1
EXHIBIT 10(s)
U.S. $80,000,000
CREDIT AGREEMENT,
dated as of May 30, 1995
among
THORN APPLE VALLEY, INC.
as the Borrower,
and
CERTAIN COMMERCIAL LENDING INSTITUTIONS,
as the Lenders,
and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.
New York Branch
as the Agent for the Lenders
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TABLE OF CONTENTS
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I DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.3. Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.4. Accounting and Financial Determinations . . . . . . . . . . . . . . . . . . . . . . . . . 17
II COMMITMENTS, BORROWING PROCEDURES AND NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1.1. Commitment of Each Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1.2. Lenders Not Permitted or Required To Make Loans . . . . . . . . . . . . . . . . . . . . . 17
2.2. Reduction of Commitment Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.3. Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.4. Continuation and Conversion Elections . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.5. Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.6. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.7. Extension of Commitment Termination Date . . . . . . . . . . . . . . . . . . . . . . . . 19
III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.1. Repayments and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2. Interest Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.2.1. Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.2.2. Post-Maturity Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.2.3. Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.3.1. Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.3.2. Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.3.3. Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
IV CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.1. Eurodollar Rate Lending Unlawful . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.2. Deposits Unavailable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.3. Increased Eurodollar Rate Loan Costs, etc. . . . . . . . . . . . . . . . . . . . . . . . 24
4.4. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.5. Increased Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.7. Payments, Computations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.8. Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.9. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.10. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
V CONDITIONS TO BORROWING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1. Initial Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1.1. Resolutions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1.2. Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.1.3. Acquisition Consummated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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5.1.4. Payment of Outstanding Indebtedness, etc. . . . . . . . . . . . . . . . . . . . . . . . . 29
5.1.5. Environmental Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.1.6. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.1.7. Closing Fees, Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.2. All Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.2.1. Compliance with Warranties, No Default, etc. . . . . . . . . . . . . . . . . . . . . . . 29
5.2.2. Borrowing Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
VI REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.1. Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.2. Due Authorization, Non-Contravention, etc. . . . . . . . . . . . . . . . . . . . . . . . 31
6.3. Government Approval, Regulation, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.4. Validity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.5. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.6. No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.7. Litigation, Labor Controversies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.8. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.9. Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.11. Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.12. Environmental Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.13. Regulations G, U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.14. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.15. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.16. Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.17. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.18. Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
VII COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.1.1. Financial Information, Reports, Notices, etc. . . . . . . . . . . . . . . . . . . . . . . 36
7.1.2. Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.1.3. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.1.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.1.5. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.1.6. Environmental Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.2. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.2.1. Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.2.2. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.2.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.2.4. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2.5. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.2.6. Restricted Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.2.7. Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.2.8. Asset Dispositions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.2.9. Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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7.2.10. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.2.11. Compliance with Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
VIII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.1. Listing of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.1.1. Non-Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.1.2. Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.1.3. Non-Performance of Certain Covenants and Obligations . . . . . . . . . . . . . . . . . . 47
8.1.4. Non-Performance of Other Covenants and Obligations . . . . . . . . . . . . . . . . . . . 47
8.1.5. Default on Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.1.6. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.1.7. Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.1.8. Control of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.1.9. Bankruptcy, Insolvency, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.2. Action if Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.3. Action if Other Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
IX THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.1. Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.2. Funding Reliance, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.3. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.4. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.5. Loans by RBN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.6. Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.7. Copies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
X MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
10.1. Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
10.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.3. Payment of Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.5. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.7. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.8. Execution in Counterparts, Effectiveness, etc. . . . . . . . . . . . . . . . . . . . . . 55
10.9. Governing Law; Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.11. Sale and Transfer of Loans and Note; Participations in Loans and Note . . . . . . . . . . 56
10.11.1. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.11.2. Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.12. Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.13. Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . 59
10.14. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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SCHEDULE I - Disclosure Schedule
EXHIBIT A - Form of Note
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Borrowing Request
EXHIBIT D - Form of Continuation/Conversion Notice
EXHIBIT E - Form of Lender Assignment Agreement
EXHIBIT F - Form of Opinion of Counsel to the Borrower
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of May 30, 1995, among THORN APPLE
VALLEY, INC. a Michigan corporation (the "Borrower"), the various financial
institutions as are or may become parties hereto (collectively, the "Lenders"),
and COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., acting through its
New York Branch ("RBN"), as agent (the "Agent") for the Lenders,
W I T N E S S E T H:
WHEREAS, the Borrower is engaged directly and through its various
Subsidiaries in the business of processing food; and
WHEREAS, the Borrower desires to obtain Commitments from the Lenders
pursuant to which Loans, in a maximum aggregate principal amount at any one
time outstanding not to exceed $80,000,000, will be made to the Borrower from
time to time prior to the Commitment Termination Dates of the Lenders; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend such
Commitments and make such Loans to the Borrower.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acquisition" shall mean the purchase of assets contemplated by the
Wilson Purchase Agreement.
"Affiliate" shall mean any Person:
(a) which directly or indirectly controls, or is
controlled by, the Borrower; or
(b) which beneficially owns or holds 5% or more of
any class of Voting Stock of the Borrower.
7
"Agent's Fee Letter" means the letter dated May 15, 1995 between the
Borrower and the Agent.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Alternate Base Rate" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of:
(i) the rate of interest announced by the Agent from
time to time in New York, New York as its base rate; or
(ii) one percent (1%) per annum above the fluctuating
rate of interest that is the rate determined by RBN to be the opening
rate per annum paid or payable by it on the day in question in New
York, New York for federal funds purchased overnight from other
banking institutions.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the RBN in connection with extensions of credit.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Agent will give notice promptly to the Borrower and the Lenders
of changes in the Alternate Base Rate.
"Applicable Margin" means (i) 0.80% during the period in which the
Interest Coverage Ratio is greater than 4.5 to 1 or (ii) 1.00% during the
period in which the Interest Coverage Ratio is equal to or less than 4.5 to 1;
provided, however, that the Applicable Margin during the period from the
Effective Date until the first anniversary of the Effective Date will be 0.80%.
Any increase or decrease in the Applicable Margin resulting from a
change in the Interest Coverage Ratio shall become effective as of the first
day of the Fiscal Quarter immediately following the date the financial
statements described in Sections 7.1.1(a) and 7.1.1(b) are delivered to the
Agent; provided, however, that if such financial statements are not delivered
during such preceding Fiscal Quarter, the Applicable Margin shall be the amount
defined in subparagraph (ii) above.
"Assignee Lender" is defined in Section 10.11.1.
"Authorized Officer" means, relative to the Borrower, those of its
officers whose signatures and incumbency shall have been certified to the Agent
and the Lenders pursuant to Section 5.1.1.
2
8
"Available Borrowing Base" means, at any time, the excess (if any) of
the Borrowing Base, as calculated in the then most recently delivered Borrowing
Base Certificate, over the aggregate principal amount of all outstanding Other
Borrowing Base Debt.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Beneficial Ownership" has the meaning given to such term in Rule
13d-3 under the Securities Exchange Act of 1934, as amended, and as it may be
further amended from time to time.
"Borrower" is defined in the preamble.
"Borrowing" means the Loans of the same type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by all Lenders on
the same Business Day and pursuant to the same Borrowing Request in accordance
with Section 2.1.
"Borrowing Base" means at any time an amount equal to the sum of (i)
eighty percent (80%) of the unpaid principal amount of Eligible Receivables of
the Borrower plus (ii) sixty percent (60%) of the Eligible Inventory of the
Borrower.
"Borrowing Base Certificate" means a certificate of an Authorized
Officer of the Borrower, substantially in the form of Exhibit B, or such other
form as the Agent may approve from time to time, setting forth a calculation of
the Borrowing Base.
"Borrowing Base Debt" means the Loans and the Other Borrowing Base
Debt.
"Borrowing Request" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit
C hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a
legal holiday on which banks are authorized or required to be closed
in New York, New York and Chicago, Illinois; and
(b) relative to the making, continuing, prepaying or
repaying of any Eurodollar Rate Loans, any day on which dealings in
Dollars are carried on in the London interbank market.
"Capital Lease" shall mean any lease of property which in accordance
with GAAP should be capitalized on the lessee's balance sheet, or for which the
amount of the asset and liability
3
9
thereunder as if so capitalized should be disclosed in a note to such balance
sheet, and, for purposes of this Agreement and each other Loan Document, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) the acquisition, through purchase or otherwise (including
the agreement to act in concert without more), by any Person (other
than Designated Persons) or group of Persons acting in concert (other
than Designated Persons), directly or indirectly, in one or more
transactions, of Beneficial Ownership or control of securities
representing more than 30% of the combined voting power of the
Borrower's Voting Stock; or
(b) the distribution by the Borrower of cash, securities or
other properties (other than regular periodic cash dividends at a rate
which is substantially consistent with past practice, including with
respect to increases in dividends, and other than common stock of the
Borrower or rights to acquire common stock of the Borrower) to holders
of capital stock (including by means of dividend, reclassification,
recapitalization or otherwise) which, together with all other such
distributions during the 365-day period preceding the date of such
distribution, has an aggregate fair market value in excess of an
amount equal to 30% of the fair market value of the Voting Stock of
the Borrower outstanding on the date immediately prior to such
distribution.
A merger or consolidation pursuant to Section 7.2.7 with respect to
which the Voting Stock of the surviving corporation is more than 30% owned by a
Person or group of Persons acting in concert (other than Designated Persons)
who did not own such Voting Stock prior to such merger or consolidation shall
constitute a "Change of Control."
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
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"Commitment" means, relative to any Lender, such Lender's obligation
to make Loans pursuant to Section 2.1.1.
"Commitment Amount" means, on any date, $80,000,000, as such amount
may be reduced from time to time pursuant to Section 2.2.
"Commitment Termination Date" means, for each Lender, May 30, 1998, as
such date may be extended by such Lender pursuant to the provisions of Section
2.7.
"Consolidated Adjusted Net Worth" shall mean Consolidated
Shareholders' Equity less all goodwill, tradenames, trademarks, patents,
organizational expense, unamortized debt discount and expense and other
intangible assets properly classified as intangibles in accordance with GAAP
and incurred after the date of consummation of the Acquisition.
"Consolidated Earnings Available for Fixed Charges" shall mean
Consolidated Net Earnings plus taxes, Consolidated Interest Expense, and
minimum operating lease payments.
"Consolidated Earnings Available for Interest Expense" shall mean, for
any period, Consolidated Net Earnings for such period before deduction of any
amount which, in conformity with GAAP, would be set forth opposite the caption
"income tax expense" (including deferred income taxes) (or any like caption) on
a consolidated income statement of Borrower for such period, plus Consolidated
Interest Expense for such period plus the amortization of any financing cost
and of any debt discount, plus an amount which, in conformity with GAAP, would
be set forth opposite the caption "depreciation and amortization expenses" (or
any like caption) (including, without limitation, amortization of intangible
assets) on such an income statement for such period, to the extent the same are
deducted from Borrower's net revenues, in conformity with GAAP, in determining
Consolidated Net Earnings for such period.
"Consolidated Interest Expense" shall mean the interest expense
(including capitalized and noncapitalized interest, the interest component of
Rentals under Capitalized Leases and any expense associated with the
termination of a swap arrangement) of the Borrower and its Subsidiaries on a
consolidated basis for any period.
"Consolidated Net Earnings" shall mean the net earnings of the
Borrower and its Subsidiaries in accordance with GAAP, excluding:
(a) extraordinary items (including extraordinary gains and
losses, and including acquisition closing costs including agent's
fees); and
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(b) any equity interest of the Borrower on the unremitted
earnings of any corporation not a Subsidiary.
"Consolidated Shareholders' Equity" shall mean consolidated
shareholders' equity of the Borrower and its Subsidiaries determined in
accordance with GAAP.
"Consolidated Total Assets" shall mean the total assets of the
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP.
"Consolidated Total Capitalization" shall mean the sum of Consolidated
Adjusted Net Worth and Funded Debt.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit D hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of
the Code or Section 4001 of ERISA.
