EXHIBIT 10.1
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CREDIT AGREEMENT
Dated as of November 20, 2003
among
THL FOOD PRODUCTS CO.,
as the Borrower,
THL FOOD PRODUCTS HOLDING CO.,
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and
L/C Issuer,
The Other Lenders Party Hereto,
BANC OF AMERICA SECURITIES LLC and
DEUTSCHE BANK SECURITIES INC.,
as Joint Lead Arrangers and Joint Book Managers,
DEUTSCHE BANK SECURITIES INC. and
UBS SECURITIES LLC,
as Co-Syndication Agents,
and
GENERAL ELECTRIC CAPITAL CORPORATION and
COOPERATIVE CENTRALE RAIFFEISEN - BOERENLEENBANK B.A.,
"RABOBANK INTERNATIONAL," NEW YORK BRANCH,
as Co-Documentation Agents
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms...........................................................1
1.02 Other Interpretive Provisions..........................................37
1.03 Accounting Terms.......................................................38
1.04 Rounding...............................................................38
1.05 References to Agreements and Laws......................................38
1.06 Times of Day...........................................................39
1.07 Timing of Payment or Performance.......................................39
1.08 Currency Equivalents Generally.........................................39
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 The Loans..............................................................39
2.02 Borrowings, Conversions and Continuations of Loans.....................40
2.03 Letters of Credit......................................................41
2.04 Swing Line Loans.......................................................49
2.05 Prepayments............................................................51
2.06 Termination or Reduction of Commitments................................54
2.07 Repayment of Loans.....................................................55
2.08 Interest...............................................................56
2.09 Fees...................................................................57
2.10 Computation of Interest and Fees.......................................57
2.11 Evidence of Indebtedness...............................................58
2.12 Payments Generally.....................................................58
2.13 Sharing of Payments....................................................60
2.14 Increase in Term Commitments...........................................61
2.15 Increase in Revolving Credit Commitments...............................62
ARTICLE III
TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY
3.01 Taxes..................................................................63
3.02 Illegality.............................................................65
3.03 Inability to Determine Rates...........................................66
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurodollar Rate Loans...............................................66
3.05 Funding Losses.........................................................67
3.06 Matters Applicable to All Requests for Compensation....................68
3.07 Replacement of Lenders under Certain Circumstances.....................69
3.08 Survival...............................................................70
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension.................................70
4.02 Conditions to All Credit Extensions....................................73
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws...............74
5.02 Authorization; No Contravention........................................74
5.03 Governmental Authorization; Other Consents.............................75
5.04 Binding Effect.........................................................75
5.05 Financial Statements; No Material Adverse Effect.......................75
5.06 Litigation.............................................................76
5.07 No Default.............................................................77
5.08 Ownership of Property; Liens...........................................77
5.09 Environmental Compliance...............................................77
5.10 Insurance..............................................................78
5.11 Taxes..................................................................78
5.12 ERISA Compliance.......................................................78
5.13 Subsidiaries; Equity Interests.........................................79
5.14 Margin Regulations; Investment Company Act;
Public Utility Holding Company Act..................................79
5.15 Disclosure.............................................................79
5.16 Compliance with Laws...................................................80
5.17 Intellectual Property; Licenses, Etc...................................80
5.18 Solvency...............................................................80
5.19 Casualty, Etc..........................................................80
5.20 Perfection, Etc........................................................80
5.21 Tax Shelter Regulations................................................81
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01 Financial Statements...................................................81
6.02 Certificates; Other Information........................................82
6.03 Notices................................................................84
6.04 Payment of Obligations.................................................84
6.05 Preservation of Existence, Etc.........................................85
6.06 Maintenance of Properties..............................................85
6.07 Maintenance of Insurance...............................................85
6.08 Compliance with Laws...................................................85
6.09 Books and Records......................................................85
6.10 Inspection Rights......................................................85
6.11 Use of Proceeds........................................................86
6.12 Covenant to Guarantee Obligations and Give Security....................86
6.13 Compliance with Environmental Laws.....................................88
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6.14 Further Assurances.....................................................88
6.15 Interest Rate Hedging..................................................89
ARTICLE VII
NEGATIVE COVENANTS
7.01 Liens..................................................................89
7.02 Investments............................................................92
7.03 Indebtedness...........................................................94
7.04 Fundamental Changes....................................................97
7.05 Dispositions...........................................................98
7.06 Restricted Payments...................................................100
7.07 Change in Nature of Business..........................................101
7.08 Transactions with Affiliates..........................................102
7.09 Burdensome Agreements.................................................102
7.10 Use of Proceeds.......................................................102
7.11 Financial Covenants...................................................102
7.12 Amendments of Organization Documents..................................103
7.13 Accounting Changes....................................................103
7.14 Prepayments, Etc. of Indebtedness.....................................103
