofore delivered to the Lenders.
"Consolidated Total Indebtedness" shall mean all Indebtedness of the
Parent and its Subsidiaries determined on a consolidated basis in accordance
with GAAP.
"Dean Foods" shall mean Dean Foods Company, a Delaware corporation.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"DFVC" shall mean Dean Foods Vegetable Company, a Wisconsin
corporation.
"EBITDA" shall mean, with reference to any period, Consolidated Net
Income for such period plus all amounts deducted in arriving at such
Consolidated Net Income in respect of (i) Interest Expense, (ii) taxes imposed
on or measured by income or excess profits, and (iii) all charges for
depreciation of fixed assets and amortization of intangibles, all determined in
accordance with GAAP.
"Equity Offering" shall mean a public offering, private placement or
other issuance or sale of the capital stock or other equity interests (or of
warrants, options or other rights therefor) of the Parent or any of its
Subsidiaries; provided that the issuance by the Parent of common stock to its
producer members in accord with past practice shall not constitute an Equity
Offering.
"ERISA" is defined in Section 6.7 hereof.
"Event of Default" shall mean any of the events specified in Section
9.1 hereof.
"Excess Cash Flow" shall mean for the Parent and its Subsidiaries on a
consolidated basis for any period for which the same is to be computed, EBITDA
for such period less the sum for such period of regularly scheduled principal
payments and voluntary prepayments made on Indebtedness (other than principal
payments made on Revolving Credit Loans and on any other loans if and to the
extent that the borrower has the contractual right to reborrow the funds so
paid) paid during such period, Interest Expense paid in cash during such period,
cash payments of income and similar taxes paid during such period, Net Capital
Expenditures funded during such period (other than such thereof as are funded
out of the proceeds of Indebtedness) and Restricted Payments paid during such
period and minus the amount of any increase and plus the amount of any decrease
in Consolidated Net Working Capital between the first day of such period and the
last day of such period.
"Excluded Assets" is defined in Section 5.1 hereof.
"Existing Subordinated Notes" shall mean the 12-1/4% Senior
Subordinated Notes due 2005 of the Company issued under an indenture dated as of
November 3, 1994 by and among PF Acquisition Corp. (a predecessor to the
Company) as Issuer, the Parent as Guarantor and IBJ Schroeder Bank & Trust
Company as Trustee (the "Existing Subordinated Notes Indenture").
"Fed Funds Rate" shall mean the fluctuating interest rate per annum
described in the proviso to the definition of the definition of Base Rate.
"Fixed Charge Coverage Ratio" shall mean as of any time the same is to
be determined the ratio for the period of four consecutive fiscal quarters then
ending of (a) EBITDA less Net Capital Expenditures (if positive) to (b) the sum
for such period of Interest Expense, regular payments of principal on
Consolidated Total Indebtedness which are scheduled to become due during the
period of four consecutive fiscal quarters commencing on the day after the date
of determination (provided that principal payments on the note payable to Duane
Packer shown on Exhibit I shall be excluded) and dividends paid by the Parent
during such period, all computed on a consolidated basis for the Parent and its
Subsidiaries. The foregoing to the contrary notwithstanding, the computation of
the Fixed Charge Coverage Ratio as of the close of the second fiscal quarter of
fiscal 1999 shall be made for the fiscal quarter then ending, the computation
thereof as of the third fiscal quarter of fiscal 1999 shall be made for the
period of two consecutive fiscal quarters then ending and the computation
thereof as of the close of the fourth fiscal quarter of fiscal 1999 shall be
made for the period of three consecutive fiscal quarters then ending.
"Fixed Fed Funds Swing Loan" is defined in Section 3.4 hereof.
"Fixed Fed Funds Rate" shall mean with respect to each Fixed Fed Funds
Swing Loan, the rate of interest per annum as determined by the Swing Lender at
which term federal funds would be offered by the Swing Lender on the first day
of such Fixed Fed Funds Swing Loan to major banks in the interbank market upon
request by such major banks for a period equal to the term of such Fixed Fed
Funds Swing Loan and in an amount equal to the principal amount of such Fixed
Fed Funds Swing Loan. Each determination of the Fixed Fed Funds Rate made by the
Swing Lenders in accordance with this paragraph shall be conclusive and binding
on the Company except in the case of manifest error or willful misconduct.
"Foreign Subsidiaries" shall mean all Subsidiaries of the Parent
organized and existing under laws other than those of the United States of
America or a political subdivision thereof and conducting substantially all of
their business, and having substantially all of their assets, outside of the
United States of America.
"GAAP" shall mean generally accepted accounting principles set forth in
the 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 that are applicable
to the circumstances as of the date of determination and consistently applied.
"Governmental Body" shall mean the United States of America or any
state or political subdivision thereof, and any other nation or political
subdivision thereof or any agency, department, commission, board, bureau or
instrumentality of any of the foregoing which exercises jurisdiction over the
Parent or any of its Subsidiaries or any of their assets or the conduct of the
business of the Parent or any of its Subsidiaries or any of their assets in any
such jurisdiction.
"Governmental Requirements" shall mean any law, ordinance, order, rule
or regulation of a Governmental Body.
"Guarantors" shall mean the Parent and all Subsidiaries of the Parent
in each instance whether now owned and existing or hereafter formed or acquired
other than (i) Subsidiaries of the Parent whose aggregate assets, revenues and
net income comprise less than 2% of the assets, revenues and net income of the
Parent and Subsidiaries taken as a whole and (ii) Foreign Subsidiaries.
"Harris" shall mean Harris Trust and Savings Bank, an Illinois banking
corporation.
"Hedging Liability" shall mean liabilities of the Company to the
Lenders or any of them or to any of their Affiliates arising in connection with
the interest rate hedging activities constituting part of the Hedging Program.
"Hedging Program" is defined in Section 8.25 hereof.
"Indebtedness" shall mean and include (but without duplication) all
obligations of the Person in question of the following types, determined in
accordance with GAAP: (i) obligations (whether recourse or non recourse) for
borrowed money or for the deferred purchase price of, or which have been
incurred in connection with the acquisition of, Property other than current
accounts payable, (ii) obligations of others of the type described in clause (i)
secured by any lien or other charge upon Property owned by the Person in
question, even though such Person has not assumed or become liable for the
payment of such obligations, (iii) obligations payable over a period in excess
of one year to acquire Property or to obtain the services of another Person if
the contract requires that payment for such Property or services be made
regardless of whether such Property is delivered or such services are performed,
(iv) Capitalized Rentals of such Person, (v) obligations in respect of letters
of credit and banker's acceptances and (vi), all liabilities of others of the
type referred to in clauses (i), (ii), (iii), (iv) and (v) above which are
directly or indirectly guaranteed by such Person, or as to which it has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which it has otherwise assured a creditor against loss.
"Interest Coverage Ratio" shall mean, as of any date, the ratio of
EBITDA of the Parent and its Subsidiaries for the four fiscal quarters ended on
such date to Interest Expense for the same period except that, provided,
however, that the calculation of the close of the second fiscal quarter of
fiscal 1999 shall be made for the fiscal quarter ended on such date, the
calculation as of the close of the third fiscal quarter of fiscal 1999 shall be
made for the period of two fiscal quarters ended on such date and the
calculation as of the close of the fourth fiscal quarter of fiscal 1999 shall be
made for the period of three consecutive fiscal quarters ended on such date.
"Interest Expense" shall mean with reference to any period all interest
charges (excluding amortization of debt discount and expense and debt issuance
expense and interest payable at the option of the obligor in securities of the
same ranking but including imputed interest on Capitalized Leases, except that
if and so long as imputed interest on Capitalized Leases is less than $250,000
per annum it may be excluded from Interest Expense) accrued for such period,
whether or not paid, all as computed on a consolidated basis for the Parent and
its Subsidiaries in accordance with GAAP except as expressly provided for above.
"Interest Period" shall mean with respect to any LIBOR Portion:
(a) initially, the period commencing on, as the case may be,
the creation or conversion date with respect to such LIBOR Portion and
ending one, two, three or six months thereafter as selected by the
Company in its notice as provided for herein; and
(b) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Portion
and ending one, two, three or six months thereafter as selected by the
Company in its notice as provided for herein;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, that Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) no Interest Period may extend beyond the final maturity
date of the applicable Notes;
(iii) the interest rate to be applicable to each Portion for
each Interest Period shall apply from and including the first day of
such Interest Period to but excluding the last day thereof;
(iv) no Interest Period may be selected if after giving effect
thereto the Company will be unable to make a principal payment
scheduled to be made during such Interest Period without paying part of
a LIBOR Portion on a date other than the last day of the Interest
Period applicable thereto; and
(v) unless and until the Syndication Agent has advised the
Company that its syndication of the credit facilities provided for
herein is complete or the Syndication Agent otherwise agrees, Interest
Periods may not be longer than one month and shall be co-terminus and
may be of any shorter duration which is acceptable to the Company and
the Lenders.
For purposes of determining an Interest Period, a month means a period
starting on one day in a calendar month and ending on the numerically
corresponding day in the next calendar month, provided, however, if an Interest
Period begins on the last day of a month or if there is no numerically
corresponding day in the month in which an Interest Period is to end, then such
Interest Period shall end on the last Business Day of such month.
"Issuing Bank" shall mean Harris and its successors as letter of credit
issuer hereunder.
"Lenders" shall mean the Revolving Credit Lenders, the A Credit
Lenders, the B Credit Lenders and the C Credit Lenders.
"Letters of Credit" is defined in Section 2.1(c)(i) hereof.
"Leverage Ratio" shall mean, as of any time the same is to be
determined, the ratio of (a) Consolidated Total Indebtedness (other than
Seasonal Debt and liabilities in respect of undrawn letters of credit supporting
insurance and self insurance obligations of the Company and its Subsidiaries and
supporting payment by the Company and its Subsidiaries for goods and services in
the ordinary course of business) as of such time to (b) EBITDA for the period of
twelve calendar months most recently concluded, with EBITDA for any period prior
to the Acquisition Closing Date computed as though DFVC were then a Subsidiary
and the Company had not owned its asceptic business.
"LIBOR Index Rate" shall mean, for any Interest Period applicable to a
LIBOR Portion, the rate per annum (rounded upwards, if necessary, to the next
higher one hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a period equal to such Interest Period, which appears on the
Telerate Page 3750 as of 11:00 a.m. (London, England time) on the day two
Business Days before the commencement of such Interest Period.
"LIBOR Portion" is defined in Section 3.1 hereof.
"LIBOR Rate" shall mean for each Interest Period applicable to a LIBOR
Portion, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic
average of the rates of interest per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) at which deposits in U.S. Dollars in immediately
available funds are offered to the Administrative Agent at 11:00 a.m. (London,
England time) two (2) Business Days before the beginning of such Interest Period
by three (3) or more major banks in the interbank eurodollar market selected by
the Administrative Agent for a period equal to such Interest Period and in an
amount equal or comparable to the principal amount of the LIBOR Portion
scheduled to be made by the Administrative Agent during such Interest Period.
"Loan Documents" shall mean this Agreement, the Notes, the Applications,
the Collateral Documents, all documents under which the Hedging Liability
arises, and each of the other instruments and documents to be delivered
hereunder or thereunder or otherwise in connection therewith.
"Marketing Agreement" shall mean the Marketing and Facilitation Agreement
dated as of November 3, 1994 by and between Pro-Fac and the Company (then known
as Curtice-Burns Foods, Inc.) as amended by the Amendment to the Marketing and
Facilitation Agreement effective as of September 23, 1998 and as further amended
as permitted hereby.
"Material Adverse Effect" shall mean a material adverse effect on (i) the
business, property, condition (financial or otherwise), or results of operations
of the Parent and its Subsidiaries taken as a whole, (ii) the ability of the
Parent or any Subsidiary to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Administrative Agent, Issuing Bank or of the Lenders
thereunder or of the Marketing Agreement, Stock Purchase Agreement or Asset
Transfer Agreement.
"Merger" shall mean the merger of DFVC with and into the Company, with the
Company being the surviving corporation.
"Net Capital Expenditures" shall mean for any period all sums paid by the
Parent and its Subsidiaries to acquire assets which payments are not to be
treated as expenses in accordance with GAAP less up to $10,000,000 of the net
cash proceeds received by the Parent and its Subsidiaries from the sale or other
disposition of capital assets during the same period, except that Permitted
Acquisitions shall be excluded from Net Capital Expenditures.
"Notes" shall mean the Revolving Credit Notes, the Swing Credit Note, the A
Credit Notes, the B Credit Notes and the C Credit Notes.
"Offered Rate Swing Loan" is defined in Section 3.4 hereof..
"Parent" shall mean Pro-Fac Cooperative, Inc., a New York agricultural
cooperative corporation.
"Permitted Acquisition" shall mean an acquisition permitted by Section
8.17(g) hereof.
"Permitted Liens" is defined in Section 8.8 hereof.
"Person" shall mean any individual, trust, partnership, firm, corporation,
limited liability company, association, unincorporated organization or any other
entity or organization, including a government or agency or political
subdivision thereof.
"Pledging Guarantors" shall mean all Guarantors which are not Foreign
Subsidiaries or the Parent.
"Portion" is defined in Section 3.1 hereof.
"Property" shall mean all assets and properties of any nature whatsoever,
whether real or personal, tangible or intangible, including without limitation
intellectual property.
"Rentals" shall mean and include all rents (including such payments which
the lessee is obligated to make to the lessor on termination of the lease or
surrender of the Property) payable by the Parent or its Subsidiaries as lessee
or sub-lessee under a lease or other agreement for the use or possession of real
or personal property but shall be exclusive of any amounts required to be paid
by the Parent or any Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance, taxes and
similar charges. Rentals shall be computed for the Parent and Subsidiaries on a
consolidated basis.
"Required Lenders" shall mean Lenders which, taken together, hold (i) 51%
or more in aggregate amount of the sum of (aa) the Revolving Credit Commitments
or, if the Revolving Credit Commitments have terminated or expired, of the
Revolving Credit Loans (treating the Swing Loans as though they had been ratably
refunded by Revolving Credit Loans) and the credit risk incident to the Letters
of Credit, and (ab) the A Loans and (ac) 51% or more in aggregate amount of the
sum of the B Loans and the C Loans.
"Required Revolving Credit Lenders" shall mean Revolving Credit Lenders
with Revolving Credit Percentages aggregating at least 51%.
"Reserve Percentage" shall mean the daily arithmetic average maximum rate
at which reserves (including, without limitation, any supplemental, marginal and
emergency reserves) are imposed on member banks of the Federal Reserve System
during the applicable Interest Period by the Board of Governors of the Federal
Reserve System (or any successor) under Regulation D on "eurocurrency
liabilities" (as such term is defined in Regulation D), subject to any
amendments of such reserve requirement by such Board or its successor, taking
into account any transitional adjustments thereto. For purposes of this
definition, the LIBOR Portions shall be deemed to be eurocurrency liabilities as
defined in Regulation D without benefit or credit for any prorations, exemptions
or offsets under Regulation D. The Adjusted LIBOR Rate shall automatically be
adjusted as of the date of any change in the Eurodollar Reserve Percentage.
"Restricted Payments" is defined in Section 8.18.
"Revolving Credit" shall mean the credit facility established by Section
2.1 hereof.
"Revolving Credit Commitments" is defined in Section 2.1(a).
"Revolving Credit Lender" shall mean each Lender from time to time having a
Revolving Credit Commitment or outstanding Revolving Credit Loans or a risk
participation in the Letters of Credit.
"Revolving Credit Loans" is defined in Section 2.1(b).
"Revolving Credit Notes" is defined in Section 2.1(b).
"Revolving Credit Percentage" shall mean the percentage which a Revolving
Credit Lender's unused Revolving Credit Commitment, outstanding Revolving Credit
Loans and its participated share of the risk incident to outstanding Letters of
Credit bears to the aggregate of the foregoing for all Revolving Credit Lenders.
Solely for the purpose of computing the foregoing and the Aggregate Percentages,
outstanding Swing Loans shall be treated as though they were Revolving Credit
Loans made pro rata from the Revolving Credit Lenders in accordance with the
respective amounts of their Revolving Credit Commitments.
"Seasonal Debt" shall mean Indebtedness for money borrowed of the Parent
and its Subsidiaries (computed on a consolidated basis) incurred to meet their
seasonal working capital needs provided that (i) no Indebtedness shall be
treated as Seasonal Debt during the last fiscal quarter of each fiscal year and
(ii) the aggregate amount of Indebtedness included in Seasonal Debt as of the
last day of each first fiscal quarter of the Parent (ending on or about
September 30) shall not exceed $150,000,000, the aggregate amount of
Indebtedness included in Seasonal Debt as of the last day of the second fiscal
quarter of the Parent (ending on or about December 31 of each year) shall not
exceed $175,000,000 and the aggregate amount of Indebtedness included in
Seasonal Debt as of the last day of the third fiscal quarter of the Parent
(ending on or about March 31 of each year) shall not exceed $125,000,000.
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement dated as
of July 24, 1998 by and between Dean Foods and the Company as amended as
permitted hereby.
"Subordinated Bridge Loan" shall mean a loan in the amount of $200,000,000
maturing on September 23, 1999 made to the Company pursuant to the Senior
Subordinated Credit Agreement dated as of September 23, 1998 among the Company,
the Guarantors, Warburg Dillon Read LLC as Arranger and Syndication Agent, UBS
AG, Stanford Branch as Administrative Agent and the lenders named therein (the
"Bridge Credit Agreement").
"Subordinated Debt" shall mean (i) the Subordinated Bridge Loan and (ii)
any other Indebtedness of the Company and guaranties thereof by the Guarantors
which are subject to and subordinate in right of payment to the prior payment of
the Parents' and its Subsidiaries' indebtedness and obligations under the Loan
Documents pursuant to written subordination provisions acceptable to the
Required Lenders, having other terms and conditions acceptable to the Required
Lenders, maturing no earlier than September 30, 2006 and bearing interest at an
interest rate approved by the Required Lenders provided that, no such consent
shall be required if (y) the net proceeds of such Indebtedness will be used to
refinance, in whole or in part, the Subordinated Bridge Loan and (z) (A) such
indebtedness contains no covenants requiring the maintenance of particular
levels of financial or balance sheet condition or of financial performance or of
other financial ratios, (B) the subordination provisions and events of default
contained in such Indebtedness are not materially worse to the Borrower or the
Lenders than the terms contained in the Subordinated Bridge Loan, (C) the terms
of any limitation on Indebtedness will not restrict Revolving Credit Borrowings
under the terms of this Agreement as amended (but not amendments increasing any
of the Commitments), (D) such Indebtedness matures no earlier than September 30,
2006 and (E) bearing except for a conversion of the Subordinated Bridge Loan
into a term loan pursuant to the Bridge Credit Agreement (such term loan to bear
interest as provided for in the Bridge Credit Agreement as originally executed
and delivered) interest at a rate not in excess of 15% per annum, with not more
than interest at the rate of 13% per annum payable in cash, and with the
remainder of such interest being payable only through the issuance of
subordinated payment in kind securities satisfying the foregoing requirements.
"Subsidiary" shall mean, any corporation or other entity of which more
than fifty percent (50%) of the outstanding stock or comparable equity interests
having ordinary voting power for the election of the Board of Directors of such
corporation or similar governing body in the case of a non-corporation
(irrespective of whether or not, at the time, stock or other equity interests of
any other class or classes of such corporation or other entity shall have or
might have voting power by reason of the happening of any contingency which has
not occurred) is at the time directly or indirectly owned by the Person in
question or by one or more of its Subsidiaries. Unless the context otherwise
requires, references herein to Subsidiaries shall be references to Subsidiaries
of the Parent.
"Swing Credit Note" is defined in Section 2.1(d) hereof.
"Swing Lender" shall mean Harris and any successor thereto as swing lender
hereunder.
"Swing Loans" is defined in Section 2.1(d).
"Syndication Agent" shall mean Bank of Montreal in its capacity as such.
"Telerate Page 3750" shall mean the display designated as "Page 3750" on
the Telerate Service (or such other page as may replace Page 3750 on that
service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar deposits).
"Term Loans" shall mean the A Loans, the B Loans and the C Loans.
"Termination Date" shall mean September 30, 2003, or such earlier date on
which the Commitments are terminated in whole pursuant to Section 4.5 or Section
9 hereof.
"Withholding Taxes" is defined in Section 4.9 hereof.
"Year 2000 Problem" shall mean any significant risk that computer hardware,
software, or equipment containing embedded microchips essential to the business
or operations of the Parent or any of its Subsidiaries will not, in the case of
dates or time periods occurring after December 31, 1999, function at least as
efficiently and reliably as in the case of times or time periods occurring
before January 1, 2000, including the making of accurate leap year calculations.
Capitalized terms defined in any provision of this Agreement shall have the
meanings so ascribed to them in all provisions of this Agreement.
Section 1.2. Accounting Terms. For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to such terms in conformity with GAAP. Financial statements and other
information furnished to the Administrative Agent pursuant to Section 8.5 shall
be prepared in accordance with GAAP (as in effect at the time of such
preparation) on a consistent basis. In the event any "Accounting Changes" (as
defined below) shall occur and such changes affect financial covenants,
standards or terms in this Agreement, then the Parent, the Company, the
Administrative Agent and the Lenders agree to enter into negotiations in order
to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating the
financial condition of the Parent and its Subsidiaries shall be the same after
such Accounting Changes as if such Accounting Changes had not been made, and
until such time as such an amendment shall have been executed and delivered by
the Company, the Guarantors and the Required Lenders, (A) all financial
covenants, standards and terms in this Agreement shall be calculated and/or
construed as if such Accounting Changes had not been made, and (B) the Company
shall prepare footnotes to each compliance certificate and the financial
statements required to be delivered hereunder that show the differences between
the financial statements delivered (which reflect such Accounting Changes) and
the basis for calculating financial covenant compliance (without reflecting such
Accounting Changes). "Accounting Changes" means: (a) changes in accounting
principles required by GAAP since the close of the Parent's 1998 fiscal year and
implemented by the Parent or any of its Subsidiaries; (b) changes in accounting
principles recommended by certified public accountants of the Parent or any of
its Subsidiaries; and (c) changes in carrying value of the Parents' (or any of
its Subsidiaries') assets, liabilities or equity accounts resulting from the
application of purchase accounting principles. All references herein to fiscal
years, fiscal quarters or fiscal periods shall, unless the context otherwise
requires, be references to fiscal years, fiscal quarters or fiscal periods of
the Parent.
SECTION 2. THE CREDIT FACILITIES.
Section 2.1. The Revolving Credit.
