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$220,000,000
TERM LOAN AGREEMENT
among
B&G FOODS HOLDINGS CORP.
B&G FOODS, INC.,
as Borrower
The Several Lenders
from Time to Time Parties Hereto,
LEHMAN BROTHERS INC.,
as Arranger
THE BANK OF NEW YORK,
as Documentation Agent
HELLER FINANCIAL, INC.,
as Co-Documentation Agent
LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent
and
LEHMAN COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of March 15, 1999
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................1
1.1 Defined Terms....................................................1
1.2 Other Definitional Provisions...................................25
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS...................................26
2.1 Term Loan Commitments...........................................26
2.2 Procedure for Term Loan Borrowing...............................26
2.3 Repayment of Term Loans.........................................26
2.4 Repayment of Term Loans; Evidence of Debt.......................27
2.5 Fees, etc. .....................................................28
2.6 Optional Prepayments............................................28
2.7 Mandatory Prepayments and Commitment Reductions.................29
2.8 Conversion and Continuation Options.............................30
2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches.......30
2.10 Interest Rates and Payment Dates...............................31
2.11 Computation of Interest and Fees...............................31
2.12 Inability to Determine Interest Rate...........................32
2.13 Pro Rata Treatment and Payments................................32
2.14 Requirements of Law............................................34
2.15 Taxes..........................................................35
2.16 Indemnity......................................................37
2.17 Illegality.....................................................38
2.18 Change of Lending Office.......................................38
2.19 Substitution of Lenders........................................38
SECTION 3. REPRESENTATIONS AND WARRANTIES....................................39
3.1 Financial Condition.............................................39
3.2 No Change.......................................................40
3.3 Corporate Existence; Compliance with Law........................40
3.4 Corporate Power; Authorization; Enforceable Obligations.........40
3.5 No Legal Bar....................................................41
3.6 No Material Litigation..........................................41
3.7 No Default......................................................41
3.8 Ownership of Property; Liens....................................41
3.9 Intellectual Property...........................................41
3.10 Taxes..........................................................41
3.11 Federal Regulations............................................42
3.12 Labor Matters..................................................42
3.13 ERISA..........................................................42
3.14 Investment Company Act; Other Regulations......................42
3.15 Subsidiaries...................................................42
3.16 Use of Proceeds................................................43
3.17 Environmental Matters..........................................43
3.18 Accuracy of Information, etc...................................44
3.19 Security Documents.............................................44
3.20 Solvency.......................................................45
3.21 Senior Indebtedness............................................45
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3.22 Regulation H...................................................45
3.23 Year 2000 Matters..............................................45
SECTION 4. CONDITIONS PRECEDENT..............................................46
4.1 Conditions to Term Loans........................................46
SECTION 5. AFFIRMATIVE COVENANTS.............................................51
5.1 Financial Statements............................................51
5.2 Certificates; Other Information.................................51
5.3 Payment of Obligations..........................................53
5.4 Conduct of Business and Maintenance of Existence, etc. .........53
5.5 Maintenance of Property; Insurance..............................53
5.6 Inspection of Property; Books and Records; Discussions..........53
5.7 Notices.........................................................54
5.8 Environmental Laws..............................................54
5.9 Interest Rate Protection........................................55
5.10 Additional Collateral, etc.....................................55
5.11 Further Assurances.............................................56
SECTION 6. NEGATIVE COVENANTS................................................57
6.1 Financial Condition Covenants...................................57
6.2 Limitation on Indebtedness......................................61
6.3 Limitation on Liens.............................................62
6.4 Limitation on Fundamental Changes...............................63
6.5 Limitation on Disposition of Property...........................63
6.6 Limitation on Restricted Payments...............................64
6.7 Limitation on Capital Expenditures..............................64
6.8 Limitation on Investments.......................................65
6.9 Limitation on Optional Payments and Modifications of
Debt Instruments, etc. .......................................66
6.10 Limitation on Transactions with Affiliates.....................66
6.11 Limitation on Sales and Leasebacks.............................66
6.12 Limitation on Changes in Fiscal Periods........................67
6.13 Limitation on Negative Pledge Clauses..........................67
6.14 Limitation on Lines of Business................................67
6.15 Limitation on Amendments to Acquisition Documentation..........67
6.16 Limitation on Activities of Holdings...........................67
6.17 Limitation on Withdrawal of Reinvestment Deferred Amount.......68
SECTION 7. EVENTS OF DEFAULT.................................................68
SECTION 8. THE AGENTS........................................................71
8.1 Appointment.....................................................71
8.2 Delegation of Duties............................................71
8.3 Exculpatory Provisions..........................................71
8.4 Reliance by Agents..............................................72
8.5 Notice of Default...............................................72
8.6 Non-Reliance on Agents and Other Lenders........................72
8.7 Indemnification.................................................73
8.8 Agent in Its Individual Capacity................................73
8.9 Successor Agents................................................73
8.10 Authorization to Release Liens; Other Actions Relating to
Security Documents.............................................74
8.11 The Arranger, the Co-Documentation Agent and the
Documentation Agent............................................74
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SECTION 9. MISCELLANEOUS.....................................................75
9.1 Amendments and Waivers..........................................75
9.2 Notices.........................................................76
9.3 No Waiver; Cumulative Remedies..................................77
9.4 Survival of Representations and Warranties......................78
9.5 Payment of Expenses.............................................78
9.6 Successors and Assigns; Participations and Assignments..........79
9.7 Adjustments; Set-off............................................81
9.8 Counterparts....................................................82
9.9 Severability....................................................82
9.10 Integration....................................................82
9.11 GOVERNING LAW..................................................82
9.12 Submission To Jurisdiction; Waivers............................82
9.13 Acknowledgments................................................83
9.14 Confidentiality................................................83
9.15 Release of Collateral Security and Guarantee Obligations.......84
9.16 Accounting Changes.............................................84
9.17 Delivery of Lender Addenda.....................................84
9.18 WAIVERS OF JURY TRIAL..........................................84
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ANNEXES:
A Pricing Grid for Tranche A Term Loans
SCHEDULES:
1.1 Mortgaged Property
3.4 Consents, Authorizations, Filings and Notices
3.9 Intellectual Property Claims
3.15 Subsidiaries
3.19(a)-1 UCC Filing Jurisdictions
3.19(a)-2 UCC Financing Statements to Remain on File
3.19(a)-3 UCC Financing Statements to be Terminated
3.19(b) Mortgage Filing Jurisdictions
4.1(j) Environmental Assessments
6.2(d) Existing Indebtedness
6.3(f) Existing Liens
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Dechert, Price & Rhoads
F-2 Form of Legal Opinion of Local Counsel
G Form of Term Note
H Form of Prepayment Option Notice
I Form of Exemption Certificate
J Form of Lender Addendum
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TERM LOAN AGREEMENT, dated as of March 15, 1999, among B&G FOODS
HOLDINGS CORP., a Delaware corporation ("Holdings"), B&G FOODS, INC., a Delaware
corporation (the "Borrower"), the several banks and other financial institutions
or entities from time to time parties to this Agreement (the "Lenders"), LEHMAN
BROTHERS INC., as advisor, lead arranger and book manager (in such capacity, the
"Arranger"), THE BANK OF NEW YORK, as documentation agent (in such capacity, the
"Documentation Agent"), HELLER FINANCIAL, INC., as co-documentation agent (in
such capacity, the "Co-Documentation Agent"), LEHMAN COMMERCIAL PAPER INC., as
syndication agent (in such capacity, the "Syndication Agent"), and LEHMAN
COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower wishes to establish the credit facilities
described below to provide a portion of the financing for (i) the Borrower's
acquisition of the Heritage Portfolio of Brands from The Pillsbury Company and
(ii) the refinancing of certain existing senior secured debt of the Borrower;
and
WHEREAS, the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.
"Acquired Assets": the Transferred Assets (as defined in the
Acquisition Agreement).
"Acquired Property": as defined in the definition of Consolidated
EBITDA.
"Acquisition": the acquisition by the Borrower, or a wholly owned
Subsidiary of the Borrower, of the Acquired Assets pursuant to the
Acquisition Agreement.
"Acquisition Agreement": the Asset and Stock Purchase Agreement, dated
as of January 28, 1999, among The Pillsbury Company, the Borrower and
others.
"Acquisition Documentation": collectively, the Acquisition Agreement
and all schedules, exhibits, annexes and amendments thereto and all side
letters and agreements affecting the terms thereof or entered into in
connection therewith, in each case, as amended, supplemented or otherwise
modified from time to time.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b) direct or
cause the direction of the management and policies of such Person, whether
by contract or otherwise.
"Agents": the collective reference to the Documentation Agent, the
Co-Documentation Agent, the Syndication Agent and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time, an amount
equal to (a) until the Closing Date, the aggregate amount of such Lender's
Commitment at such time and (b) thereafter, the aggregate then unpaid
principal amount of such Lender's Term Loans.
"Aggregate Exposure Percentage" with respect to any Lender at any time,
the ratio (expressed as a percentage) of such Lender's Aggregate Exposure at
such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this Term Loan Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": for each Type of Term Loan, the rate per annum set
forth under the relevant column heading below:
Base Rate Eurodollar
Loans Loans
--------- ----------
Tranche A Term Loans 2.125% 3.125%
Tranche B Term Loans 2.25% 3.25%
provided, that on and after the first Adjustment Date occurring after the
completion of two full fiscal quarters of the Borrower after the Closing
Date, the Applicable Margin with respect to Tranche A Term Loans will be
determined pursuant to the Pricing Grid.
"Approved Fund": with respect to any Lender that is a fund that invests
in commercial loans, any other fund that invests in commercial loans and is
managed or
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advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Arranger": as defined in the preamble hereto.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 6.5) which yields gross proceeds to
Holdings, the Borrower or any of its Subsidiaries (valued at the initial
principal amount thereof in the case of non-cash proceeds consisting of
notes or other debt securities and valued at fair market value in the case
of other non-cash proceeds) in excess of $1,000,000.
"Assignee": as defined in Section 9.6(c).
"Assignment and Acceptance": each Assignment and Acceptance,
substantially in the form of Exhibit E, executed and delivered pursuant to
Section 9.6.
"Assignor": as defined in Section 9.6(c).
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on such day plus
1% and (c) the Federal Funds Effective Rate in effect on such day plus 2 of
1%. For purposes hereof: "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by the Reference Lender as its
prime or base rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged by
the Reference Lender in connection with extensions of credit to debtors);
"Base CD Rate" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the C/D Reserve Percentage and (b) the C/D
Assessment Rate; and "Three-Month Secondary CD Rate" shall mean, for any
day, the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board through the
public information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 A.M., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding Business
Day) by the Reference Lender from three New York City negotiable certificate
of deposit dealers of recognized standing selected by it. Any change in the
Base Rate due to a change in the Prime Rate, the Base CD Rate or the Federal
Funds Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate, respectively.
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"Base Rate Loans": Term Loans for which the applicable rate of interest
is based upon the Base Rate.
"Benefitted Lender": as defined in Section 9.7.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Business Day": (i) for all purposes other than as covered by clause
(ii) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close
and (ii) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) and which is also a day for
trading by and between banks in Dollar deposits in the interbank eurodollar
market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized
repairs and improvements during such period) which should be capitalized
under GAAP on a consolidated balance sheet of such Person and its
Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for
as capital leases on a balance sheet of such Person under GAAP, and, for the
purposes of this Agreement, the amount of such obligations at any time shall
be the capitalized amount thereof at such time determined in accordance with
GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and
all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the
foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the
date of acquisition issued by any Lender or by any commercial bank organized
under the laws of the United States of America or any state thereof having
combined capital and surplus of not less than $500,000,000; (c) commercial
paper of an
4
issuer rated at least A-2 by Standard & Poor's Ratings Services ("S&P") or
P-2 by Moody's Investors Service, Inc. ("Moody's"), or carrying an
equivalent rating by a nationally recognized rating agency, if both of the
two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by
any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of
which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at least A by
S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause (b)
of this definition; and (g) shares of money market mutual or similar funds
which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition. "C/D Assessment Rate": for any day as
applied to any Base Rate Loan, the annual assessment rate in effect on such
day that is payable by a member of the Bank Insurance Fund maintained by the
Federal Deposit Insurance Corporation (the "FDIC") classified as
well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12 C.F.R.
Section 327.4 (or any successor provision) to the FDIC (or any successor)
for the FDIC's (or such successor's) insuring time deposits at offices of
such institution in the United States. "C/D Reserve Percentage": for any day
as applied to any Base Rate Loan, that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by the Board, for determining
the maximum reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board as in effect from time to time) in respect of new
non-personal time deposits in Dollars having a maturity of 30 days or more.
"Closing Date": the date on which the conditions precedent set forth in
Section 4.1 shall have been satisfied, which date shall be not later than
March 15, 1999. "Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Co-Documentation Agent": as defined in the preamble hereto.
"Collateral": all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": as to any Lender, the sum of the Tranche A Term Loan
Commitment of such Lender and the Tranche B Term Loan Commitment of such
Lender.
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"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated February 1999 and furnished to the initial Lenders.
"Consolidated Current Assets": at any date, all amounts (other than
cash and Cash Equivalents) which would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such
date.
"Consolidated Current Liabilities": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet
of the Borrower and its Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of the Borrower and its Subsidiaries and
(b) without duplication of clause (a) above, all Indebtedness consisting of
Revolving Credit Loans and Swing Line Loans to the extent otherwise included
therein.
"Consolidated EBITDA": of any Person for any period, Consolidated Net
Income of such Person and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense,
(b) Consolidated Interest Expense of such Person and its Subsidiaries,
amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with
Indebtedness, (c) depreciation and amortization expense, (d) amortization of
intangibles (including, but not limited to, goodwill) and organization
costs, (e) any extraordinary, unusual or non-recurring expenses or losses
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales
of assets outside of the ordinary course of business) and (f) any other
non-cash charges, and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest income
(except to the extent deducted in determining Consolidated Interest
Expense), (b) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the
sales of assets outside of the ordinary course of business) and (c) any
other non-cash income, all as determined on a consolidated basis; provided,
that for purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period, (i) the Consolidated EBITDA of any Person or
assets (such person or assets an "Acquired Property") acquired by the
Borrower or its Subsidiaries during such period shall be included
6
on a pro forma basis for such period (assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period) if the
balance sheet of such Acquired Property as at the end of the period
preceding the acquisition of such Acquired Property and the related
consolidated statements of income and stockholders' equity and of cash flows
for the period in respect of which Consolidated EBITDA is to be calculated
(x) have been previously provided to the Administrative Agent and the
Lenders and (y) either (1) have been reported on without a qualification
arising out of the scope of the audit by independent certified public
accountants of nationally recognized standing or (2) have been found
acceptable by the Administrative Agent, (ii) the Consolidated EBITDA of any
assets Disposed of by the Borrower or its Subsidiaries during such period
shall be excluded for such period (assuming the consummation of such
Disposition and the repayment of any Indebtedness in connection therewith
occurred on the first day of such period) and (iii) in calculating the
amount of the Consolidated EBITDA of any Acquired Property to be included on
a pro forma basis pursuant to the foregoing clause (i) of this proviso, the
pro forma expenses of the Acquired Property for the relevant period shall be
determined in accordance with the Borrower's customary practices consistent
with the methodology reflected in the Pro Forma Balance Sheet and related
financial statements included in the Confidential Information Memorandum.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for such
period minus the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such period on account of Capital Expenditures
to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense of the Borrower and its
Subsidiaries for such period payable in cash, (b) provision for cash income
taxes made by the Borrower or any of its Subsidiaries on a consolidated
basis in respect of such period (excluding cash taxes payable in respect of
any gain recognized in connection with a Disposition, to the extent such
taxes are paid with proceeds of such Disposition) and (c) scheduled payments
made during such period on account of principal of Indebtedness of the
Borrower or any of its Subsidiaries (including scheduled principal payments
in respect of the Term Loans).