7.15 Amendment of Merger Agreement.........................................104
7.16 Equity Interests of the Borrower and Subsidiaries.....................104
7.17 Holding Company.......................................................104
7.18 Designated Senior Debt................................................104
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default.....................................................104
8.02 Remedies Upon Event of Default........................................107
8.03 Application of Funds..................................................107
ARTICLE IX
ADMINISTRATIVE AGENT AND OTHER AGENTS
9.01 Appointment and Authorization of Agents...............................108
9.02 Delegation of Duties..................................................109
9.03 Liability of Agents...................................................109
9.04 Reliance by Agents....................................................110
9.05 Notice of Default.....................................................110
9.06 Credit Decision; Disclosure of Information by Agents..................110
9.07 Indemnification of Agents.............................................111
9.08 Agents in their Individual Capacities.................................111
9.09 Successor Agents......................................................112
9.10 Administrative Agent May File Proofs of Claim.........................113
9.11 Collateral and Guaranty Matters.......................................113
9.12 Other Agents; Arrangers and Managers..................................114
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9.13 Appointment of Supplemental Administrative Agents....................114
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc .....................................................115
10.02 Notices and Other Communications; Facsimile Copies...................117
10.03 No Waiver; Cumulative Remedies.......................................118
10.04 Attorney Costs, Expenses and Taxes...................................118
10.05 Indemnification by the Borrower......................................118
10.06 Payments Set Aside ..................................................119
10.07 Successors and Assigns...............................................120
10.08 Confidentiality .....................................................123
10.09 Setoff ..............................................................124
10.10 Interest Rate Limitation.............................................124
10.11 Counterparts ........................................................125
10.12 Integration .........................................................125
10.13 Survival of Representations and Warranties...........................125
10.14 Severability ........................................................125
10.15 Tax Forms ...........................................................126
10.16 Governing Law .......................................................127
10.17 Waiver of Right to Trial by Jury.....................................128
10.18 Binding Effect ......................................................128
SIGNATURES...................................................................S-1
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SCHEDULES
I Guarantors
1.01 Real Properties
2.01 Commitments and Pro Rata Shares
5.05 Supplement to Interim Financial Statements
5.08(b) Owned Real Property
5.08(c) Leased Real Property
5.08(d) Other Locations of Tangible Personal Property
5.09 Environmental Matters
5.13 Subsidiaries and Other Equity Investments
5.17 Intellectual Property Matters
7.01 Existing Liens
7.02 Existing Investments
7.03 Existing Indebtedness
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
Form of
A Committed Loan Notice
B Swing Line Loan Notice
C-1 Term Note
C-2 Revolving Credit Note
D Compliance Certificate
E Assignment and Assumption
F-1 Parent Guaranty
F-2 Subsidiary Guaranty
G Security Agreement
H Mortgage
I Intellectual Property Security Agreement
J-1 Opinion Matters - Counsel to Loan Parties
J-2 Opinion Matters - Local Counsel to Loan Parties
J-3 Opinion Matters - Local Counsel to Loan Parties (Mortgages)
K Assumption Agreement
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of November 20,
2003, among THL FOOD PRODUCTS CO., a Delaware corporation (the "Company", and
together with the Surviving Corporation (as hereinafter defined), the
"Borrower"), THL FOOD PRODUCTS HOLDING CO., a Delaware corporation ("Holdings"),
each lender from time to time party hereto (collectively, the "Lenders" and
individually, a "Lender"), DEUTSCHE BANK SECURITIES INC. and UBS SECURITIES LLC,
as Co-Syndication Agents, GENERAL ELECTRIC CAPITAL CORPORATION and COOPERATIVE
CENTRALE RAIFFEISEN - BOERENLEENBANK B.A., "RABOBANK INTERNATIONAL," NEW YORK
BRANCH, as Co-Documentation Agents, and BANK OF AMERICA, N.A., as Administrative
Agent, Swing Line Lender and L/C Issuer.
PRELIMINARY STATEMENTS
The Company was organized by Holdings to acquire (the "Acquisition")
all of the Equity Interests of M-Foods Holdings, Inc., a Delaware corporation
(the "Target Company").
Pursuant to the Agreement and Plan of Merger dated as of October 10,
2003 (the "Merger Agreement") between Holdings, the Company, M-Foods Investors,
LLC, the Target Company, and certain other stockholders of the Target Company,
the Company agreed to merge (the "First Merger") with and into the Target
Company with the Target Company being the surviving corporation (the "Surviving
Corporation") in order to effect the Acquisition and, in connection therewith,
Michael Foods, Inc., a Minnesota corporation and wholly-owned direct subsidiary
of the Target Company ("MFI"), agreed to merge (the "Second Merger", and
together with the First Merger, the "Mergers") with and into the Surviving
Corporation with the Surviving Corporation being the surviving entity.
Thereafter, the Surviving Corporation shall change its name to Michael Foods,
Inc., a Delaware corporation.
The Company has requested that (a) simultaneously with the
consummation of the First Merger, the Lenders make Term Loans to the Company in
an aggregate amount of $495,000,000 to pay, among other things, the cash
consideration for the Acquisition and the First Merger and (b) from time to
time, the Lenders lend to the Borrower and the L/C Issuer (as hereinafter
defined) issue Letters of Credit (as hereinafter defined) for the account of the
Borrower under a $100,000,000 revolving credit facility for the Borrower and its
Subsidiaries.
The Lenders have indicated their willingness to lend and the L/C
Issuer has indicated its willingness to so issue Letters of Credit, in each
case, on the terms and subject to the conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Acquisition" has the meaning specified in the Preliminary Statements
to this Agreement.
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto.
"Agent-Related Persons" means the Administrative Agent, together with
its Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Agents" means, collectively, the Administrative Agent, the
Co-Syndication Agents, the Co-Documentation Agents and the Supplemental
Administrative Agents (if any).
"Aggregate Commitments" means the Commitments of all the Lenders.
"Aggregate Credit Exposures" means, at any time, the sum of (i) the
unused portion of the Revolving Credit Commitment then in effect, (ii) the
unused portion of each Term Commitment then in effect and (iii) the Total
Outstandings at such time.