(a) General Terms. Subject to all of the terms and conditions hereof, the
Revolving Credit Lenders agree to extend a Revolving Credit to the Company which
may be availed of by the Company from time to time, be repaid and used again,
during the period from the date hereof to the Termination Date. The Revolving
Credit may be utilized by the Company in the form of Loans or Letters of Credit,
all as more fully hereinafter set forth, provided that (i) the aggregate amount
of Revolving Credit Loans, Swing Loans and Letters of Credit outstanding at any
one time shall not exceed the Revolving Credit Commitments (ii) the aggregate
amount of Letters of Credit outstanding at any one time shall not exceed
$40,000,000 through November 30, 1998 or $25,000,000 thereafter or, if less in
any instance, the aggregate Revolving Credit Commitments then in effect and
(iii) the aggregate amount of Swing Loans outstanding at any one time shall not
exceed $15,000,000 or, if less, the aggregate Revolving Credit Commitments then
in effect. The maximum amount of the Revolving Credit which each Revolving
Credit Lender agrees to extend hereunder shall be as set forth under the heading
"Revolving Credit Commitment" opposite its signature hereto or on an Assignment
Agreement to which it is a party and as the same is reduced from time to time
pursuant hereto (its "Revolving Credit Commitment"). The obligations of the
Revolving Credit Lenders hereunder are several and not joint and no Revolving
Credit Lender shall under any circumstance be obligated to extend credit under
the Revolving Credit in excess of its Revolving Credit Commitment or its
Revolving Credit Percentage of the credit outstanding thereunder.
(b) Revolving Credit Loans. Subject to all of the terms and
conditions hereof, the Revolving Credit may be availed of by the Company in the
form of Loans made pursuant to this Section 2.1(b) (individually a "Revolving
Credit Loan" and collectively the "Revolving Credit Loans"). Each Borrowing of
Revolving Credit Loans shall be in a minimum amount of $15,000,000 and
thereafter in integral multiples of $1,000,000 and shall be made pro rata from
the Revolving Credit Lenders in accordance with the amounts of their Revolving
Credit Percentages. All Revolving Credit Loans made by each Revolving Credit
Lender shall be made against and evidenced by a Revolving Credit Note
(individually a "Revolving Credit Note" and collectively the "Revolving Credit
Notes") in the form (with appropriate insertions) annexed hereto as Exhibit A.
Each Revolving Credit Note shall mature on the Termination Date.
(c) Letters of Credit.
(i) General Terms. Subject to all of the terms and conditions hereof,
the Revolving Credit may be availed of by the Company in the form of
letters of credit issued to Persons other than Affiliates of the Company
(the "Letters of Credit"). The amount of any Letter of Credit for all
purposes of this Agreement shall be the maximum amount which could be drawn
thereunder under any circumstances and over any period of time plus all
unreimbursed drawings then outstanding with respect thereto. The Issuing
Bank shall issue the Letters of Credit for the account of the Revolving
Credit Lenders and, accordingly, each Letter of Credit shall be deemed to
utilize a pro rata share of the Revolving Credit Commitment of each
Revolving Credit Lender.
(ii) General Characteristics. Each Letter of Credit issued hereunder
shall expire or be terminable by the Issuing Bank within one year of the
date of issuance but not later than the Termination Date. Each Letter of
Credit issued hereunder shall conform to the general requirements of the
Issuing Bank for the issuance of letters of credit as to form and
substance, shall be a letter of credit which the Issuing Bank may lawfully
issue and shall be governed by the Uniform Customs and Practices for
Documentary Credits, 1993 Revision (International Chamber of Commerce
Publication 500) or any successor thereto acceptable to the Issuing Bank.
If the Issuing Bank issues any Letter of Credit with an expiration date
that is automatically extended unless such Issuing Bank gives notice that
the expiration date will not so extend beyond its then scheduled expiration
date, the Issuing Bank will give notice of such non-renewal before the time
necessary to prevent such automatic extension if before such required
notice date (aa) the expiration date of such Letter of Credit if so
extended would be after the Termination Date then in effect, (ab) the
Revolving Credit Commitments have been terminated, or (ac) a Default or an
Event of Default exists and the Required Lenders have given the Issuing
Bank instructions not to so permit the extension of the expiration date of
such Letter of Credit.
(iii) Applications and Agreements. At the time the Company requests a
Letter of Credit to be issued (or prior to the first issuance of a Letter
of Credit, in the case of a continuing application), it shall execute and
deliver to the Issuing Bank an application for such Letter of Credit in the
form then prescribed by the Issuing Bank (the "Applications"). Anything
contained in the Applications to the contrary notwithstanding (aa) the
Company shall pay fees in connection with Letters of Credit only as set
forth in Section 4 hereof, (ab) in the event that the Issuing Bank is not
promptly reimbursed for the amount of any draft drawn under a Letter of
Credit issued hereunder after notice to the Company that such draft has
been received, the obligation of the Company to reimburse the Issuing Bank
for the amount of such draft shall bear interest (which the Company hereby
promises to pay) from and after the date the draft is paid at a fluctuating
rate per annum equal to the sum of the Base Rate from time to time in
effect plus the Applicable Margin for the Revolving Credit Base Rate
Portion as from time to time in effect, (ac) so long as no Event of Default
has occurred and is continuing, the Issuing Bank will not call for
additional collateral security for the obligations of the Company under the
Applications other than the collateral security contemplated by this
Agreement, and (ad) so long as no Event of Default has occurred and is
continuing, the Issuing Bank will not call for the funding of a Letter of
Credit prior to being presented with a draft or demand for payment
thereunder (or, in the event the draft is a time draft, prior to its due
date). Reimbursement of a drawing paid under a Letter of Credit shall be
made to the Issuing Bank (with notice to the Administrative Agent) by no
later than 1:00 p.m. (Chicago time) on the date when such drawing is paid
and any payment of a reimbursement obligation relating to a Letter of
Credit received after such time shall be deemed to have been received by
the Issuing Bank on the next Business Day.
(iv) Change in Laws. If the Issuing Bank or any Revolving Credit
Lender shall determine in good faith that any applicable law, regulation or
guideline (including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System) or any interpretation of any of
the foregoing by any governmental authority charged with the administration
thereof or any central bank or other fiscal, monetary or other authority
having jurisdiction over the Issuing Bank or such Revolving Credit Lender
(whether or not having the force of law) shall after the date hereof:
(aa) impose, modify or deem applicable any reserve, special
deposit or similar requirements against the Letters of Credit or the
Issuing Bank's or such Revolving Credit Lender's or the Company's
liability with respect thereto; or
(bb) impose on the Issuing Bank or such Revolving Credit Lender
any penalty with respect to the foregoing or any other condition
regarding this Agreement, the Applications or the Letters of Credit;
and the Issuing Bank or such Revolving Credit Lender shall determine in
good faith that the result of any of the foregoing is to increase the
cost (whether by incurring a cost or adding to a cost) to the Issuing
Bank or such Revolving Credit Lender of issuing, maintaining or
participating in the Letters of Credit hereunder (without benefit of,
or credit for, any prorations, exemptions, credits or other offsets
available under any such laws, regulations, guidelines or
interpretations thereof), then the Company shall pay within fifteen
(15) days following demand by the Issuing Bank or such Revolving Credit
Lender from time to time as specified by the Issuing Bank or such
Revolving Credit Lender such additional amounts as the Issuing Bank or
such Revolving Credit Lender shall in good faith determine are
sufficient to compensate and indemnify it for such increased cost. If
the Issuing Bank or any Revolving Credit Lender makes such a claim for
compensation, it shall provide to the Company and the Administrative
Agent a written explanation of the circumstances giving rise to such
claim and a certificate setting forth such increased costs as a result
of any event mentioned herein in reasonable detail and such certificate
shall be deemed prima facie correct.
(v) Participations in Letters of Credit. Each Revolving Credit
Lender shall participate on a pro rata basis based on its Revolving
Credit Percentage in the Letters of Credit issued by the Issuing Bank,
which participation shall automatically arise upon the issuance of
each such Letter of Credit (such participations to ratably (based on
the Revolving Credit Percentages) count against the Revolving Credit
Commitments of the Revolving Credit Lenders when the Letters of Credit
are issued). Each Revolving Credit Lender unconditionally agrees that
whether or not a Default or Event of Default has occurred and is
continuing, in the event the Issuing Bank is not immediately
reimbursed by the Company for the amount paid by the Issuing Bank on
any draft presented to it under a Letter of Credit issued by it, then
the Issuing Bank shall give prompt notice thereof to each Revolving
Credit Lender and in that event each Revolving Credit Lender shall
thereafter pay to the Issuing Bank an amount equal to such Revolving
Credit Lender's Revolving Credit Percentage of such unpaid
reimbursement obligation, such payment to be made in immediately
available funds at the Issuing Bank's lending office designated on its
signature page hereof (or on an Assignment Agreement delivered
pursuant to Section 12.12 hereof), together with interest on such
amount accrued from the date the related payment was made by the
Issuing Bank to the date of such payment by such participating
Revolving Credit Lender at a rate per annum equal to (x) from the date
the related payment was made by the Issuing Bank or, if later, the
date of the Issuing Bank's notice thereof to such Revolving Credit
Lender, to the date two (2) Business Days after payment by such Bank
is due hereunder, the Fed Funds Rate for each such day and (y) from
the date two (2) Business Days after the date such payment is due from
such Bank to the date such payment is made by such Bank, the Base Rate
plus the Applicable Margin for the Revolving Credit Base Rate Portion
in effect for each such day. In the event that any Revolving Credit
Lender fails to honor its obligation to reimburse the Issuing Bank for
its pro rata share of the amount of any such draft, then in that event
the defaulting Revolving Credit Lender shall have no right to
participate in any recoveries from the Company in respect of such
draft, and (without limiting the other rights of the Issuing Bank
against such defaulting Revolving Credit Lender) all amounts to which
the defaulting Revolving Credit Lender would otherwise be entitled
under the terms of this Agreement shall first be applied to
reimbursing the Issuing Bank for the defaulting Revolving Credit
Lender's portion of the draft, together with interest thereon at the
rate provided for herein. Upon reimbursement to the Issuing Bank
(pursuant to the above or otherwise) of the amount due it in respect
of the defaulting Revolving Credit Lender's share of the draft,
together with interest thereon, the defaulting Revolving Credit Lender
shall thereupon be entitled to its participation in such Issuing
Bank's rights of recovery against the Company in respect of the draft
paid by the Issuing Bank.
(vi) Payment and Reimbursement. The responsibility of the Issuing
Bank to the Company and the Revolving Credit Lenders shall be only to
determine that the documents (including each draft) delivered under
each Letter of Credit in connection with each presentment thereunder
shall be in conformity in all material respects with such Letter of
Credit. The Company's obligation to reimburse the Issuing Bank for
drafts paid under Letters of Credit shall be absolute and
unconditional under any and all circumstances and irrespective of the
occurrence of any Default or Event of Default or any condition
precedent whatsoever or any setoff, counterclaim or defense to payment
which the Company may have or have had against the Administrative
Agent, any Lender or any beneficiary of a Letter of Credit. The
Company further agrees that the Issuing Bank and the Revolving Credit
Lenders shall not be responsible for, and the Company's reimbursement
obligations shall not be affected by, among other things, the validity
or genuineness of documents or of any endorsements thereon, even if
such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among any of
the Company, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be
transferred or any claims or defenses whatsoever of the Company
against the beneficiary of any Letter of Credit or any such
transferee. The Issuing Bank and the Revolving Credit Lenders shall
not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit.
(d) Swing Loans. Subject to all of the terms and conditions hereof, the
Revolving Credit may be availed of by the Company in the form of Loans made
pursuant to this Section 2.1(d) ("Swing Loans") which shall be made available to
the Company by the Swing Lender. Each Swing Loan shall be in a minimum amount of
$250,000 unless the Swing Lender otherwise approves and the aggregate principal
balance of Swing Loans at any one time outstanding shall not exceed the lesser
of $15,000,000 or the amount of the Revolving Credit Commitments not utilized in
the form of Revolving Credit Loans or Letters of Credit. Swing Loans shall
mature and be due and payable on the date selected by the Company but (i) such
date shall not be beyond the Termination Date and (ii) shall not be more than
seven days from the date of funding of such Swing Loan unless consented to by
the Swing Lender. No more than five Swing Loans may be outstanding at any one
time. The Swing Loans shall be made against and evidenced by a Swing Credit Note
(the "Swing Credit Note") in the form (with appropriate insertions) annexed
hereto as Exhibit B. The Swing Lender may at any time on behalf of the Company
(which hereby irrevocably authorizes the Swing Lender so to do) request that
each Revolving Credit Lender make a Revolving Credit Loan in an amount equal to
such Revolving Credit Lender's Revolving Credit Percentage of the amount of the
Swing Loans outstanding on the date such notice is given, such Revolving Credit
Loans to be made without regard to the minimum amount restrictions otherwise
applicable to Revolving Credit Loans. Each Revolving Credit Lender shall make
the proceeds of its requested Revolving Credit Loan available to the Swing
Lender in immediately available funds at its office before noon Chicago time on
the Business Day following the date such notice is given and the Swing Lender
shall apply the proceeds of such Revolving Credit Loans to the repayment of the
outstanding Swing Loans. The Company authorizes the Swing Lender to charge its
accounts with the Swing Lender (up to the amount available in such accounts) to
pay the amount of any such outstanding Revolving Credit Loans to the extent
amounts received from the Revolving Credit Lenders are insufficient for that
purpose. If any Revolving Credit Lender fails or is unable to make a Revolving
Credit Loan to refund its Revolving Credit Percentage of the Swing Loans
pursuant to the foregoing, whether because the conditions precedent to Borrowing
have not been met or otherwise, such Revolving Credit Lender shall at the
request of the Swing Lender purchase from the Swing Lender an undivided
participating interest in the outstanding Swing Loans in an amount equal to its
Revolving Credit Percentage thereof promptly upon demand by the Swing Lender.
Each Revolving Credit Lender that so purchases a participation in the Swing
Loans shall thereafter be entitled to receive its Revolving Credit Percentage of
each payment of principal thereafter received by the Swing Lender in respect of
such Swing Loans and of each payment of interest so received which accrued from
and after the date such Revolving Credit Lender funded its participation. The
obligation of the Revolving Credit Lenders to the Swing Lender to fund refunding
Revolving Credit Loans and purchase participations in Swing Loans pursuant to
the foregoing shall be absolute and unconditional and shall not be effected or
impaired by any Default or Event of Default or any other circumstance.
(e) Cleanup. Anything contained elsewhere in this Agreement to the contrary
notwithstanding, the Company shall for a period of not less than fifteen
consecutive days falling between May 1 and July 15 of each year have no
Revolving Credit Loans or Swing Loans outstanding (each such period of fifteen
consecutive days in each year being hereinafter referred to as a "Cleanup
Period") and unless the Company has selected and complied with an earlier
Cleanup Period then (i) on July 1st of each year the Company shall pay all
Revolving Credit Loans and Swing Loans then outstanding and (ii) the Company
shall not be permitted to borrow Revolving Credit Loans or Swing Loans prior to
July 16 of such year.
Section 2.2. The Term Credits.
(a) The A Credit. Subject to all of the terms and conditions hereof, each A
Credit Lender agrees to make a Loan to the Company (individually an "A Loan" and
collectively the "A Loans") in the amount set forth opposite its signature
hereto under the heading "A Credit Commitment" or on an Assignment Agreement to
which it is party (its "A Credit Commitment" and collectively the "A Credit
Commitments"). There shall be a single Borrowing of the A Loans and the
obligations of the A Credit Lenders to make the A Loans shall expire on
September 30, 1998 unless sooner terminated as herein provided. The obligations
of the A Credit Lenders hereunder are several and not joint and no A Credit
Lender shall under any circumstances be obligated to make an A Loan in excess of
its A Credit Commitment. The A Loan made by each A Credit Lender shall be
evidenced by an A Credit Note (individually an "A Credit Note" and collectively
the "A Credit Notes") in the form (with appropriate insertions) annexed hereto
as Exhibit C. Unless required to be sooner paid, the Company promises to pay the
A Loans in seventeen quarterly installments commencing on September 30, 1999 and
continuing on the last day of each calendar quarter thereafter to and including
September 30, 2003. The first sixteen of such installments shall each aggregate
the lesser of $5,000,000 or 5% of the Adjusted Initial Balance of the A Loans
and the seventeenth and final installment shall be in the amount necessary to
pay the A Loans in full. Each A Credit Lender shall be entitled to its pro rata
share of each such payment of principal. The Adjusted Initial Balance of the A
Loans shall equal the original aggregate principal amount thereof reduced by the
amount, if any, of A Loans converted into B Loans or C Loans pursuant to Section
2.2(d) hereof.
(b) The B Credit. Subject to all of the terms and conditions hereof, each B
Credit Lender agrees to make a Loan to the Company (individually a "B Loan" and
collectively the "B Loans") in the amount set forth opposite its signature
hereto under the heading "B Credit Commitment" or on an Assignment Agreement to
which it is party (its "B Credit Commitment" and collectively the "B Credit
Commitments"). There shall be a single Borrowing of the B Loans and the
obligations of the B Lenders to make the B Loans shall expire on September 30,
1998 unless sooner terminated as herein provided. The obligations of the B
Credit Lenders hereunder are several and not joint and no B Credit Lender shall
under any circumstances be obligated to make a B Loan in excess of its B Credit
Commitment. The B Loans made by each B Credit Lender to the Company shall be
evidenced by a B Credit Note (individually a "B Credit Note" and collectively
the "B Credit Notes") in the form (with appropriate insertions) annexed hereto
as Exhibit D. Unless required to be sooner paid, the Company promises to pay the
B Loans in twenty-four quarterly installments commencing on December 31, 1998
and continuing on the last day of each calendar quarter thereafter to and
including September 30, 2004. The first twenty-three of such installments shall
each aggregate $100,000 and the twenty-fourth and final installment shall be in
the amount necessary to pay the B Loans in full. Each B Credit Lender shall be
entitled to its pro rata share of each such payment of principal.
(c) The C Credit. Subject to all of the terms and conditions hereof, each C
Credit Lender agrees to make a Loan to the Company (individually a "C Loan" and
collectively the "C Loans") in the amount set forth opposite its signature
hereto under the heading "C Credit Commitment" or on an Assignment Agreement to
which it is party (its "C Credit Commitment" and collectively the "C Credit
Commitments"). There shall be a single Borrowing of the C Loans and the
obligations of the C Credit Lenders to make the C Loans shall expire on
September 30, 1998 unless sooner terminated as herein provided. The obligations
of the C Credit Lenders hereunder are several and not joint and no C Credit
Lender shall under any circumstances be obligated to make a C Loan in excess of
its C Credit Commitment. The C Loan made by each C Credit Lender to the Company
shall be evidenced by a C Credit Note (individually a "C Credit Note" and
collectively the "C Credit Notes") in the form (with appropriate insertions)
annexed hereto as Exhibit E. Unless required to be sooner paid, the Company
promises to pay the C Loans in twenty-eight quarterly installments commencing on
December 31, 1998 and continuing on the last day of each calendar quarter
thereafter to and including September 30, 2005. The first twenty-seven of such
installments shall each aggregate $100,000 and the twenty-eighth and final
installment shall be in the amount necessary to pay the C Loans in full. Each C
Credit Lender shall be entitled to its pro rata share of each such payment of
principal.
(d) Conversion of Bank of Montreal A Loans into B Loans and/or C Loans.
Bank of Montreal may at any time on or before December 30, 1998, by notice to
the Company and the Administrative Agent, elect to convert up to $50,000,000 of
its A Loans into B Loans and/or C Loans, such conversion to be accomplished by
written notice from Bank of Montreal to the Company and the Administrative Agent
specifying the amount of the A Loans to be so converted (which shall not be in
excess of $50,000,000) and whether such A Loans are to be converted into B
Loans, C Loans or a combination of both. Such conversion shall become effective
fifteen days after the sending by Bank of Montreal of such notice (the
"Conversion Date") and each of Bank of Montreal, the Administrative Agent and
the Company shall mark their books and records to reflect the conversion.
Effective on the Conversion Date the portion of the A Loan of Bank of Montreal
converted into a B Loan and/or C Loan shall (ii) be deemed evidenced by the B
Credit Note and/or C Credit Note of Bank of Montreal (as appropriate) and shall
thereafter bear interest and mature as in the case of all other B Loans and/or C
Loans, as appropriate, and the aggregate outstanding principal balances of the A
Loans, the B Loans and the C Loans shall be adjusted to reflect such conversion.
Section 2.3. Manner of Borrowing. The Company shall give written or
telephonic notice to the Administrative Agent (which notice shall be irrevocable
once given and, if given by telephone, shall be promptly confirmed in writing)
by no later than 11:00 a.m. (Chicago time) on the date the Company requests that
any Borrowing of Loans be made to it under the Commitments, and the
Administrative Agent shall promptly notify the relevant Lenders of the
Administrative Agent's receipt of each such notice. Each such notice shall
specify the date of the Borrowing of Loans requested (which must be a Business
Day and which date shall be at least three (3) Business Days subsequent to the
date of such notice in the case of any Borrowing of Loans constituting a LIBOR
Portion), the amount of such Borrowing and the Commitments being utilized.
Except in the case of Swing Loans, each Borrowing of Loans shall initially
constitute part of the applicable Base Rate Portion except to the extent the
Company has otherwise timely elected that such Borrowing constitute part of a
LIBOR Portion as provided in Section 3 hereof. The Company agrees that the
Administrative Agent may rely upon any written or telephonic notice given by any
person the Administrative Agent in good faith believes is an Authorized
Representative without the necessity of independent investigation and, in the
event any telephonic notice conflicts with the written confirmation, such
telephonic notice shall govern if the Administrative Agent and/or Lenders have
acted in reliance thereon. Not later than 1:00 p.m. (Chicago time) on the date
specified for any Borrowing of Loans to be made hereunder, each relevant Lender
shall make the proceeds of its Loan comprising part of such Borrowing available
to the Administrative Agent in Chicago, Illinois in immediately available funds.
Subject to the provisions of Section 7 hereof, the proceeds of each Loan shall
be made available to the Company at the principal office of the Administrative
Agent in Chicago, Illinois, in immediately available funds, upon receipt by the
Administrative Agent from each relevant Lender of its pro rata share of such
Borrowing. Unless the Administrative Agent shall have been notified by a Lender
prior to 1:00 p.m. (Chicago time) on the date a Borrowing is to be made
hereunder that such Lender does not intend to make its pro rata share of such
Borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender has made such share available to the Administrative
Agent on such date and the Administrative Agent may (but shall not be obligated
to) in reliance upon such assumption make available to the Company a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Lender and the Administrative Agent has made
such amount available to the Company, the Administrative Agent shall be entitled
to receive such amount from such Lender forthwith upon its demand, together with
interest thereon in respect of each day during the period commencing on the date
such amount was made available to the Company and ending on but excluding the
date the Administrative Agent recovers such amount at a rate per annum equal to
(x) from the date the related payment was due to the Administrative Agent to the
date two (2) Business Days after the date such payment was due, the Fed Funds
Rate for such day (or in the case of a day which is not a Business Day, then for
the preceding day) and (y) thereafter until payment of such amount is received
by the Administrative Agent from such Lender, the Base Rate plus the Applicable
Margin in effect for each such day for the Base Rate Portion of Revolving Credit
Loans.
SECTION 3. INTEREST.