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA of the Borrower and its Subsidiaries for such period
to (b) Consolidated Interest Expense of the Borrower and its Subsidiaries
for such period payable in cash.
"Consolidated Interest Expense": of any Person for any period, (a)
total interest expense (including that attributable to Capital Lease
Obligations) of such Person and its Subsidiaries for such period with
respect to all outstanding Indebtedness of such Person and its Subsidiaries
(including, without limitation, all commissions, discounts and other fees
and charges owed by such Person with respect to letters of credit and
bankers'
7
acceptance financing and net costs of such Person under Hedge Agreements in
respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP) minus (b) the total interest income of such
Person for such period, determined in accordance with GAAP; provided that
when the term "Consolidated Interest Expense" is used in the calculation of
the Consolidated Interest Coverage Ratio or Consolidated Fixed Charge Ratio
for any period, Consolidated Interest Expense shall include, on a pro forma
basis, interest expense in respect of any Indebtedness incurred in
connection with any acquisition of an Acquired Property during such period
(assuming incurrence of such Indebtedness at the beginning of such period)
and shall exclude, on a pro forma basis, interest expense in respect of any
Indebtedness repaid in connection with a Disposition during such period
(assuming repayment of such Indebtedness at the beginning of such period).
"Consolidated Leverage Ratio": as at the last day of any period of four
consecutive fiscal quarters, the ratio of (a) Consolidated Total Debt on
such day to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for
such period.
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP;
provided, that in calculating Consolidated Net Income of the Borrower and
its consolidated Subsidiaries for any period, there shall be excluded (a)
the income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary) in which the Borrower or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or
similar distributions and (c) the undistributed earnings of any Subsidiary
to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms
of any Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.
"Consolidated Senior Debt": all Consolidated Total Debt other than the
Senior Subordinated Notes.
"Consolidated Senior Leverage Ratio": as of the last day of any period
of four consecutive fiscal quarters, the ratio of (a) Consolidated Senior
Debt on such day to (b) Consolidated EBITDA of the Borrower and its
Subsidiaries for such period.
"Consolidated Total Debt": at any date, the aggregate principal amount
of all Funded Debt of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP; provided that,
for purposes of calculating the financial ratios referred to in Sections
6.1(a) and (b) on any date, an amount equal to the then outstanding
aggregate Reinvestment Deferred Amount on such date may be deducted from the
amount of Consolidated Total Debt on such date so long as such Reinvestment
Deferred Amount is on deposit in an account subject, pursuant to the
8
Guarantee and Collateral Agreement, to the sole dominion and control of the
Administrative Agent for the ratable benefit of the Lenders and the
Revolving Credit Lenders (it being understood that the foregoing deduction
shall not be made when calculating the Consolidated Leverage Ratio for
purposes of determining the Applicable Margin).
"Consolidated Working Capital": at any date, the excess of Consolidated
Current Assets on such date over Consolidated Current Liabilities on such
date.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Investment Affiliate": as to any Person, any other Person that
(a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or
more companies. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Default": any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Derivatives Counterparty": as defined in Section 6.6.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof;
and the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agent": as defined in the preamble hereto.
"Dollars" and "$": lawful currency of the United States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States of America.
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, enforceable guidelines, codes, decrees, or other
legally enforceable requirements (including, without limitation, common law)
of any international authority, foreign government, the United States, or
any state, local, municipal or other governmental authority, regulating,
relating to or imposing liability or standards of conduct concerning
protection of the environment or of human health, or employee health and
safety, as has been, is now, or may at any time hereafter be, in effect.
9
"Environmental Permits": any and all permits, licenses, approvals,
registrations, notifications, exemptions and other authorizations required
under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time,
two Business Days prior to the beginning of such Interest Period. In the
event that such rate does not appear on Page 3750 of the Telerate screen (or
otherwise on such screen), the "Eurodollar Base Rate" for purposes of this
definition shall be determined by reference to such other comparable
publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.
"Eurodollar Loans": Term Loans the rate of interest applicable to which
is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Eurodollar Loans
shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both,
has been satisfied.
10
"Excess Cash Flow": for any fiscal year of the Borrower, the excess, if
any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) an amount equal to the amount of all non-cash charges
(including depreciation and amortization) deducted in arriving at such
Consolidated Net Income, (iii) decreases in Consolidated Working Capital for
such fiscal year, (iv) an amount equal to the aggregate net non-cash loss on
the Disposition of Property by the Borrower and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of
business), to the extent deducted in arriving at such Consolidated Net
Income and (v) the net increase during such fiscal year (if any) in deferred
tax accounts of the Borrower over (b) the sum, without duplication, of (i)
an amount equal to the amount of all non-cash credits included in arriving
at such Consolidated Net Income, (ii) the Specified Capital Expenditure
Amount for such fiscal year, (iii) the aggregate amount of all prepayments
of Revolving Credit Loans during such fiscal year to the extent accompanying
permanent optional reductions of the Revolving Credit Commitments and all
optional prepayments of the Term Loans during such fiscal year, (iv) the
aggregate amount of all regularly scheduled principal payments of Funded
Debt (including, without limitation, the Term Loans) of the Borrower and its
Subsidiaries made during such fiscal year (other than in respect of any
revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (v) increases in Consolidated Working
Capital for such fiscal year, (vi) an amount equal to the aggregate net
non-cash gain on the Disposition of Property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, (vii) an amount equal to the aggregate cash gain on
the Disposition of Property by the Borrower and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of
business) to the extent (A) included in arriving at such Consolidated Net
Income, and (B) included in any Reinvestment Deferred Amount or applied as a
Capital Expenditure during such fiscal year, (viii) the net decrease during
such fiscal year (if any) in deferred tax accounts of the Borrower, (ix) the
amount of cash invested in Permitted Acquisitions during such fiscal year
(excluding any such Permitted Acquisition to the extent financed with the
proceeds of Indebtedness or any Reinvestment Deferred Amount) and (x) the
Permitted Stock Repurchase Amount for such fiscal year (less the amount of
proceeds of resales of stock reinvested in the Borrower during such fiscal
year as contemplated by the definition of "Permitted Stock Repurchase
Amount" in this Section 1.1).
"Excess Cash Flow Application Date": as defined in Section 2.7(c).
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in respect of
which either (i) the pledge of all of the Capital Stock of such Subsidiary
as Collateral or (ii) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to the Borrower.
"Facility": each of (a) the Tranche A Term Loan Commitments and the
Tranche A Term Loans made thereunder (the "Tranche A Term Loan Facility")
and (b) the
11
Tranche B Term Loan Commitments and the Tranche B Term Loans made thereunder
(the "Tranche B Term Loan Facility").
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Reference Lender from three federal funds brokers of recognized standing
selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person of the
types described in clauses (a) through (e) of the definition of
"Indebtedness" in this Section.
"Funding Office": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"FY": when used with a numerical year designation, means such fiscal
year (i. e., FY 1999 means fiscal year 1999, which ends on the Saturday
nearest to December 31, 1999; and "FQ1", "FQ2 ", "FQ3", and "FQ4", when used
with a numerical year designation, means the first, second, third or fourth
fiscal quarters, respectively, of such fiscal year of the Borrower. (e.g.,
FQ1 1999 means the first fiscal quarter of FY 1999).
"GAAP": generally accepted accounting principles in the United States
of America as in effect from time to time, except that for purposes of
Section 6.1, GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation
of the most recent audited financial statements referred to in Section
3.1(b).
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by Holdings, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same
may be amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation,
12
in either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of any
other third Person (the "primary obligor") in any manner, whether directly
or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any Property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1)_) for the purchase or payment
of any such primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase Property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of business.
The amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum amount
for which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantors": the collective reference to Holdings and the Subsidiary
Guarantors.
"Hedge Agreements": all interest rate swaps, caps or collar agreements
or similar arrangements entered into by the Borrower or its Subsidiaries
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than
trade payables incurred in the ordinary course of such Person's business),
(c) all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such Property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as
an account party or applicant under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above; (i)
all obligations of
13
the kind referred to in clauses (a) through (h) above secured by (or for
which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or
not such Person has assumed or become liable for the payment of such
obligation, (j) for the purposes of Section 7(e) only, all obligations of
such Person in respect of Hedge Agreements and (k) the liquidation value of
any preferred Capital Stock of such Person or its Subsidiaries held by any
Person other than such Person and its Wholly Owned Subsidiaries if such
Preferred Capital Stock is mandatorily redeemable prior to the date which is
91 days after the final scheduled maturity date of the Term Loans.
"Indemnified Liabilities": as defined in Section 9.5.
"Indemnitee": as defined in Section 9.5.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to sue at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Base Rate Loan
is outstanding and the final maturity date of such Base Rate Loan, (b) as to
any Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three months, or
a whole multiple thereof, after the first day of such Interest Period and
the last day of such Interest Period and (d) as to any Term Loan, the date
of any repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice
of conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loan and ending one, two,
three or six months thereafter, as selected by the Borrower by irrevocable
notice to the Administrative Agent not less than three Business Days prior
to the last day of the then current Interest
14
Period with respect thereto; 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 that is
not a Business Day, such 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) any Interest Period that would otherwise extend beyond the
date final payment is due on the Tranche A Term Loans or the Tranche B
Term Loans, as the case may be, shall end on such due date, as
applicable;
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Eurodollar Loan.
"Investments": as defined in Section 6.8.
"Joint Required Lenders": Lenders and/or Revolving Credit Lenders
holding more than 60% of the sum of (a) the undrawn Commitments, (b) the
undrawn Revolving Credit Commitments, (c) the outstanding Term Loans and (d)
the Total Revolving Extensions of Credit (as defined in the Revolving Credit
Agreement).
"Lehman Entity": any of Lehman Commercial Paper Inc. or any of its
affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit J, to be executed and
delivered by such Lender on the Closing Date as provided in Section 9.17.
"Lenders": as defined in the preamble hereto.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any capital lease having substantially the same economic effect as any
of the foregoing).
15
"Loan Documents": this Agreement, the Security Documents, the
Syndication Letter and the Notes.
"Loan Parties": Holdings, the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the holders
of more than 50% of the aggregate unpaid principal amount of the Term Loans
outstanding under such Facility.
"Material Adverse Effect": a material adverse effect on (a) the
enforceability of the documents entered into in connection with the
Acquisition, (b) the business, assets, property, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole or (c) the validity or enforceability of this Agreement or any of the
other Loan Documents or the rights or remedies of the Agents or the Lenders
hereunder or thereunder.
"Material Environmental Amount": an amount or amounts payable by the
Borrower and/or any of its Subsidiaries, in the aggregate in excess of
$500,000 in respect of any one occurrence, for: costs to comply with any
Environmental Law; costs of any investigation, and any remediation, of any
Material of Environmental Concern; and compensatory damages (including,
without limitation damages to natural resources), punitive damages, fines,
and penalties pursuant to any Environmental Law.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
pollutants, contaminants, radioactivity, and any other substances or forces
of any kind, whether or not any such substance or force is defined as
hazardous or toxic under any Environmental Law, that is regulated pursuant
to or could reasonably be expected to give rise to liability under any
Environmental Law.
"Mortgaged Properties": the real properties listed on Schedule 1.1, as
to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, substantially in the form of Exhibit D (with such
changes thereto as shall be advisable under the law of the jurisdiction in
which such mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
16
"Nealson Street Property": the Mortgaged Property of Bloch &
Guggenheimer, Inc. located at 202 Nealson Street in Hurlock, Maryland.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment
of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such
Asset Sale or Recovery Event, net of attorneys' fees, accountants' fees,
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset
which is the subject of such Asset Sale or Recovery Event (other than any
Lien pursuant to a Security Document) and other customary fees and expenses
actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of attorneys'
fees, investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in Section 2.15(a).
"Non-U.S. Lender": as defined in Section 2.15(d).
"Notes": the collective reference to each promissory note, if any,
evidencing Term Loans.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Term Loans
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Term Loans and all other
obligations and liabilities of the Borrower to the Administrative Agent or
to any Lender (or, in the case of Specified Hedge Agreements, any affiliate
of any Lender), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any other Loan Document, any
Specified Hedge Agreement or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise; provided, that (i) obligations of
the Borrower or any Subsidiary under any Specified Hedge Agreement shall be
secured and guaranteed pursuant to the Security Documents only to the extent
that, and for so long as, the other Obligations are so secured and
guaranteed and (ii) any release of Collateral or guarantors
17
effected in the manner permitted by this Agreement shall not require the
consent of holders of obligations under Specified Hedge Agreements.
"Other Taxes": any and all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 9.6(b).
"Payment Office": the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": any acquisition by the Borrower or any of its
Subsidiaries of all of the Capital Stock of, or all or substantially all of
the assets constituting a business unit of, any other Person so long as,
with respect to any such acquisition, the following conditions are
satisfied:
(a) no Default or Event of Default shall have occurred and be
continuing or would result from such acquisition;
(b) after giving effect to such acquisition, the Borrower shall be
in pro forma compliance with the financial covenants set forth in
Section 6.1;
(c) such acquisition shall be consistent with the Borrower's
stated management strategy as in effect on the Closing Date, and the
target of such acquisition shall be in the same or a similar line of
business as the Borrower and its Subsidiaries;
(d) the aggregate consideration for such acquisition shall not
exceed (i) $20,000,000 if such acquisition is consummated in FY 1999,
(ii) $30,000,000 if such acquisition is consummated in FY 2000, and
(iii) $40,000,000 if such acquisition is consummated thereafter;
provided, that the foregoing restrictions in this paragraph (d) shall
not be applicable to any acquisition if the Consolidated Leverage Ratio
would be less than or equal to 5.5 to 1.0 after giving pro forma effect
to such acquisition as if it had occurred on the first day of the
period measured by the Consolidated Leverage Ratio;
(e) the target of such acquisition either (i) shall have had
positive consolidated net income before interest, taxes, depreciation
and amortization, determined in accordance with GAAP ("EBITDA") for the
period of four consecutive fiscal quarters of such target most recently
ended prior to the date of
18
such acquisition, or (ii) shall have had positive pro forma EBITDA for
such period (such pro forma EBITDA to be determined in accordance with
the Borrower's customary practices consistent with the methodology
reflected in the Pro Forma Balance Sheet and related financial
statements included in the Confidential Information Memorandum);
(f) the Borrower shall have performed reasonable and customary due
diligence with respect to such acquisition and the target thereof,
including with respect to environmental matters;
(g) the Borrower and/or the applicable Subsidiary shall have
obtained all material third party consents and approvals required in
connection with such acquisition;
(h) environmental audits, pro forma financial statements,
appraisals, if any, accounting reviews and material due diligence
reports conducted by the Borrower with respect to the business to be
acquired shall have been delivered to Administrative Agent not less
than ten Business Days prior to consummation of such acquisition;
(i) the Borrower shall have reasonably determined that it has
adequate liquidity available for working capital; and
(j) substantially all of the assets so acquired are located in the
United States or Canada or, if such acquisition is structured as a
purchase of stock, the Person so acquired is organized under the laws
of a state of the United States, and substantially all of the assets
owned by such Person are located in the United States or Canada;
provided, that (i) the Borrower may acquire the stock of a Person
organized under the laws of a state of the United States whose assets
are located, in whole or in part, in Puerto Rico or Canada, if such
Person becomes a Subsidiary Guarantor and grants a security interest in
its assets as contemplated by Section 5.10 and (ii) the Borrower may
acquire the stock of any Person organized under the laws of Puerto Rico
or Canada, so long as the aggregate amount of investments made pursuant
to this clause (ii), together with Investments made as permitted by
Section 6.8(h), does not exceed $5,000,000.