"Agreement" means this Credit Agreement.
"Applicable Rate" means a percentage per annum equal to:
(a) with respect to Term Loans, (i) until the first Business Day
immediately following the date on which the Compliance Certificate for the
fiscal quarter ended March 31, 2004 is delivered pursuant to Section
6.02(b), (A) for Eurodollar Rate Loans, 2.50% and (B) for Base Rate Loans,
1.50%, and (ii) thereafter, (A) if the Leverage Ratio is less than
3.50:1.00 as set forth in the most recent Compliance Certificate received
by the Administrative Agent pursuant to Section 6.02(b), (1) for Eurodollar
Rate Loans, 2.25% and (2) for Base Rate Loans, 1.25% and (B) if the
Leverage Ratio is not less than 3.50:1.00 as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to
Section 6.02(b), (1) for Eurodollar Ratio Loans, 2.50% and (2) for Base
Rate Loans, 1.50%; and
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(b) with respect to the Revolving Credit Loans, (i) until the first
Business Day immediately following the date on which the Compliance
Certificate for the fiscal quarter ended March 31, 2004 is delivered
pursuant to Section 6.02(b), (A) for Eurodollar Rate Loans, 2.50% and (B)
for Base Rate Loans, 1.50% and (ii) thereafter, the following percentages
per annum, based upon the Leverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to
Section 6.02(b):
Applicable Rate
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Eurodollar
Rate and
Pricing Letters of
Level Leverage Ratio Credit Base Rate
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1 <=3.50:1 1.50% 0.50%
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2 >3.50:1 but <=4.00:1 1.75% 0.75%
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3 >4.00:1 but <=4.50:1 2.00% 1.00%
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4 >4.50:1 but <=5.00:1 2.25% 1.25%
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5 >5.00:1 2.50% 1.50%
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Any increase or decrease in the Applicable Rate resulting from a change in the
Leverage Ratio shall become effective as of the first Business Day immediately
following the date a Compliance Certificate is delivered pursuant to Section
6.02(b); provided, however, that Pricing Level 5 shall apply as of the first
Business Day at any time after (x) the date on which a Compliance Certificate
was required to have been delivered but was not delivered or (y) an Event of
Default shall have occurred and be continuing.
"Appropriate Lender" means, at any time, (a) with respect to the Term
Facility or the Revolving Credit Facility, a Lender that has a Commitment with
respect to such Facility at such time, (b) with respect to the Letter of Credit
Sublimit, (i) the L/C Issuer and (ii) if any Letters of Credit have been issued
pursuant to Section 2.03(a), the Revolving Credit Lenders and (c) with respect
to the Swing Line Facility, (i) the Swing Line Lender and (ii) if any Swing Line
Loans are outstanding pursuant to Section 2.04(a), the Revolving Credit Lenders.
"Approved Domestic Bank" has the meaning specified in clause (b) of
the definition of "Cash Equivalents".
"Approved Foreign Bank" has the meaning specified in clause (f) of the
definition of "Cash Equivalents".
"Approved Fund" means any Fund that is administered, advised or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers, advises or manages a Lender.
"Arrangers" means BAS and Deutsche Bank Securities Inc., in their
capacities as exclusive joint lead arrangers and exclusive joint book managers.
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"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit E.
"Assumption Agreement" has the meaning specified in Section
4.01(a)(xvii).
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease payments under the relevant lease that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP if such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of MFI and its Subsidiaries for the fiscal years ended December 31, 2001
and December 31, 2002, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal year of MFI and
its Subsidiaries, including the notes thereto.
"Auto-Renewal Letter of Credit" has the meaning specified in Section
2.03(b)(iii).
"Bank of America" means Bank of America, N.A. and its successors.
"BAS" means Banc of America Securities LLC and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its "prime rate." The "prime rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Borrower" has the meaning specified in the introductory paragraph to
this Agreement.
"Borrower Parties" means the collective reference to the Borrower and
its Subsidiaries, and "Borrower Party" means any one of them.
"Borrowing" means a Revolving Credit Borrowing, a Swing Line Borrowing
or a Term Borrowing, as the context may require.
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"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Capital Expenditures" means, as of any date for the applicable period
then ended, all capital expenditures of the Borrower Parties on a consolidated
basis for such period, as determined in accordance with GAAP; provided, however,
that Capital Expenditures shall not include any such expenditures which
constitute (a) a Permitted Acquisition, (b) capital expenditures relating to the
construction or acquisition of any property which has been transferred to a
Person that is not a Borrower Party pursuant to a sale-leaseback transaction
permitted under Section 7.05(f) or (c) to the extent permitted by this
Agreement, a reinvestment of the Net Cash Proceeds of any Disposition in
accordance with Section 2.05(b)(ii) (other than any Dispositions under Sections
7.05(b) and (h)), Casualty Events or Equity Issuance by any Consolidated Party.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Collateral" has the meaning specified in Section 2.03(g).