Section 3.1. Options. Subject to all of the terms and conditions of this
Section 3, portions of the principal indebtedness evidenced by each Class of
Notes (all of the indebtedness evidenced by each Class of Notes bearing interest
at the same rate for the same period of time being hereinafter referred to as a
"Portion") shall, at the option of the Company, bear interest with reference to
the Base Rate (the "Base Rate Portions") or with reference to the Adjusted
LIBOR Rate ("LIBOR Portions"), and Portions shall be convertible from time to
time from one basis to the other. All of the indebtedness evidenced by each
Class of Notes which is not part of a LIBOR Portion shall constitute a single
Base Rate Portion. All of the indebtedness evidenced by each Class of Notes
which bears interest with reference to a particular Adjusted LIBOR Rate for a
particular Interest Period shall constitute a single LIBOR Portion. Anything
contained herein to the contrary notwithstanding, there shall not be more than
fifteen (15) LIBOR Portions outstanding at any one time and each Bank shall have
a ratable interest in each Portion based on its applicable Commitment. The
Company promises to pay interest on each Portion at the rates and times
specified in this Section 3.
Section 3.2. Base Rate Portion. Each Base Rate Portion shall bear interest
(which the Company promises to pay at the times herein provided) at the rate per
annum determined by adding the Applicable Margin to the Base Rate as in effect
from time to time. Interest on the Base Rate Portions shall be payable monthly
in arrears on the last day of month and at maturity of the applicable Notes, and
interest after maturity shall be due and payable upon demand.
Section 3.3. LIBOR Portions. Each LIBOR Portion shall bear interest (which
the Company promises to pay at the times herein provided) for each Interest
Period selected therefor at a rate per annum equal to the Adjusted LIBOR Rate
for such Interest Period plus the Applicable Margin. Interest on each LIBOR
Portion shall be due and payable on the last day of each Interest Period
applicable thereto and, if an Interest Period is longer than three (3) months,
then at the end of each three month period and at the end of such Interest
Period, and interest after maturity shall be due and payable upon demand. The
Company shall give written or telephonic notice to the Administrative Agent
(which notice shall be irrevocable once given and, if given by telephone, shall
be promptly confirmed in writing) on or before 11:00 a.m. (Chicago time) on the
third Business Day preceding the end of an Interest Period applicable to a LIBOR
Portion whether such LIBOR Portion is to continue as a LIBOR Portion, in which
event the Company shall notify the Administrative Agent of the new Interest
Period selected therefor, and in the event the Company shall fail to so notify
the Administrative Agent, such LIBOR Portion shall automatically be converted
into and added to the applicable Base Rate Portion as of and on the last day of
such Interest Period. The Administrative Agent shall promptly notify each
relevant Lender of each notice received from the Company pursuant to the
foregoing provisions. Anything contained herein to the contrary notwithstanding,
the obligation of the Lenders to create or continue any LIBOR Portion or to
convert any part of the Base Rate Portion into a LIBOR Portion shall be
suspended if a Default or Event of Default shall have occurred and be
continuing.
Section 3.4. Interest on Swing Loans. Swing Loans shall not bear interest
as provided for in Sections 3.1 through 3.3 hereof but shall instead bear
interest (which the Company hereby promises to pay at the times herein provided)
at (i) the Fixed Fed Funds Rate for the maturity requested as in effect on the
date such Swing Loan is funded plus the Applicable Margin for Revolving Credit
Loans which are LIBOR Portions (a "Fixed Fed Funds Swing Loan"), or (ii) at the
fixed rate otherwise agreed to by the Swing Lender and the Company on the date
of funding (an "Offered Rate Swing Loan"). Swing Loans shall bear interest after
maturity (whether by lapse of time, acceleration or otherwise) and until payment
in full hereof at the rate per annum determined by adding 2% to the rate
otherwise applicable thereto through the express maturity date thereof and
thereafter at the interest rate from time to time applicable to the Base Rate
Portion for Revolving Credit Loans. All interest on Swing Loans shall be due and
payable monthly on the last day of each month and on the Termination Date (or on
the maturity date of each Swing Loan if the Swing Lender so requests) and
interest accruing thereafter shall be due and payable upon demand. The Swing
Lender shall note the amount, interest rate and maturity date of each Swing Loan
in its books and records and such books and records shall be deemed prima facie
correct. Swing Loans may not be prepaid prior to their express maturity date.
Section 3.5. Computation. All interest on the Notes and all fees, charges
and commissions due hereunder shall be computed on the basis of a year of 360
days for the actual number of days elapsed, except that interest on the Base
Rate Portions and on Fixed Fed Funds Swing Loans, the commitment fee and the
Letter of Credit fee shall be computed on the basis of a year of 365 or 366 days
(as the case may be) for the actual number of days elapsed.
Section 3.6. Minimum Amounts. Each LIBOR Portion shall be in a minimum
amount of $15,000,000 and thereafter in integral multiples of $1,000,000.
Section 3.7. Manner of Rate Selection. The Company shall notify the
Administrative Agent by 11:00 a.m. (Chicago time) at least three (3) Business
Days prior to the date upon which it requests that any LIBOR Portion be created
or that any part of a Base Rate Portion be converted into a LIBOR Portion (such
notice to specify in each instance the amount thereof and the Interest Period
selected therefor) and the Administrative Agent shall promptly advise each
relevant Lender of each such notice. If any request is made to convert a LIBOR
Portion into the applicable Base Rate Portion, such conversion shall only be
made so as to become effective as of the last day of the Interest Period
applicable thereto. All requests for the creation, continuance or conversion of
Portions under this Agreement shall be irrevocable. Such requests may be written
or telephonic (provided that if such notice is given by telephone, the Company
shall promptly confirm such notice to the Administrative Agent in writing), and
the Administrative Agent is hereby authorized to honor telephonic requests for
creations, continuances and conversions received by it from any person the
Administrative Agent reasonably believes to be an Authorized Representative, the
Company hereby indemnifying the Administrative Agent and the Lenders from any
liability or loss ensuing from so acting.
Section 3.8. Funding Indemnity. In the event any Lender shall incur any
loss, cost or expense (including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or re-employment of deposits or other
funds acquired by such Lender to fund or maintain any LIBOR Portion or the
relending or reinvesting of such deposits or amounts paid or prepaid to such
Lender, and any loss of profit) as a result of:
(a) any payment or prepayment of a LIBOR Portion on a date other than
the last day of its Interest Period for any reason, whether before or after
default, and whether or not such payment is required by any of the
provisions of this Agreement;
(b) any failure (because of a failure to meet the conditions of
Section 7 hereof or otherwise) by the Company to create, borrow, continue
or effect by conversion a LIBOR Portion on the date specified in a notice
given pursuant to this Agreement; or
(c) any failure by the Company to make any payment of principal on any
LIBOR Portion when due (whether by acceleration, mandatory prepayment or
otherwise),
then, upon the demand of such Lender, the Company shall pay to such Lender such
amount as will reimburse such Lender for such loss, cost or expense. If any
Lender makes such a claim for compensation, it shall provide to the Company a
certificate executed by an officer of such Lender setting forth the amount of
such loss, cost or expense in reasonable detail (including an explanation of the
basis for and the computation of such loss, cost or expense) and such
certificate shall be deemed prima facie correct.
Section 3.9. Change of Law. Notwithstanding any other provisions of this
Agreement or any Note, if at any time any change in applicable law or regulation
or in the official interpretation thereof makes it unlawful for any Lender to
make or continue to maintain LIBOR Portions or to give effect to its obligations
to make LIBOR Portions available as contemplated hereby, such Lender shall
promptly give notice thereof to the Company and the Administrative Agent and
such Lender's obligations to make or maintain LIBOR Portions under this
Agreement shall terminate until it is no longer unlawful for such Lender to make
or maintain LIBOR Portions. To the extent required to comply with any such law
as changed, the Company shall prepay on demand the outstanding principal amount
of any such affected LIBOR Portions, together with all interest accrued thereon
and all other amounts then due and payable to such Lender under this Agreement;
provided, however, subject to all of the terms and conditions of this Agreement,
the Company may then elect to convert the principal amount of the affected LIBOR
Portion from such Lender into the Base Rate Portion from such Lender which shall
not be made ratably by the Lenders but only from such affected Lender. During
the period when it is unlawful for any Lender to make LIBOR Portions, Loans
shall continue to be made in such a manner so that the percentage of each
Lender's relevant Commitments in use is identical, but the Lenders affected by
such illegality shall make their share of each Borrowing which has been
requested in the form of a LIBOR Portion available in the form of a Base Rate
Portion. Each Lender agrees (to the extent consistent with internal policies) to
designate a different lending office if such designation would avoid the
illegality described in this Section 3.9; provided, however, that such
designation need not be made if it would result in any additional costs,
expenses or risks to such Lender that are not reimbursed by the Company pursuant
hereto or would, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
Section 3.10. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR Rate. If on or prior to the first day of any Interest
Period for any LIBOR Portion the Administrative Agent determines that deposits
in United States Dollars (in the applicable amounts) are not being offered to it
or to banks generally in the offshore eurodollar market for such Interest
Period, then the Administrative Agent shall forthwith give notice thereof to the
Company and the Lenders, whereupon until the Administrative Agent notifies the
Company that the circumstances giving rise to such suspension no longer exist,
the obligations of the Lenders to make any further LIBOR Portions available
shall be suspended.
Section 3.11. Increased Cost and Reduced Return. If, on or after the date
hereof, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the official interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender (or
its lending office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency:
(a) shall subject any Lender (or its lending office) to any charges of
any kind (other than Withholding Taxes covered by Section 4.9 hereof) with
respect to its interest in the LIBOR Portions, its Notes or its obligation
to make LIBOR Portions available, or shall change the basis of taxation of
payments to any Lender (or its lending office) of the principal of or
interest on LIBOR Portions or any other amounts due under this Agreement in
respect of its LIBOR Portions or its obligation to make LIBOR Portions; or
(b) shall impose, modify or deem applicable any reserve, special
deposit or similar requirements (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding any such requirement included in an applicable
Eurodollar Reserve Percentage) against assets of, deposits with or for the
account of, or credit extended by, any Lender (or its lending office) or
shall impose on any Lender (or its lending office) or the offshore
interbank market any other condition affecting LIBOR Portions, its Notes or
its obligation to make LIBOR Portions available;
and the result of any of the foregoing is to increase the cost to such Lender
(or its lending office) of making or maintaining any LIBOR Portion, or to reduce
the amount of any sum received or receivable by such Lender (or its lending
office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Lender to be material, then, within fifteen (15) days
after demand by such Lender (with a copy to the Administrative Agent), the
Company shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction. A certificate of
any Lender claiming compensation under this Section 3.11 and setting forth the
additional amount or amounts in reasonable detail (including an explanation of
the basis therefor and the computation of such amount) to be paid to it
hereunder shall be deemed prima facie correct. In determining such amount, such
Lender may use reasonable averaging and attribution methods.
Section 3.12. Lending Offices. Each Lender may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "lending office") or at such other of
its branches, offices or affiliates as it may from time to time elect and
designate in a notice to the Company and the Administrative Agent (but such
funds shall in any event be made available to the Company at the office of the
Administrative Agent as herein provided for).
Section 3.13. Discretion of Banks as to Manner of Funding. Notwithstanding
any other provision of this Agreement, each Lender shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations under this Agreement (including, without limitation, calculations
under Sections 3.8 and 3.11 hereof) shall be made as if each Lender had actually
funded and maintained its interest in each LIBOR Portion through the purchase of
deposits in the offshore interbank market having a maturity corresponding to
such LIBOR Portion's Interest Period and bearing an interest rate equal to LIBOR
for such Interest Period.
SECTION 4. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS.
Section 4.1. Commitment Fee. For the period from the date hereof to and
including the Termination Date, the Company shall pay to the Administrative
Agent for the ratable account of the Revolving Credit Lenders a commitment fee
at the Applicable Margin on the average daily unused amount of the Revolving
Credit Commitments hereunder, such fee to be payable quarterly in arrears on the
last day of each March, June, September and December in each year to and
including, and on, the Termination Date. Swing Loans shall not be treated as a
utilization of the Revolving Credit Commitments for the foregoing purpose.
Section 4.2. Letter of Credit Fees.
(a) Shared Fees. The Company shall pay to the Administrative Agent for the
ratable account of the Revolving Credit Lenders a letter of credit fee computed
at the Applicable Margin on the maximum amount of the Letters of Credit from
time to time outstanding, such fee to be paid quarterly in arrears on the last
day of each December, March, June and September in each year to and including,
and on, the Termination Date.
(b) Issuing Bank Fronting Fees. On the date of issuance of each Letter of
Credit, and as a condition thereto, the Company shall pay to the Issuing Bank
for its own account a non-refundable letter of credit issuance fee in an amount
equal to 0.125% of the amount of the relevant Letter of Credit to be issued. In
addition, the Company further agrees to pay the Issuing Bank for its own account
such amendment, processing and transaction fees and charges as the Issuing Bank
from time to time customarily imposes in connection with any amendment,
cancellation, negotiation and/or payment of Letters of Credit issued by such
Issuing Bank and drafts drawn thereunder. The Company also agrees to reimburse
the Issuing Bank for the amount of any taxes, fees, charges or other costs and
expenses incurred by the Issuing Bank in connection with any payment made under
or with respect to a Letter of Credit.
Section 4.3. Administrative Agent's Fees. On the Acquisition Closing Date,
and on each anniversary date thereof when any credit or commitment to extend
credit is outstanding hereunder, the Company shall pay to the Administrative
Agent, for its own use and benefit, such fees as may be agreed upon in writing
by the Company and the Administrative Agent, as the same may be amended from
time to time.
Section 4.4. Prepayments.
(a) Optional Prepayments. The Company shall have the privilege (upon notice
to the Administrative Agent by 11:00 a.m. (Chicago Time) on the date of
prepayment, which must be a Business Day) of prepaying without premium or
penalty and in whole or in part (but, if in part, then in an amount not less
than $10,000,000 and thereafter in integral multiples of $100,000) (or such
lesser amount as will prepay the relevant Class of Notes in full) a Class of
Notes at any time, each such prepayment to be made by the payment of the
principal amount to be prepaid, any amount due the Lenders under Section 3.8
hereof (any failure of the Administrative Agent or the Lenders to require
payment of any amount due under Section 3.8 not to preclude a later demand that
the amount so due be paid) and, in the case of a prepayment which prepays a
Class of Notes in full (after which the Revolving Credit Commitments are no
longer outstanding in the case of a prepayment of the Revolving Credit Notes),
accrued interest thereon to the date fixed for prepayment. The foregoing to the
contrary notwithstanding, Swing Loans may not be prepaid.
(b) Mandatory Prepayments.
(i) Fixed Asset Proceeds. An amount equal to any and all net cash
proceeds (i.e., gross cash proceeds net of out-of-pocket expenses and
property and transfer taxes incurred in effecting the sale or other
disposition and net of proceeds applied to the repayment of liens on the
assets sold or disposed of) received by the Parent or its Subsidiaries from
the sale or disposition (whether voluntary or involuntary) of fixed or
capital assets (including the proceeds of a sale as part of a
sale/leaseback transaction) shall be promptly paid over to the
Administrative Agent as and for a mandatory prepayment on the Term Loans;
provided, however, that (i) the foregoing provisions shall be inapplicable
to funds received by the Administrative Agent under the Collateral
Documents if and so long as, pursuant to the terms of the Collateral
Documents, the same are to be held by the Administrative Agent and
disbursed for (or to reimburse the Parent and its Subsidiaries for the cost
of) the restoration, repair or replacement of the property in respect of
which such proceeds were received, (ii) no prepayment shall be required
with respect to net cash proceeds received from the ordinary course of
business sale or other disposition of Property which is worn out, or
obsolete if and to the extent that such cash proceeds would not cause Net
Capital Expenditures for the fiscal year of receipt to be negative and
(iii) no prepayment shall be required out of the first $5,000,000 of net
cash proceeds received by the Parent and its Subsidiaries in any fiscal
year which are not otherwise excepted from prepayment hereunder. If and to
the extent that the purchase price for the sale or other disposition of an
asset is deferred (whether or not evidenced by a note), it shall be
included in net cash proceeds as and when paid in cash. Nothing herein
contained shall in any manner impair or otherwise affect the prohibitions
against the sale or other disposition of Collateral or assets contained
herein.
(ii) Excess Cash Flow. On the last day of each September of each year
(commencing September 30, 1999) the Company shall pay over to the
Administrative Agent as and for a mandatory prepayment on the Term Loans an
amount equal to 75% (66-2/3% if the Leverage Ratio computed as of the last
day of the immediately preceding fiscal year was less than 4.5 to 1) of
Excess Cash Flow for the immediately preceding fiscal year, provided that
if subsequent to the close of the Parent's 1999 fiscal year, the Leverage
Ratio shall be less than 3.00 to 1 as of the last day of two consecutive
fiscal quarters, no prepayments shall thereafter be required under this
subpart.
(iii) Equity Offerings. Promptly upon receipt thereof, the Company
shall pay over to the Administrative Agent as and for a mandatory
prepayment on the Term Loans, an amount equal to fifty percent of all net
cash proceeds received by the Parent from Equity Offerings, provided that
(i) no such prepayment shall be required out of or in respect of the
portion of such net cash proceeds applied to the payment of the
Subordinated Bridge Loan and (ii) if subsequent to the close of the
Parent's 1999 fiscal year, the Leverage Ratio shall be less than 3.00 to 1
as of the last day of two consecutive fiscal quarters, no prepayments shall
thereafter be required under this subpart. If and to the extent that the
proceeds of the Equity Offering in question are applied to the prepayment
of indebtedness included in Consolidated Total Indebtedness which is not
revolving and is not Seasonal Debt, the Leverage Ratio may be computed,
solely for purposes of the foregoing requirement, by reducing Consolidated
Total Indebtedness as of the test date by the amount of the prepayment.
(iv) Pension Reversions. Promptly upon each receipt by the Parent or
any Subsidiary of any amounts from or out of any pension or other employee
benefit plan covering any officers or employees of the Parent or any
Subsidiary or of their predecessors, the Company shall pay over an amount
equal the amount so received (net of taxes (including excise taxes) payable
in respect of such reversion) as and for a mandatory prepayment on the Term
Loans.
(v) Debt Issuances. Promptly upon receipt by the Parent or any
Subsidiary of any amounts from or out of the issuance of Indebtedness
included in Consolidated Total Indebtedness, the Company shall pay over to
the Administrative Agent as and for a mandatory prepayment on the Term
Loans an amount equal to the net cash proceeds received by the Parent or
its Subsidiaries therefrom except that no such prepayment shall be required
to be made out of (i) the proceeds of Subordinated Debt to the extent that
the same is applied to the repayment or retirement of the Subordinated
Bridge Loan or other Subordinated Debt, (ii) the proceeds of indebtedness
consisting of a Capitalized Lease or incurred to finance the purchase of a
fixed or capital asset (iii) the proceeds of a Borrowing under the
Revolving Credit Commitments or (iv) out of the first $5,000,000 of
Indebtedness proceeds received in any fiscal year which is not otherwise
excepted pursuant to clauses (i) through (iii) hereof.
Section 4.5. Terminations. The Company shall have the privilege at any time
and from time to time upon five Business Days' prior notice to the
Administrative Agent (which shall promptly notify the Revolving Credit Lenders)
to ratably terminate the Revolving Credit Commitments in whole or in part (but,
if in part, then in a minimum amount of $10,000,000) provided that the Revolving
Credit Commitments may not be reduced to an amount less than the aggregate
principal amount of Revolving Credit Loans, Swing Loans and Letters of Credit
then outstanding. No termination of the Revolving Credit Commitments may be
reinstated.
Section 4.6. Place and Application.
(a) General. Except as otherwise provided in Section 2.1(c) with respect to
Letters of Credit, all payments of principal, interest and fees shall be made to
the Administrative Agent at its office at 115 South LaSalle Street, Chicago,
Illinois (or at such other place as the Administrative Agent may specify) in
immediately available and freely transferable funds at the place of payment. All
payments due from the Company hereunder shall be made without set-off or
counterclaim and without reduction for, and free from, any and all present or
future taxes, levies, imposts, duties, fees, charges, deductions, withholdings,
restrictions or conditions of any nature imposed by any government or political
subdivision or taxing authority thereof. Except as otherwise provided in Section
2.1(c) with respect to Letters of Credit, payments received by the
Administrative Agent after 1:00 p.m. (Chicago time) shall be deemed received as
of the opening of business on the next Business Day. Except as otherwise
provided in this Agreement, all payments shall be received by the Administrative
Agent for the ratable account of the Lenders entitled to share in same, and
shall be promptly distributed by the Administrative Agent ratably to them except
that payments which pursuant to the terms hereof are for the use and benefit of
the Administrative Agent, the Swing Lender or the Issuing Bank shall be retained
by the intended recipient for its own account and payments received to reimburse
an Issuing Bank or a Lender for a fee or cost peculiar to that Issuing Bank or
Lender, as the case may be, shall be remitted to it. Unless the Company
otherwise directs, principal payments on the Notes shall be first applied to the
applicable Base Rate Portion and then to the applicable LIBOR Portions in the
order in which their Interest Periods expire. Prepayments on the Term Loans
shall be applied to the scheduled installment maturities thereof in the inverse
order of maturity. Reimbursements of drawings under Letters of Credit shall be
promptly remitted to the Issuing Bank for remittance to the Lenders to the
extent they have previously reimbursed the Issuing Bank therefor. Prepayments in
full of LIBOR Portions shall be accompanied by accrued interest thereon to the
date fixed for prepayment.
(b) Term Loan Prepayments. Except as otherwise herein provided, all
prepayments of the Term Loans shall be applied pro rata as among the Term Loans.
The foregoing to the contrary notwithstanding, each B Credit Lender and C Credit
Lender shall have the right to waive receipt of any mandatory prepayment payable
hereunder in respect of its B Loan or C Loan in which event the amount of the
prepayment so waived shall be added pro rata to the amount to be prepaid on the
A Loans and those B Loans and C Loans as to which the holder thereof has not
waived receipt of the prepayment. In order to enable the B Credit Lenders and
the C Credit Lenders to avail themselves of the right to waive a prepayment
pursuant to this subsection (b), the Company shall notify the Administrative
Agent of each mandatory prepayment made or anticipated to be made pursuant to
Section 4.4(b) hereof (which notice may be given up to 30 days in advance of the
date of the prepayment) specifying its good faith estimate of the amount
thereof. The Administrative Agent shall within 5 Business Days of receipt of
each such notice notify the B Credit Lenders and C Credit Lenders thereof. Such
Lenders shall then each have 5 Business Days to make an election not to accept
such prepayment by a written notice to that effect to the Administrative Agent.
Unless and until the period in which the B Credit Lenders and the C Credit
Lenders may elect to waive a mandatory prepayment under this subsection (b) has
elapsed, the proceeds of any mandatory prepayment otherwise payable in respect
of the B Loans and the C Loans shall be held by the Administrative Agent.