"Debt" shall mean, for any Person (i) all items of borrowings,
including Capitalized Leases, which in accordance with GAAP would be included
in determining total liabilities as shown on the liability side of a balance
sheet of such Person as of the date at which Indebtedness is to be determined,
(ii) all Guaranties (other than Guaranties of Indebtedness of such Person or a
Subsidiary of such Person by a Subsidiary of such Person, or of a Subsidiary of
by such Person), letters of credit and endorsements (other than of notes, bills
and checks presented to banks for collection or deposit in the ordinary course
of business), in each case to support Indebtedness of other Persons; and (iii)
all items of borrowings secured by any mortgage, pledge or Lien existing on
property owned subject to such mortgage, pledge or Lien, whether or not the
borrowings secured thereby shall have been assumed by such Person or any
Subsidiary.
"Declining Lender" is defined in Section 2.7.
"Default" means any condition, occurrence or event that after notice
or lapse of time or both would constitute on Event of Default.
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"Designated Persons" means any of the following:
(a) (i) Henry S. Dorfman, Marla Dorfman, Gayle Weiss, Carolyn
Dorfman and Joel Dorfman; (ii) the estates of the Persons set forth in
clause (i); and (iii) inter vivos or testamentary trusts the
beneficiaries of which are one or more Persons falling within the
scope of clauses (i) or (ii) above;
(b) Joel Dorfman, Henry S. Dorfman, Louis Glazier, Michael
Rozzano, Keith Jahnke and Edward Boan;
(c) a group of Persons fifty percent or more of which are
comprised of Persons set forth in paragraphs (a) and/or (b) above; or
(d) an Employee Stock Ownership Plan as defined in Section
4975(e)(7) of the Code.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agent and the Required
Lenders.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in a Lender
Assignment Agreement or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender, as the case may be, to each other Person
party hereto.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 10.8.
"Eligible Inventory" means inventory of the Borrower valued at the
lower of cost or fair market, excluding inventory which: (a) consists of
obsolete or unsalable items or (b) is subject to a Lien in favor of any Person.
"Eligible Receivable" at any time means a Receivable that meets each
of the following requirements:
(i) the obligor is not an Affiliate of the Borrower;
(ii) the obligor of which is not the obligor of any Receivable as to
which any payment or part thereof remains unpaid for more than 60 days from the
original due date for such payment in an aggregate amount of 20% or more of the
aggregate unpaid principal amount of all the Receivables of such obligor;
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(iii) as to which any payment or part thereof is past due for more
than 30 days from the original due date for such payment;
(iv) with regard to which the obligor thereof is not insolvent or the
subject of any bankruptcy or insolvency proceeding or which has made an
assignment for the benefit of creditors, suspended normal business operations,
dissolved, liquidated, terminated its existence, ceased to pay its debts as
they become due or suffered a receiver or trustee to be appointed for any of
its assets or affairs;
(v) which is denominated and payable only in Dollars; and
(vi) which is owned by the Borrower free and clear of any Liens.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"Eurodollar Rate Loan" means a Loan bearing interest, at all times
during an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the LIBOR Rate (Reserve Adjusted).
"Event of Default" is defined in Section 8.1.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of fifty-two consecutive weeks ending
on, in the case of 1995, May 26, 1995 and, in the case of any other Fiscal
Year, the last Friday in May; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., the "1994 Fiscal Year") refer to the
Fiscal Year ending in May of such calendar year.
"Fixed Charge Coverage Ratio" means the ratio of Consolidated Earnings
Available for Fixed Charges to Fixed Charges measured as of the last day of any
Fiscal Quarter for the period consisting of four consecutive Fiscal Quarters
ending on such last day.
"Fixed Charges" means, for any period, the Consolidated Interest
Expense of the Borrower and its Subsidiaries for such
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period, plus the aggregate amount of the minimum net rent payments of Borrower
and its Subsidiaries for such period under all operating leases of Borrower and
its Subsidiaries.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"Funded Debt" shall, at any time, mean the aggregate principal amount
of Debt of the Borrower and its Subsidiaries on a consolidated basis minus the
lesser of $10,000,000 and the principal amount of the Loans then outstanding.
"GAAP" is defined in Section 1.4.
"Guaranty" means all obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection
or obligations incurred in the ordinary course of business in connection with
repurchase agreements) of a Person guaranteeing or, in effect, guaranteeing any
Indebtedness, dividend or other obligation, of any other Person in any manner,
whether directly or indirectly, including, without limitation, all obligations
incurred through an agreement, contingent or otherwise, by such Person: (i) to
purchase such Indebtedness or obligation or any property or assets constituting
security therefor, (ii) to advance or supply funds (x) for the purchase or
payment of such Indebtedness or obligations, (y) to maintain working capital or
other balance sheet condition or otherwise to advance or make available funds
for the purchase or payment of such Indebtedness or obligation, (iii) to lease
property or to purchase securities or other property or services primarily for
the purpose of assuring the owner of such Indebtedness, or (iv) otherwise to
assure the owner of the Indebtedness or obligation against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to
be Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness
equal to the maximum aggregate amount of such obligation, liability or
dividend.
"Hazardous Material" means:
(a) any "hazardous substance," as defined by CERCLA;
(b) any "hazardous waste," as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
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(d) any pollutant or contaminant or hazardous, dangerous
or toxic chemical, material or substance within the meaning of any
other applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning
any hazardous, toxic or dangerous waste, substance or material, all as
amended or hereafter amended.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
"herein," "hereof," "hereto," "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of the Borrower, any qualification or exception to such opinion or
certification:
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of
any item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause the Borrower to be in default of any of its
obligations under Section 7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments;
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(b) all obligations, contingent or otherwise, relative to
the face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Leases;
(d) all other items which, in accordance with GAAP, would
be included as liabilities on the liability side of the balance sheet
of such Person as of the date at which Indebtedness is to be
determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services, and indebtedness
(excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse; and
(g) all Guaranties of such Person in respect of any of
the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Interest Coverage Ratio" means the ratio of Consolidated Earnings
Available for Interest Expense to Consolidated Interest Expense measured as of
the last day of any Fiscal Quarter for the period consisting of four
consecutive Fiscal Quarters ending on such last day.
"Interest Period" means, relative to any Eurodollar Rate Loan, the
period beginning on (and including) the date on which such Eurodollar Rate Loan
is made or continued as, or converted into, a Eurodollar Rate Loan pursuant to
Section 2.3 or 2.4, and shall end on (but exclude) the day which numerically
corresponds to such date one, two, three or six months thereafter (or, if such
month has no numerically corresponding day, on the last Business Day of such
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month), in either case as the Borrower may select in its relevant notice
pursuant to Section 2.3 or 2.4; provided, however, that
(a) the Borrower shall not be permitted to select
Interest Periods to be in effect at any one time which have expiration
dates occurring on more than ten different dates;
(b) Interest Periods commencing on the same date for
Loans comprising part of the same Borrowing shall be of the same
duration;
(c) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the
next following Business Day (unless such next following Business Day
is the first Business Day of a calendar month, in which case such
Interest Period shall end on the Business Day next preceding such
numerically corresponding day); and
(d) no Interest Period may end later than the Commitment
Termination Date.
"Investment" means, relative to any Person:
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business);
(b) any Guaranty of such Person; and
(c) any ownership or similar interest held by such Person
in any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof, less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person) and
shall, if made by the transfer or exchange of property other than cash, be
deemed to have been made in an original principal or capital amount equal to
the fair market value of such property.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit E hereto.
"Lenders" is defined in the preamble.
"LIBOR Office" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the
Lender Assignment Agreement or such other office of a Lender as designated from
time to time by notice from such Lender to the Borrower and the Agent, whether
or not outside the
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United States, which shall be making or maintaining Eurodollar Rate Loans of
such Lender hereunder.
"LIBOR Rate" means the rate with respect to the relevant Interest
Period to be determined on the basis of the offered rates for deposits in
Dollars for the relevant Interest Period which appear on Telerate Page 3750
(or, if such service or page is not available, such other service or page as
the Agent may determine as the appropriate service and page for the purpose of
displaying offered rates of leading reference banks in London for interbank
deposits in U.S. Dollars) as of 11:00 A.M. (London time) on the day that is two
(2) Business Days prior to the first day of the relevant Interest Period.
"LIBOR Rate (Reserve Adjusted)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a Eurodollar Rate Loan for
any Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:
LIBOR Rate = LIBOR Rate
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBOR Rate (Reserve Adjusted) for any Interest Period for
Eurodollar Rate Loans will be determined by the Agent on the basis of the LIBOR
Reserve Percentage in effect on, and the applicable rates furnished to and
received by the Agent from RBN, two Business Days before the first day of such
Interest Period.
"LIBOR Reserve Percentage" of RBN for the Interest Period for any
Eurodollar Rate Loan means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable,
the daily average of such percentages for those days in such Interest Period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Lender with respect to liabilities or assets
consisting of or including "eurocurrency liabilities" (as such term is defined
in Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time) having a term equal to such Interest Period.
"Lien" shall mean with respect to any Person, any mortgage, lien,
pledge, adverse claim, charge, security interest or other encumbrance in or on,
or interest or title of any vendor, lessor, lender or other secured party to or
of such Person under a conditional sale or other title retention agreement or
Capital Lease with respect to, any property or asset of such Person, or the
signing or filing of a financing statement which names such Person
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as debtor, or the signing of any security agreement authorizing any other party
as the secured party thereunder to file any financing statement.
"Loan" is defined in Section 2.1.1.
"Loan Document" means this Agreement, the Notes and the Agent's Fee
Letter.
"Majority-Owned Subsidiary" means, when applied to a Subsidiary, any
Subsidiary 80% or more of the Voting Stock of which is owned by the Borrower or
a Majority-Owned Subsidiary (other than Voting Stock required to be held as
director's qualifying stock).
"Note" means a promissory note of the Borrower payable to any Lender,
in the form of Exhibit A hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from outstanding Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower arising under or in connection with this Agreement, the Notes and each
other Loan Document.
"Organic Document" means, relative to the Borrower, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of capital
stock.
"Other Borrowing Base Debt" means any Indebtedness outstanding under a
credit line or other facility between the Borrower and a Lender (or any other
Person to the extent the aggregate principal amount outstanding to all such
other Persons does not exceed $2,000,000 at any time), providing for borrowings
for a period of less than one year.
"Participant" is defined in Section 10.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan," as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the
Borrower, a member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within the meaning of
section 4063 of ERISA at any time during the preceding five years, or by
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reason of being deemed to be a contributing sponsor under section 4069 of
ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
opposite its signature hereto or set forth in the Lender Assignment Agreement,
as such percentage may be adjusted from time to time pursuant to Lender
Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and
delivered pursuant to Section 10.11.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Property" means any real or personal or tangible or intangible asset.
"Quarterly Payment Date" means the first day of each April, July,
October, and January or, if any such day is not a Business Day, the next
succeeding Business Day.
"RBN" is defined in the preamble.
"Receivable" means any right to payment of the Borrower from any
Person arising from the sale of goods or services by the Borrower in the
ordinary course of its business.
"Release" means a "release," as such term is defined in CERCLA.
"Replacement Lender" is defined in Section 2.7.
"Required Lenders" means, at any time, Lenders holding at least
66 2/3% of the then aggregate outstanding principal amount of the Notes then
held by the Lenders, or, if no such principal amount is then outstanding,
Lenders having at least 66 2/3% of the Commitments.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 690, et seq., as in effect
from time to time.
"Restricted Payment" is defined in Section 7.2.6.
"Sale and Lease-Back Transaction" means any arrangement, directly or
indirectly, with any Person whereby a seller or a transferor shall sell or
otherwise transfer any real or personal property and then or thereafter lease
(whether or not a Capitalized
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Lease), or repurchase under any extended purchase contract, the same or similar
property from the purchaser or the transferee of such property.
"Stated Maturity Date" means, with respect to the Loans of any Lender,
such Lender's Commitment Termination Date.