"Cash Collateral Account" means a blocked, non-interest bearing
deposit account at Bank of America (or another commercial bank selected in
compliance with Section 6.19) in the name of the Administrative Agent and under
the sole dominion and control of the Administrative Agent, and otherwise
established in a manner satisfactory to the Administrative Agent.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
"Cash Equivalents" means any of the following types of Investments, to
the extent owned by the Borrower or any of its Subsidiaries free and clear of
all Liens:
(a) readily marketable obligations issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof having maturities of not more than three hundred and sixty (360)
days from the date of acquisition thereof; provided, that the full faith
and credit of the United States is pledged in support thereof;
(b) time deposits with, or insured certificates of deposit or bankers'
acceptances of, any commercial bank that (i) (A) is a Lender or (B) is
organized under the laws of the United States, any state thereof or the
District of Columbia or is the principal banking subsidiary of a bank
holding company organized under the laws of the United States, any state
thereof or the District of Columbia, and is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper rated
at least P-1 (or the then equivalent grade) by Moody's or at least "A-1"
(or the then equivalent grade) by S&P, and (iii) has combined capital and
surplus of at least $500,000,000 (any such bank being an "Approved Domestic
Bank"), in each case with maturities of not more than three hundred and
sixty (360) days from the date of acquisition thereof;
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(c) commercial paper and variable or fixed rate notes issued by an
Approved Domestic Bank (or by the parent company thereof) or any variable
rate note issued by, or guaranteed by a domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof)
or better by Moody's, in each case with maturities of not more than three
hundred and sixty (360) days from the date of acquisition thereof; and
(d) repurchase agreements entered into by any Person with a bank or
trust company (including any of the Lenders) or recognized securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States in which
such Person shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase thereof, a
fair market value of at least 100% of the amount of the repurchase
obligations; and
(e) Investments, classified in accordance with GAAP as Current Assets
of the Borrower or any of its Subsidiaries, in money market investment
programs registered under the Investment Company Act of 1940, which are
administered by financial institutions having capital of at least
$500,000,000, and the portfolios of which are limited such that 95% of such
investments are of the character, quality and maturity described in clauses
(a), (b), (c) and (d) of this definition; and
(f) solely with respect to any Foreign Subsidiary, non-Dollar
denominated (i) certificates of deposit of, bankers acceptances of, or time
deposits with, any commercial bank which is organized and existing under
the laws of the country in which such Foreign Subsidiary maintains its
chief executive office and principal place of business provided such
country is a member of the Organization for Economic Cooperation and
Development, and whose short-term commercial paper rating from S&P is at
least A-1 or the equivalent thereof or from Moody's is at least P-1 or the
equivalent thereof (any such bank being an "Approved Foreign Bank") and
maturing within twelve (12) months of the date of acquisition and (ii)
equivalents of demand deposit accounts which are maintained with an
Approved Foreign Bank.
"Casualty Event" means any event that gives rise to the receipt by
Holdings, the Borrower or any of its Subsidiaries of any insurance proceeds or
condemnation awards in respect of any equipment, fixed assets or real property
(including any improvements thereon) to replace or repair such equipment, fixed
assets or real property.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Change of Control" means the earlier to occur of (a) the Equity
Investors shall cease to have the power, directly or indirectly, to vote or
direct the voting of securities having a
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majority of the ordinary voting power for the election of directors of the
Borrower; provided, that the occurrence of the foregoing event shall not be
deemed a Change of Control if,
(i) any time prior to the consummation of a Qualifying IPO, and for
any reason whatever, (A) the Equity Investors otherwise have the right to
designate (and does so designate) a majority of the board of directors of
the Borrower or (B) the Equity Investors own of record and beneficially an
amount of common stock of the Borrower equal to an amount more than fifty
percent (50%) of the amount of common stock of the Borrower owned by the
Equity Investors of record and beneficially as of the Closing Date and such
ownership by the Equity Investors represents the largest single block of
voting securities of the Borrower held by any Person or related group for
purposes of Section 13(d) of the Securities and Exchange Act of 1934, as
amended, or
(ii) at any time after the consummation of a Qualifying IPO, and for
any reason whatsoever, (A) no "person" or "group" (as such terms are used
in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended, but excluding any employee benefit plan of such person and its
subsidiaries, and any person or entity acting in its capacity as trustee,
agent or other fiduciary or administrator of any such plan), excluding the
Equity Investors, shall become the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of more than
the greater of (x) thirty-five percent (35%) of the shares outstanding or
(y) the percentage of the then outstanding voting stock of Borrower owned
beneficially by the Equity Investors, (B) during any period of twelve (12)
consecutive months, the board of directors of Borrower shall consist of a
majority of the Continuing Directors or (C) the Equity Investors have the
power, directly or indirectly, to vote or direct the voting of at least
thirty percent (30%) of the voting of securities having a majority of the
ordinary voting power for the election of directors of Holdings (or the
Borrower after a Qualifying IPO of the Borrower); or
(b) any "Change of Control" (or any comparable term) in any document
pertaining to the Senior Subordinated Notes, Senior Unsecured Term Notes or
Permitted Subordinated Indebtedness with an aggregate outstanding principal
amount in excess of the Threshold Amount; or
(c) at any time prior to a Qualifying IPO of the Borrower, the
Borrower shall cease to be a wholly owned Subsidiary of Holdings.
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01.
"Co-Documentation Agents" means General Electric Capital Corporation
and Cooperative Centrale Raiffeisen - Boerenleenbank B.A., "Rabobank
International," New York Branch, as Co-Documentation Agents under the Loan
Documents.
"Co-Syndication Agents" means Deutsche Bank Securities Inc. and UBS
Securities LLC, as Co-Syndication Agents under the Loan Documents.
"Code" means the U.S. Internal Revenue Code of 1986.
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"Collateral" means all of the "Collateral" referred to in the
Collateral Documents and all of the other property and assets that are or are
required under the terms of the Collateral Documents to be subject to Liens in
favor of the Administrative Agent for the benefit of the Secured Parties.