(c) Applications of Payments after an Event of Default. Anything contained
herein to the contrary notwithstanding, all payments and collections received in
respect of the indebtedness evidenced by the Notes or the Applications and all
proceeds of the Collateral received, in each instance, by the Administrative
Agent or any of the Lenders after the occurrence of an Event of Default shall be
distributed as follows:
(a) first, to the payment of any outstanding costs and expenses
incurred by the Administrative Agent or Issuing Bank in monitoring,
verifying, protecting, preserving or enforcing the liens on the Collateral
or in protecting, preserving or enforcing rights under the Loan Documents
and in any event including all costs and expenses of a character which the
Company has agreed to pay under Section 12.10 hereof (such funds to be
retained by the Administrative Agent or Issuing Bank for its own account
unless it has previously been reimbursed for such costs and expenses by the
Lenders, in which event such amounts shall be remitted to the Lenders to
reimburse them for payments theretofore made to the Administrative Agent or
Issuing Bank);
(b) second, to the payment of any outstanding interest or other fees
or amounts due under the Loan Documents other than for principal or in
reimbursement of the principal amount of drafts presented and paid under
Letters of Credit or in respect of the Hedging Liability, ratably as among
the Lenders in accord with the amount of such interest and other fees or
amounts owing each;
(c) third, to the payment of the principal of the Notes, the amounts
of all drafts presented and paid under Letters of Credit, to be held by the
Administrative Agent to secure payment of any amount which could
subsequently be drawn on Letters of Credit (up to the full amount thereof)
and to the Hedging Liability, ratably as among all of such; and
(d) fourth, to whoever may be lawfully entitled thereto.
The foregoing to the contrary notwithstanding, the proceeds received
through the enforcement of the Administrative Agent's lien on real property (but
not personal property or fixtures) located in the state of New York shall not be
applied to the payment of the principal of or interest on the Revolving Credit
Loans or in reimbursement of the principal amount of drafts presented and paid
under Letters of Credit. However, if as a result of the foregoing, any Lender
receives a disproportionately smaller allocation of the proceeds of Collateral
than would have been the case but for this paragraph and but for the fact that
the Revolving Credit Loans are not secured with real property located in the
State of New York, the Revolving Credit Lenders shall receive a disproportionate
share of the proceeds of the other Collateral to the extent necessary so that
after giving effect to such applications each Lender receives the same
percentage recovery out of the Collateral as would have been the case but for
this paragraph and had the Revolving Credit Loans been secured with the
Collateral consisting of real property located in the State of New York.
Section 4.7. Notations and Requests. All advances made against the Notes,
interest rates, Interest Periods and maturities shall be recorded by the Lenders
on their books or, at their option in any instance, endorsed on the reverse side
of the Notes and the unpaid principal balances so recorded or endorsed by the
Lenders shall be prima facie evidence in any court or other proceeding brought
to enforce the Notes as to such matters. Prior to any negotiation of any Note,
the Lender holding such Note shall endorse thereon the principal amount
remaining unpaid thereon. The Administrative Agent shall maintain at its address
referred to herein a copy of each Assignment Agreement delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and of each Commitment, extended by each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Company, the Agents and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Company or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Upon its receipt of an Assignment Agreement
executed by an assigning Lender and an assignee, the Administrative Agent shall,
if such Assignment Agreement acceptance has been completed and is acceptable to
the Administrative Agent in form and substance, (a) accept such assignment and
acceptance, (b) record the information contained therein in the Register and (c)
give prompt written notice thereof to the Company.
Section 4.8. Capital Adequacy. If any Lender shall determine that any
change after the date hereof in any applicable law, rule or regulation regarding
capital adequacy, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof or compliance by such Lender (or
its lending office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's capital as a consequence of its obligations hereunder or the
Letters of Credit or credit extended by it hereunder to a level below that which
such Lender could have achieved but for such law, rule, regulation, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time as specified by such Lender the Company shall pay such additional
amount or amounts as will compensate such Lender for such reduction in rate of
return. A certificate of any Lender claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder in
reasonable detail shall be deemed prima facie correct. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
Section 4.9. The Register. The Administrative Agent shall maintain at its
address referred to herein, a copy of each Assignment Agreement delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and each Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Company, the Agents and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice. Upon its
receipt of an Assignment Agreement executed by an assigning Lender and an
assignee, the Administrative Agent shall, if such Assignment Agreement has been
completed and is acceptable to it in form and substance, (a) accept such
assignment and acceptance, and (b) record the information contained therein in
the Register and (c) give promptly written notice thereof to the Company.
Section 4.10. Withholding Taxes.
(a) Payments Free of Withholding. Except as otherwise required by law and
subject to Section 4.10(b) and (c) hereof, each payment by the Company and the
Guarantors under this Agreement or the other Loan Documents shall be made
without withholding for or on account of any present or future taxes (other than
overall net income taxes on the recipient) imposed by or within the jurisdiction
in which the Company or any Guarantor is domiciled, any jurisdiction from which
the Company or any Guarantor makes any payment, or (in each case) any political
subdivision or taxing authority thereof or therein (herein, "Withholding
Taxes"). If any such Withholding Tax is so required, the Company or relevant
Guarantor, as applicable shall make the withholding, pay the amount withheld to
the appropriate governmental authority before penalties attach thereto or
interest accrues thereon, and forthwith pay such additional amount as may be
necessary to ensure that the net amount actually received by each Lender, the
Administrative Agent and the Issuing Bank free and clear of such Withholding
Taxes (including such taxes on such additional amount) is equal to the amount
which that Lender, the Issuing Bank or the Administrative Agent (as the case may
be) would have received had such withholding not been made. If the
Administrative Agent, the Issuing Bank or any Lender pays any amount in respect
of any such Withholding Taxes, penalties or interest, the Company shall
reimburse the Administrative Agent, the Issuing Bank or such Lender for that
payment on demand in the currency in which such payment was made. If the Company
or a Guarantor pays any such taxes, penalties or interest, it shall deliver
official tax receipts evidencing that payment or certified copies thereof to the
Lender, the Issuing Bank or Administrative Agent on whose account such
withholding was made (with a copy to the Administrative Agent if not the
recipient of the original) on or before the thirtieth day after payment.
(b) U.S. Withholding Tax Exemptions. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Company and the Administrative Agent on or before the earlier of
the date of the initial Borrowing is made hereunder or thirty (30) days after it
becomes a Lender, two duly completed and signed copies of either Form 1001
(relating to such Lender and entitling it to a complete exemption from
withholding under the Code on all amounts to be received by such Lender,
including fees, pursuant to the Loan Documents and the Loans) or Form 4224
(relating to all amounts to be received by such Lender, including fees, pursuant
to the Loan Documents and the Loans) of the United States Internal Revenue
Service or, solely if such Lender is claiming exemption from United States
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or any successor form prescribed
by the Internal Revenue Service, and a certificate representing that such Lender
is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code), of the
Parent or the Company and is not a controlled foreign corporation related to the
Parent or the Company (within the meaning of Section 864(d)(4) of the Code.
Thereafter and from time to time, each Lender shall submit to the Company and
the Administrative Agent such additional duly completed and signed copies of one
or the other of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may be (i)
requested by the Company in a written notice, directly or through the
Administrative Agent, to such Lender and (ii) required under then-current United
States law or regulations to avoid or reduce United States withholding taxes on
payments in respect of all amounts to be received by such Lender, including
fees, pursuant to the Loan Documents or the Loans.
(c) Inability of Bank to Submit Forms. If any Lender determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Company or the Administrative Agent any form or certificate that such Lender is
obligated to submit pursuant to subsection (b) of this Section 4.10 or that such
Lender is required to withdraw or cancel any such form or certificate previously
submitted or any such form or certificate otherwise becomes ineffective or
inaccurate, such Lender shall promptly notify the Company and Administrative
Agent of such fact and the Lender shall to that extent not be obligated to
provide any such form or certificate and will be entitled to withdraw or cancel
any affected form or certificate, as applicable.
Section 4.11. Bank Replacement. If the Company is required to make any
reduction or withholding with respect to any payment due any Lender under
Section 4.10 hereof or is required to make any payment to a Lender under
Sections 2.1(c)(iv), 3.11 or 4.8 hereof or a Lender's obligation to make or
maintain LIBOR Portions is suspended pursuant to Section 3.9 hereof (in any such
case a "Replaceable Bank"), the Company may, with the consent of the
Administrative Agent and the Issuing Bank, propose that another lender (a
"Replacement Bank"), which lender may be an existing Lender, be substituted for
and replace the Replaceable Bank for purposes of this Agreement. If a
Replacement Bank is so substituted for the Replaceable Bank, the Replaceable
Bank shall enter into an Assignment Agreement with the Replacement Bank, the
Company and the Administrative Agent to assign and transfer to the Replacement
Bank the Replaceable Bank's Commitments and Loans and credit risk with respect
to Letters of Credit hereunder pursuant to and in accordance with the provisions
and requirements of Section 12.12 hereof (except that no processing or
recordation fee shall be payable to the Administrative Agent) and, as a
condition to its execution thereof, the Replaceable Bank shall concurrently
receive the full amount of its Loans, interest thereon, and all accrued fees and
other amounts to which it is entitled under this Agreement, including amounts
which would have been due it under Section 3.9 hereof if its Loans had been
prepaid rather than assigned.
SECTION 5. THE COLLATERAL.
Section 5.1. The Collateral. The Notes and the other obligations of the
Company and the Guarantors to the Administrative Agent, the Issuing Bank and the
Lenders under the Loan Documents shall be secured by (a) valid, perfected and
enforceable liens in all right, title and interest of the Parent and of each
Subsidiary in all capital stock or other equity interests in the Company and
each Subsidiary (except that only 65% of the capital stock of Foreign
Subsidiaries need be pledged and the capital stock of those Subsidiaries
designated as inactive on Exhibit H hereto need not be pledged so long as the
same are inactive and the capital stock of Birds Eye de Mexico SA de CV need not
be pledged), in each instance whether now owned or hereafter acquired, and all
proceeds thereof and (b) valid, perfected and enforceable liens in all right,
title and interest of the Company and of each Pledging Guarantor in all
accounts, chattel paper, general intangibles (including trademarks),
instruments, securities, documents, contract rights, including rights under
the Marketing Agreement and payment rights under the Stock Purchase Agreement
and Asset Transfer Agreement, inventory, equipment and real property of every
kind and description whether now owned or hereafter acquired, and all proceeds
thereof; provided, however, that (i) until a Default or an Event of Default has
occurred and is continuing and thereafter until otherwise required by the
Required Lenders or the Administrative Agent, liens need not be perfected on
notes receivable having a fair market value of less than $1,000,000 in any
instance and $5,000,000 in the aggregate, (ii) liens on the plants located in
Montezuma, Georgia and Uvalde, Texas may be subject to prior liens thereon
securing indebtedness in the amounts of $195,000, and $431,221, respectively,
(iii) liens need not be perfected outside of the United States on trademarks and
patents unless and until the Administrative Agent or the Required Lenders so
request and (iv) the Revolving Credit Loans need not be secured with real
property located in the State of New York. The liens in the Collateral shall be
granted to the Administrative Agent for the ratable account of the Lenders and
shall be valid and perfected first liens subject, however, to the rights of
lessors under permitted leases and purchase money liens held by vendors
providing permitted purchase money financing. Notwithstanding anything to the
contrary contained herein, in no event will any of the Collateral described
above be deemed to include (aa) any interests in equipment owned by the Company
or any Subsidiary which is subject to a permitted purchase money lien in favor
of any third party (other than the Company or any of its Affiliates) to the
extent the granting of a security interest or lien therein is prohibited by the
agreement(s) pursuant to which such equipment is financed and such prohibition
has not been or is not waived or the consent of the applicable party has not
been or is not obtained, (ab) any interests in any leases or licenses to use
Property under which the Company or any Subsidiary is lessee or licensee and a
Person other than the Company or an Affiliate of the Company is lessor or
licensor to the extent the granting of a security interest or lien therein is
prohibited by the agreement(s) pursuant to which such property is leased as
licensed and such prohibition has not been or is not waived or the consent of
the applicable party has not been or is not obtained, (ac) any rights under
other contracts (other than contracts with Affiliates of the Company) to which
the Company or a Pledging Guarantor is a party (other than rights to receive
money due and to become due) to the extent the granting of a security interest
or lien thereon is prohibited by such contracts or applicable law and such
prohibition has not been or is not waived or the consent of the applicable party
has not been or is not obtained and (ad) the other assets shown on Exhibit L
hereto (collectively, the "Excluded Assets").
Section 5.2. Further Assurances. The Company covenants and agrees
that it shall, and shall cause each Subsidiary to, comply with all terms and
conditions of each of the Collateral Documents and that the Company shall, and
shall cause each Subsidiary to, at any time and from time to time at the request
of the Administrative Agent or the Required Lenders execute and deliver such
instruments and documents and do such acts and things as the Administrative
Agent or the Required Lenders may reasonably request in order to provide for or
protect or perfect the lien of the Administrative Agent in the Collateral,
subject to the terms of Section 5.1 above.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Company and the Parent represent and warrant to the Lenders as follows:
Section 6.1. Organization and Power. The Parent and the Company are duly
organized and existing under the laws of the state of their organization, and
after giving effect to the Acquisition and the Merger will be duly licensed or
qualified to do business in each state where the nature of the assets owned or
leased by them or business conducted by them requires such licensing or
qualification and in which the failure to be so licensed or qualified could
reasonably be expected to have a Material Adverse Effect and have all necessary
power to carry on their present and contemplated businesses. The Parent and the
Company have full right, power and authority to enter into this Agreement, to
make the borrowings herein provided for, to issue the Notes in evidence thereof,
to execute and deliver the Applications and the other Loan Documents executed
and delivered or to be executed and delivered by them, and to perform each and
all of the matters and things herein and therein provided for. Each Guarantor
has, or upon its acquisition or formation will have, full right, power and
authority to enter into the Loan Documents executed by it and to perform each
and all of the matters and things therein provided for. The Loan Documents do
not, and the performance or observance by the Parent or any Subsidiary of any of
the matters and things herein or therein provided for will not, contravene any
provision of law or any charter, by-law or similar agreement of the Parent or
any such Subsidiary or constitute a breach or default under any covenant,
indenture or agreement of or affecting the Parent or any such Subsidiary where
such breach or default could reasonably be expected to have a Material Adverse
Effect.
Section 6.2. Subsidiaries. Each Subsidiary is, or upon acquisition or
formation will be, duly organized and existing under the laws of the
jurisdiction of its organization, and duly licensed or qualified to do business
in each state or other jurisdiction where the nature of the assets owned or
leased by it or business conducted by it requires such licensing or
qualification and in which the failure to be so licensed or qualified could
reasonably be expected to have a Material Adverse Effect and has all necessary
corporate power to carry on its present business. Exhibit H hereto identifies
each Subsidiary, the jurisdiction of its organization, the percentage of issued
and outstanding shares of each class of its capital stock or other equity owned
by the Parent and the Subsidiaries and, if such percentage is not 100%
(excluding directors' qualifying shares as required by law), a description of
each class of its authorized capital stock or other equity interest and the
number of shares of each class issued and outstanding. All of the outstanding
shares of capital stock of or other equity interest in each Subsidiary are
validly issued and outstanding and fully paid and, subject to Section 630 of the
New York Business Corporation Law, nonassessable, and all shares or other equity
interests in each Subsidiary indicated on Exhibit H as owned by the Parent or a
Subsidiary are owned, beneficially and of record, by the Parent or such
Subsidiary free and clear of all liens, security interests, charges and
encumbrances, other than the lien of the Administrative Agent required hereby.
There are no outstanding commitments or other obligations of any Subsidiary to
issue, and no options, warrants or other rights of any Person to acquire, any
shares of any class of capital stock of or other equity interest in any
Subsidiary. The Company is a wholly owned Subsidiary of the Parent.
Section 6.3. Use of Proceeds; Regulation U. The Company shall use proceeds
of the Loans and other extensions of credit made available hereunder solely for
the purpose of funding the Acquisition and for its working capital and other
general corporate purposes. Neither the Company nor any Subsidiary is engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stocks (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System), and no part of the proceeds of any loan or
extension of credit hereunder will be used to purchase or carry any margin stock
or extend credit to others for the purpose of purchasing or carrying any margin
stock if as a result thereof such loan or other extension of credit would
violate Regulation U or any interpretation thereof.
Section 6.4. Financial Reports. (a) The Parent and the Company have each
heretofore delivered to each Lender a copy of their annual audit reports for
their 1994, 1995, 1996, 1997, and 1998, fiscal years and the accompanying
consolidated financial statements of the Parent and its Subsidiaries and the
Company and its Subsidiaries, and their unaudited interim consolidated balance
sheets as at August 29, 1998, and the related consolidated statements of
operations, changes in members' and shareholder's capitalization (as to the
Parent and its Subsidiaries) and cash flows of each of them and of their
Subsidiaries for the two months then ended. Such financial statements have been
prepared in accordance with GAAP (except for the omission of footnotes from such
unaudited statements) and fairly reflect the consolidated financial position of
the Parent and its Subsidiaries and of the Company and its Subsidiaries as of
the dates thereof and the results of their operations for the periods covered
thereby. The Parent and its Subsidiaries have no material contingent liabilities
that are required to be disclosed on such financial statements other than as
indicated on said financial statements. Since the date of the fiscal 1998 audit
report, there has been no material adverse change in the financial condition or
results of operations, or with respect to the Properties, of the Parent or any
of its Subsidiaries, except those disclosed in writing to the Lenders prior to
the date of this Agreement.
(b) The Company has delivered to the Lenders the audited consolidated
balance sheets of DFVC and its Subsidiaries as of the close of their 1996, 1997,
and 1998 fiscal years, and the audited consolidated income statements and
statements of cash flow of DFVC and its Subsidiaries for their 1996, 1997 and
1998 fiscal years, and the unaudited interim balance sheet of DFVC and its
Subsidiaries as of August 30, 1998 and unaudited interim income statement of
DFVC and its Subsidiaries for the three month period ended August 30, 1998
(collectively, the "DFVC Financial Statements"). Based on the Company's review
of the DFVC Financial Statements and other financial information obtained by the
Company in connection with the DFVC Acquisition, nothing has come to the
Company's attention that would cause it to believe that the DFVC Financial
Statements are inaccurate in any material respect or that the DFVC Financial
Statements do not present fairly, in all materials respects, the consolidated
financial position of DFVC and its Subsidiaries as the dates thereof and the
consolidated results of operations of DFVC and its Subsidiaries for the periods
covered thereby in conformity with GAAP or that DFVC has any material contingent
liabilities not disclosed in the DFVC Financial Statements, except (i) as
otherwise indicated in the DFVC Financial Statements, and (ii) for such matters
as would not individually or in the aggregate have a Material Adverse Effect.
Section 6.5. Litigation and Taxes. Except as is set forth on Schedule 6.5,
there is no litigation or governmental proceeding pending, nor to the knowledge
of the Parent or the Company threatened, against the Parent or any Subsidiary or
DFVC, BEMSA or their Subsidiaries or for which any of them is liable which if
adversely determined could reasonably be expected to result in a Material
Adverse Effect after giving effect to the Acquisition. No authorization,
consent, license, or exemption from, or filing or registration with, any court
or governmental department, agency or instrumentality, is or will be necessary
to the valid execution, delivery or performance by the Parent or any Subsidiary
of any Loan Document or the Stock Purchase Agreement, Asset Transfer Agreement
or Marketing Agreement or to the consummation of the Acquisition or the Merger,
except for such consents, exemptions and approvals with respect to the
Acquisition which will have been obtained and remain in full force and effect.
Section 6.6. Burdensome Contracts with Affiliates. All material contracts
and agreements between the Company and/or its Subsidiaries and their Affiliates
are on terms and conditions which are no less favorable to the Company or such
Subsidiary than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other.
Section 6.7. ERISA. The Parent and each Subsidiary is in compliance in all
material respects with the Employee Retirement Income Security Act of 1974
("ERISA") to the extent applicable to it and has received no notice to the
contrary from the Pension Benefit Guaranty Corporation ("PBGC"), and, in the
event of the Parent's or any Subsidiary's partial or total withdrawal from any
pension plans, multi-employer pension plans or non-payment by other employer
participants therein, the liability of the Parent and its Subsidiaries for any
unfunded vested benefits thereunder would not result in a Material Adverse
Effect.
Section 6.8. Full Disclosure. The statements and information furnished to
either Agent or the Lenders in connection with the negotiation of this Agreement
and the commitments by the Lenders to provide all or part of the financing
contemplated hereby do not, taken as a whole, contain any untrue statement of a
material fact or omit a material fact necessary to make the material statements
contained therein or herein not misleading, except for such thereof as were
corrected in subsequent written statements furnished the Lenders prior to the
date hereof (the Lenders acknowledging that as to any projections furnished to
the Lenders, the Parent and the Company only represent that the same were
prepared on the basis of information and estimates they believe to be
reasonable). There is no fact peculiar to the Parent or any Subsidiary, DFVC or
BEMSA which the Company has not disclosed to the Lenders in writing which
materially adversely affects the Parent or its Subsidiaries nor, so far as the
Parent or the Company now can reasonably foresee, is reasonably likely to have a
Material Adverse Effect. The unaudited pro forma consolidated balance sheet for
the Parent and its Subsidiaries and for the Company and its Subsidiaries
heretofore delivered to the Lenders fairly presents the financial condition of
the Parent and its Subsidiaries immediately after giving effect to the
Acquisition and the Merger, based upon the best information currently available
to the Parent and the Company with respect to the Acquisition.
Section 6.9. Compliance with Law. (a) Neither the Parent nor any Subsidiary
is or will after giving effect to the Acquisition and the Merger be (i) in
default with respect to any order, writ, injunction or decree or (ii) in default
in any material respect under any Governmental Requirement (including ERISA, the
Occupational Safety and Health Act of 1970 and laws and regulations establishing
quality criteria and standards for air, water, land and toxic waste) of any
Governmental Body if, in the case of either clause (i) or (ii), such default is
reasonably likely to result in a Material Adverse Effect; and (b) without
limiting the generality of the foregoing, the Parent and each Subsidiary are and
after giving effect to the Acquisition and the Merger will each be, in
compliance with all applicable state and federal environmental, health and
safety statutes and regulations, including, without limitation, regulations
promulgated under the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
ss.ss.6901 et seq., except where failure to be in compliance is reasonably
likely not to have a Material Adverse Effect, and, to the Company's and Parent's
knowledge, neither the Parent nor any Subsidiary will have acquired, incurred or
assumed, directly or indirectly, any contingent liability in connection with the
release of any toxic or hazardous waste or substance into the environment which
is reasonably likely to have a Material Adverse Effect. Insofar as known to the
responsible officers of the Company and the Parent, and after giving effect to
the Merger and the Acquisition neither the Parent nor any Subsidiary is liable,
in whole or in part, for, nor are any of the assets or property of the Parent or
any Subsidiary subject to a lien in favor of any Governmental Body for any
material liability arising from or in any way relating to, the costs of cleaning
up, remediating or responding to a release of hazardous substances (including,
without limitation, petroleum, its by-products or derivatives, or other
hydrocarbons).