"Subordinated Debt" shall mean the principal of and premium, if any,
and interest on all indebtedness of the Borrower, whether currently outstanding
or hereafter created, for money borrowed, or any indebtedness incurred in
connection with an acquisition or lease of property or with a merger,
consolidation, or acquisition of assets which is expressly subordinated in
right of payment pursuant to its terms to the Loans (whether or not it is
subordinated to other indebtedness of the Borrower).
"Subsidiary" shall mean any corporation of which the Borrower directly
or indirectly owns more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency).
"Taxes" is defined in Section 4.6.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan, or a Eurodollar Rate Loan.
"United States" or "U.S." means the United States of America, its
fifty States and the District of Columbia.
"Voting Stock" shall mean capital stock of any class or classes of a
corporation having power under ordinary circumstances to vote for the election
of members of the board of directors of such corporation, or persons performing
similar functions (irrespective of whether or not at the time stock of any of
the class or classes shall have or might have special voting power or rights by
reason of the happening of any contingency).
"Welfare Plan" means a "welfare plan," as such term is defined in
section 3(1) of ERISA.
"Wilson Purchase Agreement" means the Asset Purchase Agreement, dated
as of April 29, 1995, between the Borrower and Doskocil Companies Incorporated,
Wilson Foods Corporation, Concordia Foods Corporation, Dixie Foods Company and
Shreveport Foods Company.
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SECTION 1.2. Use of Defined Terms. Unless otherwise defined or
the context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Loan Document,
notice and other communication delivered from time to time in connection with
this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified,
references in this Agreement and in each other Loan Document to any Article or
Section are references to such Article or Section of this Agreement or such
other Loan Document, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause are references
to such clause of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, all accounting determinations and computations
hereunder or thereunder (including under Section 7.2.4) shall be made, and all
financial statements required to be delivered hereunder or thereunder shall be
prepared in accordance with those generally accepted accounting principles
("GAAP") applied in the preparation of the financial statements referred to in
Section 6.5.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the
conditions of this Agreement (including Article V), each Lender severally
agrees to make Loans pursuant to the Commitments described in this Section 2.1.
SECTION 2.1.1. Commitment of Each Lender. From time to time on any
Business Day occurring prior to such Lender's Commitment Termination Date, each
Lender will make loans (relative to such Lender, and of any type, its "Loans")
to the Borrower equal to such Lender's Percentage of the aggregate amount of
the Borrowing requested by the Borrower to be made on such day. The commitment
of each Lender described in this Section 2.1.1 is herein referred to as its
"Commitment." On the terms and subject to the conditions hereof, the Borrower
may from time to time borrow, prepay and reborrow Loans.
SECTION 2.1.2. Lenders Not Permitted or Required To Make Loans. No
Lender shall be permitted or required to make any Loan if, after giving effect
thereto, the aggregate outstanding principal amount of all Loans
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(a) of all Lenders would exceed the lesser of (i) the
Available Borrowing Base and (ii) the Commitment Amount, or
(b) of such Lender would exceed such Lender's Percentage
of the lesser of (i) the Available Borrowing Base and (ii) the
Commitment Amount.
SECTION 2.2. Reduction of Commitment Amount.
The Borrower may, from time to time on any Business Day occurring
after the time of the initial Borrowing hereunder, voluntarily reduce the
Commitment Amount; provided, however, that all such reductions shall require at
least five Business Days' prior notice to the Agent and be permanent, and any
partial reduction of the Commitment Amount shall be in a minimum amount of
$5,000,000 and in an integral multiple of $1,000,000.
SECTION 2.3. Borrowing Procedure. By delivering a Borrowing
Request to the Agent on or before 12:00 Noon, New York City time, on a Business
Day, the Borrower may from time to time irrevocably request, on not less than
three Business Days' notice (in the case of a request for a Eurodollar Loan) or
on the day of the requested Borrowing (in the case of a request for a Base Rate
Loan), that a Borrowing be made in a minimum amount of $500,000 and an integral
multiple of $100,000 or in the unused amount of the Commitments. The Agent
shall promptly advise each Lender of such Borrowing Request. On the terms and
subject to the conditions of this Agreement, each Borrowing shall be comprised
of the type of Loans, and shall be made on the Business Day, specified in such
Borrowing Request. On or before 12:00 Noon, New York City time, on such
Business Day if the requested Borrowing is for Eurodollar Loans or on or before
2:00 p.m., New York City time, if the requested Borrowing is for Base Rate
Loans each Lender shall deposit with the Agent same-day funds in an amount
equal to such Lender's Percentage of the requested Borrowing. Such deposit
will be made to an account which the Agent shall specify from time to time by
notice to the Lenders. To the extent funds are received from the Lenders, the
Agent shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing Request. No
Lender's obligation to make any Loan shall be affected by any other Lender's
failure to make any Loan.
SECTION 2.4. Continuation and Conversion Elections. By delivering
a Continuation/Conversion Notice to the Agent on or before 11:00 a.m., New York
City time, on a Business Day, the Borrower may from time to time irrevocably
elect on not less than three Business Days' notice that the total amount, or
any portion in an aggregate minimum amount of $500,000 and an integral multiple
of $100,000, of any Loans be, in the case of Base Rate Loans, converted into
Eurodollar Rate Loans or, in the case of Eurodollar Rate Loans, be converted
into a Base Rate Loan or continued as a
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Eurodollar Rate Loan (in the absence of delivery of a Continuation/Conversion
Notice with respect to any Eurodollar Rate Loan at least three Business Days
before the last day of the then current Interest Period with respect thereto,
such Eurodollar Rate Loan shall, on such last day, automatically convert to a
Base Rate Loan); provided, however, that (i) each such conversion or
continuation shall be pro-rated among the applicable outstanding Loans of all
Lenders, and (ii) no portion of the outstanding principal amount of any Loans
may be continued as, or be converted into, Eurodollar Rate Loans when any
Default has occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill
its obligation to make, continue or convert Eurodollar Rate Loans hereunder by
causing one of its foreign branches or Affiliates (or an international banking
facility created by such Lender) to make or maintain such Eurodollar Rate Loan;
provided, however, that such Eurodollar Rate Loan shall nonetheless be deemed
to have been made and to be held by such Lender, and the obligation of the
Borrower to repay such Eurodollar Rate Loan shall nevertheless be to such
Lender for the account of such foreign branch, Affiliate or international
banking facility. In addition, the Borrower hereby consents and agrees that,
for purposes of any determination to be made for purposes of Sections 4.1, 4.2,
4.3 or 4.4, it shall be conclusively assumed that each Lender elected to fund
all Eurodollar Rate Loans by purchasing, as the case may be, Dollar
certificates of deposit in the U.S. or Dollar deposits in its LIBOR Office's
interbank eurodollar market.
SECTION 2.6. Notes. Each Lender's Loans under its Commitment
shall be evidenced by a Note payable to the order of such Lender in a maximum
principal amount equal to such Lender's Percentage of the original Commitment
Amount. The Borrower hereby irrevocably authorizes each Lender to make (or
cause to be made) appropriate notations on the grid attached to such Lender's
Note (or on any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of, and the
interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall be conclusive and binding on the Borrower absent manifest
error; provided, however, that the failure of any Lender to make any such
notations shall not limit or otherwise affect any Obligations of the Borrower.
SECTION 2.7. Extension of Commitment Termination Date. Sixty (60)
days prior to any anniversary of the Effective Date, the Borrower may, by
telephonic notice to the Agent (provided that telephonic notice shall be
promptly confirmed by the Borrower in writing), request an extension of the
Lenders' Commitment Termination Date for an additional year. The Agent shall
promptly notify the Lenders of such request. Each Lender shall decide, in its
individual and sole discretion, whether to so extend its
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Commitment Termination Date and shall notify the Borrower and the Agent if it
agrees to such extension at least fifteen (15) days prior to such anniversary.
Failure of a Lender to respond to a notice from the Agent of a request to
extend its Commitment Termination Date shall be deemed to constitute such
Lender's refusal to extend. If a Lender agrees to such extension, the new
Commitment Termination Date for such Lender shall be the date which is one year
after such Lender's existing Commitment Termination Date. With respect to each
Lender declining to extend the Commitment Termination Date (each a "Declining
Lender"), the Borrower may obtain the commitment of one or more other banks or
financial institutions that are willing to become a party to this Agreement and
replace such Declining Lenders; provided, however, that prior to obtaining such
commitments, the Borrower gives each of the Lenders extending its Commitment
Termination Date the opportunity to increase its commitment amount to an amount
which would include all or a portion of the Declining Lenders' Commitments. If
any of the Lenders increase their Commitments or the Borrower obtains the
commitment of one or more new Lenders (in each case a "Replacement Lender"),
the Declining Lender will negotiate in good faith with any such Replacement
Lender to assign the applicable portion of such Declining Lender's rights, and
transfer the applicable portion of its obligations, to such Replacement Lender;
provided, further that nothing herein shall relieve or discharge any Declining
Lender from any obligation hereunder unless such obligation is expressly
assumed by the Replacement Lender by such Replacement Lender's execution and
delivery of a Lender Assignment Agreement. If the Commitment Termination Date
is extended for some but not all of the Lenders and the Borrower has not
replaced all the Declining Lenders, on the Commitment Termination Date as in
effect before such extension, the Borrower shall pay to each Declining Lender
the principal balance of all Loans then outstanding to such Lender, together
with all interest accrued thereon and all fees due to such Lender hereunder.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall repay
in full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor. Prior thereto, the Borrower:
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding
principal amount of any Loans; provided, however, that
(i) any such prepayment shall be made pro rata
among Loans of the same type and, if applicable, having the
same Interest Period of all Lenders;
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(ii) all voluntary prepayments of Eurodollar Loans
shall require at least five Business Days' prior written
notice to the Agent; and
(iii) all such voluntary partial prepayments shall be
in an aggregate minimum amount of $500,000 and an integral
multiple of $100,000;
(b) shall, on each date when any reduction in the
Commitment Amount shall become effective, including pursuant to
Section 2.2, make a mandatory prepayment of all Loans equal to the
excess, if any, of the aggregate outstanding principal amount of all
Loans over the Commitment Amount as so reduced;
(c) shall, if on any date the aggregate principal amount
of outstanding Loans exceeds the Available Borrowing Base, as
calculated in the then most recently delivered Borrowing Base
Certificate, make a mandatory prepayment of all Loans equal to such
excess; and
(d) shall, immediately upon any acceleration of the
Stated Maturity Date of any Loans pursuant to Section 8.2 or Section
8.3, repay all Loans, unless, pursuant to Section 8.3, only a portion
of all Loans is so accelerated.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No voluntary
prepayment of principal of any Loans shall cause a reduction in the Commitment
Amount.
SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of Loans shall accrue and be payable in accordance with this
Section 3.2.
SECTION 3.2.1. Rates. Pursuant to an appropriately delivered
Borrowing Request or Continuation/Conversion Notice, the Borrower may elect
that Loans comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a
Base Rate Loan, equal to the sum of the Alternate Base Rate from time
to time in effect; and
(b) on that portion maintained as a Eurodollar Rate Loan,
during each Interest Period applicable thereto, equal to the sum of
the LIBOR Rate (Reserve Adjusted) for such Interest Period, plus the
Applicable Margin then in effect.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan is due and payable (whether on the Stated Maturity Date,
upon acceleration or otherwise), or after any
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other monetary Obligation of the Borrower shall have become due and payable,
the Borrower shall pay, but only to the extent permitted by law, interest
(after as well as before judgment) on such amounts at a rate per annum equal to
the rate which would otherwise be in effect, plus a margin of 2%.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall
be payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) if the Borrower reduces the Commitment to zero, on
the date of any payment or prepayment, in whole, of the principal
outstanding on such Loan pursuant to Section 3.1(b);
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the Effective Date;
(d) with respect to Eurodollar Rate Loans, the last day
of each applicable Interest Period (and, if such Interest Period shall
exceed three months, on the day which is three months after the first
day of such Interest Period) and if such Eurodollar Rate Loan is
prepaid prior to the last day of such Interest Period, on the date of
such prepayment; and
(e) on that portion of any Loans the Stated Maturity Date
of which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth
in this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the
Agent for the account of each Lender, for the period (including any portion
thereof when its Commitment is suspended by reason of the Borrower's inability
to satisfy any condition of Article V) commencing on the Effective Date and
continuing through such Lender's Commitment Termination Date, a commitment fee
at the rate of .25 of 1% per annum on such Lender's Percentage of the sum of
the average daily unused portion of the Commitment Amount. Such commitment
fees shall be payable by the Borrower in arrears on each Quarterly Payment
Date, commencing with the first such day following the Effective Date and on
such Lender's Commitment Termination Date.