"Collateral Documents" means, collectively, the Security Agreement,
the Intellectual Property Security Agreement, the Mortgages, each of the
mortgages, collateral assignments, Security Agreement Supplements, IP Security
Agreement Supplements, security agreements, pledge agreements or other similar
agreements delivered to the Administrative Agent and the Lenders pursuant to
Section 6.12, and each of the other agreements, instruments or documents that
creates or purports to create a Lien in favor of the Administrative Agent for
the benefit of the Secured Parties.
"Commitment" means a Term Commitment or a Revolving Credit Commitment,
as the context may require.
"Committed Loan Notice" means a notice of (a) a Term Borrowing, (b) a
Revolving Credit Borrowing, (c) a conversion of Loans from one Type to the
other, or (d) a continuation of Eurodollar Rate Loans, pursuant to Section
2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.
"Company" has the meaning specified in the introductory paragraph to
this Agreement.
"Compensation Period" has the meaning specified in Section
2.12(c)(ii).
"Compliance Certificate" means a certificate substantially in the form
of Exhibit D.
"Consolidated Cash Taxes" means, as of any date for the applicable
period ending on such date with respect to the Borrower Parties on a
consolidated basis, the aggregate of all income, franchise and similar taxes, as
determined in accordance with GAAP, to the extent the same are payable in cash
with respect to such period.
"Consolidated EBITDA" means, as of any date for the applicable period
ending on such date with respect to any Person and its Subsidiaries on a
consolidated basis, the sum of (a) Consolidated Net Income, plus (b) an amount
which, in the determination of Consolidated Net Income for such period, has been
deducted for, without duplication,
(i) total interest expense,
(ii) income, franchise and similar taxes and any tax distributions
permitted to be made pursuant to Sections 7.06(f)(i) and (iii),
(iii) depreciation and amortization expense,
(iv) letter of credit fees,
8
(v) non-cash expenses resulting from any employee benefit or management
compensation plan or the grant of stock and stock options to employees
of Holdings, the Borrower or any of their respective Subsidiaries
pursuant to a written plan or agreement or the treatment of such
options under variable plan accounting,
(vi) all extraordinary charges,
(vii)non-cash amortization of financing costs of such Person and its
Subsidiaries,
(viii) cash expenses incurred in connection with the Transaction or, to the
extent permitted hereunder, any Investment permitted under Section
7.02, Equity Issuance or Debt Issuance (in each case, whether or not
consummated),
(ix) any losses (or minus any gains) realized upon the disposition of
property outside of the ordinary course of business,
(x) to the extent actually reimbursed, expenses incurred to the extent
covered by indemnification provisions in any agreement in connection
with a Permitted Acquisition,
(xi) to the extent covered by insurance, expenses with respect to liability
or casualty events, business interruption or product recalls,
(xii) management fees permitted under Section 7.08(d),
(xiii) any non-cash purchase accounting adjustment and any step-ups with
respect to re-valuing assets and liabilities in connection with the
Transaction or any Investment permitted under Section 7.02,
(xiv) non-cash losses from Joint Ventures and non-cash minority interest
reductions,
(xv) fees and expenses in connection with the exchange of the Senior
Subordinated Notes for registered notes with identical terms as
contemplated by the Senior Subordinated Notes Indenture or exchanges
or refinancings permitted by Section 7.14,
(xvi) non-cash, non-recurring charges,
(xvii) other non-recurring charges in an aggregate amount not to exceed
$4,000,000 during any four (4) consecutive fiscal quarter period,
(xviii) expenses representing the implied principal component under
Synthetic Lease Obligations,
(xix) expenses in connection with payments made by any such Person or its
Subsidiaries with respect to industrial revenue bond financings and
Guarantees in respect thereof,
9
(xx) losses from discontinued operations not to exceed $2,000,000 during
any period of four (4) consecutive fiscal quarters,
(xxi) other expenses of such Person and its Subsidiaries reducing
Consolidated Net Income which do not represent a cash item in such
period or any future period, and
(xxii) with respect to any Event of Default of any covenant set forth in
Section 7.11, the Net Cash Proceeds of any Permitted Equity Issuance
to the Equity Investors solely to the extent that such Net Cash
Proceeds (A) are actually received by the Borrower (including through
capital contribution of such Net Cash Proceeds by Holdings to the
Borrower) no later than fifteen (15) Business Days after the delivery
of a Notice of Intent to Cure, (B) have not been applied to make any
Restricted Payment, any Investment or any prepayment of Indebtedness,
and (C) do not exceed the aggregate amount necessary to cure such
Event of Default under Section 7.11 for any applicable period;
provided, that the provisions of this clause (xxii) may be relied on
for purposes of determining Consolidated EBITDA no more than two (2)
times in any twelve-month period; it being understood that this clause
(xxii) may not be relied on for purposes of calculating any financial
ratios other than as applicable to Section 7.11, minus
(c) an amount which, in the determination of Consolidated Net Income, has been
included for
(i) all extraordinary gains and non-cash income during such period, and
(ii) any gains realized upon the disposition of property outside of the
ordinary course of business, plus/minus
(d) unrealized losses/gains in respect of Swap Contracts, all as determined in
accordance with GAAP;
provided, however, that, notwithstanding any other provision to the contrary
contained in this Agreement, for purposes of any calculation made under the
financial covenants set forth in Section 7.11 (including for purposes of the
definition of "Pro Forma Basis", but excluding for purposes of the definition of
"Applicable Rate"), no more than 15% of total Consolidated EBITDA for the
applicable period shall be attributable to Foreign Subsidiaries and/or
Investments in Joint Ventures; provided, further, that, Consolidated EBITDA for
such period shall be calculated after giving Pro Forma Effect to the Dairy
Disposition; provided, further, that to the extent the receipt of any Net Cash
Proceeds of any Permitted Equity Issuance are an effective addition to
Consolidated EBITDA as contemplated by, and in accordance with, the provisions
of clause (b)(xxii) above and, as a result thereof, any Event of Default of the
covenants set forth in Section 7.11 shall have been cured for any applicable
period, such cure shall be deemed to be effective as of the last day of such
applicable period. Notwithstanding anything to the contrary, Consolidated EBITDA
shall be deemed to be $35,500,000 for the fiscal quarter ended June 30, 2003 and
$36,400,000 for the fiscal quarter ended September 30, 2003.