Section 6.10. Certain Contracts. The Company has delivered true copies of
the Stock Purchase Agreement, the Asset Transfer Agreement and the Marketing
Agreement and all amendments thereto to the Lenders.
Section 6.11. Stock Purchase Agreement Warranties. Nothing has come to the
attention of the Company or the Parent that would indicate that any
representation of Dean Foods contained in the Stock Purchase Agreement is untrue
in any respect which would have a Material Adverse Effect.
Section 6.12. Restrictive Agreements. Neither the Parent nor any Subsidiary
nor, to their knowledge, DFVC, is a party to any contract or agreement, or
subject to any charge or other corporate restriction, which affects its ability
to execute, deliver and perform the Loan Documents to which it is a party and
repay its indebtedness, obligations and liabilities under the Loan Documents or
which materially and adversely affects or, insofar as the Parent and the Company
can reasonably foresee, could reasonably be expected to have a Material Adverse
Effect.
Section 6.13. No Default under Other Agreements. Neither the Parent nor any
Subsidiary is in default with respect to any note, indenture, loan agreement,
mortgage, lease, deed, or other agreement to which it is a party or by which it
or its Property is bound, which default could reasonably be expected to have a
Material Adverse Effect.
Section 6.14. Status under Certain Laws. Neither the Parent nor any
Subsidiary is an "investment company" or a person directly or indirectly
controlled by or acting on behalf of an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or a "holding Company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company," within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
Section 6.15. Year 2000 Compliance. The Parent and the Company have
conducted a comprehensive review and assessment of the computer applications of
the Parent and its Subsidiaries and has made inquiry of their material
suppliers, vendors (including data processors) and customers, with respect to
any defect in computer software, data bases, hardware, controls and peripherals
related to the occurrence of the year 2000 or the use at any time of any date
which is before, on or after December 31, 1999, in connection therewith. Based
on the foregoing review, assessment and inquiry, the Parent and the Company
believe that no such defect could reasonably be expected to have a Material
Adverse Effect.
Section 6.16. Solvency, Etc. On the initial Borrowing date and after giving
effect to the Acquisition and the Merger and the financing thereof, (i) the
assets of the Parent and of each Subsidiary, at a fair valuation, will exceed
its liabilities, including contingent liabilities, (ii) the remaining capital of
the Parent and of each Subsidiary will not be unreasonably small to conduct, or
in relation to, its business or any transaction in which it intends to engage,
and (iii) the Parent and each Subsidiary will not have incurred debts, and does
not intend to incur debts, beyond its ability to pay such debts as they mature.
For purposes of this Section, "debt" means any liability on a claim, and "claim"
means (i) right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured; or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured,
or unsecured.
SECTION 7. CONDITIONS PRECEDENT.
Section 7.1. All Advances. The obligation of the Lenders to make any
Borrowing available hereunder (including the first Borrowing) or of the Issuing
Bank to issue any Letter of Credit shall be subject to the provisions of
Sections 9.2 and 9.3 hereof and shall also be subject to the satisfaction of the
following conditions precedent at the time of the making of each Borrowing or
the issuance of a Letter of Credit under the Revolving Credit:
(a) each of the representations and warranties set forth herein and in
the other Loan Documents shall be true and correct as of the date of such
Borrowing or issuance (except the representations and warranties made in
Section 6.4 hereof shall be deemed to refer to the most recent financial
statements delivered to the Lenders pursuant to Section 8.5 hereof); and
(b) no Default or Event of Default shall have occurred and be
continuing.
Any request made by the Company for a Borrowing or a Letter of Credit hereunder
shall be deemed to constitute a representation and warranty that the foregoing
statements are true and correct. In addition, in the case of the issuance of a
Letter of Credit, the Issuing Bank shall have received a properly completed
Application therefor and its fee therefor.
Section 7.2. Initial Advance. At or prior to the time of the initial
Borrowing hereunder or the issuance of the initial Letter of Credit, the
following conditions precedent shall also have been satisfied:
(a) The Administrative Agent shall have received the following for the
account of the Lenders (each to be properly executed and completed) and the
same shall have been approved as to form and substance by the Agents:
(i) this Agreement and the Notes;
(ii) copies (executed or certified as may be appropriate) for
each Lender of the articles of incorporation and by-laws of and good
standing certificates for the Parent and each Guarantor and of all
legal documents or proceedings taken in connection with the execution
and delivery of the Loan Documents to the extent the Administrative
Agent or its counsel may reasonably request, including, without
limitation, certificates as to the incumbency and authority of, and
setting forth a specimen signature of, each officer who is to sign any
Loan Document;
(iii) the Acquisition and the Merger shall have been consummated
without material deviation from the terms of the Stock Purchase
Agreement and Asset Transfer Agreement and without modification
thereto or waivers of the terms or conditions thereof (except for
modifications and waivers approved by the Administrative Agent) and
with the Company's asceptic business having been transferred to Dean
Foods or a Subsidiary thereof and (aa) with the amount of cash
expended by the Parent and its Subsidiaries in respect of such
Acquisition not being in excess of $360,000,000 plus amounts payable
pursuant to the working capital adjustment provisions of the Stock
Purchase Agreement, (ab) with the sum of such amounts plus amounts
required to refinance indebtedness of the Company and DFVC required to
be repaid pursuant to the terms of Section 7.2(a)(vii) hereof plus
financing costs and costs of retiring Indebtedness funded through
borrowings under this Agreement not to exceed $560,000,000, and (ac)
immediately after consummation of the Acquisition and Merger, the
Parent shall have Consolidated Net Worth of not less than
$160,000,000;
(iv) the Collateral Documents and any documentation necessary to
perfect the liens thereby created (including, without limitation, all
certificates of capital stock of the Company and the Pledging
Guarantors which are corporations together with executed blank stock
powers therefor, and with all financing statements requested by the
Administrative Agent in connection with the Collateral Documents) to
the extent required by Section 5.1 hereof;
(v) evidence of the maintenance of insurance as required hereby
or by the Collateral Documents;
(vi) a certificate from an authorized officer of the Company
stating (i) whether the pro forma consolidated balance sheet of the
Parent and its Subsidiaries delivered to the Lenders and referred to
in the last sentence of Section 6.8 hereof, is accurate in all
material respects as of the date the other conditions precedent to the
initial advance under this Section 7.2 are satisfied or, if not,
setting forth the differences, and (ii) that the conditions set forth
in clause (iii) above have been satisfied;
(vii) a pay-off letter or letters from all lenders under loan
arrangements not permitted to exist after the initial Borrowing or
Letter of Credit hereunder in form and substance satisfactory to the
Administrative Agent and such other evidence that all of the Parent's
and its Subsidiaries' indebtedness thereunder has been fully paid and
that the liens securing same have been or will be released, as the
Administrative Agent may require;
(viii) with respect to the liens on real property (the "Mortgaged
Premises"), a commitment or commitments from Lawyers Title Insurance
Corporation (the "Title Company") stating that it is prepared to issue
its standard form of ALTA mortgagee's title policy or policies with
such endorsements as the Administrative Agent reasonably requests,
such policy showing title to the Mortgaged Premises in the Company or
Guarantors and insuring such Mortgages as a first lien (except as
otherwise permitted by Section 5.1 hereof), without unacceptable
encroachments or prior rights of others on the Mortgaged Premises,
subject only to current general taxes and assessments not yet
delinquent and other exceptions which are acceptable to the
Administrative Agent and with the amount of coverages under such
policies to be acceptable to the Administrative Agent;
(ix) such additional documents, opinions or undertakings as may
be required by the Title Company in order to provide the insurance to
be afforded to the Administrative Agent pursuant to this Section 7.2;
(x) a Phase I environmental assessment of the Mortgaged Premises
(other than properties of DFVC) prepared by environmental consultants
selected by the Company and acceptable to the Administrative Agent
showing no condition that is not acceptable to the Administrative
Agent; and
(xi) satisfactory appraisal reports with respect to the Mortgaged
Premises from appraisers satisfactory to the Administrative Agent
which meet or exceeds the requirements of FIRREA.
(b) The liens and security interests granted to the Administrative
Agent under the Collateral Documents shall have been perfected to the
extent required by Section 5.1 hereof or such perfection shall have been
provided for in a manner satisfactory to the Administrative Agent;
(c) The Company and Dean Foods shall have received such approvals,
exemptions, consents or withholdings of objection from Governmental Bodies
as are necessary in order to lawfully consummate the Acquisition and the
Merger and same shall not have been stayed, revoked or overturned and no
petition or application shall be pending, seeking to modify, stay, revoke
or overturn the same except for such thereof as are acceptable to the
Agents;
(d) The Administrative Agent shall have received a solvency opinion as
to the Company and its Subsidiaries after giving effect to the Acquisition
and the Merger from Houlihan Lokey Howard & Zukin Financial Advisors, Inc.
satisfactory in form and substance to the Administrative Agent;
(e) The Company shall have delivered to the Administrative Agent (i) a
pro forma balance sheet of the Parent and its Subsidiaries after giving
effect to the Acquisition and the Merger; and (ii) projections for the
ensuing five years, and such pro forma consolidating balance sheet and such
projections shall be satisfactory to the Administrative Agent;
(f) No material litigation or administrative proceedings shall be
pending or threatened against the Parent or its Subsidiaries;
(g) The Agents shall have received for their own account the fees to
be received by them at such time by agreement with the Company;
(h) the Subordinated Bridge Loan shall have been funded;
(i) not less than $1,000,000 of the Existing Subordinated Notes shall
have been purchased by the Company or redeemed and the Existing
Subordinated Notes Indenture shall have been amended as provided in the
form of Third Supplemental Indenture heretofore delivered to the Agents;
and
(j) The Administrative Agent shall have received for the account of
the Lenders such other agreements, instruments, documents, certificates and
opinions as the Administrative Agent may reasonably request.
Section 7.3. Legal Matters. Legal matters incident to the execution and
delivery of the Loan Documents and the other instruments and documents
contemplated hereby and the Acquisition and the Merger shall be satisfactory to
the Agents and their counsel, and the Lenders shall have received the favorable
written opinions of acceptable counsel for the Parent and each Subsidiary party
to the Loan Documents, in form and substance and with such limitations,
assumptions and qualifications as shall be satisfactory to the Administrative
Agent and its counsel, with respect to:
(a) the due organization and existence of the Parent and each such
Subsidiary and the due licensing or qualification of the Parent and each
such Subsidiary in all jurisdictions where a material part of the
Collateral is located or where the failure to be so qualified could have a
Material Adverse Effect;
(b) the power and authority of the Parent and each such Subsidiary to
enter into the Loan Documents (and of the Company to consummate the
Acquisition and the Merger) and to perform and observe all the matters and
things herein and therein provided for and the fact that the execution and
delivery of the Loan Documents and the consummation of the Acquisition and
the Merger will not, nor will the observance or performance of any of the
matters or things therein or herein provided for, contravene any provision
of law or of the charter or by-laws, operating agreement or management
agreement of the Parent or any such Subsidiary;
(c) the due authorization for and the validity and enforceability of
the Loan Documents (other than of mortgages);
(d) the fact that no governmental authorization, consent, exemption or
withholding of objection is required with respect to the lawful execution,
delivery and performance of the Loan Documents or consummation of the
Acquisition and Merger other than such thereof as have been obtained and
are in full force and effect;
(e) the fact that the Merger and Acquisition have been consummated;
(f) except to the extent set forth on Schedule 6.5, the lack, to the
knowledge of such counsel, of any legal or administrative proceedings
pending or threatened against DFVC (but without independent inquiry as to
matters affecting only DFVC), the Parent or any Subsidiary which seeks to
prevent the consummation of the Acquisition or the Merger or which, if
adversely determined, would result in a Material Adverse Effect after
giving effect to the Acquisition and Merger; and
(g) such other matters as the Administrative Agent or its counsel may
reasonably require.
SECTION 8. COVENANTS.
The Parent and the Company agree that, so long as any credit is available
to or in use by the Company hereunder, except to the extent compliance in any
case or cases is waived in writing by the Required Lenders:
Section 8.1. Maintenance of Business. The Parent will, and will cause each
Subsidiary to, preserve and keep in force and effect all licenses and permits
necessary to the proper conduct of their respective businesses except where the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect.
Section 8.2. Maintenance. The Parent will, and will cause each Subsidiary
to, maintain, preserve and keep their plant, properties and equipment (other
than obsolete or worn out equipment held for sale or disposition) in reasonably
good repair, working order and condition (ordinary wear and tear excepted) and
the Parent will, and will cause each Subsidiary to, from time to time make all
needful and proper repairs, renewals, replacements, additions and betterments
thereto so that at all times the efficiency thereof shall be substantially
preserved and maintained, in each case where the failure to do so is reasonably
likely to have a Material Adverse Effect.
Section 8.3. Taxes. The Parent will, and will cause each Subsidiary to,
duly pay and discharge all taxes, rates, assessments, fees and governmental
charges upon or against any of them or against their respective properties, in
each case before the same become delinquent and before penalties accrue thereon,
unless and to the extent that the same are being contested in good faith and by
appropriate proceedings, in each case where the failure to do so is reasonably
likely to have a Material Adverse Effect.
Section 8.4. Insurance. The Parent will, and will cause each Subsidiary to,
insure and keep insured, with good and responsible insurance companies, all
insurable property owned by them which is of a character usually insured by
companies similarly situated and operating like properties; and the Parent will,
and will cause each Subsidiary to, insure such other hazards and risks
(including employers', product liability and public liability risks) in good and
responsible insurance companies as and to the extent usually insured by
companies similarly situated and conducting similar businesses. The Parent will
upon request of the Administrative Agent furnish a certificate setting forth in
summary form the nature and extent of the insurance maintained pursuant to this
Section.
Section 8.5. Financial Reports. The Parent will, and will cause each
Subsidiary to, maintain a standard and modern system of accounting in accordance
with sound accounting practice and will furnish to the Lenders and their duly
authorized representatives such information respecting the business and
financial condition of the Parent and its Subsidiaries as any Lender (acting
through the Administrative Agent) may reasonably request; and without any
request, will furnish to the Lenders:
(a) within 45 days after the close of each quarterly fiscal period of
the Parent and the Company, a copy of the balance sheets, statements of
operations and statements of cash flow of the Parent and its Subsidiaries
and of the Company and its Subsidiaries for such period, prepared on a
consolidated basis in accordance with GAAP, and the notes thereto, all
certified (subject to year end audit adjustments which are not expected to
be material) by the chief financial officers of the Company and the Parent;
(b) within 90 days after the close of each fiscal year of the Company
and the Parent, a copy of the audit report for such year and accompanying
financial statements, including balance sheets, statements of operations
and statements of cash flow on a consolidated basis for the Parent and its
Subsidiaries and the Company and its Subsidiaries in accordance with GAAP,
and the notes thereto, certified without qualification by independent
public accountants of recognized standing selected by the Parent and the
Company and satisfactory to the Required Lenders (the "Auditors");
(c) within the periods provided in paragraphs (a) and (b) above, a
certificate of an authorized financial officer of the Company stating that
such officer has reviewed the provisions of this Agreement and setting
forth: (aa) the information and computations (in sufficient detail)
required in order to compute the Leverage Ratio and (in the case of the
year end statements only) Excess Cash Flow and to establish whether the
Company was in compliance with the requirements of Sections 8.8, 8.9, 8.10,
8.11, 8.12, 8.13, 8.14, 8.15, 8.17 8.18 and 8.20 hereof at the end of the
period covered by the financial statements then being furnished, and (ab)
to the best of such officer's knowledge, whether there exists on the date
of the certificate or existed at any time during the period covered by such
financial statement any Default or Event of Default and, if any such
condition or event exists on the date of the certificate or existed during
such period, specifying the nature and period of existence thereof and the
action the Company is taking, has taken or proposes to take with respect
thereto; and
(d) within the period provided in paragraph (b) above, a business plan
for the Parent and its Subsidiaries for the ensuing fiscal year and
projections for the Parent and its Subsidiaries for the ensuing five fiscal
years, all in detail reasonably acceptable to the Administrative Agent.
The Parent will, and will cause each Subsidiary to, permit
representatives of any Lenders, upon reasonable notice and during normal
business hours, to examine and make extracts from the books and records of the
Parent and its Subsidiaries and to examine their assets and access thereto shall
be permitted for such purpose.
Section 8.6. Compliance with Laws. The Parent will, and will cause each
Subsidiary to, comply with all Governmental Requirements to which they are
subject, including, without limitation, the Occupational Safety and Health Act
of 1970, as amended, ERISA, and all laws, ordinances, governmental rules and
regulations relating to environmental protection in all applicable
jurisdictions, the violation of which is reasonably likely to have a Material
Adverse Effect or would result in any lien or charge upon any property of the
Parent or any Subsidiary which is not a Permitted Lien.
Section 8.7. Nature of Business. The Parent will not, nor will it permit
any Subsidiary to, engage in any business or activity if, as a result, the
general nature of the business which would then be engaged in by the Parent and
its Subsidiaries taken as a whole would be substantially changed from the
business in which they are engaged after giving effect to the Acquisition.
Section 8.8. Liens. The Parent will not, nor will it permit any Subsidiary
to, pledge, mortgage or otherwise encumber or subject to, or permit to exist
upon or be subjected to, any lien, security interest or charge upon, any assets
of the Parent or any Subsidiary; provided, however, that nothing in this Section
contained shall operate to prevent any of the following (collectively,
"Permitted Liens"):
(a) liens, pledges or deposits in connection with workmen's
compensation, unemployment insurance, social security obligations, taxes,
assessments, statutory obligations or other similar charges, good faith
deposits in connection with tenders, contracts or leases to which the
Parent or any of its Subsidiaries is a party or other deposits required to
be made in the ordinary course of business and not in connection with
borrowing money or obtaining advances or credit; provided in each case that
the obligation or liability arises in the ordinary course of business and
is not overdue, or if overdue, is being contested in good faith by
appropriate proceedings which prevent enforcement of the matter under
contest and adequate reserves have been established therefor to the extent
required by GAAP;
(b) inchoate statutory, construction, common carrier's, materialmen's,
landlord's, warehousemen's, mechanics, producers' or operator's liens
securing obligations not overdue, or if overdue, being contested in good
faith by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves have been established therefor to the
extent required by GAAP;
(c) the liens created by the Loan Documents;
(d) attachment or judgment liens to the extent, but only to the
extent, the attachment or judgment in question is not an Event of Default
under Section 9.1(f);
(e) liens for taxes, assessments or other governmental charges not yet
due and payable or which are being diligently contested in good faith by
the Parent or its applicable Subsidiary by appropriate proceedings,
provided that in any such case an adequate reserve is being maintained by
the Parent or such Subsidiary for the payment of same;
(f) easements, licenses, permits, rights-of-way, rights of entry or
passage, rights of lessees, restrictions and other similar encumbrances
incurred in the ordinary course of business which do not secure debt for
money borrowed or its equivalent, and which do not materially detract from
the value of the Property subject thereto or materially interfere with the
ordinary conduct of the business of the Parent or any Subsidiary or use of
the assets in question for their intended purposes;
(g) liens described on Exhibit J attached hereto, encumbering the
assets noted thereon opposite the description of the indebtedness or
obligation secured thereby and extensions and renewals of the foregoing
Permitted Liens, provided that the aggregate amount of such liabilities
secured by such extended or renewed lien is not increased and such extended
or renewed liabilities secured by such lien are on terms and conditions no
more restrictive than the terms and conditions of the same being extended
or renewed;
(h) liens securing indebtedness which is paid in full at the time of
the initial Borrowing and which are promptly discharged; and
(i) liens not otherwise permitted hereby securing obligations
permitted by Section 8.9(g) hereof and not aggregating in excess of
$20,000,000 ($10,000,000 while the Subordinated Bridge Loan is outstanding)
at any one time outstanding.
Section 8.9. Indebtedness. The Parent will not, nor will it permit any
Subsidiary to, issue, incur, assume, create, or have outstanding any
Indebtedness; provided, however, that the foregoing provisions shall not
restrict nor operate to prevent:
(a) Indebtedness owing to the Administrative Agent, the Issuing Bank
and the Lenders under this Agreement or any of the other Loan Documents;
(b) Indebtedness described on Exhibit I attached hereto;
(c) Subordinated Debt;
(d) Existing Subordinated Notes (and guarantees thereof by the
Guarantors) in an aggregate principal amount not in excess of $1,000,000;
(e) Indebtedness of the Parent and the Company to each other and to
the Guarantors and Indebtedness of the Guarantors to the Parent, the
Company and each other, provided that the Indebtedness of the Parent to the
Company shall not exceed $40,000,000 at any one time outstanding;
(f) Indebtedness which is paid in full concurrently with the initial
Borrowing; and
(g) Indebtedness in addition to that otherwise permitted by this
Section 8.9 aggregating not more than $25,000,000 ($10,000,000 while the
Subordinated Bridge Loan is outstanding) at any time outstanding.
Section 8.10. Consolidated Net Worth. The Parent will at all times maintain
Consolidated Net Worth of not less than the Minimum Required Amount. The Minimum
Required Amount shall be $150,000,000 provided that (i) on the last day of each
fiscal year of the Parent (commencing with the 1999 fiscal year) the Minimum
Required Amount as then in effect shall be increased by 50% of positive
Consolidated Net Income for such fiscal year and (ii) the Minimum Required
Amount shall be increased effective upon, and by, 90% of the amount of any
increase in Consolidated Net Worth resulting from the issuance and/or sale of
equity securities or interests by the Parent or any Subsidiary (other than
issuances by the Parent of common equity to producers of agricultural
commodities purchased by it which issuances are in accordance with its past
practices).
Section 8.11. Leverage Ratio. The Parent will as of the last day of each
fiscal quarter (commencing with the second fiscal quarter of fiscal 1999), have
a Leverage Ratio of not more than that specified for such fiscal quarter below:
MAXIMUM LEVERAGE RATIO
FOR FISCAL QUARTERS : SHALL BE
Second Fiscal Quarter of Fiscal 1999 6.00 to 1
Third Fiscal Quarter of Fiscal 1999 5.75 to 1
Fourth Fiscal Quarter of Fiscal 1999 5.5 to 1
All Fiscal Quarters of Fiscal 2000 5.0 to 1
All Fiscal Quarters of Fiscal 2001 4.5 to 1
All Fiscal Quarters of Fiscal 2002 4.0 to 1
All Fiscal Quarters Thereafter 3.5 to 1
The foregoing to the contrary notwithstanding, if the Parent has a Leverage
Ratio of 3.0 to 1 or less computed as of the last day of two consecutive fiscal
quarters ending subsequent to the close of its 1999 fiscal year, then the Parent
shall have a Leverage Ratio as of the last day of each fiscal quarter ending
thereafter of not less than 3.5 to 1.