"Permitted Investors": the collective reference to the Sponsor, Bruce
C. Bruckmann, Harold O. Rosser II, Stephen C. Sherrill, Donald Bruckmann, H.
Virgil Sherrill, Nancy Zweng, BCB Partnership, NAZ Partnership and Paul D.
Kaminski, and their respective Control Investment Affiliates.
"Permitted Stock Repurchase Amount": the amount of Restricted Payments
made by the Borrower to Holdings and applied by Holdings to repurchase
Capital Stock of Holdings from officers and employees of the Borrower in
connection with the death, departure or termination of employment of such
officers and employees; provided, that
19
(a) the proceeds of any resale of the Capital Stock so purchased are
immediately reinvested in the common equity of the Borrower and (b) the
cumulative amount of such payments from and after the Closing Date, less the
cumulative amount of proceeds of such resales reinvested in the Borrower,
shall not at any time exceed $5,000,000.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Plan": at a particular time, any employee benefit plan that is covered
by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Prepayment Option Notice": as defined in Section 2.13(d).
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 3.1(a).
"Projections": as defined in Section 5.2(c).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating
to any asset of Holdings, the Borrower or any of its Subsidiaries.
"Reference Lender": Bankers Trust Company.
"Register": as defined in Section 9.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligations": as defined in the Revolving Credit
Agreement.
"Reinvestment Deferred Amount": with respect to any Reinvestment Event,
the aggregate Net Cash Proceeds received by Holdings, the Borrower or any of
its Subsidiaries in connection therewith that are not applied to prepay the
Term Loans pursuant to Section 2.7(b) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
20
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Default or Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of the Net
Cash Proceeds of an Asset Sale or Recovery Event to acquire, repair or
restore assets useful in the Borrower's or any Subsidiary's business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire,
repair or restore assets useful in the Borrower's or any Subsidiary's
business.
"Reinvestment Prepayment Date": with respect to any Reinvestment Event,
the earlier of (a) the date occurring 270 days after such Reinvestment Event
and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire, repair or restore assets useful in
the Borrower's or any Subsidiary's business with all or any portion of the
relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of
ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. Section 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments and (b) thereafter, the aggregate
unpaid principal amount of the Term Loans then outstanding.
"Required Prepayment Lenders": the Majority Facility Lenders in respect
of each Facility.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its Property or to which
such Person or any of its Property is subject.
"Responsible Officer": the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
"Restricted Payments": as defined in Section 6.6.
"Revolving Credit Agreement": the Revolving Credit Agreement, dated as
of March 15, 1999, among the Borrower, the lenders named therein, Lehman
Commercial
21
Paper Inc., as administrative agent, and others, as the same may be amended,
supplemented or otherwise modified from time to time.
"Revolving Credit Commitment": as defined in the Revolving Credit
Agreement.
"Revolving Credit Facility": the credit facility made available
pursuant to the Revolving Credit Agreement.
"Revolving Credit Lender": each Lender (as defined in the Revolving
Credit Agreement).
"Revolving Credit Loans": as defined in the Revolving Credit Agreement.
"SEC": the Securities and Exchange Commission (or successors thereto or
an analogous Governmental Authority).
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents
hereafter delivered to the Administrative Agent granting a Lien on any
Property of any Person to secure the obligations and liabilities of any Loan
Party under any Loan Document and of any Loan Party (as defined in the
Revolving Credit Agreement) under any Loan Document (as defined in the
Revolving Credit Agreement).
"Senior Subordinated Note Indenture": the Indenture, dated as of August
11, 1997, entered into by the Borrower and certain of its Subsidiaries and
The Bank of New York, as Trustee, in connection with the issuance of the
Senior Subordinated Notes, together with all instruments and other
agreements entered into by the Borrower or such Subsidiaries in connection
therewith, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with Section 6.9.
"Senior Subordinated Notes": the subordinated notes of the Borrower
issued pursuant to the Senior Subordinated Note Indenture in the original
aggregate principal amount of $120,000,000.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, that, as of any date
of determination, (a) the amount of the "present fair saleable value" of the
assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the liability
of such Person on its debts as such debts become absolute and matured, (c)
such Person will
22
not have, as of such date, an unreasonably small amount of capital with
which to conduct its business, and (d) such Person will be able to pay its
debts as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to payment,
whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.
"Specified Capital Expenditure Amount": for any fiscal year (the
"Calculation Year"), an amount equal to the amount of Capital Expenditures
permitted by Section 6.7 to be made in the Calculation Year (including any
amount carried over from the prior fiscal year), minus (b) the amount of any
permitted Capital Expenditures from the prior fiscal year which was carried
over into the Calculation Year but not actually expended for Capital
Expenditures in the Calculation Year.
"Specified Change of Control": a "Change of Control" as defined in the
Senior Subordinated Note Indenture.
"Specified Hedge Agreement": any Hedge Agreement (a) entered into by
(i) the Borrower or any of its Subsidiaries and (ii) any Lender or any
affiliate thereof, as counterparty and (b) which has been designated by such
Lender and the Borrower, by notice to the Administrative Agent and the
Syndication Agent, as a Specified Hedge Agreement.
"Sponsor": Bruckmann, Rosser, Sherill & Co., L.P.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than any
Excluded Foreign Subsidiary.
"Swing Line Loans": as defined in the Revolving Credit Agreement.
"Syndication Letter Agreement": the letter agreement, dated as of the
date hereof, between the Borrower and the Syndication Agent and the Arranger
relating to the
23
syndication of the revolving credit facility provided for in the Revolving
Credit Agreement and of the Term Loan Facilities.
"Term Loan Facilities": the collective reference to the Tranche A Term
Loan Facility and the Tranche B Term Loan Facility.
"Term Loans": the collective reference to the Tranche A Term Loans and
Tranche B Term Loans.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any Lender, the obligation of
such Lender, if any, to make a Tranche A Term Loan to the Borrower hereunder
in a principal amount not to exceed the amount set forth under the heading
"Tranche A Term Loan Commitment" opposite such Lender's name on Schedule 1
to the Lender Addendum delivered by such Lender, or, as the case may be, in
the Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original aggregate amount of the Tranche A Term Loan Commitments
is $70,000,000.
"Tranche A Term Loan Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Tranche A Term Loan Lender": each Lender that has a Tranche A Term
Loan Commitment or is the holder a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan Lender at
any time, the percentage which such Lender's Tranche A Term Loan Commitment
then constitutes of the aggregate Tranche A Term Loan Commitments (or, at
any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender's Tranche A Term Loan then outstanding
constitutes of the aggregate principal amount of the Tranche A Term Loans
then outstanding).
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to any Lender, the obligation of
such Lender, if any, to make a Tranche B Term Loan to the Borrower hereunder
in a principal amount not to exceed the amount set forth under the heading
"Tranche B Term Loan Commitment" opposite such Lender's name on Schedule 1
to the Lender Addendum delivered by such Lender, or, as the case may be, in
the Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original aggregate amount of the Tranche B Term Loan Commitments
is $150,000,000.
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"Tranche B Term Loan Facility": as defined in the definition of
"Facility" in this Section 1.1.
"Tranche B Term Loan Lender": each Lender that has a Tranche B Term
Loan Commitment or which is the holder of a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time, the
percentage which such Lender's Tranche B Term Loan Commitment then
constitutes of the aggregate Tranche B Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal
amount of such Lender's Tranche B Term Loan then outstanding constitutes of
the aggregate principal amount of the Tranche B Term Loans then
outstanding).
"Transferee": as defined in Section 9.14.
"Type": as to any Term Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required
by law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is a
Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate
or other document made or delivered pursuant hereto or thereto, accounting terms
relating to Holdings, the Borrower and its Subsidiaries not defined in Section
1.1 and accounting terms partly defined in Section 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
25
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions hereof,
(a) each Tranche A Term Loan Lender severally agrees to make a term loan (a
"Tranche A Term Loan") to the Borrower on the Closing Date in an amount not to
exceed the amount of the Tranche A Term Loan Commitment of such Lender and (b)
each Tranche B Term Loan Lender severally agrees to make a term loan (a "Tranche
B Term Loan") to the Borrower on the Closing Date in an amount not to exceed the
amount of the Tranche B Term Loan Commitment of such Lender. The Term Loans may
from time to time be Eurodollar Loans or Base Rate Loans, as determined by the
Borrower and notified to the Administrative Agent in accordance with Sections
2.2 and 2.8.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Lenders make the Term
Loans on the Closing Date and specifying the amount to be borrowed. The Term
Loans shall initially be Base Rate Loans and may be converted to Eurodollar
Loans after the Closing Date pursuant to Section 2.8. Upon receipt of such
notice the Administrative Agent shall promptly notify each Lender thereof. Not
later than 12:00 Noon, New York City time, on the Closing Date each Lender shall
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Term Loan or Term Loans to be made by
such Lender. The Administrative Agent shall make available to the Borrower the
aggregate of the amounts made available to the Administrative Agent by the
Lenders in like funds.
2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of each
Tranche A Term Loan Lender shall mature in 16 consecutive quarterly
installments, commencing on June 30, 2000, each of which shall be in an amount
equal to such Lender's Tranche A Term Loan Percentage multiplied by the amount
set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
June 30, 2000 $3,750,000
September 30, 2000 3,750,000
December 31, 2000 3,750,000
March 31, 2001 3,750,000
June 30, 2001 3,750,000
September 30, 2001 3,750,000
December 31, 2001 3,750,000
March 31, 2002 3,750,000
June 30, 2002 5,000,000
September 30, 2002 5,000,000
December 31, 2002 5,000,000
March 31, 2003 5,000,000
June 30, 2003 5,000,000
26
September 30, 2003 5,000,000
December 31, 2003 5,000,000
March 31, 2004 5,000,000
(b) The Tranche B Term Loan of each Tranche B Term Loan Lender shall
mature in 20 consecutive quarterly installments, commencing on June 30, 2001,
each of which shall be in an amount equal to such Lender's Tranche B Term Loan
Percentage multiplied by the amount set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
June 30, 2001 $ 250,000
September 30, 2001 250,000
December 31, 2001 250,000
March 31, 2002 250,000
June 30, 2002 250,000
September 30, 2002 250,000
December 31, 2002 250,000
March 31, 2003 250,000
June 30, 2003 250,000
September 30, 2003 250,000
December 31, 2003 250,000
March 31, 2004 250,000
June 30, 2004 18,000,000
September 30, 2004 18,000,000
December 31, 2004 18,000,000
March 31, 2005 18,000,000
June 30, 2005 18,750,000
September 30, 2005 18,750,000
December 31, 2005 18,750,000
March 31, 2006 18,750,000
(c) In any event, all unpaid Obligations in respect of the Tranche A
Term Loans and the Tranche B Term Loans will be due and payable on March 31,
2004 and March 31, 2006, respectively.
2.4 Repayment of Term Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Lender the principal amount of each Term Loan of such Lender in
installments according to the amortization schedule set forth in Section 2.3 (or
on such earlier date on which the Term Loans become due and payable pursuant to
Section 7). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Term Loans from time to time outstanding from the date
hereof until payment in full thereof at the rates per annum, and on the dates,
set forth in Section 2.10.
27
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Term Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall maintain
the Register pursuant to Section 9.6(d), and a subaccount therein for each
Lender, in which shall be recorded (i) the amount of each Term Loan made
hereunder and any Note evidencing such Term Loan, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.4(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Term Loans
made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing any Term Loans of such Lender,
substantially in the form of Exhibit G with appropriate insertions as to date
and principal amount; provided that delivery of such notes shall not be a
condition precedent to the making of the Term Loans on the Closing Date.
2.5 Fees, etc. (a) The Borrower agrees to pay to the Syndication Agent
the fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Syndication Agent.
(b) The Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates from time to time agreed to in writing by the
Borrower and the Administrative Agent.
2.6 Optional Prepayments. (a) The Borrower may at any time and from
time to time prepay the Term Loans, in whole or in part, without premium or
penalty (except as otherwise provided herein), upon irrevocable notice delivered
to the Administrative Agent at least three Business Days prior thereto in the
case of Eurodollar Loans and at least one Business Day prior thereto in the case
of Base Rate Loans, which notice shall specify the date and amount of prepayment
and whether the prepayment is of Eurodollar Loans or Base Rate Loans; provided,
that if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 2.16. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
28
payable on the date specified therein, together with accrued interest to such
date on the amount prepaid. Partial prepayments of Term Loans shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof. Optional
prepayments of the Term Loans shall be applied to the Tranche A Term Loans and
the Tranche B Term Loans ratably and to the installments thereof ratably in
accordance with the then outstanding amounts thereof and may not be reborrowed.
(b) All optional prepayments of principal in respect of the Tranche B
Term Loans during the two year period following the Closing Date shall be
accompanied by a prepayment fee equal to (i) if such prepayment is made on or
prior to the first anniversary of the Closing Date, 2% of the amount of the
principal prepaid and (ii) if such prepayment is made after the first
anniversary of the Closing Date and on or prior to the second anniversary of the
Closing Date, 1% of the amount of the principal prepaid. Any prepayment of Term
Loans in connection with a refinancing of the Facilities will be deemed to
constitute an optional prepayment.
2.7 Mandatory Prepayments and Commitment Reductions. (a) Unless the
Required Prepayment Lenders shall otherwise agree, if any Capital Stock shall be
issued (excluding Capital Stock of Holdings issued to Persons who are Permitted
Investors, provided that prior to and after giving effect to the proposed
issuance, no Default or Event of Default shall have occurred and be continuing),
or Indebtedness incurred, by Holdings, the Borrower or any of its Subsidiaries
(excluding any Indebtedness incurred in accordance with Section 6.2 as in effect
on the date of this Agreement), an amount equal to the Net Cash Proceeds thereof
shall be applied on the date of such issuance or incurrence toward the
prepayment of the Term Loans.
(b) Unless the Required Prepayment Lenders shall otherwise agree, if on
any date the Borrower or any of its Subsidiaries shall receive Net Cash Proceeds
from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall
be delivered in respect thereof, an amount equal to such Net Cash Proceeds shall
be applied on such date toward the prepayment of the Term Loans; provided, that,
notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount
equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Term Loans.
(c) Unless the Required Prepayment Lenders shall otherwise agree, if,
for any fiscal year of the Borrower commencing with the fiscal year ending
December 31, 1999, there shall be Excess Cash Flow, the Borrower shall, on the
relevant Excess Cash Flow Application Date, apply 50% of such Excess Cash Flow
toward the prepayment of the Term Loans. Each such prepayment and commitment
reduction shall be made on a date (an "Excess Cash Flow Application Date") no
later than five days after the earlier of (i) the date on which the financial
statements of the Borrower referred to in Section 5.1(a), for the fiscal year
with respect to which such prepayment is made, are required to be delivered to
the Lenders and (ii) the date such financial statements are actually delivered.
(d) Each mandatory prepayment required by this Section shall be
allocated among the Term Loan Facilities pro rata according to the respective
outstanding principal amounts of Term Loans under such Facilities and may not be
reborrowed. Amounts to be applied in
29
connection with prepayments made pursuant to this Section shall be applied,
first, to Base Rate Loans and, second, to Eurodollar Loans. Each prepayment of
the Term Loans under this Section shall be accompanied by accrued interest to
the date of such prepayment on the amount prepaid.
2.8 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor); provided that no Base Rate Loan under a particular
Facility may be converted into a Eurodollar Loan (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has or the Majority
Facility Lenders in respect of such Facility have determined in its or their
sole discretion not to permit such conversions or (ii) after the date that is
one month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Term Loans,
provided that no Eurodollar Loan under a particular Facility may be continued as
such (i) when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations or (ii) after the date that is one month prior to the final
scheduled termination or maturity date of such Facility, and provided, further,
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Term Loans shall be automatically converted to Base Rate
Loans on the last day of such then expiring Interest Period. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall
be outstanding at any one time.