"Consolidated Funded Indebtedness" means, with respect to any Person
and its Subsidiaries on a consolidated basis, without duplication,
10
(a) all obligations of such Person for borrowed money,
(b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments,
(c) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business),
(d) all obligations of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person (other
than accrued expenses and trade debt incurred in the ordinary course
of business) which would appear as liabilities on a balance sheet of
such Person and to the extent constituting contingent obligations,
(e) all Consolidated Funded Indebtedness of others secured by (or for
which the holder of such Consolidated Funded Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien
on, or payable out of the proceeds of production from, property owned
or acquired by such Person, whether or not the obligations secured
thereby have been assumed,
(f) all Guarantees of such Person with respect to Consolidated Funded
Indebtedness of another Person,
(g) the implied principal component of all obligations of such Person
under Capitalized Leases,
(h) the maximum amount of all standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent
unreimbursed),
(i) unless the holder thereof is a Loan Party or, if the issuer thereof is
a Subsidiary of Holdings which is not a Loan Party, any other
Subsidiary of Holdings, all Disqualified Equity Interests issued by
such Person,
(j) the principal portion of all obligations of such Person under
Synthetic Lease Obligations, and
(k) the Consolidated Funded Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner
or a joint venturer to the extent such Consolidated Funded
Indebtedness is recourse to such Person.
Notwithstanding any other provision of this Agreement to the contrary, (i) the
term "Consolidated Funded Indebtedness" shall not be deemed to include (x) any
earn-out obligation until such obligation becomes a liability on the balance
sheet of the applicable Person, (y) any deferred compensation arrangements or
(z) any non-compete or consulting obligations incurred in connection with
Permitted Acquisitions and (ii) the amount of Consolidated Funded
11
Indebtedness for which recourse is limited either to a specified amount or to an
identified asset of such Person shall be deemed to be equal to such specified
amount (or, if less, the fair market value of such identified asset).
"Consolidated Interest Charges" means, as of any date for the
applicable period ending on such date with respect to any Person and its
Subsidiaries on a consolidated basis, interest expense (including the
amortization of debt discount and premium, the interest component under
Capitalized Leases and the implied interest component under Synthetic Lease
Obligations, but excluding, to the extent included in interest expense, (i) fees
and expenses associated with the consummation of the Transaction, (ii) annual
agency fees paid to the Administrative Agent, (iii) costs associated with
obtaining Swap Contracts and (iv) fees and expenses associated with any
Investment permitted under Section 7.02, Equity Issuance or Debt Issuance
(whether or not consummated)), as determined in accordance with GAAP, to the
extent the same are payable in cash with respect to such period.
"Consolidated Net Income" means, as of any date for the applicable
period ending on such date with respect to any Person and its Subsidiaries on a
consolidated basis, net income (excluding, without duplication, (i)
extraordinary items and (ii) any amounts attributable to Investments in any
Joint Venture to the extent that either (x) such amounts have not been
distributed in cash to such Person and its Subsidiaries during the applicable
period, (y) such amounts were not earned by such Joint Venture during the
applicable period or (z) there exists in respect of any future period any
encumbrance or restriction on the ability of such Joint Venture to pay dividends
or make any other distributions in cash on the Equity Interests of such Joint
Venture held by such Person and its Subsidiaries), as determined in accordance
with GAAP.
"Consolidated Parties" means the collective reference to Holdings and
its Subsidiaries, and "Consolidated Party" means any one of them.
"Consolidated Scheduled Funded Debt Payments" means, as of any date
for the applicable period ending on such date with respect to the Borrower
Parties on a consolidated basis, the sum of all scheduled payments of principal
on Consolidated Funded Indebtedness during such period (including the implied
principal component of payments due on Capitalized Leases during such period and
Synthetic Lease Obligations, less the reduction for all voluntary prepayments or
mandatory prepayments required pursuant to Section 2.05, in each case as applied
pursuant to Section 2.05), as determined in accordance with GAAP.
"Continuing Directors" shall mean the directors of Holdings on the
Closing Date, after giving effect to the Acquisition and the other transactions
contemplated hereby, and each other director, if, in each case, such other
directors' nomination for election to the board of directors of Holdings (or the
Borrower after a Qualifying IPO of the Borrower) is recommended by a majority of
the then Continuing Directors or such other director receives the vote of the
Equity Investors in his or her election by the stockholders of Holdings (or the
Borrower after a Qualifying IPO of the Borrower).
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
12
"Control" has the meaning specified in the definition of "Affiliate."
"Credit Extension" means each of the following: (a) a Borrowing and
(b) an L/C Credit Extension.