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SECTION 3.3.2. Facility Fee. The Borrower agrees to pay to the Agent
for the account of each Lender, a facility fee in an amount equal to .10 of 1%
of such Lender's Percentage of the Commitment Amount (without regard to any
reduction thereto), payable on the Effective Date.
SECTION 3.3.3. Agent's Fee. To the Agent for its own account, the
amounts set forth in the Agent's Fee Letter at the times set forth therein for
payment.
ARTICLE IV
CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS
SECTION 4.1. Eurodollar Rate Lending Unlawful. If any Lender
shall determine (which determination shall, upon notice thereof to the Borrower
and the Lenders, be conclusive and binding on the Borrower) that the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or any central bank or other governmental authority asserts that it
is unlawful, for such Lender to make, continue or maintain any Loan as, or to
convert any Loan into, a Eurodollar Rate Loan, the obligations of all Lenders
to make, continue, maintain or convert any such Loans shall, upon such
determination, forthwith be suspended until such Lender shall notify the Agent
that the circumstances causing such suspension no longer exist, and all
Eurodollar Rate Loans shall automatically convert into Base Rate Loans at the
end of the then current Interest Periods with respect thereto or sooner, if
required by such law or assertion.
SECTION 4.2. Deposits Unavailable. If the Agent shall have
determined that:
(a) Dollar certificates of deposit or Dollar deposits, as
the case may be, in the relevant amount and for the relevant Interest
Period are not available to RBN in its relevant market; or
(b) by reason of circumstances affecting RBN's relevant
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to Eurodollar Rate Loans of such type;
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, Eurodollar Rate Loans
shall forthwith be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.
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SECTION 4.3. Increased Eurodollar Rate Loan Costs, etc. The
Borrower agrees to reimburse each Lender for any increase in the cost to such
Lender of, or any reduction in the amount of any sum receivable by such Lender
in respect of, making, continuing or maintaining (or of its obligation to make,
continue or maintain) any Loans as, or of converting (or of its obligation to
convert) any Loans into, Eurodollar Rate Loans. Such Lender shall promptly
notify the Agent and the Borrower in writing of the occurrence of any such
event, such notice to state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate such Lender for such increased
cost or reduced amount. Such additional amounts shall be payable by the
Borrower directly to such Lender within five days of its receipt of such
notice, and such notice shall, in the absence of manifest error, be conclusive
and binding on the Borrower.
SECTION 4.4. Funding Losses. In the event any Lender shall incur
any loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a
Eurodollar Rate Loan) as a result of:
(a) any conversion or repayment or prepayment of the
principal amount of any Eurodollar Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 3.1 or otherwise;
(b) any Loans not being made as Eurodollar Rate Loans in
accordance with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into,
Eurodollar Rate Loans in accordance with the Continuation/Conversion
Notice therefor;
then, upon the written notice of such Lender to the Borrower (with a copy to
the Agent), the Borrower shall, within five days of its receipt thereof, pay
directly to such Lender such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
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such Lender, and such Lender determines (in its sole and absolute discretion)
that the rate of return on its or such controlling Person's capital as a
consequence of its Commitment or the Loans made by such Lender is reduced to a
level below that which such Lender or such controlling Person could have
achieved but for the occurrence of any such circumstance, then, in any such
case upon notice from time to time by such Lender to the Borrower, the Borrower
shall immediately pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return. A statement of such Lender as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower. In determining such
amount, such Lender may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable.
SECTION 4.6. Taxes. All payments by the Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder shall be
made free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and
(c) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount
such Lender would have received had no such withholding or deduction
been required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Borrower will promptly pay such
additional amounts (including any penalties, interest or expenses) as is
necessary in order that the net amount received by such Person after the
payment of such Taxes (including any Taxes on such additional amount) shall
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equal the amount such Person would have received had not such Taxes been
asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 4.6, a distribution hereunder by
the Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
Upon the request of the Borrower or the Agent, each Lender that is
organized under the laws of a jurisdiction other than the United States shall,
prior to the due date of any payments under the Notes, execute and deliver to
the Borrower and the Agent, on or about the first scheduled payment date in
each Fiscal Year, one or more (as the Borrower or the Agent may reasonably
request) United States Internal Revenue Service Forms 4224 or Forms 1001 or
such other forms or documents (or successor forms or documents), appropriately
completed, as may be applicable to establish the extent, if any, to which a
payment to such Lender is exempt from withholding or deduction of Taxes.
SECTION 4.7. Payments, Computations, etc. Unless otherwise
expressly provided, all payments by the Borrower pursuant to this Agreement,
the Notes or any other Loan Document shall be made by the Borrower to the Agent
for the pro rata account of the Lenders entitled to receive such payment. All
such payments required to be made to the Agent shall be made, without setoff,
deduction or counterclaim, not later than 11:00 a.m., New York City time, on
the date due, in same day or immediately available funds, to such account as
the Agent shall specify from time to time by notice to the Borrower. Funds
received after that time shall be deemed to have been received by the Agent on
the next succeeding Business Day. The Agent shall promptly remit in same day
funds to each Lender its share, if any, of such payments received by the Agent
for the account of such Lender. All interest and fees shall be computed on the
basis of the actual number of days (including the first day but excluding the
last day) occurring during the period for which such interest or fee is payable
over a year comprised of 360 days (or, in the case of interest on a Base Rate
Loan, 365 days or, if appropriate, 366 days). Whenever any payment to be made
shall otherwise be due on a day which is not a Business Day, such payment shall
(except as otherwise required by clause (c) of the definition of the term
"Interest Period" with respect to Eurodollar Rate Loans) be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest and fees, if any, in connection with such payment.
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SECTION 4.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan (other than pursuant to the terms
of Sections 4.3, 4.4 and 4.5) in excess of its pro rata share of payments then
or therewith obtained by all Lenders, such Lender shall purchase from the other
Lenders such participations in Loans made by them as shall be necessary to
cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided, however, that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and each Lender which has sold a
participation to the purchasing Lender shall repay to the purchasing Lender the
purchase price to the ratable extent of such recovery together with an amount
equal to such selling Lender's ratable share (according to the proportion of
(a) the amount of such selling Lender's required
repayment to the purchasing Lender
to
(b) the total amount so recovered from the purchasing
Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of
such participation. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders entitled under this Section to share in the benefits of
any recovery on such secured claim.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence of
any Default described in clauses (a) through (d) of Section 8.19 or any other
Event of Default, have the right to appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) the Borrower hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of the
Borrower then or thereafter maintained with such Lender; provided, however,
that any such appropriation and application shall be subject to the provisions
of Section 4.8. Each Lender agrees promptly to notify the Borrower and the
Agent after any such setoff
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and application made by such Lender; provided, however, that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of each Lender under this Section are in addition to other rights
and remedies (including other rights of setoff under applicable law or
otherwise) which such Lender may have.
SECTION 4.10. Use of Proceeds. The Borrower shall apply the
proceeds of the initial Borrowing to finance the Acquisition and to pay in full
all the Indebtedness identified in Item 7.2.2(b) ("Indebtedness to be Paid") of
the Disclosure Schedule. Proceeds of each other Borrowing shall be used for
general corporate purposes and working capital purposes of the Borrower and its
Subsidiaries. Without limiting the foregoing, no proceeds of any Loan will be
used to acquire any equity security of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934 or any "margin stock," as
defined in F.R.S. Board Regulation U.
ARTICLE V
CONDITIONS TO BORROWING
SECTION 5.1. Initial Borrowing. The obligations of the Lenders to
fund the initial Borrowing shall be subject to the prior or concurrent
satisfaction of each of the conditions precedent set forth in this Section 5.1.
SECTION 5.1.1. Resolutions, etc. The Agent shall have received from
the Borrower a certificate, dated the date of the initial Borrowing, of its
Secretary or Assistant Secretary as to
(a) resolutions of its Board of Directors then in full
force and effect authorizing the execution, delivery and performance
of this Agreement, the Notes and each other Loan Document to be
executed by it; and
(b) the incumbency and signatures of those of its
officers authorized to act with respect to this Agreement, the Notes
and each other Loan Document executed by it,
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary of the Borrower canceling or
amending such prior certificate.
SECTION 5.1.2. Delivery of Notes. The Agent shall have received,
for the account of each Lender, its Notes duly executed and delivered by the
Borrower.
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SECTION 5.1.3. Acquisition Consummated. The conditions set forth in
Article X of the Wilson Purchase Agreement to the obligations of the Borrower
to consummate the Acquisition shall have been satisfied in full (without
amendment or waiver of, or other forbearance to exercise any rights with
respect to, any of the terms or provisions thereof by the Borrower), and the
Acquisition shall have been consummated in accordance with Article X of the
Wilson Purchase Agreement.
SECTION 5.1.4. Payment of Outstanding Indebtedness, etc. All
Indebtedness identified in Item 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, shall have been paid in
full (including, to the extent necessary, from proceeds of the initial
Borrowing).
SECTION 5.1.5. Environmental Report. The Agent shall have received a
Phase I environmental assessment with respect to the assets subject to the
Acquisition, which assessment shall be, in form and substance, satisfactory to
the Lenders.
SECTION 5.1.6. Opinions of Counsel. The Agent shall have received
opinions, dated the date of the initial Borrowing and addressed to the Agent
and all Lenders, from Honigman, Miller, Schwartz & Cohn, counsel to the
Borrower, substantially in the form of Exhibit F hereto.
SECTION 5.1.7. Closing Fees, Expenses, etc. The Agent shall have
received for its own account, or for the account of each Lender, as the case
may be, all fees, costs and expenses due and payable pursuant to Sections 3.3
and 10.3, if then invoiced.
SECTION 5.2. All Borrowings. The obligation of each Lender to
fund any Loan on the occasion of any Borrowing (including the initial
Borrowing) shall be subject to the satisfaction of each of the conditions
precedent set forth in this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to any Borrowing (but, if any Default of the
nature referred to in Section 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:
(a) the representations and warranties set forth in
Article VI (excluding, however, those contained in Section 6.7) shall
be true and correct with the same effect as if then made (unless
stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct as of such
earlier date);
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(b) except as disclosed by the Borrower to the Agent and
the Lenders pursuant to Section 6.7:
(i) no labor controversy, litigation, arbitration
or governmental investigation or proceeding shall be pending
or, to the knowledge of the Borrower, threatened against the
Borrower or any of its Subsidiaries which might materially
adversely affect the Borrower's consolidated business,
operations, assets, revenues, properties or prospects or which
purports to affect the legality, validity or enforceability of
this Agreement, the Notes or any other Loan Document; and
(ii) no development shall have occurred in any
labor controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 6.7
which might materially adversely affect the consolidated
businesses, operations, assets, revenues, properties or
prospects of the Borrower and its Subsidiaries;
(c) no Default shall have then occurred and be
continuing, and neither the Borrower nor any of its Subsidiaries are
in material violation of any law or governmental regulation or court
order or decree; and
(d) the aggregate outstanding principal amount of the Loans
shall not exceed the Available Borrowing Base, as calculated in the
then most recently delivered Borrowing Base Certificate, and the
Borrower shall not be delinquent in the delivery of any Borrowing Base
Certificate.
SECTION 5.2.2. Borrowing Request. The Agent shall have received a
Borrowing Request for such Borrowing. Each of the delivery of a Borrowing
Request and the acceptance by the Borrower of the proceeds of such Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing (both immediately before and after giving effect to such
Borrowing and the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Agent to enter into this
Agreement and to make Loans hereunder, the Borrower represents and warrants
unto the Agent and each Lender as set forth in this Article VI.