30
2.10 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Term Loan
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), all outstanding Term Loans shall bear interest at a rate per annum
that is equal to the rate that would otherwise be applicable thereto pursuant to
the foregoing provisions of this Section plus 2% and (ii) if all or a portion of
any interest payable on any Term Loan or any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
relate to a particular Facility, the rate then applicable to Base Rate Loans
under the Revolving Credit Facility plus 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.
2.11 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of each determination of a Eurodollar Rate. Any change in the interest rate on a
Term Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.11(a).
31
2.12 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Term Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Term Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans under
the relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Term Loans under the relevant Facility to Eurodollar
Loans.
2.13 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder and any reduction of the Commitments of the
Lenders shall be made pro rata according to the respective Tranche A Term Loan
Percentages or Tranche B Term Loan Percentages, as the case may be, of the
relevant Lenders. Each payment (other than prepayments) in respect of principal
or interest in respect of the Term Loans and each payment in respect of fees
payable hereunder shall be applied to the amounts of such obligations owing to
the Lenders pro rata according to the respective amounts then due and owing to
the Lenders.
(b) Other than with respect to any substituted Lender in accordance
with Section 2.19, each payment (including each prepayment) of the Term Loans
outstanding under any Term Loan Facility shall be allocated among the Term Loan
Lenders holding such Term Loans pro rata based on the principal amount of such
Term Loans held by such Term Loan Lenders, and shall be applied to the
installments of such Term Loans pro rata based on the remaining outstanding
principal amount of such installments. Amounts prepaid on account of the Term
Loans may not be reborrowed.
(c) Notwithstanding anything to the contrary in Section 2.6, 2.7 or
2.13, so long as any Tranche A Term Loans are outstanding, each Tranche B Term
Loan Lender may, at its option, accept or decline any or all of the portion of
any optional prepayment or mandatory
32
payment applicable to the Tranche B Term Loans of such Lender; accordingly, with
respect to the amount of any optional prepayment described in Section 2.6 or
mandatory prepayment described in Section 2.7 that is allocated to Tranche B
Term Loans (such amounts, the "Tranche B Prepayment Amount") at any time when
Tranche A Term Loans remain outstanding, the Borrower will, (i) in the case of
any optional prepayment which the Borrower wishes to make, not later than 10
Business Days prior to the date on which the Borrower wishes to make such
optional prepayment, and (ii) in the case of any mandatory prepayment of Tranche
B Term Loans required to be made pursuant to Section 2.7, in lieu of applying
such amount to the prepayment of Tranche B Term Loans as provided in Section
2.7, on the date specified in Section 2.7 for such prepayment, give the
Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each Tranche B
Lender a notice (each, a "Prepayment Option Notice") as described below. As
promptly as practicable after receiving such notice from the Borrower, the
Administrative Agent will send to each Tranche B Lender a Prepayment Option
Notice, which shall be in the form of Exhibit H, and shall include an offer by
the Borrower to prepay on the date (each a "Prepayment Date") that is 5 Business
Days after the date of the Prepayment Option Notice, the relevant Term Loans of
such Lender by an amount equal to the portion of the Prepayment Amount indicated
in such Lender's Prepayment Option Notice as being applicable to such Lender's
Tranche B Term Loans. On the Prepayment Date, (i) the Borrower shall pay to the
Administrative Agent the aggregate amount necessary to prepay that portion of
the outstanding relevant Term Loans in respect of which Tranche B Lenders have
accepted prepayment as described above (such Lenders, the "Accepting Lenders"),
and such amount shall be applied to reduce the Tranche B Prepayment Amounts, as
applicable, with respect to each Accepting Lender and (ii) the Borrower shall
pay to the Administrative Agent an amount equal to 100% of the portion of the
Tranche B Prepayment Amount not accepted by the Accepting Lenders, and such
amount shall be applied to the prepayment of the Tranche A Term Loans.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Payment Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may
33
assume that such Lender is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the borrowing date
therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Effective Rate for the period until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error. If such Lender's share of
such borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such borrowing date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to Base Rate Loans under the relevant Facility, on demand,
from the Borrower.
(f) Unless the Administrative Agent shall have been notified in writing
by the Borrower prior to the date of any payment being made hereunder that the
Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at a rate per annum equal to the daily average
Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights
of the Administrative Agent or any Lender against the Borrower.
2.14 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect
thereof (except for Non-Excluded Taxes covered by Section 2.15 and
changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of such Lender that is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining
34
Eurodollar Loans, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such corporation for such reduction.
(c) A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender to the Borrower setting out in reasonable detail
the method of determination of such additional amounts (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Term Loans and all other
amounts payable hereunder.
2.15 Taxes. (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on any Agent or any Lender as a result of a present or former connection
between such Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from such
Agent's or such Lender's having executed, delivered or performed its obligations
or received a payment under, or enforced, this Agreement or any other Loan
Document). If any such non-excluded taxes, levies, imposts, duties, charges,
fees, deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to any Agent or any Lender hereunder, the
amounts so payable to such Agent or such Lender shall be increased to the extent
necessary to yield to such Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, provided,
however, that the Borrower shall not be required to increase any such amounts
payable to any Lender with
35
respect to any Non-Excluded Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (d) or (e) of this Section
or (ii) that are United States withholding taxes imposed on amounts payable to
such Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to Section 2.15(a).
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section 2.15 shall survive the termination of this Agreement and the payment of
the Term Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent (and, in the case of a
Participant, also to the Lender from which the related participation shall have
been purchased) two copies of either U.S. Internal Revenue Service Form 1001 or
Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest" a statement substantially in the form of
Exhibit I and a Form W-8, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
36
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a refund in
respect of Non-Excluded Taxes or Other Taxes paid by the Borrower, which in the
good faith judgment of such Lender is allocable to such payment, it shall
promptly pay such refund, together with any other amounts paid by the Borrower
in connection with such refunded Non-Excluded Taxes or Other Taxes, to the
Borrower, net of all out-of-pocket expenses of such Lender incurred in obtaining
such refund, provided, however, that the Borrower agrees to promptly return such
refund to the Administrative Agent or the applicable Lender, as the case may be,
if it receives notice from the Administrative Agent or applicable Lender that
the Administrative Agent or such Lender is required to repay such refund.
(g) Notwithstanding anything to the contrary in this Section, if the
Internal Revenue Service determines that a Lender is participating in a conduit
financing arrangement as defined in Section 7701(i) of the Code and the
regulations thereunder (a "Conduit Financing Arrangement"), then (i) any Taxes
that the Borrower is required to withhold from payments to such Lender shall be
excluded from the definitions of "Non-Excluded Taxes" and (ii) such Lender shall
indemnify the Borrower in full for any and all Taxes for which the Borrower is
held directly liable under Section 1461 of the Code by virtue of such Conduit
Financing Arrangement. Each Lender represents that it is not participating in a
Conduit Financing Arrangement.
2.16 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on
a day that is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amount so prepaid or
converted, or not so borrowed, converted or continued, for the period from the
date of such prepayment or conversion or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Term Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as
37
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Term Loans and
all other amounts payable hereunder.
2.17 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender's Term Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Term Loans or within such
earlier period as required by law. If any such conversion of a Eurodollar Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 2.16.
2.18 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.14, 2.15(a) or
2.17 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Term Loans affected by such event with
the object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of the Borrower or the rights of any Lender
pursuant to Section 2.14, 2.15(a) or 2.17.
2.19 Substitution of Lenders. Upon the receipt by the Borrower from any
Lender (an "Affected Lender") of a claim under Section 2.14, 2.15 or 2.17, the
Borrower may: (a) request one more of the other Lenders to acquire and assume
all or part of such Affected Lender's Term Loans and Commitment; or (b) replace
such Affected Lender by designating another Lender or a financial institution
that is willing to acquire such Term Loans and assume such Commitment; provided
that (i) such replacement does not conflict with any Requirement of Law, (ii) no
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) the Borrower shall repay (or the replacement bank or
institution shall purchase, at par) all Term Loans, accrued interest and other
amounts owing to such replaced Lender prior to the date of replacement, (iv) the
Borrower shall be liable to such replaced Lender under Section 2.16 if any
Eurodollar Loan owing to such replaced Lender shall be prepaid (or purchased)
other than on the last day of the Interest Period relating thereto, (v) the
replacement bank or institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (vi) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of this
Section 9.6 (provided that the Borrower or replacement Lender shall be obligated
to pay the registration and processing fee) and (vii) the Borrower shall pay all
38
additional amounts (if any) required pursuant to Section 2.14, 2.15 or 2.17, as
the case may be, to the extent such additional amounts were incurred on or prior
to the consummation of such replacement.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Term Loans, Holdings and the Borrower hereby jointly and severally
represent and warrant to each Agent and each Lender that:
3.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at January 2,
1999 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies of
which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the consummation of
the Acquisition, (ii) the Term Loans to be made hereunder and the loans, if any,
to be made under the Revolving Credit Agreement on the Closing Date, and the use
of proceeds thereof and (iii) the payment of fees and expenses in connection
with the foregoing. The Pro Forma Balance Sheet has been prepared based on the
best information available to the Borrower as of the date of delivery thereof,
and presents fairly on a pro forma basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at January 2, 1999, assuming that
the events specified in the preceding sentence had actually occurred at such
date.
(b) The audited consolidated balance sheets of the Borrower as at
December 28, 1996, January 3, 1998 and January 2, 1999, and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from KPMG
LLP, present fairly the consolidated financial condition of the Borrower as at
such date, and the consolidated results of its operations and its consolidated
cash flows for the respective fiscal years then ended. The unaudited
consolidated balance sheet of Holdings as at December 31, 1998 presents fairly
the consolidated financial condition of Holdings as at such date. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). Holdings, the Borrower and its Subsidiaries do not have
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from January 2, 1999 to and including the date hereof there
has been no Disposition by the Borrower of any material part of its business or
Property.
(c) The audited consolidated balance sheets of the Acquired Assets as
at September 30, 1997 and September 30, 1998, and the consolidated statements of
income and of cash flows for the fiscal years ended September 30, 1996,
September 30, 1997 and September 30, 1998, reported on by and accompanied by an
unqualified report from KPMG LLP, present fairly
39
the consolidated financial condition of the Acquired Assets as at such date, and
the consolidated results of their operations and their consolidated cash flows
for the respective fiscal years then ended. The unaudited consolidated balance
sheets of the Acquired Assets as at January 3, 1998 and January 2, 1999, and the
related unaudited consolidated statements of income and cash flows for the
three-month periods ended on such dates, present fairly the consolidated
financial condition of the Acquired Assets as at such date, and the consolidated
results of their operations and their consolidated cash flows for the
three-month periods then ended (subject to normal year-end audit adjustments).
3.2 No Change. Since January 2, 1999 there has been no development or
event that has had or could reasonably be expected to have a Material Adverse
Effect. Since September 30, 1998, there has been no development or event that
has had or could be reasonably be expected to have a material adverse effect on
the Acquired Assets.
3.3 Corporate Existence; Compliance with Law. Each of Holdings, the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate or business trust power and authority, and the legal right, to own
and operate its Property, to lease the Property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation or business trust and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of Property or the
conduct of its business requires such qualification and (d) is in compliance
with all Requirements of Law except, in the case of each of the foregoing
clauses (c) and (d), to the extent that the failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan
Party has the corporate or business trust power and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is a party
and, in the case of the Borrower, to borrow hereunder. Each Loan Party has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower, to authorize the borrowings on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the Acquisition and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the other Loan Documents, except (i) consents, authorizations, filings
and notices described in Schedule 3.4, which consents, authorizations, filings
and notices have been obtained or made and are in full force and effect, (ii)
the filings referred to in Section 3.19 and (iii) consents, notices and filings
which the failure to make or obtain could not reasonably be expected to have a
Material Adverse Effect. Each Loan Document has been duly executed and delivered
on behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors'
40
rights generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law).
3.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of Holdings, the Borrower or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
No Requirement of Law or Contractual Obligation applicable to the Borrower or
any of its Subsidiaries could reasonably be expected to have a Material Adverse
Effect.
3.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Holdings or the Borrower, threatened by or against Holdings, the
Borrower or any of its Subsidiaries or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
3.7 No Default. Neither Holdings, the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of Holdings, the Borrower and
its Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property, subject only to Liens and other matters permitted by
Section 6.3, and good title to, or a valid leasehold interest in, all its other
Property, and none of such Property is subject to any Lien except as permitted
by Section 6.3.
3.9 Intellectual Property. To the knowledge of Holdings and the
Borrower, Holdings, the Borrower and each of its Subsidiaries owns, or is
licensed to use, all Intellectual Property necessary and material for the
conduct of its business as currently conducted. To the knowledge of Holdings and
the Borrower, except as indicated on Schedule 3.9, no material claim has been
asserted and is pending by any Person alleging that the use of any Intellectual
Property by Holdings, the Borrower and its Subsidiaries infringes on the
intellectual property rights of any Person in any material respect nor does
Holdings or the Borrower know of any valid basis for any such claim.
3.10 Taxes. Each of Holdings, the Borrower and each of its Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns that are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
Property and all other taxes, fees or other charges imposed on it or any of its
Property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which
41
reserves in conformity with GAAP have been provided on the books of Holdings,
the Borrower or its Subsidiaries, as the case may be); and as of the Closing
Date no tax Lien has been filed, and, to the knowledge of Holdings and the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.
3.11 Federal Regulations. No part of the proceeds of any Term Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
3.12 Labor Matters. There are no strikes or other labor disputes
against Holdings, the Borrower or any of its Subsidiaries pending or, to the
knowledge of Holdings or the Borrower, threatened that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. Hours
worked by and payment made to employees of Holdings, the Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law dealing with such matters that (individually
or in the aggregate) could reasonably be expected to have a Material Adverse
Effect. All payments due from Holdings, the Borrower or any of its Subsidiaries
on account of employee health and welfare insurance that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect if not
paid have been paid or accrued as a liability on the books of Holdings, the
Borrower or the relevant Subsidiary.
3.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by more than $1,000,000. Neither the Borrower nor any Commonly
Controlled Entity has at any time contributed to a Multiemployer Plan.
3.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
3.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 3.15
constitute all the Subsidiaries of the Borrower at the date hereof. Schedule
3.15 sets forth as of the Closing Date
42
the name and jurisdiction of incorporation of each Subsidiary and, as to each
such Subsidiary, the percentage of each class of Capital Stock owned by any Loan
Party.
(b) There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors' qualifying shares) of any nature relating
to any Capital Stock of the Borrower or any Subsidiary.
3.16 Use of Proceeds. The proceeds of the Term Loans shall be used to
finance a portion of the Acquisition and to pay related fees and expenses and to
refinance certain existing Indebtedness of the Borrower.
3.17 Environmental Matters. Other than exceptions to any of the
following that could not, individually and in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) the Borrower and its Subsidiaries: (i) are, and within the
period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits (each of which is in full force and effect)
required for any of their current operations or for any property owned,
leased, or otherwise operated by any of them; (iii) are, and within the
period of all applicable statutes of limitation have been, in
compliance with all of their Environmental Permits; and (iv) reasonably
believe that: each of their Environmental Permits will be timely
renewed and complied with; any additional Environmental Permits that
may be required of any of them will be timely obtained and complied
with; and compliance with any Environmental Law that is or is expected
to become applicable to any of them will be timely attained and
maintained.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or, to the knowledge of the
Borrower and its Subsidiaries, formerly owned, leased or operated by
the Borrower or any of its Subsidiaries, or, to the knowledge of the
Borrower and its Subsidiaries, at any other location (including,
without limitation, any location to which Materials of Environmental
Concern have been sent for re-use or recycling or for treatment,
storage, or disposal) which could reasonably be expected to (i) give
rise to liability of the Borrower or any of its Subsidiaries under any
applicable Environmental Law or otherwise result in costs to the
Borrower or any of its Subsidiaries, or (ii) interfere with the
Borrower's or any of its Subsidiaries' continued operations.