"Current Assets" means, with respect to any Person, all assets of such
Person that, in accordance with GAAP, would be classified as current assets on
the balance sheet of a company conducting a business the same as or similar to
that of such Person, after deducting appropriate and adequate reserves therefrom
in each case in which a reserve is proper in accordance with GAAP.
"Dairy Disposition" means the Disposition of the dairy business,
consisting of the development, manufacturing, processing, distribution,
marketing and sales of coffee creamers, half & half, whipping cream, soft-serve
mix and other specialty dairy items of MFI, to Suiza Dairy Group Inc., a
wholly-owned subsidiary of Dean Foods Company, the proceeds of which were
applied to the payment of taxes related to the operation and sale of the diary
business and repayment of a portion of MFI's senior bank debt.
"Debt Issuance" means the issuance by any Person and its Subsidiaries
of any Indebtedness for borrowed money.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2.0% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2.0% per annum, in each
case, to the fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Term Loans, Revolving Credit Loans, participations in L/C
Obligations or participations in Swing Line Loans required to be funded by it
hereunder within one (1) Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
(1) Business Day of the date when due, unless the subject of a good faith
dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy
or insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction and any sale of
Equity Interests) of any property by any Person, including any sale, assignment,
transfer or other disposal, with or without recourse, of any notes or accounts
receivable or any rights and claims associated
13
therewith; provided, however, that "Disposition" and "Dispose" shall not be
deemed to include any issuance by Holdings of any of its Equity Interests to
another Person.
"Disqualified Equity Interests" means any Equity Interest which, by
its terms (or by the terms of any security or other Equity Interests into which
it is convertible or for which it is exchangeable), or upon the happening of any
event or condition (a) matures or is mandatorily redeemable, pursuant to a
sinking fund obligations or otherwise, (b) is redeemable at the option of the
holder thereof, in whole or in part, (c) provides for the scheduled payments of
dividends in cash, or (d) is or becomes convertible into or exchangeable for
Indebtedness or any other Equity Interests that would constitute Disqualified
Equity Interests, in each case, prior to the date that is ninety one (91) days
after the Maturity Date of the Term Facility.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under the
laws of the United States, any state thereof or the District of Columbia and any
other Subsidiary that is not a "controlled foreign corporation" under Section
957 of the Code.
"Egg Products Inspection Act" means the Egg Products Inspection Act,
21 U.S.C.(S)1031, et seq., and its implementing regulations.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, (ii) in the case of any assignment of
a Revolving Commitment, the L/C Issuer and the Swing Line Lender, and (iii)
unless an Event of Default has occurred and is continuing under Section 8.01(a)
or (f), the Borrower (each such approval not to be unreasonably withheld or
delayed); provided, that notwithstanding the foregoing, "Eligible Assignee"
shall not include (i) Holdings or any of its Affiliates or Subsidiaries or (ii)
Highland Capital Management, L.P. or any of its Affiliates or Subsidiaries.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
14
"Equity Contributions" means, collectively, (a) the contribution by
the Sponsor and by the Management Shareholders of an aggregate amount not less
than $315,000,000 to Investors LLC, (b) the further contribution by Investors
LLC of all such contribution proceeds to Holdings, and (c) the further
contribution by Holdings of all such contribution proceeds to the Company in
order to consummate the Acquisition and the Mergers.
"Equity Interests" means, with respect to any Person, all of the
shares, interests, rights, participations or other equivalents (however
designated) of capital stock of (or other ownership or profit interests or units
in) such Person and all of the warrants, options or other rights for the
purchase, acquisition or exchange from such Person of any of the foregoing
(including through convertible securities).
"Equity Investors" means the Sponsor and the Management Shareholders
and the other members of Investors LLC as of the Closing Date.
"Equity Issuance" means any issuance for cash by any Person and its
Subsidiaries to any other Person of (a) its Equity Interests, (b) any of its
Equity Interests pursuant to the exercise of options or warrants, (c) any of its
Equity Interests pursuant to the conversion of any debt securities to equity or
(d) any options or warrants relating to its Equity Interests. A Disposition
shall not be deemed to be an Equity Issuance.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with any Loan Party within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by any Loan Party or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by any Loan Party or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party
or any ERISA Affiliate.