Section 8.12. Fixed Charge Coverage Ratio. The Parent will as of the last
day of each fiscal quarter (commencing with the second fiscal quarter of fiscal
1999) have a Fixed Charge Coverage Ratio of not less than that specified for
such fiscal quarter below:
As of the last day of the Fixed Charge Coverage Ratio
following fiscal quarters shall not be less than
Second through Fourth of fiscal 1999 1.05 to 1
First through Fourth of fiscal 2000 and First of fiscal 2001 1.15 to 1
Second through Fourth of fiscal 2001 and First of fiscal 2002 1.20 to 1
all fiscal quarters thereafter 1.25 to 1
Section 8.13. EBITDA. The Parent will as of the last day of each
fiscal quarter have EBITDA for the period of four fiscal quarters then ended of
not less than that specified for such fiscal quarter below (with EBITDA for
periods prior to the Acquisition Closing Date computed as though DFVC were at
all times a Subsidiary of the Company and as though the Company had not owned
its asceptic business):
For fiscal quarters: EBITDA shall not be less than
First and second of fiscal 1999 $115,000,000
Third of fiscal 1999 $120,000,000
Fourth of fiscal 1999 $125,000,000
First and second of fiscal 2000 $130,000,000
Third and fourth of fiscal 2000 $135,000,000
First and second of fiscal 2001 $140,000,000
all fiscal quarters ended after the second fiscal $145,000,000
quarter of fiscal 2001
Section 8.14. Interest Coverage Ratio. The Parent will as of the last day
of each fiscal quarter (commencing with the second fiscal quarter of fiscal
1999) have an Interest Coverage Ratio of not less than that specified for such
quarter below:
Interest Coverage Ratio
For fiscal quarters: shall not be less than
Second through fourth of fiscal 1999 and First of 1.90 to 1
fiscal 2000
Second of fiscal 2000 2.05 to 1
Third and fourth of fiscal 2000 and first of fiscal 2.20 to 1
2001
Second and Third of fiscal 2001 2.30 to 1
Fourth of fiscal 2001 2.40 to 1
First and Second of fiscal 2002 2.50 to 1
Third of fiscal 2002 2.60 to 1
Fourth of fiscal 2002 and First of fiscal 2003 2.70 to 1
Second and Third of fiscal 2003 2.80 to 1
all fiscal quarters thereafter 3.00 to 1
Section 8.15. Net Capital Expenditures. The Parent shall not and shall not
permit its Subsidiaries to expend for Net Capital Expenditures in any fiscal
year in excess of (a) $25,000,000 plus (b) (in the case of fiscal 1999 and all
subsequent fiscal years) the lesser of $10,000,000 or the amount by which Net
Capital Expenditures for the immediately preceding year were less than
$25,000,000.
Section 8.16. Rentals. The Parent will not, and will not permit any
Subsidiary to, enter into any lease or other agreement for the use or possession
of Property if after giving effect thereto the aggregate liability of the Parent
and its Subsidiaries for Rentals (other than Capitalized Rentals) in any fiscal
year would exceed $25,000,000.
Section 8.17. Acquisitions, Investments, Loans and Advances and Guarantees.
The Parent will not, nor will it permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any interest or investments
(whether through purchase of stock or obligations or otherwise) in, or loans or
advances to, any other Person, or acquire all or any substantial part of the
assets or business of any other Person; provided, however, that the foregoing
provisions shall not apply to nor operate to prevent:
(a) investments by the Parent or any Subsidiary in direct obligations
of the United States of America or of any agency or instrumentality thereof
whose obligations constitute full faith and credit obligations of the
United States of America, provided that any such obligations shall mature
within twelve months from the date the same are acquired by the Parent or
such Subsidiary;
(b) investments by the Parent or any Subsidiary in certificates of
deposit or time deposits issued by any Lender, or by any United States
commercial bank having capital and surplus of not less than $100,000,000
and having a maturity of twelve months or less;
(c) investments by the Parent or any Subsidiary in commercial paper
maturing 270 days or less from the date of issuance which at the time of
acquisition is rated A-1 or better by Standard & Poor's Ratings Services
Group, a division of the McGraw-Hill Companies and P-1 or better by Moody's
Investors Service, Inc.;
(d) investments by the Parent or any Subsidiary in debt securities
issued by U.S. corporations or states of the United States maturing within
twelve months from the date of acquisition thereof if at the time of
acquisition the investment in question has a rating of not less than AA
from Standard & Poor's Ratings Services Group, a division of The
McGraw-Hill Companies, Inc. and/or Aa2 from Moody's Investors Services,
Inc.;
(e) investments by the Parent or any Subsidiary in preferred stock of
any corporation organized under the laws of any state of the United States
which is subject to a remarketing undertaking at intervals not exceeding
twelve months issued by any substantial broker and which is rated AA or
better by Standard & Poor's Ratings Services Group, a division of The
McGraw-Hill Companies, Inc. and/or Aa2 or better by Moody's Investors
Services, Inc.;
(f) the Acquisition;
(g) other acquisitions by the Parent or any Subsidiary of the capital
stock of or assets or business of any Person, including acquisitions
accomplished by a merger of the Parent or any Subsidiary with any other
Person which is permitted by Section 8.19 hereof, provided that (i)
immediately after giving effect thereto no Default or Event of Default has
occurred and is continuing, (ii) immediately after giving effect thereto
the aggregate amount expended by the Parent and its Subsidiaries on account
of all such acquisitions (including in such amounts expended, the amount of
all indebtedness assumed by the Parent and its Subsidiaries in connection
therewith, all indebtedness secured by liens on the assets acquired and all
indebtedness of the Person in question, (in the event the acquisition is of
an equity interest in such Person)) during the period from the date hereof
to and including the last day of fiscal 1999 shall not exceed $10,000,000
and during each period of twelve consecutive months concluding thereafter
shall not exceed the greater (aa) $10,000,000 or, (ab) if but only if the
acquisition occurs subsequent to the first date after the date hereof when
the Leverage Ratio computed as of the last day of each of the four fiscal
quarters of the Parent most recently concluded prior to the consummation of
the Acquisition in question has been equal to or less than 3.5 to 1, (but
in the case of the last of such fiscal quarters, substituting Consolidated
Total Indebtedness as it exists on the date of and after giving effect to
the consummation of the acquisition in question for Consolidated Total
Indebtedness as it existed an the last day of such fiscal quarter)
$25,000,000, and (iii) the acquisition in question shall have been approved
by the board of directors or similar governing body of the Person being, or
whose assets are being, acquired;
(h) loans and advances by the Parent or any Subsidiary to the Parent,
the Company, and/or any Guarantor provided that the corresponding
Indebtedness is permitted by Section 8.9 hereof;
(i) existing investments, loans and advances identified on Exhibit K
hereto; and
(j) investments in, and loans and advances to Persons not
otherwise permitted by this Section at no time aggregating more than
$10,000,000.
In determining the amount of investments, loans and advances permitted under
this Section, investments shall always be taken at the original cost thereof,
regardless of any subsequent appreciation (including retained earnings) or
depreciation therein, loans and advances shall be taken at the principal amount
thereof.
Section 8.18. Restricted Payments. The Parent shall not during any fiscal
year (a) declare or pay any distributions in respect of any equity interest in
the Parent or (b) directly or indirectly purchase, redeem or otherwise acquire
or retire any equity interest in the Parent (collectively, "Restricted
Payments"); provided, however, that the Parent may, provided in each instance
that after giving effect thereto no Default or Event of Default has occurred and
is continuing (i) pay dividends on its non cumulative preferred stock at the
annual rate of $1.50 per share (ii) pay dividends on its Class A cumulative
preferred stock of the annual rate of up to $2.00 per share (iii) pay dividends
on its Class B cumulative preferred stock at the annual rate of $1.00 per share
(iv) pay dividends on its common stock at a rate not in excess of 8% per annum
(v) make distributions to its members of up to 30% of each fiscal year's
"Earnings on Pro-Fac Products" as such term is defined in the Marketing
Agreement as in effect on the date hereof and computed consistent with past
practice and (vi) expend up to $2,000,000 in any fiscal year to repurchase,
redeem or otherwise acquire or retire its common and/or preferred stock or to
pay nonqualified retains.
Section 8.19. Mergers. The Parent will not, nor will it permit any
Subsidiary to, consolidate or be a party to a merger with any other Person,
except that so long as no Default or Event of Default has occurred and is
continuing or would arise as a result thereof (i) any Subsidiary of the Parent
may merge with and into the Parent or the Company if the Parent or the Company
is the surviving corporation, (ii) any Subsidiary may merge with and into any
other Subsidiary if and so long as if either of such Subsidiaries is a
Guarantor, the Guarantor is the survivor thereof, (iii) the Merger may be
consummated and (iv) the Parent or any Subsidiary may merge with any other
Person if the Parent or the relevant Subsidiary is the survivor and the merger
is permitted by and treated as an acquisition for purposes of Section 8.17(g)
hereof.
Section 8.20. Sales of Assets. The Parent will not, nor will it permit any
Subsidiary to, sell, lease or otherwise dispose of any of its Property
(including any disposition of Property as part of a sale and leaseback
transaction); provided, that nothing contained therein shall prohibit (i) sales
of inventory in the ordinary course of business; (ii) sales or dispositions of
obsolete or worn out Property disposed of in the ordinary course of business;
(iii) sales as part of sale and leaseback transactions provided that the fair
value of all Property subject to such transactions consummated in any fiscal
year of the Parent shall not exceed $10,000,000; (iv) transfers of assets of
Subsidiaries to the Company in connection with the liquidation and/or
dissolution of such Subsidiaries; (v) transfers of patents, trademarks,
copyrights and other intellectual property from the Company to Linden Oaks
Corporation provided that (aa) such steps are taken as the Administrative Agent
may reasonably require in order to assure that its liens thereon are not
impaired by such transfers and (ab) from and after the first such transfer and
continuously thereafter Linden Oaks Corporation remains a wholly owned
subsidiary of the Company and a Pledging Guarantor hereunder and (vi) sales,
leases and other dispositions of Property not otherwise permitted by this
Section 8.20 aggregating in any fiscal year not more than five percent of the
consolidated tangible assets of the Parent and its Subsidiaries as of the first
day of such fiscal year. Anything contained in this Agreement to the contrary
notwithstanding, the Parent will not nor will it permit the Company to, without
the consent of the Required Lenders, sell (or in the case of the Company, issue)
capital stock of the Company (other than to the Parent). At the request of the
Company, so long as no Default or Event of Default then exists or would arise as
a result of such disposition, the Administrative Agent is hereby authorized to
release its lien on any Property sold pursuant to the foregoing provisions.
Section 8.21. Burdensome Contracts with Affiliates. The Parent will not,
nor will it permit any Subsidiary to, enter into or be a party to any contract
or agreement with an Affiliate on terms and conditions materially less favorable
to the Parent or such Subsidiary than would be usual and customary in similar
contracts or agreements between Persons not affiliated with each other.
Section 8.22. No Change in Fiscal Year. The Parent will not, nor will it
permit any Subsidiary to, have a fiscal year other than the present fiscal year
of the Parent (i.e., fiscal years ending on the last Saturday of June and fiscal
quarters of thirteen calendar weeks, provided that the Required Lenders shall
not unreasonably withhold their consent to such a change if in connection
therewith the provisions of this Agreement measuring covenant compliance or
payments with reference to fiscal periods are renegotiated in a manner
reasonably acceptable to them.
Section 8.23. Formation of Subsidiaries. In the event any Subsidiary is
formed or acquired after the date hereof which meets the definition of the term
"Guarantor" herein or any Subsidiary which did not formerly meet the criteria
for treatment as a Guarantor meets such requirements, the Parent shall within
thirty (30) Business Days thereof cause such Subsidiary to execute an Additional
Guarantor Supplement in the form annexed hereto as Exhibit G with such
modifications as may be approved by the Administrative Agent (an "Additional
Guarantor Supplement") and cause such Guarantor to execute and deliver to the
Administrative Agent Additional Guarantor Documentation with respect to it and,
if such Guarantor is a Pledging Guarantor, cause such Pledging Guarantor to take
such actions as the Administrative Agent may require to subject those of its
assets included within the term "Collateral" to liens in favor of the
Administrative Agent of the priority required by this Agreement.
Section 8.24. No Restriction on Subsidiary Dividends. Neither the Parent
nor any Subsidiary is a party to, nor will the Parent or any Subsidiary become a
party to, any agreement prohibiting or otherwise restricting the declaration or
payment of any dividends or equity distributions by any such Subsidiary provided
that the foregoing restrictions shall not apply to debt agreements in effect on
the date hereof which are terminated concurrently with the first extension of
credit hereunder.
Section 8.25. Interest Rate Protection. Within 90 days of the date hereof
the Company shall enter into and continuously maintain an interest rate hedging
program with parties and on terms reasonably acceptable to the Agents pursuant
to which the Company will be protected against increases in the LIBOR Rate above
a rate acceptable to the Administrative Agent for a period of four years and for
an amount approximating 50% of the amount of the Term Loans scheduled to be
outstanding during such four year period (the "Hedging Program").
Section 8.26. Concerning the Subordinated Debt. The Parent and the Company
will not make (or give any notice for) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of any Subordinated Debt or
make any payment of principal or interest thereon in violation of the
subordination provisions thereof or amend or modify in any material respect any
term, covenant or provision of any Subordinated Debt or set off any amounts
against any Subordinated Debt provided, however that the foregoing shall not
apply to or restrict the payment or retirement of Subordinated Debt out of the
net proceeds received from any concurrent issuance of additional Subordinated
Debt or the payment or retirement of the Subordinated Bridge Loan.
Section 8.27. Concerning the Marketing Agreement. The Parent and the
Company will comply in all material respects with their respective obligations
under the Marketing Agreement and will not amend or modify same in any material
respect or terminate the same.
Section 8.28. Year 2000 Assessment. The Parent shall take all actions
necessary and commit adequate resources to assure that its computer-based and
other systems (and those of all Subsidiaries) are able to effectively process
dates, including dates before, on and after January 1, 2000, without
experiencing any Year 2000 Problem that could cause a material adverse effect on
the business or financial affairs of the Parent and its Subsidiaries taken on a
consolidated basis. At the request of the Administrative Agent, the Parent and
the Company will provide the Administrative Agent with written assurances and
substantiations (including, but not limited to, the results of internal or
external audit reports prepared in the ordinary course of business) reasonably
acceptable to the Administrative Agent as to the capability of the Parent and
its Subsidiaries to conduct its and their businesses and operations before, on
and after January 1, 2000, without experiencing a Year 2000 Problem causing a
Material Adverse Effect.
Section 8.29. Preservation of Cooperative Status. The Parent will preserve,
renew and keep in full force and effect its corporate existence and status as a
cooperative association as defined in Section 1141j(a) of Title 12 of the United
States Code.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.
Section 9.1. Events of Default Any one or more of the following shall
constitute an "Event of Default" hereunder:
(a) default in the payment of any amount of the principal of any Note
or any amount due under an Application when due, whether at the stated
maturity thereof or at any other time provided for in this Agreement, or
default in the payment when due of any interest, fee, charge or other
amount payable by the Company hereunder or under any other Loan Document
and the continuance of such default for three Business Days after notice
thereof to the Company from the Administrative Agent or any Lender;
(b) default in the observance or performance of any covenant set forth
in Sections 8.5, 8.9, 8.10, 8.11, 8.12, 8.13, 8.14, 8.15, 8.16, 8.17(g),
8.18, 8.19, 8.23, 8.24, 8.25, 8.26 or 8.27 hereof or of any Collateral
Document dealing with the use, disposition or remittance of the proceeds of
Collateral or the maintenance of insurance thereon;
(c) default in the observance or performance of any other provision
hereof or any of the other Loan Documents which is not remedied within 30
days after written notice thereof to the Company by any Lender or by the
holder of any Note;
(d) default shall occur in the payment when due (whether by lapse of
time, acceleration or otherwise) of any indebtedness (including as such all
obligations included in Consolidated Total Indebtedness) aggregating in
excess of $5,000,000 issued, assumed or guaranteed by the Parent or any
Subsidiary or any other event of default shall occur with respect to any
such indebtedness beyond any period of grace provided therefor (provided
that if the default in question can result in the acceleration of the
maturity of Subordinated Debt, then it shall in any event constitute an
Event of Default hereunder two Business Days prior to the date on which the
Subordinated Debt in question will become due by acceleration);
(e) any representation or warranty made herein or in any of the other
Loan Documents or in any statement or certificate furnished pursuant hereto
or thereto, or in connection with any advance or issuance made hereunder or
by any Person in connection with the transactions contemplated hereby,
proves untrue in any material respect as of the date of the issuance or
making thereof;
(f) any judgment or judgments, writ or writs or warrant or warrants of
attachment, or any similar process or processes in an aggregate amount in
excess of $5,000,000 shall be entered or filed against the Parent or any
Subsidiary or against any of the property or assets of any of them and
remains undischarged, unvacated, unbonded or unstayed for a period of 30
days;
(g) any event occurs or condition exists which is specified as an
event of default under any of the other Loan Documents after the expiration
of any applicable notice or grace periods;
(h) any of the Loan Documents or the Marketing Agreement shall for any
reason not be or shall cease to be in full force and effect, or any of the
Loan Documents or the Marketing Agreement is declared to be null and void
as to any party, or the Parent or any Subsidiary takes any action for the
purpose of repudiating or rescinding any Loan Document executed by it or
the Marketing Agreement;
(i) a Change of Control occurs;
(j) the Parent or any Subsidiary becomes insolvent or bankrupt or
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or
laws for the relief of debtors are instituted against the Parent or any
Subsidiary and are not dismissed within 60 days after such institution or a
decree or order of a court having jurisdiction in the premises for the
appointment of a trustee or receiver or custodian for the Parent or any
Subsidiary or for the major part of any of their property is entered and
the trustee or receiver or custodian appointed pursuant to such decree or
order is not discharged within 60 days after such appointment; or
(k) the Parent or any Subsidiary shall institute bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings for relief under any bankruptcy law or laws for the relief of
debtors or shall consent to the institution of such proceedings against it
by others or to the entry of any decree or order adjudging it bankrupt or
insolvent or approving as filed any petition seeking reorganization under
any bankruptcy or similar law or shall apply for or shall consent to the
appointment of a receiver or trustee or custodian for it or for the major
part of any of their property or shall make an assignment for the benefit
of creditors or shall admit in writing its inability to pay its debts as
they mature or shall take any corporate action in contemplation or in
furtherance of any of the foregoing purposes.
Section 9.2. Non Bankruptcy Defaults. When any Event of Default described
in subsections 9.1(a) to 9.1(i), both inclusive, has occurred and is continuing,
the Administrative Agent may (and shall, upon request of the Required Lenders
or, in the case of clause (a) below, the Required Revolving Credit Lenders), by
notice to the Company, take any or all of the following actions:
(a) terminate the obligation of the Lenders to extend any further
credit hereunder on the date (which may be the date thereof) stated in such
notice (such termination shall be effective upon verbal notification, the
Administrative Agent hereby agreeing to provide written notification
thereof to the Company as soon as practical thereafter);
(b) declare the principal of and the accrued interest on the Notes to
be forthwith due and payable and thereupon the Notes, including both
principal and interest, and all fees, charges and commissions payable
hereunder, shall be and become immediately due and payable without further
demand, presentment, protest or notice of any kind;
(c) demand that the Company immediately provide to the Administrative
Agent cash collateral for the full amount of each Letter of Credit and the
Company agrees to immediately provide such cash collateral and acknowledges
and agrees that the Revolving Credit Lenders would not have an adequate
remedy at law for failure by the Company to honor any such demand and that
the Lenders shall have the right to require the Company to specifically
perform such undertaking whether or not any draws have been made under the
Letters of Credit; and
(d) enforce any and all rights and remedies available under the Loan
Documents or applicable law.
Section 9.3. Bankruptcy Defaults. When any Event of Default described in
subsections 9.1(j) or (k) has occurred and is continuing, then (a) the then
unpaid balance of the Notes, including both principal and interest, and all
fees, charges and commissions payable hereunder or under the Applications, shall
immediately become due and payable without presentment, demand, protest or
notice of any kind, (b) the obligation of the Lenders to extend further credit
pursuant to any of the terms hereof shall immediately and automatically
terminate, (c) the Company shall immediately provide to the Administrative Agent
cash collateral for the full amount of all Letters of Credit, whether or not
draws have been made thereon, the Company acknowledging that the Revolving
Credit Lenders would not have an adequate remedy at law for failure by the
Company to honor any such demand, and the Revolving Credit Lenders shall have
the right to require the Company to specifically perform such undertaking
whether or not any draws have been made under the Letters of Credit, and (d) the
Administrative Agent may exercise all remedies available to it under the Loan
Documents or applicable law.
SECTION 10. THE AGENT AND ISSUING BANK.
Section 10.1. Appointment and Authorization. Each Lender hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers hereunder and under the Loan Documents as are
delegated to the Administrative Agent by the terms hereof and thereof together
with such powers as are reasonably incidental thereto. The Administrative Agent
may delegate or perform any of its responsibilities hereunder to or through its
affiliates. The Administrative Agent or Issuing Bank may resign at any time by
sending twenty (20) days prior written notice to the Company and the Lenders and
may be removed by the Required Lenders upon twenty (20) days prior written
notice to the Company and the Lenders. In the event of any such resignation or
removal the Required Lenders may appoint a new Administrative Agent or Issuing
Bank as applicable, which shall succeed to all the rights, powers and duties of
the Administrative Agent or Issuing Bank hereunder and under the other Loan
Documents. If the Administrative Agent resigns or is removed, it shall also
cease to be the Swing Lender hereunder and its replacement as Administrative
Agent shall become the Swing Lender. Any resigning or removed Administrative
Agent or Issuing Bank or Swing Lender shall be entitled to the benefit of all
the protective provisions hereof with respect to its acts as an agent, issuer or
swing lender hereunder, but no successor shall in any event be liable or
responsible for any actions of its predecessor. If the Administrative Agent
resigns or is removed and no successor is appointed, the rights and obligations
of the Administrative Agent shall be automatically assumed by the Required
Lenders and (i) the Company shall be directed to make all payments due each
Lender hereunder directly to each Lender and (ii) the Administrative Agent's
rights in the Loan Documents shall be assigned without representation, recourse
or warranty to the Lenders as their interests may appear. The parties
acknowledge that the Syndication Agent has no continuing responsibilities under
the Loan Documents other than as a Lender.
Section 10.2. Rights as a Lender. The Agents and the Issuing Bank each have
and reserve all of the rights, powers and duties hereunder and under the other
Loan Documents as any Lender may have and may exercise the same as though they
were not an Agent or the Bank and the terms "Lender" or "Lenders" as used herein
and in all of such documents shall, unless the context otherwise expressly
indicates, include the Agents and Issuing Bank in their individual capacities as
Lenders. The Agents and Issuing Bank reserve the right to extend other credit to
or engage in other business transactions with the Parent, the Subsidiaries and
their Affiliates.