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or
relating to any Environmental Law to which the Borrower or any of its
Subsidiaries is, or to the knowledge of the Borrower or any of its
Subsidiaries will be, named as a party that is pending or, to the
knowledge of the Borrower or any of its Subsidiaries, threatened.
43
(d) Neither the Borrower nor any of its Subsidiaries has received
any written request for information, or been notified that it is a
potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act
or any similar Environmental Law, or with respect to any Materials of
Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has entered
into or agreed to any consent decree, order, or settlement or other
agreement, or is subject to any judgment, decree, or order or other
agreement, in any judicial, administrative, arbitral, or other forum
for dispute resolution, relating to compliance with or liability under
any Environmental Law.
(f) Neither the Borrower nor any of its Subsidiaries has assumed
or retained, by contract, any liabilities of any kind, fixed or
contingent, known or unknown, under any Environmental Law or with
respect to any Material of Environmental Concern.
3.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to the Administrative Agent or the Lenders or any of them, by or on behalf of
any Loan Party for use in connection with the transactions contemplated by or
pursuant to this Agreement or the other Loan Documents, contained as of the date
such statement, information, document or certificate was so furnished (or, in
the case of the Confidential Information Memorandum, as of the date of this
Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such financial information as
it relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. As of the
date hereof, the representations and warranties contained in the Acquisition
Documentation are true and correct in all material respects. There is no fact
known to any Loan Party that could reasonably be expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Agents and the Lenders for use in
connection with the transactions contemplated hereby and by the other Loan
Documents or pursuant hereto or thereto.
3.19 Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when any stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements in appropriate form are filed in the
offices specified on Schedule 3.19(a)-1,
44
(which financing statements have been duly completed and executed and delivered
to the Administrative Agent) and such other filings as are specified on Schedule
3 to the Guarantee and Collateral Agreement (all of which filings have been duly
completed), the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 6.3). Schedule
3.19(a)-2 lists each UCC Financing Statement that (i) names any Loan Party as
debtor and (ii) will remain on file after the Closing Date. Schedule 3.19(a)-3
lists each UCC Financing Statement that (i) names any Loan Party as debtor and
(ii) will be terminated on or prior to the Closing Date; and on or prior to the
Closing Date, the Borrower will have delivered to the Administrative Agent, or
caused to be filed, duly completed UCC termination statements, signed by the
relevant secured party, in respect of each such UCC Financing Statement.
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
3.19(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Obligations
(as defined in the relevant Mortgage), in each case prior and superior in right
to any other Person, subject only to Liens and other matters permitted by
Section 6.3.
3.20 Solvency. The Borrower is, and the Borrower and its Subsidiaries
on a consolidated basis are, and after giving effect to the Acquisition and the
incurrence of all Indebtedness and obligations being incurred in connection
herewith and therewith will be and will continue to be, Solvent.
3.21 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in the Senior Subordinated
Note Indenture. The obligations of each Subsidiary Guarantor under the Guarantee
and Collateral Agreement constitute "Guarantor Senior Indebtedness" of such
Subsidiary Guarantor under and as defined in the Senior Subordinated Note
Indenture.
3.22 Regulation H. No Mortgage encumbers improvements which are located
in an area that has been identified by the Secretary of Housing and Urban
Development as an area having special flood hazards and in which flood insurance
has been made available under the National Flood Insurance Act of 1968, except
for the Mortgage to be recorded in Cumberland County, Maine which encumbers the
B&M Baked Bean facility, a small portion of the improvements of which lie in an
area of special flood hazard.
3.23 Year 2000 Matters. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (i) the computer systems of
Holdings and the Borrower and its Subsidiaries and (ii) equipment containing
embedded microchips (including
45
systems and equipment supplied by others or with which the systems of Holdings
and the Borrower and its Subsidiaries interface) and the testing of all such
systems and equipment, as so reprogrammed, will be completed by June 30, 1999.
The cost to Holdings and the Borrower and its Subsidiaries of such reprogramming
and testing and of the reasonably foreseeable consequences of year 2000 to
Holdings and the Borrower and its Subsidiaries (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) will not
result in a Default, an Event of Default or a Material Adverse Effect. Except
for such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of Holdings, the
Borrower and its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to be, sufficient to
permit Holdings and the Borrower and its Subsidiaries to conduct their business
without Material Adverse Effect.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Term Loans. The agreement of each Lender to make the
Term Loan or Term Loans requested to be made by it on the Closing Date is
subject to the satisfaction, prior to or concurrently with the making of such
Term Loans on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of
Holdings and the Borrower, (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of Holdings, the
Borrower and each Subsidiary Guarantor and (iii) a Mortgage covering each of
the properties described on Schedule 1.1, executed and delivered by a duly
authorized officer of each party thereto.
(b) Acquisition, etc. The following transactions shall have been
consummated, in each case on terms and conditions reasonably satisfactory to
the Lenders:
(i) Borrower shall have acquired the Acquired Assets from The
Pillsbury Company for a purchase price not exceeding $192,000,000
pursuant to the Acquisition Documentation, and no provision thereof
shall have been waived, amended, supplemented or otherwise modified.
(ii) The Borrower shall have received additional cash equity in an
amount at least equal to $35,000,000 from Holdings (which, in turn,
shall have received such amount from the Sponsor and or its Control
Investment Affiliates).
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received the Pro Forma Balance Sheet and the financial statements
described in Section 3.1, all of which shall be reasonably satisfactory.
(d) Approvals. All governmental and third party approvals necessary in
connection with the Acquisition, the financing contemplated hereby and the
continuing
46
operations of Holdings, the Borrower and its Subsidiaries shall have been
obtained and be in full force and effect (other than any such approvals
which, if not obtained, would not have a Material Adverse Effect); all
applicable waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the Acquisition or the financing
thereof (other than any such conditions which would not have a Material
Adverse Effect); and the Administrative Agent shall have received a
certificate of a Responsible Officer to the foregoing effect, which
certificate shall also either (i) certify that no such approvals are
required or (ii) have attached to it copies of any such required approvals.
(e) Related Agreements. The Administrative Agent shall have received
(in a form reasonably satisfactory to the Administrative Agent), with a copy
for each Lender, true and correct copies, certified as to authenticity by
the Borrower, of the Acquisition Agreement and the Senior Subordinated Note
Indenture and such other documents or instruments as may be reasonably
requested by the Syndication Agent, including, without limitation, a copy of
any debt instrument, security agreement or other material contract to which
the Loan Parties may be a party.
(f) Fees. The Lenders, the Syndication Agent, the Arranger and the
Administrative Agent shall have received all fees required to be paid, and
all expenses for which invoices have been presented (including reasonable
fees, disbursements and other charges of counsel to the Agents), on or
before the Closing Date. All such amounts will be paid with proceeds of the
Term Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before
the Closing Date.
(g) Business Plan. The Lenders shall have received a satisfactory
business plan for fiscal years 1999-2006 and a satisfactory written analysis
of the business and prospects of the Borrower and its Subsidiaries for the
period from the Closing Date through the final maturity of the Term Loans.
(h) Fixed Charge Coverage Ratio As of the Closing Date, the Borrower's
Fixed Charge Coverage Ratio (as defined in the Senior Subordinated Note
Indenture, and determined in accordance with Section 4.09 of the Senior
Subordinated Note Indenture) shall not be less than 2.0 to 1.0. The Lenders
shall have received a certificate from the Borrower containing all
information and calculations necessary for determining compliance with the
foregoing requirement.
(i) Lien Searches. The Lenders shall have received the results of a
recent lien search in each relevant jurisdiction with respect to the
Borrower and its Subsidiaries, and such search shall reveal no liens on any
of the assets of the Borrower or its Subsidiaries except for liens permitted
by Section 6.3 or liens to be discharged on or prior to the Closing Date
pursuant to documentation satisfactory to the Administrative Agent.
47
(j) Environmental Matters. The Administrative Agent shall have received
a written environmental assessment regarding the Portland, Maine facility
acquired in the Acquisition, prepared by Alden Environmental Management,
Inc. in form, scope, and substance satisfactory to the Administrative Agent,
together with a letter from the environmental consultant permitting the
Agents and the Lenders to rely on the environmental assessment as if
addressed to and prepared for each of them. The Administrative Agent shall
also have received the environmental assessments listed on Schedule 4.1(j).
(k) Closing Certificate. The Administrative Agent shall have received a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit C, with appropriate insertions and attachments.
(l) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Dechert, Price & Rhoads, counsel to the
Borrower and its Subsidiaries, substantially in the form of Exhibit
F-1;
(ii) the legal opinion of David E. Schmitt, Vice President and
General Counsel of Pillsbury North America, a division of The Pillsbury
Company, delivered to the Borrower, accompanied by a reliance letter in
favor of the Lenders; and
(iii) the legal opinion of local counsel in each of Maine, Vermont
and Louisiana and of such other special and local counsel as may be
required by the Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(m) Pledged Stock; Stock Power. The Administrative Agent shall have
received the certificates representing the shares of Capital Stock pledged
pursuant to the Guarantee and Collateral Agreement, together with an undated
stock power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof.
(n) Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by
the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the Lenders,
a perfected Lien on the Collateral described therein, prior and superior in
right to any other Person (other than with respect to Liens and other
matters expressly permitted by Section 6.3), shall be in proper form for
filing, registration or recordation.
48
(o) Title Insurance; Flood Insurance. (i) If requested by the
Administrative Agent, the Administrative Agent shall have received, and the
title insurance company issuing the policy referred to in clause (ii) below
(the "Title Insurance Company") shall have received, maps or plats of an
as-built survey of the sites of the Mortgaged Properties certified to the
Administrative Agent and the Title Insurance Company in a manner
satisfactory to them, dated a date satisfactory to the Administrative Agent
and the Title Insurance Company by an independent professional licensed land
surveyor satisfactory to the Administrative Agent and the Title Insurance
Company, which maps or plats and the surveys on which they are based shall
be made in accordance with the Minimum Standard Detail Requirements for Land
Title Surveys jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in 1992 or
any subsequent standards jointly adopted by such bodies, and, without
limiting the generality of the foregoing, there shall be surveyed and shown
on such maps, plats or surveys, to the extent required by the Administrative
Agent, the following: (A) the locations on such sites of all the buildings,
structures and other improvements and the established building setback
lines; (B) the lines of streets abutting the sites and width thereof; (C)
all access and other easements appurtenant to the sites; (D) all roadways,
paths, driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting the sites, whether recorded, apparent from a
physical inspection of the sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building structures and
improvements on the sites; (F) if any site is described as being on a filed
map, a legend relating the survey to said map; and (G) the flood zone
designations, if any, in which the Mortgaged Properties are located.
(ii) The Administrative Agent shall have received in respect of each
Mortgaged Property a mortgagee's title insurance policy (or policies) or
marked up unconditional binder for such insurance. Each such policy shall
(A) be in an amount satisfactory to the Administrative Agent; (B) be issued
at ordinary rates; (C) insure that the Mortgage insured thereby creates a
valid first Lien on such Mortgaged Property free and clear of all defects
and encumbrances, except as disclosed therein; (D) name the Administrative
Agent for the benefit of the Lenders as the insured thereunder; (E) be in
the form of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or
equivalent policies) to the extent the Title Insurance Company is willing to
issue the same, otherwise in the form of ALTA Loan Policy - 1992 (or
equivalent policies); (F) contain such endorsements and affirmative coverage
as the Administrative Agent may reasonably request and (G) be issued by
title companies satisfactory to the Administrative Agent (including any such
title companies acting as co-insurers or reinsurers, at the option of the
Administrative Agent). The Administrative Agent shall have received evidence
satisfactory to it that all premiums in respect of each such policy, all
charges for mortgage recording tax, and all related expenses, if any, have
been paid.
(iii) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance that (1) covers
any parcel of improved real property that is encumbered by any Mortgage, (2)
is written in an amount not less than the outstanding principal amount of
the indebtedness secured by such Mortgage that is
49
reasonably allocable to such real property or the maximum limit of coverage
made available with respect to the particular type of property under the
National Flood Insurance Act of 1968, whichever is less, and (3) has a term
ending not later than the maturity of the Indebtedness secured by such
Mortgage and (B) confirmation that the Borrower has received the notice
required pursuant to Section 208(e)(3) of Regulation H of the Board.
(iv) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in clause (ii) above and a copy of all
other material documents affecting the Mortgaged Properties.
Notwithstanding the foregoing, any items described in clauses (i)
through (iv) of this paragraph (o) that pertain to the Nealson Street
Property and that are not delivered on the Closing Date shall be delivered
in accordance with Section 5.11(b).
(p) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.3 of the Guarantee and
Collateral Agreement.
(q) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to this Agreement or any
other Loan Document shall be true and correct on and as of the Closing Date
as if made on and as of such date.
(r) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the making of the Term
Loans on the Closing Date.
(s) Leverage Ratio. As of the Closing Date, the ratio of the Borrower's
Consolidated Total Debt to the Borrower's pro forma Consolidated EBITDA for
the four consecutive fiscal quarters most recently ended (giving pro forma
effect to the Acquisition as if it had been consummated on the first day of
such period, with such adjustments as would be permissible under Regulation
S-X of the Securities and Exchange Commission) shall not be greater than 5.5
to 1.0 (subject to adjustment for changes in purchase price of the
Acquisition and projected increase in working capital associated with the
Acquisition). The Lenders shall have received a certificate from the
Borrower containing all information and calculations necessary for
determining compliance with the foregoing requirement.
(t) Revolving Credit Loans. Concurrently with the making of the Term
Loans on the Closing Date, the Revolving Credit Lenders shall make
available, and the Borrower shall borrow and obtain, the initial extensions
of credit provided for in the Revolving Credit Agreement.