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SECTION 6.1. Organization, etc. The Borrower and each of its
Subsidiaries is a corporation validly organized and existing and in good
standing under the laws of the State of its incorporation, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction where the nature of its business requires such qualification, and
has full power and authority and holds all requisite governmental licenses,
permits and other approvals to enter into and perform its Obligations under
this Agreement, the Notes and each other Loan Document and to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by the Borrower of this Agreement, the
Notes and each other Loan Document executed or to be executed by it, and the
Borrower's participation in the consummation of the Acquisition are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not:
(a) contravene the Borrower's Organic Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting the Borrower; or
(c) result in, or require the creation or imposition of,
any Lien on any of the Borrower's properties.
SECTION 6.3. Government Approval, Regulation, etc. No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body or other Person is required for
the due execution, delivery or performance by the Borrower of this Agreement,
the Notes or any other Loan Document or for the Borrower's participation in the
consummation of the Acquisition. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement constitutes, and the
Notes and each other Loan Document executed by the Borrower will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms.
SECTION 6.5. Financial Information. The balance sheets of the
Borrower and each of its Subsidiaries as at May 27, 1994, and
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the related statements of earnings and cash flow of the Borrower and each of
its Subsidiaries, copies of which have been furnished to the Agent and each
Lender, have been prepared in accordance with GAAP consistently applied, and
present fairly the consolidated financial condition of the corporations covered
thereby as at the dates thereof and the results of their operations for the
periods then ended.
SECTION 6.6. No Material Adverse Change. Since the date of the
financial statements described in Section 6.5, there has been no material
adverse change in the financial condition, operations, assets, business,
properties or prospects of the Borrower and its Subsidiaries.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no
pending or, to the knowledge of the Borrower, threatened litigation, action,
proceeding, or labor controversy affecting the Borrower or any of its
Subsidiaries, or any of their respective properties, businesses, assets or
revenues, which may materially adversely affect the financial condition,
operations, assets, business, properties or prospects of the Borrower or any
Subsidiary or which purports to affect the legality, validity or enforceability
of this Agreement, the Notes or any other Loan Document, except as disclosed in
Item 6.7 ("Litigation") of the Disclosure Schedule.
SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries,
except those Subsidiaries:
(a) which are identified in Item 6.8 ("Existing
Subsidiaries") of the Disclosure Schedule; or
(b) which are permitted to have been acquired in
accordance with Section 7.2.5 or 7.2.10.
SECTION 6.9. Ownership of Properties. Set forth on Item 6.9 of
the Disclosure Schedule is a complete and accurate list of all real property
owned by the Borrower after giving effect to the Acquisition, showing as of the
Effective Date the street address, county or other relevant jurisdiction,
state, record owner and book value thereof. The Borrower and each of its
Subsidiaries owns good and marketable title to all of its properties and
assets, real and personal, tangible and intangible, of any nature whatsoever
(including patents, trademarks, trade names, service marks and copyrights),
free and clear of all Liens, charges or claims (including infringement claims
with respect to patents, trademarks, copyrights and the like) except as
permitted pursuant to Section 7.2.3.
SECTION 6.10. Taxes. The Borrower and each of its Subsidiaries has
filed all tax returns and reports required by law
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to have been filed by it and has paid all taxes and governmental charges
thereby shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 6.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Borrowing hereunder, no steps
have been taken to terminate any Pension Plan, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by the Borrower or any member of the Controlled Group of any material
liability, fine or penalty. Except as disclosed in Item 6.11 ("Employee
Benefit Plans") of the Disclosure Schedule, neither the Borrower nor any member
of the Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
SECTION 6.12. Environmental Warranties. Except as set forth in
Item 6.12 ("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its
Subsidiaries have been, and continue to be, owned or leased by the
Borrower and its Subsidiaries in material compliance with all
Environmental Laws;
(b) there have been no past, and there are no pending or
threatened:
(i) claims, complaints, notices or requests for
information received by the Borrower or any of its
Subsidiaries with respect to any alleged violation of any
Environmental Law; or
(ii) complaints, notices or inquiries to the
Borrower or any of its Subsidiaries regarding potential
liability under any Environmental Law;
(c) there have been no Releases of Hazardous Materials
at, on or under any property now or previously owned or leased by the
Borrower or any of its Subsidiaries that, singly or in the aggregate,
have, or may reasonably be expected to have, a material adverse effect
on the financial condition, operations, assets, business, properties
or prospects of the Borrower and its Subsidiaries;
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(d) the Borrower and its Subsidiaries have been issued
and are in material compliance with all permits, certificates,
approvals, licenses and other authorizations relating to environmental
matters and necessary or desirable for their businesses;
(e) no property now or previously owned or leased by the
Borrower or any of its Subsidiaries is listed or proposed for listing
(with respect to owned property only) on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list of
sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower or any of its
Subsidiaries that, singly or in the aggregate, have, or may reasonably
be expected to have, a material adverse effect on the financial
condition, operations, assets, business, properties or prospects of
the Borrower and its Subsidiaries;
(g) neither Borrower nor any Subsidiary of the Borrower
has directly transported or directly arranged for the transportation
of any Hazardous Material to any location which is listed or proposed
for listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations
which may lead to material claims against the Borrower or such
Subsidiary thereof for any remedial work, damage to natural resources
or personal injury, including claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable
asbestos present at any property now or previously owned or leased by
the Borrower or any Subsidiary of the Borrower that, singly or in the
aggregate, have, or may reasonably be expected to have, a material
adverse effect on the financial condition, operations, assets,
business, properties or prospects of the Borrower and its
Subsidiaries; and
(i) no conditions exist at, on or under any property now
or previously owned or leased by the Borrower which, with the passage
of time, or the giving of notice or both, would give rise to liability
under any Environmental Law.
SECTION 6.13. Regulations G, U and X. The Borrower is not engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stock, and no proceeds of any Loans will be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X.
Terms for which meanings
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are provided in F.R.S. Board Regulation G, U or X or any regulations
substituted therefor, as from time to time in effect, are used in this Section
with such meanings.
SECTION 6.14. Liabilities. As of the Effective Date, except for
trade payables, payroll not yet due and payable, and real estate, personal
property and other similar taxes not yet due and payable arising in the
ordinary course of the business of the Borrower, and except for those
capitalized lease obligations, operating leases and other Indebtedness of the
Borrower disclosed in Item 6.14(a) of the Disclosure Schedule, the Borrower
does not have any capitalized lease obligations, operating leases or other
Indebtedness except the Obligations. As of the Effective Date, except as
disclosed in Item 6.14(b) of the Disclosure Schedule, the Borrower is not
liable under any Guaranty with respect to the obligations of any other Person.
SECTION 6.15. Leases. Set forth in Item 6.15 to the Disclosure
Schedule is a complete and accurate list of all leases of real property under
which the Borrower is the lessee after giving effect to the Acquisition and
having an annual rental cost of more than $50,000, showing as of the Effective
Date the street address, county or other relevant jurisdiction, state, lessor,
lessee, expiration date and annual rental cost thereof. Each such lease is the
legal, valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms (subject to limitations imposed by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity) and the effect of applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws of general application
relating to or affecting creditors' rights).
SECTION 6.16. Material Contracts. Set forth in Item 6.16 to the
Disclosure Schedule is a complete and accurate list of all material contracts
of the Borrower showing as of the Effective Date after giving effect to the
Acquisition the parties, subject matter and term thereof. As of the Effective
Date, each such material contract has been duly authorized, executed and
delivered by all parties thereto, has not been amended or otherwise modified,
is in full force and effect and is binding upon and enforceable against all
parties thereto in accordance with its terms (subject to limitations imposed by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and the effect of applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws of general
application relating to or affecting creditors' rights), and, to the best
knowledge of the Borrower, as of the Effective Date, there exists no material
default under any such material contract by any party thereto.
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SECTION 6.17. Intellectual Property. Set forth in Item 6.17 to the
Disclosure Schedule is a complete and accurate list of all patents, trademarks,
trade names, service marks and copyrights, and all applications therefor and
licenses thereof, of the Borrower after giving effect to the Acquisition,
showing as of the Effective Date the jurisdiction in which registered, the
registration number, the date of registration and the expiration date.
SECTION 6.18. Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to the Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby (including the Thorn Apple
Valley, Inc. Senior Note Financing Private Placement Memorandum dated April,
1995, true and complete copies of which were furnished to the Agent and each
Lender in connection with its execution and delivery hereof) is, and all other
such factual information hereafter furnished by or on behalf of the Borrower to
the Agent or any Lender will be, true and accurate in every material respect on
the date as of which such information is dated or certified and as of the date
of execution and delivery of this Agreement by the Agent and such Lender, and
such information is not, or shall not be, as the case may be, incomplete by
omitting to state any material fact necessary to make such information not
misleading.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with the
Agent and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will perform the
obligations set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or will cause to be furnished, to each Lender and the
Agent copies of the following financial statements, reports, notices and
information:
(a) as soon as available and in any event within 45 days
after the end of each of the first three Fiscal Quarters of each
Fiscal Year of the Borrower, consolidated balance sheets of the
Borrower and its Subsidiaries as of the end of such Fiscal Quarter and
consolidated statements of earnings and cash flow of the Borrower and
its Subsidiaries for such Fiscal Quarter and for the period commencing
at the end of the previous Fiscal Year and ending with the end of such
Fiscal Quarter, certified by the chief financial Authorized Officer of
the Borrower;
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(b) as soon as available and in any event within 90 days
after the end of each Fiscal Year of the Borrower, a copy of the
annual audit report for such Fiscal Year for the Borrower and its
Subsidiaries, including therein consolidated balance sheets of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and
consolidated statements of earnings and cash flow of the Borrower and
its Subsidiaries for such Fiscal Year, in each case certified (without
any Impermissible Qualification) in a manner acceptable to the Agent
and the Required Lenders by Coopers & Lybrand or other independent
public accountants acceptable to the Agent and the Required Lenders,
together with a certificate from such accountants to the effect that,
in making the examination necessary for the signing of such annual
report by such accountants, they have not become aware of any Default
or Event of Default that has occurred and is continuing, or, if they
have become aware of such Default or Event of Default, describing such
Default or Event of Default and the steps, if any, being taken to cure
it;
(c) as soon as available and in any event within 45 days
after the end of each of the first three Fiscal Quarters of each
Fiscal Year and within 90 days after the end of the last Fiscal
Quarter of each Fiscal Year, a certificate, executed by the chief
financial Authorized Officer of the Borrower, showing (in reasonable
detail and with appropriate calculations and computations in all
respects satisfactory to the Agent) compliance with the financial
covenants set forth in Section 7.2.4 and the calculation of the
Interest Coverage Ratio for such Fiscal Quarter;
(d) as soon as available and in any event within 45 days
after the end of each Fiscal Quarter, a Borrowing Base Certificate
setting forth a calculation of the Borrowing Base as of the last
Business Day of such Fiscal Quarter; provided, that (i) upon the
written request of the Required Lenders or (ii) if the difference
between the Available Borrowing Base and the principal amount of Loans
outstanding is, or has at any time been, less than $15,000,000, upon
the written request of at least two of the Lenders, the Borrower
shall, within twenty days after the end of each month (commencing with
the month in which such request is made), deliver a Borrowing Base
Certificate setting forth a calculation of the Borrowing Base as of
the last Business Day of such month. The Borrower may also deliver
interim Borrowing Base Certificates from time to time if it so desires
in order to demonstrate an intra-month increase in the Borrowing Base
and hence potentially increase its borrowing capacity;
(e) as soon as possible and in any event within three
days after the occurrence of each Default, a statement of the
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chief financial Authorized Officer of the Borrower setting forth
details of such Default and the action which the Borrower has taken
and proposes to take with respect thereto;
(f) as soon as possible and in any event within three
days after (x) the occurrence of any adverse development with respect
to any litigation, action, proceeding, or labor controversy described
in Section 6.7 or (y) the commencement of any labor controversy,
litigation, action, proceeding of the type described in Section 6.7,
notice thereof and copies of all documentation relating thereto;
(g) promptly after the sending or filing thereof, copies
of all reports which the Borrower sends to any of its securityholders,
and all reports and registration statements which the Borrower or any
of its Subsidiaries files with the Securities and Exchange Commission
or any national securities exchange;
(h) immediately upon becoming aware of the institution of
any steps by the Borrower or any other Person to terminate any Pension
Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under
section 302(f) of ERISA, or the taking of any action with respect to a
Pension Plan which could result in the requirement that the Borrower
furnish a bond or other security to the PBGC or such Pension Plan, or
the occurrence of any event with respect to any Pension Plan which
could result in the incurrence by the Borrower of any material
liability, fine or penalty, or any material increase in the contingent
liability of the Borrower with respect to any post-retirement Welfare
Plan benefit, notice thereof and copies of all documentation relating
thereto; and
(i) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
SECTION 7.1.2. Compliance with Laws, etc. The Borrower will, and
will cause each of its Subsidiaries to, comply in all material respects with
all applicable laws, rules, regulations and orders, such compliance to include
(without limitation):
(a) the maintenance and preservation of its corporate
existence and qualification as a foreign corporation; and
(b) the payment, before the same become delinquent, of
all taxes, assessments and governmental charges imposed upon it or
upon its property except to the extent being diligently contested in
good faith by appropriate proceedings and for
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which adequate reserves in accordance with GAAP shall have been set
aside on its books.