Section 10.3. Standard of Care. The Lenders acknowledge that they have
received and approved copies of the Loan Documents, the Stock Purchase
Agreement, the Asset Transfer Agreement, the Marketing Agreement and such other
information and documents concerning the transactions contemplated and financed
hereby as they have requested to receive and/or review. The Agents make no
representations or warranties of any kind or character to the Lenders with
respect to the validity, enforceability, genuineness, perfection, value, worth
or collectibility hereof or of the other Loan Documents or of the liens provided
for thereby or of any other documents called for hereby or thereby or of the
Collateral. The Agents need not verify the worth or existence of the Collateral.
The Lenders agree that neither the Agents nor the Issuing Bank nor any director,
officer, employee, agent or representative thereof (including any security
trustee therefor) shall in any event be liable for any clerical errors or errors
in judgment, inadvertence or oversight, or for action taken or omitted to be
taken by it or them hereunder or under the Loan Documents or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct. The Administrative Agent shall incur no liability under or in
respect of this Agreement or the other Loan Documents by acting upon any notice,
certificate, warranty, instruction or statement (oral or written) of anyone
(including anyone in good faith believed by it to be authorized to act on behalf
of the Company or any other Person), unless it has actual knowledge of the
untruthfulness of same. The Administrative Agent shall be entitled to assume
that no Default or Event of Default exists unless notified to the contrary by a
Lender. The Lenders acknowledge that the Administrative Agent may limit its
right of recovery against particular items of Collateral in order to minimize
recording, mortgage, intangibles, documentary and similar taxes and that it
shall incur no liability to the Lenders in doing so. The Administrative Agent
shall in all events be fully protected in acting or failing to act in accord
with the instructions of the Required Lenders. Upon the occurrence of an Event
of Default hereunder, the Administrative Agent shall take such action with
respect to the enforcement of its liens on the Collateral and the preservation
and protection thereof as it shall be directed to take by the Required Lenders
(and shall consult with the Lenders as to actions to be taken) but unless and
until the Required Lenders have given such direction the Administrative Agent
shall take or refrain from taking such actions as it deems appropriate and in
the best interest of all Lenders. The Administrative Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it shall be
indemnified to its reasonable satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent may treat the owner
of any Note as the holder thereof until written notice of transfer shall have
been filed with it as provided in Section 12.12 hereof signed by such owner in
form satisfactory to the Administrative Agent. Each Lender acknowledges that it
has independently and without reliance on the Agents or any other Lender and
based upon such information, investigations and inquiries as it deems
appropriate made its own credit analysis and decision to extend credit to the
Company. It shall be the responsibility of each Lender to keep itself informed
as to the creditworthiness of the Company, the Parent and each Subsidiary and
the Agents shall have no liability to any Lender with respect thereto.
Section 10.4. Costs and Expenses. Each Lender agrees to reimburse the
Administrative Agent and the Issuing Bank for all reasonable out of pocket costs
and expenses suffered or incurred by the Administrative Agent or the Issuing
Bank or any security trustee in performing its duties hereunder and under the
other Loan Documents or in the exercise of any right or power imposed or
conferred upon the Administrative Agent or the Issuing Bank hereby or thereby,
to the extent that the Administrative Agent or the Issuing Bank is not promptly
reimbursed for same by the Company or out of the Collateral, all such costs and
expenses to be borne by the Lenders ratably in accordance with the amounts of
their respective Aggregate Percentages.
Section 10.5. Indemnity. The Lenders shall ratably (in accord with
their Aggregate Percentages) indemnify and hold the Agents and Issuing Bank, and
each of their directors, officers, employees, agents or representatives
(including as such any security trustee therefor) harmless from and against any
liabilities, losses, costs or expenses suffered or incurred by them in their
capacities as such under this Agreement or any of the other Loan Documents or in
connection with the transactions contemplated hereby or thereby, regardless of
when asserted or arising, except to the extent they are promptly reimbursed for
the same by the Company or out of the Collateral and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified.
SECTION 11. THE GUARANTEES.
Section 11.1. The Guarantees. To induce the Lenders to provide the credits
described herein and in consideration of benefits expected to accrue to each
Guarantor by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, each Guarantor hereby
unconditionally and irrevocably guarantees jointly and severally to the Agents,
the Issuing Bank, the Lenders and each other holder of any of the Company's
obligations under the Loan Documents, the due and punctual payment of all
present and future indebtedness, obligations and liabilities of the Company
evidenced by or arising out of the Loan Documents, including, but not limited
to, the due and punctual payment of principal of and interest on the Notes and
amounts due on the Applications and in respect of the Hedging Liability and the
due and punctual payment of all other obligations now or hereafter owed by the
Company under the Loan Documents as and when the same shall become due and
payable, whether at stated maturity, by acceleration or otherwise, according to
the terms hereof and thereof. In case of failure by the Company punctually to
pay any indebtedness guaranteed hereby, each Guarantor hereby unconditionally
agrees jointly and severally to make such payment or to cause such payment to be
made punctually as and when the same shall become due and payable, whether at
stated maturity, by acceleration or otherwise, and as if such payment were made
by the Company.
Section 11.2. Guarantee Unconditional. The obligations of each Guarantor as
a guarantor under this Section 11 shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Company or of any other Guarantor under
this Agreement or any other Loan Document whether by operation of law or
otherwise;
(b) any modification or amendment of or supplement to this Agreement
or any other Loan Document;
(c) any change in the corporate existence, structure or ownership of,
or any insolvency, bankruptcy, reorganization or other similar proceeding
affecting, the Company, any other Guarantor, or any of their respective
assets, or any resulting release or discharge of any obligation of the
Company or of any other Guarantor contained in any Loan Document;
(d) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against any Agent or Lender or the Issuing
Bank or any other Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or demand or
any exercise of, or failure to exercise, any rights or remedies against the
Company, any other Guarantor or any Collateral;
(f) any application of any sums by whomsoever paid or howsoever
realized to any obligation of the Company, regardless of what obligations
of the Company remain unpaid,
(g) any invalidity or unenforceability relating to or against the
Company or any other Guarantor for any reason of this Agreement or of any
other Loan Document or any provision of applicable law or regulation
purporting to prohibit the payment by the Company of the principal of or
interest on any Note, or any other amount payable by it under the Loan
Documents; or
(h) any other act or omission to act or delay of any kind by any Agent
or Lender or the Issuing Bank or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph, constitute
a legal or equitable discharge of the obligations of the Guarantor under
this Section 11.
Section 11.3. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor's obligations under this Section 11 shall remain
in full force and effect until the Commitments are terminated and the principal
of and interest on the Notes and all other amounts then due and payable by the
Company under this Agreement and all other Loan Documents shall have been paid
in full and all Letters of Credit have expired. If at any time any payment of
the principal of or interest on any Note or any other amount payable by the
Company under the Loan Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of the Company or of
a Guarantor, or otherwise, each Guarantor's obligations under this Section 11
with respect to such payment shall be reinstated at such time as though such
payment had become due but had not been made at such time.
Section 11.4. Subrogation. No Guarantor will exercise any rights which it
may acquire by way of subrogation as a result of any payment made hereunder, or
otherwise, until the Notes and all other amounts payable by the Company under
the Loan Documents shall have been paid in full and after the termination of the
Commitments and expiration of the Letters of Credit. If any amount shall be paid
to a Guarantor on account of such subrogation rights at any time prior to the
later of (a) the payment in full of the Notes and all other amounts payable by
such Guarantor hereunder and (b) the termination of all the Commitments and the
expiration of all Letter of Credit, such amount shall be held in trust for the
benefit of the Administrative Agent and the Lenders and shall forthwith be paid
to the Administrative Agent and the Lenders or be credited and applied upon the
Company's' obligations under the Loan Documents, whether matured or unmatured,
in accordance with the terms of this Agreement. Notwithstanding any other
provision hereof, the right to recovery against each Guarantor under this
Section 11 shall not exceed $1.00 less than the amount which would render such
Guarantor's obligations under this Section 11 void or voidable under applicable
law.
Section 11.5. Waivers. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by the Administrative Agent
the Issuing Bank any Lender or any other Person against the Company, another
Guarantor or any other Person.
Section 11.6. Stay of Acceleration. If acceleration of the time for payment
of any amount payable by the Company under this Agreement or any other Loan
Document is stayed upon the insolvency, bankruptcy or reorganization of the
Company or any other Guarantor, all such amounts otherwise subject to
acceleration under the terms of this Agreement or the other Loan Documents shall
nonetheless be payable jointly and severally by the Guarantors hereunder
forthwith on demand by the Administrative Agent.
SECTION 12. MISCELLANEOUS.
Section 12.1. Waiver of Rights. No delay or failure on the part of any
Lender or the holder or holders of any Note in the exercise of any power or
right shall operate as a waiver thereof or as an acquiescence in any default,
nor shall any single or partial exercise thereof, or the exercise of any other
power or right, preclude any other right or the further exercise of any other
rights. The rights and remedies hereunder of the Lenders, the Administrative
Agent, the Issuing Bank, the Syndication Agent, the Lenders and of the holder or
holders of any Note are cumulative to, and not exclusive of, any rights or
remedies which any of them would otherwise have.
Section 12.2. Non-Business Day. If any payment of principal shall fall due
on a day which is not a Business Day, interest at the rate such principal bears
for the period prior to maturity shall continue to accrue on such principal from
the stated due date thereof to and including the next succeeding Business Day on
which the same is payable.
Section 12.3. Documentary Taxes. The Company agrees to pay any documentary,
stamp or similar taxes payable in respect to this Agreement or any other Loan
Document, including interest and penalties, in the event any such taxes are
assessed irrespective of when such assessment is made and whether or not any
credit is then in use or available hereunder.
Section 12.4. Survival of Representations. All representations and
warranties made in the Loan Documents or pursuant thereto or in certificates
given pursuant hereto or thereto shall survive the execution and delivery of
this Agreement and of the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.
Section 12.5. Set-off Sharing. Each Lender agrees with each other
Lender a party hereto that in the event such Lender shall receive and retain any
payment, whether by set-off or application of deposit balances or otherwise
("Set-off"), on or in respect of any Note or other obligation outstanding under
the Loan Documents in excess of the amount to which it is entitled under this
Agreement, then such Lender shall purchase for cash at face value, but without
recourse, ratably from each of the other Lenders such amount of the Notes or
other obligations held by each such other Lender (or interest therein) as shall
be necessary to cause such payment to be shared in accord with Section 4.6
hereof; provided, however, that if any such purchase is made by any Lender, and
if such excess payment or part thereof is thereafter recovered from such
purchasing Lender, the related purchases from the other Lenders shall be
rescinded ratably and the purchase price restored as to the portion of such
excess payment so recovered, but without interest.
Section 12.6. Notices. All communications provided for herein shall be in
writing or by telecopy, except as otherwise specifically provided for
hereinabove, addressed, if to the Parent, the Company or the Guarantors at 90
Linden Oaks, Rochester, New York 14625, Attention: Chief Financial Officer or if
to the Administrative Agent, the Issuing Bank or Lenders at their respective
addresses set forth opposite their respective signatures hereto or an Assignment
Agreement to which they are a party, or at such other address as shall be
designated by any party hereto in a written notice to each other party pursuant
to this Section 12.6. Any notice in writing shall be deemed to have been given
or made when served personally or three (3) days after being mailed (properly
addressed) if sent by United States mail or upon receipt, if sent by telecopy;
provided that any notice to the Administrative Agent or any Lender under
Sections 2 and 3 hereof shall only be effective upon receipt.
Section 12.7. Counterparts. This Agreement may be executed in any number of
counterparts, and by the different parties on different counterparts, each of
which when executed shall be deemed an original, but all such counterparts taken
together shall constitute one and the same instrument.
Section 12.8. Successors and Assigns. This Agreement shall be binding upon
the Company and the Guarantors and their successors and assigns, and shall be
binding upon and inure to the benefit of the Agents and the Lenders and their
respective successors and assigns, including any subsequent holder of any Note.
The Company and Guarantors may not assign their rights or obligations hereunder
without the prior written consent of the Banks.
Section 12.9. Participants. Each Lender shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made by such Lender and credit risks
in Letters of Credit held by such Lender at any time and from time to time to
one or more other Persons, provided that no such participant shall have any
rights under this Agreement or any other Loan Document (the participant's rights
against the Lender granting its participation to be those set forth in the
participation agreement between the participant and such Lender); provided,
further, that no Lender shall transfer or grant any participation under which
the participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Loan Document except to the extent such amendment or
waiver would extend a scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Termination Date) in
which such participant is participating, or reduce the rate or extend the time
of payment of interest or fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory prepayment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof). Each
such Lender selling a participation shall be entitled to the benefits of
Sections 2.1(c)(iv), 3, 4.8 and 4.9 hereof to the extent such Lender would have
been so entitled had no such participation been sold.
Section 12.10. Costs and Expenses. The Company agrees to pay within 10 days
of demand therefor all reasonable out of pocket costs and out of pocket expenses
incurred by the Agents in connection with the preparation, execution, delivery,
recording and/or filing and/or release of the Loan Documents and the other
instruments and documents to be delivered hereunder or thereunder or in
connection with the transactions contemplated hereby or thereby or the
syndication of the credit facilities provided for herein or in connection with
any consents hereunder or thereunder or waivers or amendments hereto or thereto,
including the reasonable fees and out-of-pocket expenses of counsel for the
Agents with respect to all of the foregoing, and all recording, registration,
filing or other fees, costs and taxes incident to perfecting a lien upon the
collateral security for the Notes and other obligations of the Company, all
appraisal, environmental, title insurance and similar costs and charges incurred
by the Agents, all costs of the Administrative Agent in examining, monitoring or
auditing the Collateral, and all reasonable costs and expenses (including
reasonable attorneys' fees), incurred by the Administrative Agent, any security
trustee for the Lenders, the Issuing Bank, the Lenders or any other holders of a
Note in connection with a default or the enforcement of any of the Loan
Documents and the other instruments and documents to be delivered hereunder or
thereunder or the preservation, protection or sale of Collateral, including
allocated costs of in-house counsel. The Company agrees to indemnify and save
the Lenders, the Agents, the Issuing Bank and any security trustee for the
Lenders harmless from any and all liabilities, losses, costs and expenses
incurred by any Lender, either Agent, the Issuing Bank or such security trustee
in connection with any action, suit or proceeding brought against either Agent,
a security trustee, the Issuing Bank or any Lender by any Person which arises
out of the transactions contemplated or financed hereby or by the other Loan
Documents or out of any action or inaction by an Agent, the Issuing Bank, any
security trustee or any Lender hereunder or thereunder, except for such thereof
as is caused by the gross negligence or willful misconduct of the party
indemnified. The provisions of this Section 12.10 and the protective provisions
of Section 3 and 4 hereof shall survive payment of the Notes and the other
obligations owing to the Lenders hereunder.
Section 12.11. Construction. The parties hereto acknowledge and agree that
the Loan Documents shall not be construed more favorably in favor of one than
the other based upon which party drafted the same, it being acknowledged that
all parties hereto contributed substantially to the negotiation of this
Agreement.
Section 12.12. Assignment Agreements. Each Lender may, from time to time,
with the consent of the Company (but no such Company consent shall be required
if a Default or Event of Default has occurred and is continuing), the
Administrative Agent and the Issuing Bank, which will not be unreasonably
withheld, assign to other Persons part of the indebtedness evidenced by any of
its Notes and credit risks with respect to Letters of Credit then owned by it
and/or any of its Commitments pursuant to an assignment agreement executed by
the assignor, the assignee, the Company (unless a Default or Event of Default
has occurred and is continuing), the Issuing Bank and the Administrative Agent
(an "Assignment Agreement"), specifying the portion of the indebtedness
evidenced by the Notes and Applications which is to be assigned to each such
assignee and the portion of the Commitments of the assignor to be assumed by it;
provided, however, that unless each of the Administrative Agent, the Issuing
Bank and the Company (unless a Default or Event of Default has occurred and is
continuing), otherwise consents, the aggregate amount of the unfunded
Commitments, Loans, and credit risk with respect to Letters of Credit retained
by the assigning Lender shall not be less than $10,000,000 and the assignee's
unfunded Commitments, Loans and risk participation in the Letters of Credit
shall not be less than $5,000,000, and the assigning Lender shall pay to the
Administrative Agent a processing and recordation fee of $3,500 ($2,500 in the
case of assignments to a Person who is a Lender prior to giving effect to the
assignment in question) for each assignment and any extraordinary out-of-pocket
attorney's fees and expenses incurred by the Administrative Agent in connection
with each such Assignment Agreement and, notwithstanding Section 12.10, the
Company shall have no liability therefor. The foregoing amount limitations shall
not apply in the circumstance where a Lender is assigning its entire remaining
amount of a given Commitment and all of the extensions of credit which arose
under such Commitment to an assignee nor shall such minimum amount limitations
be applicable to Bank of Montreal. Upon the execution of each Assignment
Agreement by the assignor, the assignee, the Administrative Agent, the Issuing
Bank and the Company and satisfaction of the foregoing conditions and any
conditions set forth therein (i) such assignee shall thereupon become a "Lender"
for all purposes of this Agreement with Commitments in the amounts set forth in
such Assignment Agreement and with all the rights, powers and obligations
afforded a Lender hereunder, provided that the assigning Lender shall retain the
benefit of all indemnities of the Company with respect to matters arising prior
to the effective date of such Assignment Agreement, which shall survive and
inure to the benefit of the assigning Lender, (ii) such assigning Lender shall
have no further liability for funding the portion of its Commitments assumed by
such other Lender, and (iii) the address for notices to such assignee shall be
as specified in the Assignment Agreement executed by it. Concurrently with the
execution and delivery of such Assignment Agreement by the assignor, the
assignee, the Company, the Issuing Bank and the Administrative Agent, the
Company shall execute and deliver Notes to the assignee Lender all such notes to
constitute "Notes" for all purposes of the Loan Documents.
Section 12.13. Waivers, Modifications and Amendments. Any provision hereof
or of any of the other Loan Documents may be amended, modified, waived or
released and any Default or Event of Default and its consequences may be
rescinded and annulled upon the written consent of the Required Lenders;
provided, however, that without the consent of all Lenders no such amendment,
modification or waiver shall increase the amount or extend the terms of any
Lender's Commitment or reduce the interest rate applicable to or extend the
express maturity of any Loan, fee or other obligation owed to it or reduce the
amount of the fees to which it is entitled hereunder or release any Guarantor
from its obligations hereunder (except for releases in connection with the sale
or liquidation of a Subsidiary other than the Company) or release any
substantial (in value) part of the collateral security afforded by the
Collateral Documents (except in connection with a sale or other disposition
permitted by this Agreement) or change the definition of "Required Lenders" or
amend this Section 12.13; it being understood (i) that waivers or modifications
of covenants, Defaults or Events of Default (other than those set forth in
Section 9.1(j) and (k) hereof) or of a mandatory prepayment may be made at the
discretion of the Required Lenders and shall not constitute an increase of a
Commitment of any Lender, and (ii) any waiver of applicability of any
post-default increase in interest rates may be made at the discretion of the
Required Lenders. No amendment, modification or waiver of an Agent's or the
Issuing Bank's protective provisions shall be effective without the prior
written consent of the affected Agents or the Issuing Bank, as applicable. No
change may be made in the rights or obligations of the Swing Lender without its
consent and no change may be made in the definition of the term "Required
Revolving Credit Lenders" without the consent of all Revolving Credit Lenders.
Section 12.14. Entire Agreement. The Loan Documents and any separate
agreement concerning fees constitutes the entire understanding of the parties
with respect to the subject matter hereof and any prior agreements, whether
written or oral, with respect thereto are superseded hereby. All provisions
hereof are severable.
Section 12.15. Headings. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
Section 12.16. Confidentiality. Any information disclosed by the Parent or
any of its Subsidiaries to the Administrative Agent or any of the Lenders shall
be used solely for purposes of this Agreement and for the purpose of determining
whether or not to extend other credit or financial accommodations to the Company
or its Subsidiaries and, if such information is not otherwise in the public
domain, shall not be disclosed by the Administrative Agent or such Lender to any
other Person except (i) to its independent accountants and legal counsel (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such information and instructed to keep
such information confidential), (ii) pursuant to statutory and regulatory
requirements, (iii) pursuant to any mandatory court order, subpoena or other
legal process, provided that such Lender or the Administrative Agent, as
applicable, shall give the Company prior written notice of any such disclosure
if lawful, (iv) to the Administrative Agent or any other Lender, (v) pursuant to
any agreement heretofore or hereafter made between such Lender and the Company
which permits such disclosure, (vi) in connection with the exercise of any right
or remedy under the Loan Documents, or (vii) subject to an agreement containing
provisions substantially similar in effect those of this Section, to any
participant in or assignee of, or prospective participant in or assignee of, any
obligation or Commitment.
SECTION 12.17. JURISDICTION. (A) EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS (EASTERN DIVISION) AND OF ANY ILLINOIS STATE COURT SITTING
IN CHICAGO FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING
TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAN ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(B) THE COMPANY AND THE GUARANTORS AGREE THAT THE ADMINISTRATIVE AGENT, THE
ISSUING BANK AND THE LENDERS SHALL EACH HAVE THE RIGHT TO PROCEED AGAINST THE
COMPANY AND THE GUARANTORS OR THEIR PROPERTY IN A COURT IN ANY OTHER LOCATION.
THE COMPANY AND THE GUARANTORS AGREE THAT THEY SHALL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIMS IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS PROVISION BY THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER. THE COMPANY AND THE
GUARANTORS WAIVE ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE ADMINISTRATIVE AGENT OR ANY LENDER HAS COMMENCED A PROCEEDING
DESCRIBED IN THIS SUBSECTION.
SECTION 12.18. WAIVER OF JURY TRIAL. THE COMPANY, THE GUARANTORS, THE
AGENTS, THE ISSUING BANK AND THE LENDERS EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, BETWEEN THE AGENTS OR EITHER OF THEM, THE ISSUING BANK OR ANY LENDER
AND THE COMPANY AND/OR ANY OF THE GUARANTORS ARISING OUT OF, CONNECTED WITH,
RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED
THERETO. THE COMPANY, THE GUARANTORS, THE AGENTS, THE ISSUING BANK AND THE
LENDERS EACH HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY OF
THEM MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
SECTION 12.19. GOVERNING LAW. THIS AGREEMENT AND THE NOTES, AND THE RIGHTS
AND DUTIES OF THE PARTIES HERETO, SHALL BE CONSTRUED AND DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
[SIGNATURE PAGE TO FOLLOW]
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Executed and delivered as of this 23rd day of September, 1998.
AGRILINK FOODS, INC.
By /s/ Earl L. Powers
Its Vice President Finance and
Chief Financial Officer
PRO-FAC COOPERATIVE, INC.
By /s/ Earl L. Powers
Its Vice President Finance and
Assistant Treasurer
LINDEN OAKS CORPORATION
By /s/ Timothy J. Benjamin
Its President
KENNEDY ENDEAVORS, INCORPORATED
By /s/ Earl L. Powers
Its Vice President and Secretary
Accepted and Agreed to as of the day and year last above written.