50
SECTION 5. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect or any Term Loan or other amount is
owing to any Lender or any Agent hereunder, each of Holdings and the Borrower
shall and shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Agent and each Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative
form the figures as of the end of the previous year, reported on without a
"going concern" or like qualification or exception, or qualification arising
out of the scope of the audit, by KPMG, L.L.P. or other independent
certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days after
the end of each of the first three quarterly periods of each fiscal year of
the Borrower, the unaudited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures as of the end of
and for the corresponding period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject
to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 45 days after
the end of each month occurring during each fiscal year of the Borrower
(other than the third, sixth, ninth and twelfth such month), the unaudited
consolidated balance sheets of the Borrower and its Subsidiaries as at the
end of such month and the related unaudited consolidated statements of
income and of cash flows for such month and the portion of the fiscal year
through the end of such month, setting forth in each case in comparative
form the figures as of the end of and for the corresponding period in the
previous year, certified by a Responsible Officer as being fairly stated in
all material respects (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 Certificates; Other Information. Furnish to each Agent and each
Lender, or, in the case of clause (h), to the relevant Lender:
51
(a) concurrently with the delivery of the financial statements referred
to in Section 5.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default
or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements pursuant
to Section 5.1, (i) a certificate of a Responsible Officer stating that, to
the best of such Responsible Officer's knowledge, each Loan Party during
such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and
the other Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no knowledge
of any Default or Event of Default except as specified in such certificate
and (ii) in the case of quarterly or annual financial statements, (x) a
Compliance Certificate containing all information and calculations necessary
for determining compliance by Holdings, the Borrower and its Subsidiaries
with the provisions of this Agreement referred to therein as of the last day
of the fiscal quarter or fiscal year of the Borrower, as the case may be,
and (y) to the extent not previously disclosed to the Administrative Agent,
a listing of any county or state within the United States where any Loan
Party keeps inventory or equipment and of any Intellectual Property acquired
by any Loan Party since the date of the most recent list delivered pursuant
to this clause (y) (or, in the case of the first such list so delivered,
since the Closing Date);
(c) as soon as available, and in any event no later than 45 days after
the end of each fiscal year of the Borrower, a detailed consolidated budget
for the following fiscal year (including a projected consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of the following
fiscal year, and the related consolidated statements of projected cash flow,
projected changes in financial position and projected income), and, as soon
as available, significant revisions, if any, of such budget and projections
with respect to such fiscal year (collectively, the "Projections"), which
Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on reasonable
estimates, information and assumptions and that such Responsible Officer has
no reason to believe that such Projections are incorrect or misleading in
any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition and
results of operations of the Borrower and its Subsidiaries for such fiscal
quarter and for the period from the beginning of the then current fiscal
year to the end of such fiscal quarter, as compared to the portion of the
Projections covering such periods and to the comparable periods of the
previous year;
(e) no later than 10 Business Days prior to the effectiveness thereof,
copies of substantially final drafts of any proposed amendment, supplement,
waiver or other modification with respect to the Acquisition Agreement;
52
(f) within five days after the same are sent, copies of all financial
statements and reports that Holdings or the Borrower sends to the holders of
any class of its debt securities or public equity securities and, within
five days after the same are filed, copies of all financial statements and
reports that the Holdings or Borrower may make to, or file with, the SEC;
(g) as soon as possible and in any event within 5 days of obtaining
knowledge thereof: (i) a description of any development, event, or condition
that, individually or in the aggregate with other developments, events or
conditions, could reasonably be expected to result in the payment by the
Borrower and its Subsidiaries, in the aggregate, of a Material Environmental
Amount; and (ii) any notice that any governmental authority may deny any
application for an Environmental Permit sought by, or revoke or refuse to
renew any Environmental Permit held by, the Borrower which could reasonably
be expected to have a Material Adverse Effect; and
(h) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Holdings, the Borrower or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence, etc. (a) (i)
Preserve, renew and keep in full force and effect its corporate existence and
(ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 6.4 and except, in the case of
clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5.5 Maintenance of Property; Insurance. (a) Keep all Property and
systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
5.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender upon reasonable notice to
53
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be desired and to discuss the business, operations, properties and financial and
other condition of Holdings, the Borrower and its Subsidiaries with officers and
employees of Holdings, the Borrower and its Subsidiaries and with its
independent certified public accountants.
5.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of Holdings, the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between
Holdings, the Borrower or any of its Subsidiaries and any Governmental
Authority, that in either case, if not cured or if adversely determined, as
the case may be, could reasonably be expected to have a Material Adverse
Effect;
(c) any litigation or proceeding affecting Holdings, the Borrower or
any of its Subsidiaries in which the amount involved is $1,000,000 or more
and not covered by insurance or in which injunctive or similar relief is
sought;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan that in any case under clause (i) or (ii) may
reasonably be expected to result in liability of more than $1,000,000;
(e) any amendment or other modification of any of the documents
described in Section 6.9; and
(f) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
5.8 Environmental Laws. (a) Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable
54
Environmental Laws, and obtain and comply in all material respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, or contest such orders and directives by appropriate legal means.
5.9 Interest Rate Protection. In the case of the Borrower, within 60
days after the Closing Date, enter into Hedge Agreements to the extent necessary
to provide that at least 50% of the sum of the aggregate principal amount of the
Term Loans and of the Senior Subordinated Notes is subject to either a fixed
interest rate or interest rate protection for a period of not less than three
years, which Hedge Agreements shall have terms and conditions reasonably
satisfactory to the Administrative Agent.
5.10 Additional Collateral, etc. (a) With respect to any Property
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than (v) any leasehold interests in real property, (w) any Intellectual
Property to the extent creation of a security interest therein would be
contractually prohibited, (x) any Property described in paragraph (b) or
paragraph (c) of this Section, (y) any Property subject to a Lien expressly
permitted by Section 6.3(g) and (z) Property acquired by an Excluded Foreign
Subsidiary) as to which the Administrative Agent, for the benefit of the
Lenders, does not have a perfected Lien, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
or such other documents as the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such Property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in such Property (subject to Liens permitted by
Section 6.3), including without limitation, the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $250,000 acquired after
the Closing Date by the Borrower or any of its Subsidiaries (other than any such
real property owned by an Excluded Foreign Subsidiary subject to a Lien
expressly permitted by Section 6.3(g)), promptly (i) execute and deliver a first
priority Mortgage in favor of the Administrative Agent, for the benefit of the
Lenders, covering such real property, (ii) if requested by the Administrative
Agent, provide the Lenders with (x) title and extended coverage insurance
covering such real property in an amount at least equal to the purchase price of
such real estate as well as a current ALTA survey thereof, together with a
surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
mortgage or deed of trust, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent
55
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Subsidiary of the Borrower (other than an
Excluded Foreign Subsidiary) created or acquired after the Closing Date (which,
for the purposes of this paragraph, shall include any existing Subsidiary that
ceases to be an Excluded Foreign Subsidiary), by the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement and (B) to take such actions
reasonably necessary or advisable to grant to the Administrative Agent for the
benefit of the Lenders a perfected first priority security interest in the
Collateral described in the Guarantee and Collateral Agreement with respect to
such new Subsidiary (subject to Liens and other matters permitted by Section 6.3
and excluding leasehold interests in real property, and Intellectual Property to
the extent creation of a security interest therein would be contractually
prohibited), including, without limitation, the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent, and (iv) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, and take such other action as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Lien of the
Administrative Agent thereon, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
5.11 Further Assurances. (a) From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all
56
such actions, as the Administrative Agent may reasonably request, for the
purposes of implementing or effectuating the provisions of this Agreement and
the other Loan Documents, or of more fully perfecting or renewing the rights of
the Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the Borrower or
any Subsidiary which may be deemed to be part of the Collateral) pursuant hereto
or thereto. Upon the exercise by the Administrative Agent or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the
Administrative Agent or such Lender may be required to obtain from the Borrower
or any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.
(b) Within 30 days after the Closing Date, the Borrower shall deliver
to the Administrative Agent each item described in clauses (i) through (iv) of
Section 4.1(o) that pertains to the Nealson Street Property.
(c) Within 15 days after the Closing Date, the Borrower shall deliver
to the Administrative Agent an executed legal opinion of local counsel in
Maryland, which opinion shall be in form and substance satisfactory to the
Administrative Agent.
SECTION 6. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect or any Term Loan or other amount is
owing to any Lender or any Agent hereunder, the Borrower shall not, and shall
not permit any of its Subsidiaries to, and, in the case of Section 6.16,
Holdings shall not, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as at the last day of any period of four consecutive fiscal quarters of the
Borrower ending with any fiscal quarter set forth below to exceed the ratio set
forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FQ2 1999 6.25
FQ3 1999 6.25
FQ4 1999 6.25
FQ1 2000 6.25
FQ2 2000 6.00
FQ3 2000 6.00
57
FQ4 2000 5.75
FQ1 2001 5.75
FQ2 2001 5.50
FQ3 2001 5.50
FQ4 2001 5.25
FQ1 2002 5.00
FQ2 2002 5.00
FQ3 2002 5.00
FQ4 2002 4.75
FQ1 2003 4.75
FQ2 2003 4.50
FQ3 2003 4.50
FQ4 2003 4.25
FQ1 2004 4.25
FQ2 2004 4.00
FQ3 2004 4.00
FQ4 2004 4.00
FQ1 2005 4.00
FQ2 2005 4.00
FQ3 2005 4.00
FQ4 2005 4.00
(b) Consolidated Senior Leverage Ratio. Permit the Consolidated Senior
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to
exceed the ratio set forth below opposite such fiscal quarter:
Consolidated Leverage
Fiscal Quarter Senior Ratio
-------------- ------------
FQ2 1999 4.00
FQ3 1999 4.00
FQ4 1999 4.00
FQ1 2000 4.00
FQ2 2000 3.75
FQ3 2000 3.75
FQ4 2000 3.50
FQ1 2001 3.50
FQ2 2001 3.50
FQ3 2001 3.25
FQ4 2001 3.25
FQ1 2002 3.00
FQ2 2002 3.00
FQ3 2002 2.75
FQ4 2002 2.75
58
FQ1 2003 2.75
FQ2 2003 2.50
FQ3 2003 2.50
FQ4 2003 2.50
FQ1 2004 2.50
FQ2 2004 2.50
FQ3 2004 2.50
FQ4 2004 2.50
FQ1 2005 2.50
FQ2 2005 2.50
FQ3 2005 2.50
FQ4 2005 2.50
(c) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
-------------- -------------
FQ2 1999 1.75
FQ3 1999 1.75
FQ4 1999 1.75
FQ1 2000 1.75
FQ2 2000 1.75
FQ3 2000 1.75
FQ4 2000 1.75
FQ1 2001 2.00
FQ2 2001 2.00
FQ3 2001 2.00
FQ4 2001 2.00
FQ1 2002 2.00
FQ2 2002 2.25
FQ3 2002 2.25
FQ4 2002 2.25
FQ1 2003 2.25
FQ2 2003 2.25
FQ3 2003 2.50
FQ4 2003 2.50
FQ1 2004 2.50
FQ2 2004 2.50
FQ3 2004 2.50
FQ4 2004 2.50
FQ1 2005 2.50
59
FQ2 2005 2.50
FQ3 2005 2.50
FQ4 2005 2.50
; provided, that for the purposes of determining the ratio described above for
the fiscal quarters of the Borrower ending June 30, 1999, September 30, 1999 and
December 31, 1999, Consolidated Interest Expense for the relevant period shall
be deemed to equal Consolidated Interest Expense for such fiscal quarter (and,
in the case of the latter two such determinations, each previous fiscal quarter
commencing after the Closing Date) multiplied by 4, 2 and 4/3, respectively.
(d) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower ending with any fiscal quarter set forth below to be less than
the ratio set forth below opposite such fiscal quarter:
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
-------------- ---------------------
FQ2 1999 1.00
FQ3 1999 1.00
FQ4 1999 1.00
FQ1 2000 1.00
FQ2 2000 1.00
FQ3 2000 1.00
FQ4 2000 1.00
FQ1 2001 1.00
FQ2 2001 1.00
FQ3 2001 1.00
FQ4 2001 1.00
FQ1 2002 1.00
FQ2 2002 1.00
FQ3 2002 1.00
FQ4 2002 1.00
FQ1 2003 1.00
FQ2 2003 1.00
FQ3 2003 1.00
FQ4 2003 1.00
FQ1 2004 1.00
FQ2 2004 1.00
FQ3 2004 1.00
FQ4 2004 1.00
FQ1 2005 1.00
FQ2 2005 1.00
FQ3 2005 1.00
FQ4 2005 1.00
60
; provided, that for the purposes of determining the ratio described above for
the fiscal quarters of the Borrower ending June 30, 1999, September 30, 1999 and
December 31, 1999, Consolidated Fixed Charges for the relevant period shall be
deemed to equal Consolidated Fixed Charges for such fiscal quarter (and, in the
case of the latter two such determinations, each previous fiscal quarter
commencing after the Closing Date) multiplied by 4, 2 and 4/3, respectively.
6.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 6.3(g) in an aggregate
principal amount not to exceed $5,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on Schedule
6.2(d) and any refinancings, refundings, renewals or extensions thereof
(without any increase in the principal amount thereof or any shortening of
the maturity of any principal amount thereof);
(e) Guarantee Obligations made in the ordinary course of business by
the Borrower or any of its Subsidiaries of obligations of the Borrower or
any Subsidiary Guarantor;
(f) Indebtedness of the Borrower and the other Loan Parties under the
Revolving Credit Agreement and any promissory notes issued thereunder;
(g) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$120,000,000 and (ii) Guarantee Obligations of any Subsidiary Guarantor in
respect of such Indebtedness; provided that such Guarantee Obligations are
subordinated to the obligations of such Subsidiary Guarantor under the
Guarantee and Collateral Agreement to the same extent as the obligations of
the Borrower in respect of the Senior Subordinated Notes are subordinated to
the Obligations;
(h) Indebtedness of the Borrower issued to sellers of assets acquired
in a Permitted Acquisition; provided, that (i) not more than $10,000,000 in
aggregate principal amount of such Indebtedness may be outstanding at any
one time, (ii) such Indebtedness shall provide for no payment of principal,
and no payment of interest other than payments in kind, to be made
thereunder until the date which is 91 days after the final maturity date of
the Term Loans and (iii) such Indebtedness shall be subordinated to
61
the Term Loans, Revolving Credit Loans, Swing Line Loans and Reimbursement
Obligations on terms and conditions reasonably satisfactory to the
Administrative Agent;
(i) Indebtedness secured by Liens permitted by Section 6.3(l);
provided, that the aggregate principal amount of such Indebtedness, plus the
aggregate principal amount of Indebtedness permitted by Section 6.2(c),
shall not at any time exceed $10,000,000; and
(j) other unsecured Indebtedness, not included in clauses (a) through
(i) above, not to exceed $5,000,000 at any time outstanding.
6.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its Property, whether now owned or hereafter acquired, except
for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 30 days or that are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements, rights-of-way, restrictions, encroachments (onto the
Property or by improvements located on the Property, onto adjoining property
or rights of way or onto easement areas) and other similar encumbrances and
title defects incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 6.3(f),
securing Indebtedness permitted by Section 6.2(d), provided that no such
Lien is spread to cover any additional Property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other Subsidiary
incurred pursuant to Section 6.2(c) to finance the acquisition of fixed or
capital assets, provided
62
that (i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets, (ii) such Liens do not at any
time encumber any Property other than the Property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is not
increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into by
the Borrower or any other Subsidiary in the ordinary course of its business
and covering only the assets so leased;
(j) judgment liens which would not create any Event of Default;
(k) licenses of Intellectual Property in the ordinary course of
business;
(l) liens on fixed assets existing at the time such fixed assets are
acquired in connection with a Permitted Acquisition and not created in
contemplation thereof;
(m) deposits in an aggregate amount not to exceed $250,000 made in the
ordinary course of business to secure liability insurance carriers; and
(n) Permitted Exceptions (as such term is defined in the Mortgages)
which, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
6.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary may be merged or consolidated with or into the
Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with or into any Subsidiary Guarantor (provided that such
Subsidiary Guarantor shall be the continuing or surviving corporation); and
(b) any Subsidiary may Dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or any Subsidiary
Guarantor.
6.5 Limitation on Disposition of Property. Dispose of any of its
Property (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the sale of inventory in the ordinary course of business;
63
(c) Dispositions permitted by Section 6.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Subsidiary Guarantor;
(e) the Disposition of other assets in any fiscal year of the Borrower
that contributed, in the aggregate, not more than 20% of Consolidated EBITDA
for the prior fiscal year; provided, that (i) in the case of each such
Disposition, the Borrower shall be in pro forma compliance with the
financial covenants set forth in Section 6.1 after giving effect to such
Disposition (determined on the assumption that such Disposition and the
repayment of any Indebtedness resulting therefrom had occurred on the first
day of the relevant period measured by such covenants) and (ii) in the case
of any such Disposition yielding Net Cash Proceeds of $1,000,000 or more,
the Administrative Agent shall have received a certificate of a Responsible
Officer to the effect set forth in the foregoing clause (i) and showing
calculations thereof; and
(f) any Disposition constituted by a Recovery Event, provided, that the
requirements of Section 2.7(b) are complied with in connection therewith.