SECTION 7.1.3. Maintenance of Properties. The Borrower will, and
will cause each of its Subsidiaries to, maintain, preserve, protect and keep
its properties in good repair, working order and condition, and make necessary
and proper repairs, renewals and replacements so that its business carried on
in connection therewith may be properly conducted at all times unless the
Borrower determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable.
SECTION 7.1.4. Insurance. The Borrower will, and will cause each of
its Subsidiaries to, maintain or cause to be maintained with responsible
insurance companies insurance with respect to its properties and business
(including business interruption insurance) against such casualties and
contingencies and of such types and in such amounts as is customary in the case
of similar businesses and will, upon request of the Agent, furnish to each
Lender at reasonable intervals a certificate of an Authorized Officer of the
Borrower setting forth the nature and extent of all insurance maintained by the
Borrower and its Subsidiaries in accordance with this Section.
SECTION 7.1.5. Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, keep books and records which accurately reflect
all of its business affairs and transactions and permit the Agent and each
Lender or any of their respective representatives, at reasonable times and
intervals, to visit all of its offices, to discuss its financial matters with
its officers and independent public accountant (and the Borrower hereby
authorizes such independent public accountant to discuss the Borrower's
financial matters with each Lender or its representatives whether or not any
representative of the Borrower is present) and to examine (and, at the expense
of the Borrower, photocopy extracts from) any of its books or other corporate
records. The Borrower shall pay any fees of such independent public accountant
incurred in connection with the Agent's or any Lender's exercise of its rights
pursuant to this Section.
SECTION 7.1.6. Environmental Covenant. The Borrower will, and will
cause each of its Subsidiaries to:
(a) use and operate all of its facilities and properties
in material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
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(b) immediately notify the Agent and provide copies upon
receipt of all written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties or
compliance with Environmental Laws, and shall promptly cure and have
dismissed with prejudice to the satisfaction of the Agent any actions
and proceedings relating to compliance with Environmental Laws; and
(c) provide such information and certifications which the
Agent may reasonably request from time to time to evidence compliance
with this Section 7.1.6.
SECTION 7.2. Negative Covenants. The Borrower agrees with the
Agent and each Lender that, until all Commitments have terminated and all
Obligations have been paid and performed in full, the Borrower will perform the
obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower will not, and will
not permit any of its Subsidiaries to, engage in any business activity, except
those described in the first recital and such activities as may be incidental
or related thereto.
SECTION 7.2.2. Indebtedness. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or suffer to exist or otherwise
become or be liable in respect of any Indebtedness, other than, without
duplication, the following:
(a) Indebtedness in respect of the Loans and other
Obligations;
(b) until the date of the initial Borrowing, Indebtedness
identified in Item 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule;
(c) Indebtedness existing as of the Effective Date which
is identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the
Disclosure Schedule;
(d) Indebtedness secured by Liens described in clause
(h), (j) or (k) of Section 7.2.3;
(e) unsecured Indebtedness incurred in the ordinary
course of business (including open accounts extended by suppliers on
normal trade terms in connection with purchases of goods and services,
but excluding Indebtedness incurred through the borrowing of money or
Guaranties);
(f) Hedging Obligations to a Lender;
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(g) Other Borrowing Base Debt so long as the aggregate
principal amount of such Indebtedness, together with the aggregate
principal amount of the Loans, does not exceed the Borrowing Base; or
(h) other unsecured Indebtedness of the Borrower and its
Subsidiaries, so long as at the time that such Indebtedness was
incurred the maturity date for such Indebtedness was after the
Committed Termination Date.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit
any Subsidiary to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens for taxes, assessments or governmental charges
not then due and delinquent and for which a penalty has not attached
or the validity of which is being contested in good faith and by
proper proceedings and with respect to which adequate reserves are
maintained in accordance with GAAP;
(b) Liens arising in connection with court proceedings,
provided that the execution of such Liens is effectively stayed, such
Liens are being contested in good faith and adequate reserves are
maintained with respect thereto in accordance with GAAP;
(c) Liens arising in the ordinary course of business and
not incurred in connection with the borrowing of money, including
encumbrances in the nature of zoning restrictions, easements, rights
and restrictions of record on the use of real property, landlord's and
lessor's liens in the ordinary course of business, which do not,
individually or in the aggregate, materially interfere with the
conduct of the business of the Borrower and its Subsidiaries taken as
a whole and do not materially affect the value of the Property subject
to such Liens;
(d) Construction or materialmen's or mechanic's Liens
securing obligations not overdue or, if overdue, being contested in
good faith and by proper proceedings and with respect to which
adequate reserves are maintained in accordance with GAAP;
(e) Liens in connection with workers' compensation,
social security taxes or similar charges arising in the ordinary
course of business and not incurred in connection with the borrowing
of money;
(f) Liens existing on the Effective Date set forth in
Item 7.2.3(f) of the Disclosure Schedule;
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(g) Intercompany Liens (for purposes of intercompany
Liens, a Subsidiary shall mean any corporation of which the Borrower
directly or indirectly owns at least 80% of the Voting Stock);
(h) The extension, renewal or replacement of any Lien
permitted by the foregoing paragraph (f) in respect of the same
property theretofore subject thereto or the extension, renewal or
replacement (without increase of principal amount of the Indebtedness
originally incurred);
(i) Liens incurred in connection with obtaining or
performing government contracts in the ordinary course of business and
not incurred in connection with the borrowing of money;
(j) (i) Any Lien in property or in rights relating
thereto to secure any rights granted with respect to such property in
connection with the provision of all or a part of the purchase price
or cost of the construction of such property created contemporaneously
with, or within 270 days after, such acquisition or the completion of
such construction (except Liens at the Ponca City, Oklahoma facility
shall not be permitted under this provision), or (ii) any Lien in
property existing in such property at the time of acquisition thereof,
whether or not the debt secured thereby is assumed by the Borrower or
such Subsidiary, or (iii) any Lien existing in the property of a
corporation or other Person at the time such corporation or other
Person is acquired (whether by purchase of stock, by merger, or
consolidation or otherwise) by the Borrower or a Subsidiary, or at the
time of a purchase, lease or other acquisition of the properties of a
corporation or other Person by the Borrower or a Subsidiary; provided,
that (1) the transaction referred to in clause (iii) is otherwise
permitted under this Agreement and (2) the Indebtedness secured by any
such Lien referred to in clauses (i) through (iii) above shall not
exceed 100% of the fair market value on the related property at the
time the Lien was originally created;
(k) Liens in addition to those permitted by clauses (a)
through (j) above, securing Indebtedness of the Borrower or any
Subsidiary; provided, that at the time of the incurrence of any such
Lien the aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries secured by Liens shall not exceed 20% of
Consolidated Adjusted Net Worth.
SECTION 7.2.4. Financial Condition. The Borrower will not permit:
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(a) Consolidated Adjusted Net Worth to be less than the
sum of (i) $80,000,000 and (ii) 50% of the Consolidated Net Earnings
for each Fiscal Year commencing with the 1996 Fiscal Year; provided,
however, that if Consolidated Net Earnings is less than zero in any
such Fiscal Year, such Consolidated Net Earnings shall be deemed to be
zero in such Fiscal Year for purposes of calculating the amount in
clause (ii) above.
(b) The Fixed Charge Coverage Ratio to be less than 1.50
to 1.
(c) The ratio of Funded Debt to Consolidated Total
Capitalization to be greater than .625 to 1 for the period from the
Effective Date through the 1997 Fiscal Year and .550 to 1 at any time
thereafter.
SECTION 7.2.5. Investments. The Borrower will not, and will not
permit any Subsidiary to, make, incur, assume or suffer to exist any Investment
in any other Person, except:
(a) Investments existing on the Effective Date set forth
in Item 7.2.5(a) of the Disclosure Schedule;
(b) Investments in certificates of deposit, repurchase
agreements or bankers' acceptances, maturing within one year from the
date or origin, issued by a bank organized under the laws of the
United States or any state thereof, having capital, surplus and
undivided profits aggregating at least $100,000,000;
(c) Investments in commercial paper maturing in 270 days
or less from the date of issuance which, at the time of acquisition by
the Borrower or any Subsidiary, is accorded at least an "A-1" rating
by Standard & Poor's Ratings Group or "P-1" by Moody's Investors
Service, Inc.;
(d) Investments in direct obligations of the United
States of America, or any agency thereof, the obligations of which are
guaranteed by the United States of America, maturing in twelve months
or less from the date of acquisition thereof;
(e) Investments in "money market" preferred stock rated
"A" or better by Standard & Poor's Corporation or "A2" by Moody's
Investors Service, Inc.;
(f) Tax-exempt floating rate option tender bonds backed
by an irrevocable letter of credit issued by a bank the long-term debt
rating of which is at least "AA" by Standard & Poor's Rating Group or
"A2" by Moody's Investors Service, Inc.;
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(g) Investments in Subsidiaries which operate principally
in lines of business similar to lines of business of the Borrower or
its Subsidiaries existing on the Effective Date;
(h) Investments in the Borrower's capital stock in an
amount not to exceed $20,000,000, so long as after giving effect to
any such investment the Borrower's ratio of Funded Debt to
Consolidated Total Capitalization is not more than .55 to 1; and
(i) Investments in or commitments to purchase foreign
currency; provided, that such Investment is made solely to the extent
that the Borrower and its Subsidiaries are obligated to make payments
to other Persons in such foreign currency.
In valuing any Investments for the purpose of applying the limitations
set forth above, such Investments shall be taken at the original cost thereof,
without allowance for any subsequent write-offs or appreciation or depreciation
therein, but less any amount repaid or recovered on account of capital or
principal.
For purposes of this Section 7.2.5 at any time when a corporation
becomes a Subsidiary, all investments of such corporation at such time shall be
deemed to have been made by such corporation, as a Subsidiary, at such time;
provided, however, that the Borrower shall have 60 days to dispose of any such
investments which are not permitted above.