Revolving Credit Commitment: HARRIS TRUST AND SAVINGS BANK,
$26,666,666.67 Individually and as Administrative Agent,
Issuing Bank and Swing Lender
A Credit Commitment:
$13,333,333.33
B Credit Commitment: By /s/ H. Glen Clarke
-0- Its Vice President
C Credit Commitment: Address: 111 West Monroe Street
-0- Chicago, Illinois 60690
Attention: Agribusiness Division
Eurodollar Lending Office:
Nassau Branch
111 West Monroe Street
Chicago, Illinois 60603
Revolving Credit Commitment: BANK OF MONTREAL,
$173,333,333.33 Individually and as Syndication Agent
A Credit Commitment:
$86,666,666.67
By /s/ Michael W. Hedrick
B Credit Commitment: Its Director
$175,000,000
Address: 115 South LaSalle Street
Chicago, Illinois 60603
C Credit Commitment: Attention: Global Distribution
$180,000,000
Eurodollar Lending Office:
115 South LaSalle Street
Chicago, Illinois 60603
EXHIBIT A
AGRILINK FOODS, INC.
REVOLVING CREDIT NOTE
___________, 1998
FOR VALUE RECEIVED, the undersigned, AGRILINK FOODS, INC., a New York
corporation (the "Company"), hereby promises to pay to the order of
__________________ (the "Lender") on the Termination Date (as defined in the
Credit Agreement hereinafter referred to), at the principal office of Harris
Trust and Savings Bank in Chicago, Illinois, the aggregate unpaid principal
amount of all Revolving Credit Loans made by the Lender to the Company under the
Credit Agreement hereinafter mentioned and remaining unpaid on the Termination
Date, together with interest on the principal amount of each Revolving Credit
Loan from time to time outstanding hereunder at the rates, and payable in the
manner and on the dates, specified in said Credit Agreement.
The Lender shall record on its books or records or on the schedule to
this Note which is a part hereof the principal amount of each Revolving Credit
Loan made by it to the Company under the Credit Agreement, all payments of
principal and interest thereon and the principal balances from time to time
outstanding; provided that prior to the transfer of this Note all such amounts
shall be recorded on the schedule attached to this Note. The record thereof,
whether shown on such books or records or on the schedule to this Note, shall be
prima facie evidence as to all such amounts; provided, however, that the failure
of the Lender to record any of the foregoing shall not limit or otherwise affect
the obligation of the Company to repay all Revolving Credit Loans made to under
the Credit Agreement, together with accrued interest thereon.
This Note is one of the Revolving Credit Notes referred to in and
issued under that certain Credit Agreement dated as of September 23, 1998, among
the Company, Pro-Fac Cooperative, Inc. and certain other Guarantors, Harris
Trust and Savings Bank, as Administrative Agent and Issuing Bank, and Bank of
Montreal, as Syndication Agent and the Lenders from time to time as parties
thereto, as amended from time to time (the "Credit Agreement"). All defined
terms used in this Note, except terms otherwise defined herein, shall have the
same meaning as such terms have in said Credit Agreement.
Prepayments may be made, and are sometimes required to be made, on any
Loan evidenced hereby and this Note (and the Revolving Credit Loans evidenced
hereby) may be declared due prior to the expressed maturity thereof, all in the
events, on the terms and in the
manner as provided for in said Credit Agreement. This Note is secured as
provided for in the Credit Agreement.
The undersigned hereby waive presentment for payment and demand.
This Note is governed by and shall be construed in accordance with the
internal laws of the State of Illinois.
AGRILINK FOODS, INC.
By
Its__________________________________
EXHIBIT B
AGRILINK FOODS, INC.
SWING CREDIT NOTE
_____________, 1998
FOR VALUE RECEIVED, the undersigned, AGRILINK FOODS, INC., a New York
corporation (the "Company"), hereby promises to pay to the order of Harris Trust
and Savings Bank (the "Lender"), at the principal office of Harris Trust and
Savings Bank in Chicago, Illinois, the aggregate unpaid principal amount of each
Swing Loan made by the Lender to the Company under the Credit Agreement
hereinafter mentioned on the due date therefor as specified pursuant to the
Credit Agreement hereinafter identified, together with interest on the principal
amount of each Swing Loan from time to time outstanding hereunder at the rates,
and payable in the manner and on the dates, specified in said Credit Agreement.
The Lender shall record on its books or records or on the schedule to
this Note which is a part hereof the principal amount and due date of each Swing
Loan made by it to the Company under the Credit Agreement, all payments of
principal and interest thereon and the principal balances from time to time
outstanding; provided that prior to the transfer of this Note all of such
amounts shall be recorded on the schedule attached to this Note. The record
thereof, whether shown on such books or records or on the schedule to this Note,
shall be prima facie evidence as to all such amounts; provided, however, that
the failure of the Lender to record any of the foregoing shall not limit or
otherwise affect the obligation of the Company to repay all Swing Loans made to
it, under the Credit Agreement, together with accrued interest thereon.
This Note is the Swing Credit Note referred to in and issued under that
certain Credit Agreement dated as of September 23, 1998, among the Company,
Pro-Fac Cooperative, Inc. and certain other Guarantors, Harris Trust and Savings
Bank, as Administrative Agent and Issuing Bank, and Bank of Montreal, as
Syndication Agent and the Lenders named therein, as amended from time to time
(the "Credit Agreement"). All defined terms used in this Note, except terms
otherwise defined herein, shall have the same meaning as such terms have in said
Credit Agreement.
Prepayments may be made, and are sometimes required to be made, on any
Loan evidenced hereby and this Note (and the Swing Loans evidenced hereby) may
be declared due prior to the expressed maturity thereof, all in the events, on
the terms and in the manner as provided for in said Credit Agreement. This Note
is secured as provided for in the Credit Agreement.
The undersigned hereby waive presentment for payment and demand.
This Note is governed by and shall be construed in accordance with the
internal laws of the State of Illinois.
AGRILINK FOODS, INC.
By
Its_______________________________
EXHIBIT C
AGRILINK FOODS, INC.
A CREDIT NOTE
_____________, 1998
FOR VALUE RECEIVED, the undersigned, AGRILINK FOODS, INC., a New York
corporation (the "Company"), hereby promises to pay to the order of
__________________ (the "Lender"), at the principal office of Harris Trust and
Savings Bank in Chicago, Illinois, the aggregate principal amount of the A Loans
made by the Lender to the Company under the Credit Agreement referred to below
in seventeen (17) consecutive quarterly installments, commencing on September
30, 1999, and continuing on the last day of every September, December, March and
June thereafter to and including September 30, 2003, in the amounts specified in
the Credit Agreement hereinafter referred to, together with interest on the
amount of the principal indebtedness from time to time outstanding hereunder at
the rates, and payable in the manner and on the dates specified in said Credit
Agreement.
The Lender shall record on its books or records or on the schedule to
this Note which is a part hereof the principal amount of the A Loans made by it
to the Company under the Credit Agreement, all payments of principal and
interest thereon and the principal balances from time to time outstanding;
provided that prior to the transfer of this Note all such amounts shall be
recorded on a schedule attached to this Note. The record thereof, whether shown
on such books or records or on the schedule to this Note, shall be prima facie
evidence as to all such amounts; provided, however, that the failure of the
Lender to record any of the foregoing shall not limit or otherwise affect the
obligation of the Company to repay all A Loans made to it under the Credit
Agreement, together with accrued interest thereon.
This Note is one of the A Credit Notes referred to in and issued under
that certain Credit Agreement dated as of September 23, 1998, among the Company,
Pro-Fac Cooperative, Inc. and certain other Guarantors, Harris Trust and Savings
Bank, as Administrative Agent and Issuing Bank, Bank of Montreal, as Syndication
Agent, and the Lenders named therein, as amended from time to time (the "Credit
Agreement"). All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as such terms have in said Credit Agreement.
This Note is secured as provided for in the Credit Agreement.
Prepayments may be made, and are sometimes required to be made, on the
A Loans evidenced hereby and this Note (and the A Loans evidenced hereby) may be
declared due prior
to the expressed maturity thereof, all in the events, on the terms and in the
manner as provided for in said Credit Agreement.
The undersigned hereby waive presentment for payment and demand.
This Note is governed by and shall be construed in accordance with the
internal laws of the State of Illinois.
AGRILINK FOODS, INC.
By
Its__________________________________
EXHIBIT D
AGRILINK FOODS, INC.
B CREDIT NOTE
_____________, 1998
FOR VALUE RECEIVED, the undersigned, AGRILINK FOODS, INC., a New York
corporation (the "Company"), hereby promises to pay to the order of
__________________ (the "Lender"), at the principal office of Harris Trust and
Savings Bank in Chicago, Illinois, the aggregate principal amount of the B Loans
made by the Lender to the Company under the Credit Agreement referred to below
in twenty-four (24) consecutive quarterly installments, commencing on December
31, 1998, and continuing on the last day of every September, December, March and
June thereafter to and including September 30, 2004, in the amounts specified in
the Credit Agreement hereinafter referred to, together with interest on the
amount of the principal indebtedness from time to time outstanding hereunder at
the rates, and payable in the manner and on the dates specified in said Credit
Agreement.
The Lender shall record on its books or records or on the schedule to
this Note which is a part hereof the principal amount of the B Loans made by it
to the Company under the Credit Agreement, all payments of principal and
interest thereon and the principal balances from time to time outstanding;
provided that prior to the transfer of this Note all such amounts shall be
recorded on a schedule attached to this Note. The record thereof, whether shown
on such books or records or on the schedule to this Note, shall be prima facie
evidence as to all such amounts; provided, however, that the failure of the
Lender to record any of the foregoing shall not limit or otherwise affect the
obligation of the Company to repay all B Loans made to it under the Credit
Agreement, together with accrued interest thereon.
This Note is one of the B Credit Notes referred to in and issued under
that certain Credit Agreement dated as of September 23, 1998, among the Company,
Pro-Fac Cooperative, Inc. and certain other Guarantors, Harris Trust and Savings
Bank, as Administrative Agent and Issuing Bank, Bank of Montreal, as Syndication
Agent, and the Lenders named therein, as amended from time to time (the "Credit
Agreement"). All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as such terms have in said Credit Agreement.
This Note is secured as provided for in the Credit Agreement.
Prepayments may be made, and are sometimes required to be made, on the
B Loans evidenced hereby and this Note (and the B Loans evidenced hereby) may be
declared due prior
to the expressed maturity thereof, all in the events, on the terms and in the
manner as provided for in said Credit Agreement.
The undersigned hereby waive presentment for payment and demand.
This Note is governed by and shall be construed in accordance with the
internal laws of the State of Illinois.
AGRILINK FOODS, INC.
By
Its______________________________
EXHIBIT E
AGRILINK FOODS, INC.
C CREDIT NOTE
_____________, 1998
FOR VALUE RECEIVED, the undersigned, AGRILINK FOODS, INC., a New York
corporation (the "Company"), hereby promises to pay to the order of
__________________ (the "Lender"), at the principal office of Harris Trust and
Savings Bank in Chicago, Illinois, the aggregate principal amount of the C Loans
made by the Lender to the Company under the Credit Agreement referred to below
in twenty-eight (28) consecutive quarterly installments, commencing on December
31, 1998, and continuing on the last day of every September, December, March and
June thereafter to and including September 30, 2005, in the amounts specified in
the Credit Agreement hereinafter referred to, together with interest on the
principal amount of the principal indebtedness from time to time outstanding
hereunder at the rates, and payable in the manner and on the dates specified in
said Credit Agreement.
The Lender shall record on its books or records or on the schedule to
this Note which is a part hereof the principal amount of the C Loans made by it
to the Company under the Credit Agreement, all payments of principal and
interest thereon and the principal balances from time to time outstanding;
provided that prior to the transfer of this Note all such amounts shall be
recorded on a schedule attached to this Note. The record thereof, whether shown
on such books or records or on the schedule to this Note, shall be prima facie
evidence as to all such amounts; provided, however, that the failure of the
Lender to record any of the foregoing shall not limit or otherwise affect the
obligation of the Company to repay all C Loans made to it under the Credit
Agreement, together with accrued interest thereon.
This Note is one of the C Credit Notes referred to in and issued under
that certain Credit Agreement dated as of September 23, 1998, among the Company,
Pro-Fac Cooperative, Inc. and certain other Guarantors, Harris Trust and Savings
Bank, as Administrative Agent and Issuing Bank, Bank of Montreal, as Syndication
Agent, and the Lenders named therein, as amended from time to time (the "Credit
Agreement"). All defined terms used in this Note, except terms otherwise defined
herein, shall have the same meaning as such terms have in said Credit Agreement.
This Note is secured as provided for in the Credit Agreement.
Prepayments may be made, and are sometimes required to be made, on the
C Loans evidenced hereby and this Note (and the C Loans evidenced hereby) may be
declared due prior
to the expressed maturity thereof, all in the events, on the terms and in the
manner as provided for in said Credit Agreement.
The undersigned hereby waive presentment for payment and demand.
This Note is governed by and shall be construed in accordance with the
internal laws of the State of Illinois.
AGRILINK FOODS, INC.
By
Its_______________________________
EXHIBIT F
AGRILINK FOODS, INC.
COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished to the lenders (collectively,
the "Lenders") and Harris Trust and Savings Bank as Administrative Agent (the
"Administrative Agent") for the Lenders, and the Bank of Montreal, as
Syndication Agent, pursuant to that certain Credit Agreement dated as of
September 23, 1998, by and among Agrilink Foods, Inc., a New York corporation
(the "Company"), Pro-Fac Cooperative, Inc. and certain other Guarantors and the
Lenders (the "Agreement"). Unless otherwise defined herein, the terms used in
this Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected chief financial officer of Pro-Fac
Cooperative, Inc.;
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and condition of the Parent and its Subsidiaries during the
accounting period covered by the attached financial statements sufficient for me
to provide this Certificate;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. If attached financial statements are being furnished pursuant to
the Agreement, Schedule I attached hereto sets forth financial data and
computations evidencing the Parent's and the Company's compliance with certain
covenants of the Agreement, all of which data and computations are true,
complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Parent and the Company have taken, are taking
or propose to take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _____ day of
_______________________, 19___.
SCHEDULE 1
TO COMPLIANCE CERTIFICATE
AGRILINK FOODS, INC.
COMPLIANCE CALCULATIONS FOR
CREDIT AGREEMENT DATED AS OF SEPTEMBER 23, 1998
CALCULATIONS AS OF ____________________, 19__
EXHIBIT G
ADDITIONAL GUARANTOR SUPPLEMENT
______________, 19___
HARRIS TRUST AND SAVINGS BANK, as
Administrative Agent for the Lenders
under the Credit Agreement dated as of
September 23, 1998, among Agrilink
Foods, Inc., Pro-Fac Cooperative, Inc.
and certain other Guarantors, Bank of
Montreal as Syndication Agent and such
Administrative Agent (the "Credit
Agreement")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [name of Subsidiary Guarantor], a [jurisdiction of
incorporation] corporation, hereby elects to be a "Guarantor" for all purposes
of the Credit Agreement, effective from the date hereof. The undersigned
confirms that the representations and warranties set forth in the Credit
Agreement are true and correct as to the undersigned as of the date hereof.
Without limiting the generality of the foregoing, the undersigned
hereby agrees to perform all the obligations of a Guarantor under, and to be
bound in all respects by the terms of, the Credit Agreement, including without
limitation Section 11 thereof, to the same extent and with the same force and
effect as if the undersigned were a signatory party thereto.
This Agreement shall be construed in accordance with and governed by
the internal laws of the State of Illinois.
Very truly yours,
[NAME OF SUBSIDIARY GUARANTOR]
By
Name
Title________________________________________
EXHIBIT H
SUBSIDIARIES
Pro-Fac Cooperative, Inc., a New York cooperative corporation (P)
JURISDICTION OF
NAME ORGANIZATION PERCENTAGE OWNED STATUS
Agrilink Foods, Inc. (A) New York 100%(P) Active
Curtice-Burns Express, Inc. New York 100%(A) Active
Kennedy Endeavors, Inc. Washington 100%(A) Active
Seasonal Employers, Inc. New York 100%(A) Active
Linden Oaks Corporation Delaware 100%(A) Active
Curtice Burns Foods of Canada Limited Canada 100%(A) Active
Curtice Burns Export Corporation US Virgin Islands 100%(A) Active
Snyder Distributing, Inc. Pennsylvania 100%(A) Active
Quality Snax of Maryland, Inc. Pennsylvania 100%(A) Inactive (1)
LaRestaurant of Altoona, Inc. Pennsylvania 100%(A) Inactive (1)
Convenient Product Sales Corp. Pennsylvania 100%(A) Inactive (1)
BEMSA Holding, Inc. Delaware 100%(A) (2)
<FN>
1. In process of being dissolved and liquidated.
2. Upon consummation of the acquisition of all the outstanding capital stock
of Dean Foods Vegetable Company and all of the outstanding capital stock of
BEMSA Holding, Inc., as contemplated in the Stock Purchase Agreement
between Dean Foods Company and Agrilink Foods, Inc., dated as of July 24,
1998, Agrilink Foods, Inc., will own 100% of the issued and outstanding
capital stock of BEMSA Holding, Inc.
</FN>
EXHIBIT I
EXISTING INDEBTEDNESS
Balance as of
August 31, 1998
Current Long-Term Total
Note Payable -Duane Packer3 -- $5,400,000 $5,400,000
Note Payable - John A. Hopay, Sr., $250,000 $1,113,000 $1,363,000
John A. Hopay, Jr. and Joseph C. Hopay4
Note Payable - State of Georgia5 20,034 137,179 157,213
Note Payable - Des Moines Area 50,953 -- 50,953
Community College6
Note Payable - DelAgra Corp.7 425,000 -- 425,000
Note Payable - Fairwater, WI8 2,450,000 2,450,000
Various Capitalized Leases9 776,000
(current and long)
Note Payable - MN Dept. of 10,000
Transportation10
Albrecht Land11 44,876
John Hancock Insurance12 431,221
Guarantee of loans to Great Lakes Kraut Company up to $8,000,000
Subordinated Promissory Note due Dean Foods Company $30,000,000
<FN>
3. Packer Foods Acquisition.
4. Snyder Distributing, Inc. (formerly known as J. A. Hopay Distributing,
Inc.) Acquisition.
5. Development Authority of Macon County, Georgia obligation Revenue Bond
dated 12/01/84.
6. Agrilink Foods, Inc. guarantor of Des Moines Area Community College's bond
repayment obligations.
7. Del Agra Corp. Acquisition.
8. Acquired with Dean Foods Vegetable Company, balance as of May 31, 1998.
9. Agrilink capital leases as of June 27, 1998 total $759,000. Acquired with
Dean Foods Vegetable Company: IBM Leases of $17,000 as of May 31, 1998.
10. Acquired with Dean Foods Vegetable Company, balance as of May 31, 1998.
11. Acquired with Dean Foods Vegetable Company, balance as of May 31, 1998.
12. Acquired with Dean Foods Vegetable Company, balance as of May 31, 1998.
</FN>
EXHIBIT J
EXISTING LIENS
1. Industrial Revenue Bonds. Development Authority of Macon County, Georgia
Limited Obligation Revenue Bond, dated December 1984, secured by a deed
covering 321 Plant Street, Montezuma, Georgia (the "Montezuma Facility").
2. Pursuant to an Agreement for Sale of Stock and Assets dated July 21, 1995,
between Agrilink Foods, Inc. and Duane Packer, Agrilink Foods, Inc.
acquired Packer Foods. In connection with the transaction Agrilink Foods,
Inc. delivered a $5,400,000 promissory note, which is secured by a mortgage
on real property located at 73309 South M-40, Lawton, Michigan (the "Lawton
Facility") and a security interest in equipment and proceeds at the Lawton
Facility.
3. Assignment of leases and rents in favor of John Hancock Insurance Co.
($431,221 balance as of May 31, 1998) recorded against the Uvalde, Texas
facility acquired with Dean Foods Vegetable Company.
4. Capitalized leases referred to on Exhibit I.
5. Albrecht land contract with respect to Cambria, Wisconsin real property.
EXHIBIT K
EXISTING INVESTMENTS, LOANS AND ADVANCES
Balance as of
August 31, 1998
Current Long-Term Total
Investments:
Co-Bank, ACB $1,329,513 $22,377,434 $23,706,947
Great Lakes Kraut Company LLC13 -- 6,732,000 6,732,000
Farmers Processing, Inc.14 -- -- --
Total Investments $1,329,513 $29,109,434 $30,438,947
========== =========== ===========
Loans:
Notes Receivable
Hoopeston15 125,587 1,427,919 1,553,506
Garden Gallery16 22,192 -- 22,192
Lucca17 10,000 -- 10,000
Total Notes Receivable $ 157,779 $ 1,427,919 $ 1,585,698
========== =========== ===========
<FN>
13 Represents a 50% membership interest (50 Units). Represents July, 1998
balance.
14 Represents one-half of the outstanding capital stock; nominal investment.
15 Pursuant to a Note and Security Agreement dated as of April 30, 1997,
between Hoopeston Foods, Inc. ("Hoopeston") and Agrilink Foods, Inc., in
the original principal amount of $1,700,000, Hoopeston is required to pay
Agrilink quarterly $62,150 until maturity on May 10, 2007. The promise to
pay is secured by a security interest in certain equipment.
16 Loan to Garden Galleries, Inc.
17 Sale of Lucca. In connection with the sale of the Lucca Mexican and Italian
Frozen Foods Business to Alex Foods Incorporated ("Alex"), the Company
entered into a Trademark and License and Option Agreement dated December 7,
1992, between the Company and Alex pursuant to which the Company agreed,
subject to the terms of such agreement, to sell after June 7, 1997 the
indicated trademarks to Alex ("Reds," "Mexican Holiday" and "Mexican
Classics").
</FN>
EXHIBIT L
SCHEDULED EXCLUDED ASSETS
1. Lawton Facility, 73309 South M-40, Lawton, Michigan, plant and equipment
located therein (encumbered by $5.4 million non prepayable mortgage which
forbids junior liens).
2. Wall Lake, Iowa popcorn coloring plant (insignificant plant).
3. Alton, New York, plant but not adjacent warehouse (held for sale).
4. Rushville, New York plant (closed and for sale).
5. Mount Summit, Indiana plant (closed and for sale).
6. Brillion, Wisconsin plant (closed).
7. Cedar Grove, Wisconsin plant (closed).
8. Bellinghham, Washington plant (under contract for sale).
9. McAllen, Texas plant (under contract for sale).
10. Fort Atkinson, Wisconsin plant (closed).
11. Rights as lessee under real property leases except for future ground leases
and other non-operating leases requested by the Administrative Agent.
12. Railroad rolling stock and vehicles subject to a certificate of title law.
13. Equity interest in Great Lakes Kraut Company, LLC.
14. Shares of capital stock of CoBank, ACB
DISCLOSED LITIGATION
NONE