6.6 Limitation on Restricted Payments. Declare or pay any dividend
(other than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of Holdings, the Borrower
or any Subsidiary, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of Holdings, the Borrower or any Subsidiary, or
enter into any derivatives or other transaction with any financial institution,
commodities or stock exchange or clearinghouse (a "Derivatives Counterparty")
obligating Holdings, the Borrower or any Subsidiary to make payments to such
Derivatives Counterparty as a result of any change in market value of any such
Capital Stock (collectively, "Restricted Payments"), except that (i) any
Subsidiary may make Restricted Payments to the Borrower or any Subsidiary
Guarantor and (ii) the Borrower may pay dividends to Holdings (A) in an amount
not to exceed $100,000 in any fiscal year to be used to pay corporate overhead
expenses incurred in the ordinary course of business, (B) in an amount equal to
the Permitted Stock Repurchase Amount and (C) to permit repurchase of Holdings
capital stock from the Sponsor for resale to management and employees of the
Borrower and its Subsidiaries so long as the proceeds thereof are immediately
reinvested in the common equity of the Borrower.
6.7 Limitation on Capital Expenditures. Make or commit to make any
Capital Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding, for any fiscal
year set forth below, the amount set forth below opposite such fiscal year:
64
Fiscal Year Amount
----------- ------
1999 $5,500,000
2000 $6,000,000
2001 $6,500,000
2002 $7,000,000
2003 $7,000,000
2004 $7,000,000
2005 $7,000,000
provided, that (i) any such amount referred to above, if not so expended in the
fiscal year for which it is permitted, may be carried over for expenditure in
the next succeeding fiscal year, (ii) Capital Expenditures made pursuant to this
clause (a) during any fiscal year shall be deemed made, first, in respect of
amounts permitted for such fiscal year as provided in the table above and
second, in respect of amounts carried over from the prior fiscal year pursuant
to subclause (i) above and (iii) the Borrower may make additional Capital
Expenditures during FY 1999 in the form of Capital Lease Obligations in an
aggregate amount not exceeding $500,000 and (b) Capital Expenditures made with
the proceeds of any Reinvestment Deferred Amount.
6.8 Limitation on Investments. Make any advance, loan, extension of
credit (by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting an ongoing business from, or make any other investment in,
any other Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Sections 6.2(b) and (e);
(d) loans and advances to employees of Holdings, the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and its Subsidiaries not to exceed
$1,000,000 at any one time outstanding;
(e) the Acquisition;
(f) Permitted Acquisitions;
(g) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 6.8(c)) by the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such investment,
is a Subsidiary Guarantor; and
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(h) Investments in any Subsidiary organized under the laws of Canada in
an aggregate amount not to exceed $200,000 in any fiscal year of the
Borrower; provided that the aggregate amount of the Investments at any time
outstanding pursuant to this clause (h), together with the aggregate amount
of investments made pursuant to clause (j)(ii) of the definition of
Permitted Acquisition, shall not exceed $5,000,000.
6.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, the Senior Subordinated Notes, or segregate funds for any such payment,
prepayment, repurchase, redemption or defeasance, or enter into any derivative
or other transaction with any Derivatives Counterparty obligating the Borrower
or any Subsidiary to make payments to such Derivatives Counterparty as a result
of any change in market value of the Senior Subordinated Notes, (b) amend,
modify or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Senior Subordinated Notes or
the Senior Subordinated Note Indenture (other than any such amendment,
modification, waiver or other change which (i) would extend the maturity or
reduce the amount of any payment of principal thereof, reduce the rate or extend
the date for payment of interest thereon or relax any covenant or other
restriction applicable to the Borrower or any of its Subsidiaries and (ii) does
not involve the payment of a consent fee), (c) designate any Indebtedness (other
than the Obligations) as "Designated Senior Indebtedness" for the purposes of
the Senior Subordinated Note Indenture or (d) amend its certificate of
incorporation in any manner materially adverse to the Lenders.
6.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
the Borrower or any Subsidiary Guarantor) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of business
of the Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person that is not an Affiliate. Notwithstanding the foregoing, so long as no
Default or Event of Default shall be in existence, (i) the Borrower and its
Subsidiaries may pay to the Sponsor and its Control Investment Affiliates fees
and expenses pursuant to a management agreement approved by the board of
directors of the Borrower in an aggregate amount not to exceed the lesser of (a)
1.0% of Consolidated EBITDA for the period in respect of which such fees are to
be paid or (b) the amount permitted to be paid under the terms of the Senior
Subordinated Note Indenture; (ii) the Borrower may pay transaction fees to the
Sponsor or any affiliates thereof in connection with any Permitted Acquisitions
made by a Loan Party in an amount not to exceed 1% of the total transaction
value of such Permitted Acquisitions; and (iii) the Borrower may pay transaction
fees, in an aggregate amount not to exceed $2,220,000, to the Sponsor in
connection with the Acquisition and the acquisition of the Polaner and related
brands on February 5, 1999.
6.11 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property
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which has been or is to be sold or transferred by the Borrower or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Borrower or such Subsidiary.
6.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of
the Borrower to end on a day other than the Saturday nearest to December 31 or
change the Borrower's method of determining fiscal quarters.
6.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
exist or become effective any agreement that prohibits or limits the ability of
the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, to secure the Obligations or, in the case of any guarantor,
its obligations under the Guarantee and Collateral Agreement, other than (a)
this Agreement, the Revolving Credit Agreement and the other Loan Documents and
(b) any agreements governing any purchase money Liens or Capital Lease
Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby).
6.14 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement (after
giving effect to the Acquisition) or that are reasonably related thereto.
6.15 Limitation on Amendments to Acquisition Documentation. (a) Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the indemnities and licenses furnished to the Borrower or any of
its Subsidiaries pursuant to the Acquisition Documentation such that after
giving effect thereto such indemnities or licenses shall be materially less
favorable to the interests of the Loan Parties or the Lenders with respect
thereto or (b) otherwise amend, supplement or otherwise modify the terms and
conditions of the Acquisition Documentation except to the extent that any such
amendment, supplement or modification could not reasonably be expected to have a
Material Adverse Effect.
6.16 Limitation on Activities of Holdings. In the case of Holdings,
notwithstanding anything to the contrary in this Agreement or any other Loan
Document, (a) conduct, transact or otherwise engage in, or commit to conduct,
transact or otherwise engage in, any business or operations other than those
incidental to its ownership of the Capital Stock of the Borrower and Capital
Stock of other entities, (b) incur, create, assume or suffer to exist any
Indebtedness or other liabilities or financial obligations, except (i)
nonconsensual obligations imposed by operation of law, (ii) pursuant to the Loan
Documents to which it is a party, (iii) obligations with respect to its Capital
Stock, and (iv) Indebtedness of Holdings issued to sellers of assets purchased
by Holdings or a Subsidiary of Holdings (provided that (A) such Indebtedness is
subordinated to the Term Loans, Revolving Credit Loans, Swing Line Loans and
Reimbursement Obligations, (B) such Indebtedness shall provide for no payment of
principal, and no payment of interest other than payments in kind, to be made
thereunder until the date which is 91 days after the final maturity date of the
Term Loans and (C) such Indebtedness shall
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have no covenants other than a covenant to pay principal and interest, covenants
not to make any payment in respect of equity or junior debt prior to payment of
such Indebtedness, and customary informational covenants, such as a covenant to
provide financial statements) or (c) own, lease, manage or otherwise operate any
properties or assets other than cash equivalents and shares of Capital Stock of
the Borrower and other entities.
6.17 Limitation on Withdrawal of Reinvestment Deferred Amount. To the
extent that the Borrower, in calculating Consolidated Total Debt, deducts an
amount in respect of all or any portion of the then outstanding aggregate
Reinvestment Deferred Amount on deposit in an account subject to the Lien of the
Guarantee and Collateral Agreement, withdraw any such funds from such account
unless, before and after giving effect to such withdrawal, (a) no Default or
Event of Default shall have occurred and be continuing and (b) each of the
representations and warranties made by any Loan Party in or pursuant to this
Agreement or any other Loan Document shall be true and correct on and as of such
date as if made on and as of such date.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Term Loan when
due in accordance with the terms hereof; or the Borrower shall fail to pay
any interest on any Term Loan, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest or
other amount becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any other Loan Document
shall prove to have been inaccurate in any material respect on or as of the
date made or deemed made or furnished; or
(c) (i) Any Loan Party shall default in the observance or performance
of any agreement contained in clause (i) or (ii) of Section 5.4(a) (with
respect to Holdings and the Borrower only), Section 5.7(a) or Section 6, or
Section 5 of the Guarantee and Collateral Agreement, or (ii) an "Event of
Default" under and as defined in any Mortgage shall have occurred and be
continuing; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days; or
(e) Holdings, the Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Term Loans)
on the scheduled or original due
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date with respect thereto; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or beneficiary
of such Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $2,000,000; or
(f) (i) Holdings, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all
or any substantial part of its assets, or Holdings, the Borrower or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Holdings, the Borrower
or any of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings, the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets that results in the entry of an order
for any such relief that shall not have been vacated, discharged, or stayed
or bonded pending appeal within 60 days from the entry thereof; or (iv)
Holdings, the Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
Holdings, the Borrower or any of its Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a
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Reportable Event shall occur with respect to, or proceedings shall commence
to have a trustee appointed (or a trustee shall be appointed) to administer,
or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other similar event or condition shall occur
or exist with respect to a Plan other than in the ordinary course of
business; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could,
in the sole judgment of the Required Lenders, reasonably be expected to have
a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against Holdings,
the Borrower or any of its Subsidiaries involving for Holdings, the Borrower
and its Subsidiaries taken as a whole a liability (not paid or fully covered
by insurance as to which the relevant insurance company has acknowledged
coverage) of $2,000,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be in
full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so assert;
or
(k) (i) The Permitted Investors shall cease to have the power to vote
or direct the voting of securities having a majority of the ordinary voting
power for the election of directors of Holdings (determined on a fully
diluted basis); (ii) the Permitted Investors shall cease to own of record
and beneficially at least 51% of the common stock of Holdings, (iii)
Holdings shall cease to own and control, of record and beneficially,
directly, 100% of each class of outstanding Capital Stock of the Borrower
free and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement); or (iv) a Specified Change of Control shall occur; or
(l) The Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiary Guarantors under the Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated Note
Indenture, or any Loan Party, any Affiliate of any Loan Party, the trustee
in respect of the Senior Subordinated Notes or the holders of
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at least 25% in aggregate principal amount of the Senior Subordinated Notes
shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Term Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Term Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable.
SECTION 8. THE AGENTS
8.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Agents as the agents of such Lender under this Agreement and the other Loan
Documents, and each Lender irrevocably authorizes each Agent, in such capacity,
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against any Agent.
8.2 Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
8.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
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other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
8.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Holdings or the Loan Parties), independent accountants
and other experts selected by such Agent. The Agents may deem and treat the
payee of any Note as the owner thereof for all purposes unless a written notice
of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. Each Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders (or, if
so specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense (other than any liability or expense arising from its
gross negligence or willful misconduct) that may be incurred by it by reason of
taking or continuing to take any such action. Each Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Term Loans.
8.5 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender, Holdings or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this Agreement, all Lenders); provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and
72
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and made
its own decision to make its Term Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon any Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, no Agent
shall have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or any
affiliate of a Loan Party that may come into the possession of such Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates.
8.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by Holdings, the Borrower and
without limiting the obligation of Holdings or the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Term Loans shall have been paid in full, ratably in
accordance with such Aggregate Exposure Percentages immediately prior to such
date), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (including, without limitation, at any time
following the payment of the Term Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements that are found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent's gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of the Term Loans and all
other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. Each Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Loan Party as though such Agent were not an Agent. With respect to its
Term Loans made or renewed by it, each Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
8.9 Successor Agents. The Administrative Agent may resign as
Administrative Agent upon 10 days' written notice to the Lenders and the
Borrower. If the Administrative Agent
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shall resign as Administrative Agent under this Agreement and the other Loan
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall (unless an Event of
Default under Section 7(a) or Section 7(f) with respect to the Borrower shall
have occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Term Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. The Syndication Agent may, at any time, by notice
to the Lenders and the Administrative Agent, resign as Syndication Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of the
Syndication Agent hereunder shall automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the Syndication
Agent, the Administrative Agent or any Lender. After any retiring Agent's
resignation as Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
8.10 Authorization to Release Liens; Other Actions Relating to Security
Documents. (a) The Administrative Agent is hereby irrevocably authorized by each
of the Lenders to release any Lien covering any Property of the Borrower or any
of its Subsidiaries that is the subject of a Disposition which is permitted by
this Agreement and the Revolving Credit Agreement or which has been consented to
in accordance with Section 9.1 of this Agreement and Section 9.1 of the
Revolving Credit Agreement.
(b) With respect to any action under or in respect of the Security
Documents that the provisions of this Agreement permit or require the
Administrative Agent to take only with the consent, or upon the direction, of
all of the Lenders or the Required Lenders, as the case may be, the Lenders
acknowledge that the Administrative Agent shall be required to take such action
only if such action is approved by the Joint Required Lenders.
8.11 The Arranger, the Co-Documentation Agent and the Documentation
Agent. Each of the Arranger, the Co-Documentation Agent, and the Documentation
Agent, in their respective capacities as such, shall have no duties or
responsibilities, and shall incur no liability, under this Agreement and the
other Loan Documents.
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SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement or any other Loan
Document, nor any terms hereof or thereof, may be amended, supplemented or
modified except in accordance with the provisions of this Section 9.1. Subject
to the provisions of the immediately following sentence, the Required Lenders
and each Loan Party party to the relevant Loan Document may, or (with the
written consent of the Required Lenders) the Agents and each Loan Party party to
the relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
(including amendments and restatements hereof or thereof) for the purpose of
adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Loan Parties hereunder or
thereunder or (b) waive, on such terms and conditions as may be specified in the
instrument of waiver, any of the requirements of this Agreement or the other
Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) forgive the principal amount or extend the final
scheduled date of maturity of any Term Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Commitment
of any Lender, in each case without the consent of each Lender directly affected
thereby; (ii) amend, modify or waive any provision of this Section or reduce any
percentage specified in the definition of Required Lenders or Required
Prepayment Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan Documents,
release all or substantially all of the Collateral or release all or
substantially all of the Guarantors from their guarantee obligations under the
Guarantee and Collateral Agreement, in each case without the consent of all
Lenders; (iii) reduce the percentage specified in the definition of Majority
Facility Lenders with respect to any Facility without the written consent of all
Lenders under such Facility; (iv) amend, modify or waive any provision of
Section 8 without the consent of any Agent directly affected thereby; (v) amend,
modify or waive any provision of Section 2.13 without the consent of each Lender
directly affected thereby; or (vi) amend Section 2.6(b) or 2.13(c) without the
consent of the Majority Facility Lenders of the Tranche B Term Loan Facility.