SECTION 7.2.6. Restricted Payments, etc. On and at all times after
the Effective Date, the Borrower will not:
(a) declare or pay any dividends, either in cash or
Property, on any shares of its capital stock of any class (except
dividends or other distributions payable solely in shares of capital
stock of the Borrower); or
(b) directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of Borrower's capital stock of
any class or any warrants, rights or options to purchase or acquire
any shares of the Borrower's capital stock; or
(c) make any other payment or distribution, either
directly or indirectly or through any Subsidiary, in respect of its
capital stock; or
(d) make any payment, either directly or indirectly or
through any Subsidiary, of principal of any Subordinated Debt other
than at the expressed maturity date thereof and scheduled mandatory
prepayments or redemptions thereof in
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accordance with the terms in effect on the date of creation of such
Subordinated Debt;
each of the foregoing being herein a "Restricted Payment"; provided, however,
that:
(i) Borrower may, at any time when after giving effect
thereto no Event of Default or event which, with the giving of notice
or passage of time or both, may become an Event of Default shall have
occurred and be continuing, make Restricted Payments so long as the
aggregate amount of such Restricted Payments made after the Effective
Date does not exceed the sum of (a) $22,000,000; plus (b) 50% of
positive Consolidated Net Earnings for each Fiscal Quarter ending
after May 26, 1995 to and including the date of making the Restricted
Payment; minus (c) 100% of all negative Consolidated Net Earnings for
each such Fiscal Quarter; plus (d) the net proceeds from the sale or
issuance of shares of any class of stock of the Borrower for the
period commencing on the Effective Date through the date of
determination; and
(ii) Borrower may, at any time when after giving effect
thereto no Event of Default or event which, with the giving of notice
or passage of time or both, may become an Event of Default shall have
occurred and be continuing, make any repurchase of its common stock
permitted by Section 7.2.5(h).
The Borrower will not declare any dividend which constitutes a
Restricted Payment payable more than 60 days after its date of declaration.
Any dividend which complies with the provisions of this Section 7.2.6 on the
date of its declaration shall be deemed to comply on its date of payment,
provided that any intervening event giving rise to non-compliance is not the
result of a Restricted Payment.
SECTION 7.2.7. Consolidation, Merger, etc. The Borrower will not,
and will not permit any Subsidiary to, liquidate or dissolve, consolidate with,
or merge into or with, any other corporation, or purchase or otherwise acquire
all or substantially all of the assets of any Person (or of any division
thereof) except:
(a) any such Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower or any
other Subsidiary, and the assets or stock of any Subsidiary may be
purchased or otherwise acquired by the Borrower or any other
Subsidiary; and
(b) so long as no Default has occurred and is continuing
or would occur after giving effect thereto, the Borrower or any of its
Subsidiaries may purchase all or substantially all of the assets of
any Person, or acquire such Person by merger,
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so long as (i) the Borrower is the surviving corporation, (ii) such
Person is in the same line of business as the Borrower, and (iii) the
aggregate consideration paid therefor is less than $10,000,000;
provided, however, that such consideration may exceed $10,000,000 if,
30 days prior to such acquisition, the Borrower delivers to the Agent
pro forma financial statements giving effect to the proposed
transaction which demonstrates compliance with each of the financial
covenants of the Borrower set forth in Section 7.2.4 at all times
during the remainder of the Fiscal Year in which such transaction
occurs and during the next Fiscal Year thereafter.
SECTION 7.2.8. Asset Dispositions, etc. The Borrower will not, and
will not permit any Subsidiary to, sell, lease, transfer or otherwise dispose
of any assets, including the disposition of the stock of any Subsidiary and
including any Sale and Lease-Back Transaction (collectively, a "Disposition"),
in one or a series of transactions, other than in the ordinary course of
business, to any Person, other than the Borrower or a Majority-Owned Subsidiary
if immediately preceding such Disposition and after giving effect to such
Disposition, (a) during any twelve-consecutive-month period of the Borrower the
aggregate book value of all such assets sold, leased, transferred or otherwise
disposed of during such period, would exceed 10% of the Consolidated Total
Assets as of the end of the Borrower's immediately preceding Fiscal Year, and
(b) since the Effective Date of this Agreement, the aggregate book value of all
such assets sold, leased, transferred or otherwise disposed of would exceed 25%
of the Consolidated Total Assets as of the end of the Borrower's immediately
preceding fiscal year; provided, however, that the Borrower may, and may permit
any Subsidiary to, sell, lease, transfer or otherwise dispose of assets in
excess of the percentages specified in subparagraphs (a) and (b) above if the
cash proceeds therefrom are (x) utilized within one year after such Disposition
to purchase or are committed to the purchase of Property of a similar nature
and of at least equivalent value, or (y) used to prepay Funded Debt (except
Subordinated Debt), including the Loans, on a pro rata basis.
SECTION 7.2.9. Sales and Leasebacks. The Borrower will not, and will
not permit any Subsidiary to, effect any Sale and Lease-Back Transaction unless
such Sale and Lease-Back Transaction complies with the requirements of Sections
7.2.3 and 7.2.8 and the terms of such transaction are satisfactory to the
Required Lenders.
SECTION 7.2.10. Transactions with Affiliates. The Borrower will not,
and will not permit any Subsidiary to, enter into any transaction (including
the furnishing of goods or services) with an Affiliate except in the ordinary
course of business and on terms and conditions no less favorable to the
Borrower or such Subsidiary than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate.
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SECTION 7.2.11. Compliance with Borrowing Base. The Borrower will
not incur any Borrowing Base Debt if, after giving effect to such incurrence,
and any concurrent repayment of Loans or Other Borrowing Base Debt, the
aggregate principal amount of Borrowing Base Debt would exceed the Borrowing
Base.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an "Event
of Default."
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall
default in the payment or prepayment when due of any principal of or interest
on any Loan, or in the payment when due of any commitment fee or of any other
Obligation and such default shall continue unremedied for two Business Days.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty
of the Borrower made or deemed to be made hereunder, or in any other Loan
Document executed by it or any other writing or certificate furnished by or on
behalf of the Borrower to the Agent or any Lender for the purposes of or in
connection with this Agreement or any such other Loan Document (including any
certificates delivered pursuant to Article V), is or shall be incorrect when
made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance and observance of any of its
obligations under Section 7.2.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations.
The Borrower shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Agent or any Lender.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur
in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Borrower or any of its Subsidiaries having a
principal amount, individually or in the aggregate, in excess of $2,000,000; or
a default shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness if the effect of such default is to
accelerate the maturity of any such Indebtedness or such default shall continue
unremedied for any
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applicable period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the payment of
money in excess of $2,000,000 shall be rendered against the Borrower or any of
its Subsidiaries and there shall be any period during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect.
SECTION 8.1.7. Pension Plans. Any of the following events shall
occur with respect to any Pension Plan:
(a) the institution of any steps by the Borrower, any
member of its Controlled Group or any other Person to terminate a
Pension Plan if, as a result of such termination, the Borrower or any
such member could be required to make a contribution to such Pension
Plan, or could reasonably expect to incur a liability or obligation to
such Pension Plan, in excess of $2,000,000; or
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA.
SECTION 8.1.8. Control of the Borrower. Any Change in Control shall
occur.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Borrower or any of
its Subsidiaries shall:
(a) become insolvent or generally fail to pay, or admit
in writing its inability or unwillingness to pay, debts as they become
due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or other custodian
for the Borrower or any of its Subsidiaries or any property of any
thereof, or make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
receiver, sequestrator or other custodian for the Borrower or any of
its Subsidiaries or for a substantial part of the property of any
thereof, and such trustee, receiver, sequestrator or other custodian
shall not be discharged within 60 days; provided, that the Borrower
and each Subsidiary hereby expressly authorize the Agent and each
Lender to appear
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in any court conducting any relevant proceeding during such 60-day
period to preserve, protect and defend their rights under the Loan
Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding in respect of the Borrower or any
of its Subsidiaries; and, if any such case or proceeding is not
commenced by the Borrower or such Subsidiary, such case or proceeding
shall be consented to or acquiesced in by the Borrower or such
Subsidiary or shall result in the entry of an order for relief or
shall remain for 60 days undismissed; provided, that the Borrower and
each Subsidiary hereby expressly authorize the Agent and each Lender
to appear in any court conducting any such case or proceeding during
such 60-day period to preserve, protect and defend their rights under
the Loan Documents; or
(e) take any action authorizing, or in furtherance of,
any of the foregoing.
SECTION 8.2. Action if Bankruptcy. If any Event of Default
described in clauses (a) through (d) of Section 8.1.9) shall occur, the
Commitments (if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all outstanding Loans and all other
Obligations shall automatically be and become immediately due and payable,
without notice or demand.
SECTION 8.3. Action if Other Event of Default. If any Event of
Default (other than any Event of Default described in clauses (a) through (d)
of Section 8.1.9 shall occur for any reason, whether voluntary or involuntary,
and be continuing, the Agent, upon the direction of the Required Lenders, shall
by notice to the Borrower declare all or any portion of the outstanding
principal amount of the Loans and other Obligations to be due and payable
and/or the Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations which
shall be so declared due and payable shall be and become immediately due and
payable, without further notice, demand or presentment, and/or, as the case may
be, the Commitments shall terminate.
ARTICLE IX
THE AGENT
SECTION 9.1. Actions. Each Lender hereby appoints RBN as its
Agent under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Agent to act
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on behalf of such Lender under this Agreement, the Notes and each other Loan
Document and, in the absence of other written instructions from the Required
Lenders received from time to time by the Agent (with respect to which the
Agent agrees that it will comply, except as otherwise provided in this Section
or as otherwise advised by counsel), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of the Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Agent, pro rata according to
such Lender's Percentage, from and against any and all liabilities,
obligations, losses, damages, claims, costs or expenses of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted
against, the Agent in any way relating to or arising out of this Agreement, the
Notes and any other Loan Document, including reasonable attorneys' fees, and as
to which the Agent is not reimbursed by the Borrower; provided, however, that
no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, claims, costs or expenses which are determined by
a court of competent jurisdiction in a final proceeding to have resulted solely
from the Agent's gross negligence or wilful misconduct. The Agent shall not be
required to take any action hereunder, under the Notes or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement, the
Notes or any other Loan Document, unless it is indemnified hereunder to its
satisfaction. If any indemnity in favor of the Agent shall be or become, in
the Agent's determination, inadequate, the Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Agent shall have
been notified by telephone, confirmed in writing, by any Lender by 5:00 p.m.,
New York City time, on the day prior to a Borrowing, in the case of a Borrowing
of Eurodollar Loans, that such Lender will not make available the amount which
would constitute its Percentage of such Borrowing on the date specified
therefor, the Agent may assume that such Lender has made such amount available
to the Agent and, in reliance upon such assumption, make available to the
Borrower a corresponding amount. If and to the extent that such Lender shall
not have made such amount available to the Agent, such Lender and the Borrower
severally agree to repay the Agent forthwith on demand such corresponding
amount, together with interest thereon, for each day from the date the Agent
made such amount available to the Borrower to the date such amount is repaid to
the Agent, at the interest rate applicable at the time to Loans comprising such
Borrowing in the case of a repayment by the Borrower and at the rate per annum
paid or payable by the Agent in New York, New York, for federal
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funds purchased overnight from other banking institutions, in the case of a
repayment by a Lender.
SECTION 9.3. Exculpation. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other
Loan Document, or in connection herewith or therewith, except for its own
wilful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor to
make any inquiry respecting the performance by the Borrower of its obligations
hereunder or under any other Loan Document. Any such inquiry which may be made
by the Agent shall not obligate it to make any further inquiry or to take any
action. The Agent shall be entitled to rely upon advice of counsel concerning
legal matters and upon any notice, consent, certificate, statement or writing
which the Agent believes to be genuine and to have been presented by a proper
Person.
SECTION 9.4. Successor. The Agent may resign as such at any time
upon at least 30 days' prior notice to the Borrower and all Lenders. If the
Agent at any time shall resign, the Required Lenders may (with the written
consent of the Borrower which consent shall not be unreasonably withheld or
delayed) appoint another Lender as a successor Agent, which shall thereupon
become the Agent hereunder. If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Agent's giving notice of resignation, then the retiring
Agent may (with the written consent of the Borrower which consent shall not be
unreasonably withheld or delayed), on behalf of the Lenders, appoint a
successor Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
be entitled to receive from the retiring Agent such documents of transfer and
assignment as such successor Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Agent's resignation
hereunder as the Agent, the provisions of:
(a) this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent
under this Agreement; and
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(b) Section 10.3 and Section 10.4 shall continue to inure
to its benefit.