Notwithstanding the immediately preceding sentence, the parties to this
Agreement agree, for their own benefit and for the benefit of the parties to the
Revolving Credit Agreement, that (i) the provisions of Sections 3, 5, 6 and 7
may be amended, supplemented or modified with, and only with, the consent of the
Borrower and the Joint Required Lenders (whether or not the Required Lenders
shall have consented thereto) and compliance with any of the requirements of
such Sections (or any Default or Event of Default resulting from a failure by
the Borrower to comply with such requirements) may be waived with, and only
with, the consent of the Joint Required
75
Lenders (whether or not the Required Lenders shall have consented thereto), (ii)
subject to the provisions of clause (iv) of this sentence, the provisions of the
Security Documents may be amended, supplemented or modified with, and only with,
the consent of each Loan Party that is a party thereto and the Joint Required
Lenders (whether or not the Required Lenders shall have consented thereto) and
compliance with any of the requirements of such Sections (or any Default or
Event of Default resulting from a failure by any Loan Party to comply with such
requirements) may be waived with, and only with, the consent of the Joint
Required Lenders (whether or not the Required Lenders shall have consented
thereto), (iii) the definition of Joint Required Lenders in Section 1.1 may be
amended or otherwise modified only with the consent of the Borrower, each Lender
and each Revolving Credit Lender, (iv) any release of all or substantially all
of the Collateral, and any release of all or substantially all of the Guarantors
from their guarantee obligations under the Guarantee and Collateral Agreement,
shall, in each case, be effected with, and only with, the consent of each Lender
and each Revolving Credit Lender, (v) any amendment, modification or waiver of
any provision of Section 2.7 may be effected with, and only with, the consent of
the Borrower, the Required Prepayment Lenders and Revolving Credit Lenders
holding more than 50% of the aggregate amount of the Revolving Credit
Commitments then in effect (or, if the Revolving Credit Commitments have been
terminated, the Total Revolving Extensions of Credit (as defined in the
Revolving Credit Agreement) then outstanding) and (vi) any amendment,
modification or waiver in respect of any provision of this Agreement effected
pursuant to this sentence must be accompanied by an equivalent amendment,
modification or waiver in respect of the corresponding provision of the
Revolving Credit Agreement and (vii) this sentence may be amended or otherwise
modified only with the consent of the Borrower, each Lender and each Revolving
Credit Lender. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Term Loans. In the case of any waiver, the Loan Parties, the
Lenders and the Administrative Agent shall be restored to their former position
and rights hereunder and under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon. Any such waiver, amendment, supplement
or modification shall be effected by a written instrument signed by the parties
required to sign pursuant to the foregoing provisions of this Section; provided,
that delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof. For the avoidance of doubt, this Agreement may be amended (or amended
and restated) with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party to each relevant Loan Document (x) to
add one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time outstanding thereunder and the accrued
interest and fees in respect thereof (collectively, the "Additional Extensions
of Credit") to share ratably in the benefits of this Agreement and the other
Loan Documents with the Term Loans and the accrued interest and fees in respect
thereof and (y) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders and Required Prepayment
Lenders; provided, however, that (A) no such amendment shall permit the
Additional Extensions of Credit to share ratably with or with preference to the
Term Loans in the application of mandatory prepayments without the consent of
the Required Prepayment Lenders, (B) no Lender shall be required to make or
participate in such Additional Extensions of Credit without the consent of such
Lender in its sole discretion and (C) unless each Tranche B Term Loan Lender
shall otherwise agree, the applicable margin with respect to the Additional
Extensions of Credit shall not exceed the Applicable Margin for Tranche B Term
Loans.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy
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notice, when received, addressed (a) in the case of Holdings, the Borrower and
the Agents, as follows and (b) in the case of the Lenders, as set forth in an
administrative questionnaire delivered to the Administrative Agent or, in the
case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:
Holdings: B&G Foods Holding Corp.
426 Eagle Rock Avenue
Roseland, NJ 07068
Attention: Chief Financial Officer
Telecopy: 973-228-7461
Telephone: 973-228-2500
The Borrower: B&G Foods, Inc.
426 Eagle Rock Avenue
Roseland, NJ 07068
Attention: Chief Financial Officer
Telecopy: 973-228-7461
Telephone: 973-228-2500
The Syndication Agent: Lehman Commercial Paper Inc.3 World
Financial Center
New York, New York 10285
Attention: Michael O'Brien
Telecopy: (212) 526-7691
Telephone: (212) 526-0437
The Administrative Agent: Lehman Commercial Paper Inc.3 World
Financial Center
New York, New York 10285
Attention: Michael O'Brien
Telecopy: (212) 526-7691
Telephone: (212) 526-0437
provided that any notice, request or demand to or upon the any Agent or any
Lender shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
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9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Term Loans and other extensions of credit hereunder.
9.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse
the Agents for all their reasonable out-of-pocket costs and expenses incurred in
connection with the syndication of the Facilities (other than fees payable to
syndicate members) and the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements and other
charges of counsel to the Administrative Agent, (b) to pay or reimburse each
Lender and each Agent for all their costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the
other Loan Documents and any such other documents, including, without
limitation, the fees and disbursements of counsel (including the allocated fees
and disbursements and other charges of in-house counsel) to each Lender and of
counsel to the Agents, (c) to pay, and indemnify and hold harmless each Lender
and each Agent from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, and indemnify and hold harmless each Lender, each Agent, their
respective affiliates, and their respective officers, directors, trustees,
employees, advisors, agents and controlling persons (each, an "Indemnitee") from
and against, any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Term Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of Holdings, the Borrower, any of its Subsidiaries or any of the
Properties and the fees and disbursements and other charges of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against the
Borrower hereunder (all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries so to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any indemnitee. All amounts due under this Section
shall be payable not later than 30 days after written demand therefor.
Statements payable by the Borrower pursuant to this Section
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shall be submitted to the Borrower's chief financial officer (Telephone No.
973-228-2500) (Fax No. 973-228-7461), at the address of the Borrower set forth
in Section 9.2, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative Agent
(which shall promptly notify each Lender). The agreements in this Section shall
survive repayment of the Term Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of Holdings, the
Borrower, the Lenders, the Agents, all future holders of the Term Loans and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Term Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Term Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agents shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Term Loans
or any fees payable hereunder, release all or substantially all of the
Collateral, release all or substantially all of the Guarantors from their
guarantee obligations under the Guarantee and Collateral Agreement, or postpone
the date of the final maturity of the Term Loans, in each case to the extent
subject to such participation. The Borrower agrees that if amounts outstanding
under this Agreement and the Term Loans are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall, to the maximum extent permitted by applicable
law, be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 9.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.14, 2.15 and 2.16 with respect to its participation
in the Commitments and the Term Loans outstanding from time to time as if it
were a Lender; provided that, in the case of Section 2.15, such Participant
shall have complied with the requirements of said Section and provided, further,
that no Participant shall be entitled to receive any greater amount pursuant to
any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
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(c) Any Lender (an "Assignor") may, in accordance with applicable law
and upon written notice to the Syndication Agent, at any time and from time to
time assign to any Lender or any affiliate or Approved Fund or Control
Investment Affiliate thereof or, with the consent of the Borrower and the Agents
(which, in each case, shall not be unreasonably withheld or delayed) (provided
the consent of the Borrower need not be obtained with respect to any assignment
of Term Loans), to an additional bank, financial institution or other entity (an
"Assignee") all or any part of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, executed by such Assignee and such
Assignor (and, where the consent of the Borrower or the Agents is required
pursuant to the foregoing provisions, by the Borrower and such other Persons)
and delivered to the Administrative Agent for its acceptance and recording in
the Register; provided that no such assignment to an Assignee (other than any
Lender or any affiliate or Approved Fund thereof) shall be in an aggregate
principal amount of less than $5,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower, the Syndication Agent and the Administrative
Agent. Any such assignment need not be ratable as among the Facilities. Upon
such execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment and/or Term Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto except as
to Sections 2.14, 2.15, 2.17 and 9.5 in respect of the period prior to such
effective date). Notwithstanding any provision of this Section, the consent of
the Borrower shall not be required for any assignment that occurs at any time
when any Event of Default shall have occurred and be continuing.
(d) The Administrative Agent shall, on behalf of the Borrower, maintain
at its address referred to in Section 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders and the Commitment of, and principal
amount of the Term Loans owing to, each Lender from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as the owner of the Term Loans and any Notes
evidencing the Term Loans recorded therein for all purposes of this Agreement.
Any assignment of any Term Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Term Loan evidenced by a Note shall be registered on the
Register only upon surrender for registration of assignment or transfer of the
Note evidencing such Term Loan, accompanied by a duly executed Assignment and
Acceptance; thereupon one or more new Notes in the same aggregate principal
amount shall be issued to the designated Assignee, and the old Notes shall be
returned by the Administrative Agent to the Borrower marked "canceled". The
Register shall be available for inspection by the Borrower or any Lender (with
respect to any entry relating to such Lender's Term Loans) or Agent at any
reasonable time and from time to time upon reasonable prior notice.
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(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 9.6(c), by each such other Person) together with payment
to the Administrative Agent of a registration and processing fee of $3,500
(except that no such registration and processing fee shall be payable (y) in
connection with an assignment by or to Lehman Commercial Paper Inc. or any
Affiliate thereof or (z) in the case of an Assignee which is already a Lender or
is an affiliate or Approved Fund of a Lender or a Person under common management
with a Lender), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give notice
of such acceptance and recordation to the Lenders, the Agents and the Borrower.
On or prior to such effective date, the Borrower, at its own expense, upon
request, shall execute and deliver to the Administrative Agent (in exchange for
the applicable Notes of the assigning Lender) a new Note or Notes to the order
of such Assignee in an amount equal to the applicable Term Loans acquired by it
pursuant to such Assignment and Acceptance and, if the Assignor has retained
Term Loans, upon request, a new Note or Notes to the order of the Assignor in an
amount equal to the applicable Term Loans retained by it hereunder. Such new
Note or Notes shall be dated the Closing Date and shall otherwise be in the form
of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Term Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Term Loan or Note to any Federal
Reserve Bank in accordance with applicable law.
9.7 Adjustments; Set-off. (a) Except to the extent that this Agreement
provides for payments to be allocated to a particular Lender or to the Lenders
under a particular Facility and except to the extent that Section 2.19 of this
Agreement provides for payments to a substituted Lender, if any Lender (a
"Benefitted Lender") shall at any time receive any payment of all or part of the
Obligations owing to it, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Obligations, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Obligations, or shall provide such other
Lenders with the benefits of any such collateral, as shall be necessary to cause
such Benefitted Lender to share the excess payment or benefits of such
collateral ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to Holdings or the
Borrower, any such notice being expressly waived by Holdings and the Borrower to
the extent permitted by applicable law, upon any amount becoming due and payable
by the Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency,
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and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of Holdings or the Borrower, as the
case may be. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.
9.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
9.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents represent
the entire agreement of Holdings, the Borrower, the Agents, the Arranger and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Arranger, any Agent
or any Lender relative to subject matter hereof or thereof not expressly set
forth or referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. Each of Holdings and the
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially
82
similar form of mail), postage prepaid, to Holdings or the Borrower, as the case
may be, at its address set forth in Section 9.2 or at such other address of
which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to sue
in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
9.13 Acknowledgments. Each of Holdings and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Arranger, any Agent nor any Lender has any fiduciary
relationship with or duty to Holdings or the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Arranger, the Agents and the Lenders, on the one hand,
and Holdings and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Arranger, the Agents and the Lenders or among Holdings, the Borrower and the
Lenders.
9.14 Confidentiality. Each of the Agents and the Lenders agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to the Arranger, any Agent, any other
Lender or any affiliate or Approved Fund of any thereof, (b) to any Participant
or Assignee (each, a "Transferee") or prospective Transferee that agrees to
comply with the provisions of this Section, (c) to any of its employees,
directors, agents, attorneys, accountants and other professional advisors, (d)
to any financial institution that is a direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty agrees to be bound by the provisions of this
Section), (e) upon the request or demand of any Governmental Authority
(including, without limitation, bank regulatory authorities) having jurisdiction
over it, (f) in response to any order of any court or other Governmental
Authority (including, without limitation, bank regulatory authorities) or as may
otherwise be required pursuant to any Requirement of Law, (g) in connection with
any litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this Section, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's
83
investment portfolio in connection with ratings issued with respect to such
Lender or (j) in connection with the exercise of any remedy hereunder or under
any other Loan Document.
9.15 Release of Collateral Security and Guarantee Obligations.
Notwithstanding anything to the contrary contained herein or in the Guarantee
and Collateral Agreement, upon request of the Borrower, the Administrative Agent
shall (without notice to or vote or consent of any Lender) take action having
the effect of releasing any Collateral and/or guarantee obligations provided for
in the Guarantee and Collateral Agreement to the extent necessary to permit
consummation, by the relevant Person in accordance with the terms of this
Agreement and the other Loan Documents, of any transaction not prohibited
hereunder or under the Revolving Credit Agreement.
9.16 Accounting Changes. In the event that any "Accounting Change" (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent 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
Borrower's financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
9.17 Delivery of Lender Addenda. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent and the
Syndication Agent a Lender Addendum duly executed by such Lender, the Borrower
and each Agent.
9.18 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
84
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
B&G FOODS HOLDINGS CORP.
By: /s/ Robert Cantwell
--------------------------------
Name: Robert Cantwell
Title: Chief Financial Officer
B&G FOODS, INC.
By: /s/ Robert Cantwell
--------------------------------
Name: Robert Cantwell
Title: Chief Financial Officer
LEHMAN BROTHERS INC.,
as Arranger
By: /s/ William Gallagher
--------------------------------
Name: William Gallagher
Title: Authorized Signatory
LEHMAN COMMERCIAL PAPER INC., as
Syndication Agent and as
Administrative Agent
By: /s/ William Gallagher
--------------------------------
Name: William Gallagher
Title: Authorized Signatory
THE BANK OF NEW YORK,
as Documentation Agent
By: /s/ Vito Michael Ferrone
---------------------------------
Name: Vito Michael Ferrone
Title: Vice President
85
HELLER FINANCIAL, INC.,
as Co-Documentation Agent
By: /s/ Robert M. Reeg
---------------------------------
Name: Robert M. Reeg
Title: Assistant Vice President
86
Annex A
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PRICING GRID FOR TRANCHE A TERM LOANS
-----------------------------------------------------------------------------------------
Consolidated Leverage Ratio Applicable Margin for Applicable Margin for Base
Eurodollar Loans Rate Loans
-----------------------------------------------------------------------------------------
Greater than or equal to 4.75 3.125 2.125
to 1.00
-----------------------------------------------------------------------------------------
Less than 4.75 to 1.00, but 2.875 1.875
greater than or equal to 4.25
to 1.00
-----------------------------------------------------------------------------------------
Less than 4.25 to 1.00, but 2.625 1.625
greater than or equal to 3.75
to 1.00
-----------------------------------------------------------------------------------------
Less than 3.75 to 1.00, but 2.375 1.375
greater than 3.25 to 1.00
-----------------------------------------------------------------------------------------
Less than 3.25 to 1.00 2.125 1.125
-----------------------------------------------------------------------------------------
Changes in the Applicable Margin with respect to Tranche A Term Loans resulting
from changes in the Consolidated Leverage Ratio shall become effective on the
date (the "Adjustment Date") on which financial statements are delivered to the
Lenders pursuant to Section 6.1 (but in any event not later than the 45th day
after the end of each of the first three quarterly periods of each fiscal year
or the 90th day after the end of each fiscal year, as the case may be) and shall
remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial statements
are delivered, the Consolidated Leverage Ratio as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
Pricing Grid be deemed to be greater than 4.75 to 1. In addition, at all times
while an Event of Default shall have occurred and be continuing, the
Consolidated Leverage Ratio shall for the purposes of this Pricing Grid be
deemed to be greater than 4.75 to 1. Each determination of the Consolidated
Leverage Ratio pursuant to this Pricing Grid shall be made with respect to the
period of four consecutive fiscal quarters of the Borrower ending at the end of
the period covered by the relevant financial statements.
SCHEDULE 1.1
MORTGAGED PROPERTY
SCHEDULE 3.4
CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES
SCHEDULE 3.9
INTELLECTUAL PROPERTY CLAIMS
SCHEDULE 3.15
SUBSIDIARIES
SCHEDULE 3.19(a)-1
UCC FILING JURISDICTIONS
Loan Party Filing Office
----------- -------------
[Borrower to list name of each Loan Party which is a party to
any Security Document and each filing office in which a UCC financing statement
must be filed in respect of such Loan Party and its collateral]
SCHEDULE 3.19(a)-2
UCC FINANCING STATEMENTS TO REMAIN ON FILE
SCHEDULE 3.19(a)-3
UCC FINANCING STATEMENTS TO BE TERMINATED
SCHEDULE 3.19(b)
MORTGAGE FILING JURISDICTIONS
SCHEDULE 6.2(d)
EXISTING INDEBTEDNESS
SCHEDULE 6.3(f)
EXISTING LIENS