SECTION 9.5. Loans by RBN. RBN shall have the same rights and
powers with respect to (x) the Loans made by it or any of its Affiliates, and
(y) the Notes held by it or any of its Affiliates as any other Lender and may
exercise the same as if it were not the Agent. RBN and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
RBN were not the Agent hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it
has, independently of the Agent and each other Lender, and based on such
Lender's review of the financial information of the Borrower, this Agreement,
the other Loan Documents (the terms and provisions of which being satisfactory
to such Lender) and such other documents, information and investigations as
such Lender has deemed appropriate, made its own credit decision to extend its
Commitment. Each Lender also acknowledges that it will, independently of the
Agent and each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.
SECTION 9.7. Copies, etc. The Agent shall give prompt notice to
each Lender of each notice or request required or permitted to be given to the
Agent by the Borrower pursuant to the terms of this Agreement (unless
concurrently delivered to the Lenders by the Borrower). The Agent will
distribute to each Lender each document or instrument received for its account
and copies of all other communications received by the Agent from the Borrower
for distribution to the Lenders by the Agent in accordance with the terms of
this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Lenders; provided, however, that
no such amendment, modification or waiver which would:
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(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
(b) modify this Section 10.1, change the definition of
"Required Lenders," increase the Commitment Amount or the Percentage
of any Lender, reduce any fees described in Article III, or extend the
Commitment Termination Date shall be made without the consent of each
Lender and each holder of a Note;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any
Loan (or reduce the principal amount of or rate of interest on any
Loan) shall be made without the consent of the holder of that Note
evidencing such Loan; or
(d) affect adversely the interests, rights or obligations
of the Agent shall be made without consent of the Agent.
No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower in any case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by the Agent, any Lender or the
holder of any Note under this Agreement or any other Loan Document shall,
except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
SECTION 10.2. Notices. All notices and other communications
provided to any party hereto under this Agreement or any other Loan Document
shall be in writing or by facsimile and addressed, delivered or transmitted to
such party at its address, or facsimile number set forth below its signature
hereto or set forth in the Lender Assignment Agreement or at such other
address, Telex or facsimile number as may be designated by such party in a
notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by facsimile,
shall be deemed given when transmitted.
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees
to pay on demand all expenses of the Agent (including the fees and
out-of-pocket expenses of counsel to the Agent and of
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local counsel, if any, who may be retained by counsel to the Agent) in
connection with
(a) the negotiation, preparation, execution and delivery
of this Agreement and of each other Loan Document, including schedules
and exhibits, and any amendments, waivers, consents, supplements or
other modifications to this Agreement or any other Loan Document as
may from time to time hereafter be required, whether or not the
transactions contemplated hereby are consummated, and
(b) the preparation and review of the form of any
document or instrument relevant to this Agreement or any other Loan
Document.
The Borrower further agrees to pay, and to save the Agent and the Lenders
harmless from all liability for, any stamp or other taxes which may be payable
in connection with the execution or delivery of this Agreement, the borrowings
hereunder, or the issuance of the Notes or any other Loan Documents. The
Borrower also agrees to reimburse the Agent and each Lender upon demand for all
reasonable out-of-pocket expenses (including attorneys' fees and legal
expenses) incurred by the Agent or such Lender in connection with (x) the
negotiation of any restructuring or "work-out," whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.
SECTION 10.4. Indemnification. In consideration of the execution
and delivery of this Agreement by each Lender and the extension of the
Commitments, the Borrower hereby indemnifies, exonerates and holds the Agent
and each Lender and each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action
for which indemnification hereunder is sought), including reasonable attorneys'
fees and disbursements (collectively, the "Indemnified Liabilities"), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to:
(a) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of any Loan;
(b) the entering into and performance of this Agreement
and any other Loan Document by any of the Indemnified Parties
(including any action brought by or on behalf of the Borrower as the
result of any determination by the Required Lenders pursuant to
Article V not to fund any Borrowing);
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(c) any investigation, litigation or proceeding related
to any acquisition or proposed acquisition by the Borrower or any of
its Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not the Agent or such Lender is party thereto;
(d) any investigation, litigation or proceeding related
to any environmental cleanup, audit, compliance or other matter
relating to the protection of the environment or the Release by the
Borrower or any of its Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from,
any real property owned or operated by the Borrower or any Subsidiary
thereof of any Hazardous Material (including any losses, liabilities,
damages, injuries, costs, expenses or claims asserted or arising under
any Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Borrower under
Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders
under Section 9.1, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Commitments.
SECTION 10.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and
of each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several
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counterparts, each of which shall be executed by the Borrower and the Agent and
be deemed to be an original and all of which shall constitute together but one
and the same agreement. This Agreement shall become effective (the "Effective
Date") when counterparts hereof executed on behalf of the Borrower and each
Lender (or notice thereof satisfactory to the Agent) shall have been received
by the Agent and notice thereof shall have been given by the Agent to the
Borrower and each Lender.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. This
Agreement, the Notes and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof and supersede any prior agreements, written or oral, with respect
thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that:
(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the Agent
and all Lenders; and
(b) the rights of sale, assignment and transfer of the
Lenders are subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Loans and Note; Participations
in Loans and Note. Each Lender may assign, or sell participations in, its
Loans and Commitment to one or more other Persons in accordance with this
Section 10.11.
SECTION 10.11.1. Assignments. Any Lender,
(a) with the written consents of the Borrower and the
Agent (which consents shall not be unreasonably delayed or withheld
and which consent, in the case of the Borrower, shall be deemed to
have been given in the absence of a written notice delivered by the
Borrower to the Agent, on or before the fifth Business Day after
receipt by the Borrower of such Lender's request for consent, stating,
in reasonable detail, the reasons why the Borrower proposes to
withhold such consent), may at any time assign and delegate to one or
more commercial banks or other financial institutions, and
(b) with notice to the Borrower and the Agent, but
without the consent of the Borrower or the Agent, may assign
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and delegate to any of its Affiliates, to any other Lender or to any
Federal Reserve Bank,
(each Person described in either of the foregoing clauses as being the Person
to whom such assignment and delegation is to be made, being hereinafter
referred to as an "Assignee Lender"), all or any fraction of such Lender's
total Loans and Commitment (which assignment and delegation shall be of a
constant, and not a varying, percentage of all the assigning Lender's Loans and
Commitment) in a minimum aggregate amount of $5,000,000; provided, however,
that any such Assignee Lender will comply, if applicable, with the provisions
contained in the penultimate sentence of Section 4.6; and further, provided,
however, that, the Borrower and the Agent shall be entitled to continue to deal
solely and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee Lender until:
(c) written notice of such assignment and delegation,
together with payment instructions, addresses and related information
with respect to such Assignee Lender, shall have been given to the
Borrower and the Agent by such Lender and such Assignee Lender;
(d) such Assignee Lender shall have executed and
delivered to the Borrower and the Agent a Lender Assignment Agreement,
accepted by the Agent; and
(e) the processing fees described below shall have been
paid.
From and after the date that the Agent accepts such Lender Assignment
Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and, to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in
connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the Assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Agent has received an executed Lender Assignment Agreement, the Borrower shall
execute and deliver to the Agent (for delivery to the relevant Assignee Lender)
a new Note evidencing such Assignee Lender's assigned Loans and Commitment and,
if the assignor Lender has retained Loans and a Commitment hereunder, a
replacement Note in the principal amount of the Loans and Commitment retained
by the assignor Lender hereunder (such Note to be in exchange for, but not in
payment of, that Note then held by such assignor Lender). Each such Note shall
be dated the date of the predecessor Note. The
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assignor Lender shall mark the predecessor Note "exchanged" and deliver it to
the Borrower. Accrued interest on that part of the predecessor Note evidenced
by the new Note, and accrued fees, shall be paid as provided in the Lender
Assignment Agreement. Accrued interest on that part of the predecessor Note
evidenced by the replacement Note shall be paid to the assignor Lender.
Accrued interest and accrued fees shall be paid at the same time or times
provided in the predecessor Note and in this Agreement. Such assignor Lender
or such Assignee Lender must also pay a processing fee to the Agent upon
delivery of any Lender Assignment Agreement in the amount of $3,000. Any
attempted assignment and delegation not made in accordance with this Section
10.11.1 shall be null and void.
SECTION 10.11.2. Participations. Any Lender may at any time sell to
one or more commercial banks or other Persons (each of such commercial banks
and other Persons being herein called a "Participant") participating interests
in any of the Loans, its Commitment, or other interests of such Lender
hereunder; provided, however, that:
(a) no participation contemplated in this Section 10.11
shall relieve such Lender from its Commitment or its other obligations
hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitment and such other obligations;
(c) the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and each of the other Loan
Documents;
(d) no Participant, unless such Participant is an
Affiliate of such Lender or is itself a Lender, shall be entitled to
require such Lender to take or refrain from taking any action
hereunder or under any other Loan Document, except that such Lender
may agree with any Participant that such Lender will not, without such
Participant's consent, take any actions of the type described in
clause (b) or (c) of Section 10.1; and
(e) the Borrower shall not be required to pay any amount
under Section 4.6 that is greater than the amount which it would have
been required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a
Lender.
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SECTION 10.12. Other Transactions. Nothing contained herein shall
preclude the Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.13. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE
BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.14. Waiver of Jury Trial. THE AGENT, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER. THE
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
THORN APPLE VALLEY, INC.
By_________________________________
Title:
Address: _________________________
_________________________
Facsimile No.: ___________________
Attention: ________________________
________________________
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., acting through its
U.S. branches and agencies, including
initially its New York Branch, as Agent
By_________________________________
Title:
By_________________________________
Title:
Address: 245 Park Avenue
New York, New York 10167
Attention: _______________________
_______________________
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PERCENTAGE LENDERS
---------- -------
31.25% COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A.,
New York Branch
By________________________________
Title:
By_________________________________
Title:
Domestic
Office: 245 Park Avenue
New York, New York 10167
Facsimile No.: (212) 916-7930
Attention for
Borrowing and
Payment Notices: Corporate Services Dept.
Attn: Chandra Rambarran
Attention for
all other
Notices: Rabobank Nederland
300 S. Wacker Dr.
Suite 3500
Chicago, IL 60606
Attn: M. Butz
LIBOR
Office: 245 Park Avenue
New York, New York 10167
Facsimile No.: (212) 916-7930
Attention for
Borrowing and
Payment Notices: Corporate Services Dept.
Attn: Chandra Rambarran
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25.0% OLD KENT BANK & TRUST CO.
By________________________________
Title:
Domestic
Office: __________________________
__________________________
Facsimile No.: ___________________
Attention for
Borrowing and
Payment Notices: _________________
Attention for
all other
Notices: _________________________
LIBOR
Office: _________________________
_________________________
Facsimile No.: ___________________
Attention for
Borrowing and
Payment Notices: ________________
________________
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25.0% NATIONAL CITY BANK
By________________________________
Title:
Domestic
Office: 1900 E. Ninth St.
Cleveland, OH 44114
Facsimile No.: (216) 575-9396
Attention for
Borrowing and
Payment Notices: Wendy Pollarine
Attention for
all other
Notices: Marybeth S. Howe
LIBOR
Office: 1900 E. Ninth St.
Cleveland, OH 44114
Facsimile No.: (216) 575-3207
Attention for
Borrowing and
Payment Notices: Wendy Pollarine
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18.75% HARRIS TRUST AND SAVINGS BANK
By________________________________
Title: Vice President
Domestic
Office: 111 West Monroe Street
Chicago, IL 60690
Facsimile No.: (312) 765-8095
Attention for
Borrowing and
Payment Notices: Ylanda Wilhite
Jerry Karl
Attention for
all other
Notices: Edward L. Cooper, III
LIBOR
Office: 111 West Monroe
Chicago, IL 60690
Facsimile No.: (312) 765-8095
Attention for
Borrowing and
Payment Notices: Ylanda Wilhite
Jerry Karl
____
100%
====
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