"Eurodollar Rate" means, for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest
15
Settlement Rate for deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a) does not appear
on such page or service or such page or service shall not be available, the
rate per annum equal to the rate determined by the Administrative Agent to
be the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for deposits
in Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of
such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and (b) are
not available, the rate per annum determined by the Administrative Agent as
the rate of interest at which deposits in Dollars for delivery on the first
day of such Interest Period in same day funds in the approximate amount of
the Eurodollar Rate Loan being made, continued or converted by Bank of
America and with a term equivalent to such Interest Period would be offered
by Bank of America's London Branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London time)
two (2) Business Days prior to the first day of such Interest Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate
based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Excess Cash Flow" means, with respect to any fiscal year period of
the Borrower Parties on a consolidated basis, an amount equal to (a)
Consolidated EBITDA minus (b) without duplication,
(i) Capital Expenditures,
(ii) Consolidated Interest Charges,
(iii) Consolidated Cash Taxes, including cash payments for Federal, state
and other income tax liabilities incurred prior to the Closing Date,
(iv) Consolidated Scheduled Funded Debt Payments,
(v) Restricted Payments made by the Borrower Parties to the extent that
such Restricted Payments are permitted to be made under Section
7.06(f),
(vi) voluntary prepayments of any Indebtedness (other than the
Obligations); provided, that (1) such prepayments are otherwise
permitted hereunder and (2) if such Indebtedness consists of a
revolving line of credit, the commitments under such line of credit
are permanently reduced by the amount of such prepayment,
16
(vii) letter of credit fees,
(viii) proceeds received by the Borrower Parties from insurance claims with
respect to casualty events, business interruption or product recalls
which reimburse prior business expenses,
(ix) all extraordinary cash charges,
(x) cash payments made in satisfaction of non-current liabilities,
(xi) cash expenses incurred in connection with the Transaction or, to the
extent permitted hereunder, any Investment permitted under Section
7.02, Equity Issuance or Debt Issuance (whether or not consummated),
(xii) fees and expenses in connection with the exchange of the Senior
Subordinated Notes for registered notes with identical terms as
contemplated by the Senior Subordinated Notes Indenture or exchanges
or refinancings permitted by Section 7.14,
(xiii) cash indemnity payments received pursuant to indemnification
provisions in any agreement in connection with a Permitted Acquisition
(or in any similar agreement related to any other Acquisition
consummated prior to the Closing Date),
(xiv) non-recurring charges to the extent included in determining
Consolidated EBITDA,
(xv) other non-recurring charges in an aggregate amount not to exceed
$4,000,000 during any four (4) consecutive fiscal quarter period,
(xvi) expenses in connection with payments made by any Borrower Party with
respect to industrial revenue bond financings and Guarantees in
respect thereof,
(xvii) expenses incurred in connection with deferred compensation
arrangements in connection with the Transaction,
(xviii) management fees permitted to be made under Section 7.08(d),
(xix) expenses representing the implied principal component under Synthetic
Lease Obligations,
(xx) cash payments with respect to preferred customer contracts in excess
of amortization with respect to preferred customer contracts,
(xxi) cash from operations used to consummate a Permitted Acquisition,
(xxii) to the extent added to Consolidated Net Income in determining
Consolidated EBITDA, losses from discontinued operations for such
period,
17
(xxiii) to the extent added to Consolidated Net Income in determining
Consolidated EBITDA, Net Cash Proceeds of Permitted Equity Issuances,
plus/minus
(c) changes in working capital.
"Excluded Consideration" means, with respect to any Permitted
Acquisition, consideration consisting of (a) any Equity Interests (other than
Disqualified Equity Interests) of Holdings issued to the seller of the Equity
Interests, property or assets acquired in such Permitted Acquisition, (b) to the
extent not required at such time to prepay the Loans pursuant to Section
2.05(b), consideration consisting of the Net Cash Proceeds of (i) any Permitted
Equity Issuance consummated subsequent to the Closing Date, (ii) any Disposition
by Holdings or any of its Subsidiaries of the type described in Section 7.05(a),
(c), (f), (l) and (m), (iii) any Casualty Event that occurs subsequent to the
Closing Date, (iv) the incurrence or issuance of any Permitted Subordinated
Indebtedness permitted under Section 7.03 and (c) 25% of the amount of Excess
Cash Flow for any fiscal year (commencing with the fiscal year ended December
31, 2004).
"Existing Credit Agreement" means that certain Credit Agreement dated
as of April 10, 2001 among the Target Company, MFI, the guarantors party
thereto, Bank of America, N.A., as agent, sole lead arranger and sole book
running manager, Bear, Stearns & Co., as syndication agent, and a syndicate of
lenders.
"Existing Letters of Credit" means the Letters of Credit described on
Schedule 7.03.
"Existing Notes" means the 11 3/4% Senior Subordinated Notes due 2011
of MFI.
"Existing Notes Indenture" means the Indenture dated as of March 27,
2001 between MFI and BNY Midwest Trust Company, as amended, supplemented or
otherwise modified to the Closing Date (including, after giving effect to the
amendments contemplated by the Existing Notes Tender Offer) and as may be
further amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, but only to the extent permitted under the
terms of the Loan Documents.
"Existing Notes Tender Offer" means the offer by the Company to
purchase up to 100.0% of the Existing Notes and the consent solicitation by the
Company to certain amendments of the Existing Notes Indenture, all as described
in the Existing Notes Tender Offer Documents, pursuant to which at least 80.0%
of the Existing Notes are required to be tendered.
"Existing Notes Tender Offer Documents" means (a) the Offer to
Purchase and Consent Solicitation Statement, dated October 20, 2003, (b) the
Dealer Manager Agreement between the Company and Banc of America Securities LLC,
dated October 17, 2003, and (c) the Second Supplemental Indenture between
Michael Foods, Inc., certain note guarantors and BNY Midwest Trust Company (to
be entered into as of the Closing Date).
"Facility" means the Term Facility, the Revolving Credit Facility, the
Swing Line Sublimit or the Letter of Credit Sublimit, as the context may
require.
18
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided, that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement, dated October 10, 2003, among
Holdings, the Company, BAS, Bank of America Bridge LLC and Bank of America.
"First Merger" has the meaning specified in the Preliminary Statements
to this Agreement.
"Food, Drug, and Cosmetic Act" means the Food, Drug, and Cosmetic Act,
21 U.S.C.(S)301, et seq., and its implementing regulations.
"Food Industry Laws" means the Food Security Act, the Food, Drug, and
Cosmetic Act (21 U.S.C.(S)321, et seq.), PACA, the Egg Products Inspection Act,
the Minnesota Food Law (Minnesota Statutes, Ch. 31), the MWPDA, and all other
applicable Federal, state and local laws governing the production, packaging and
distribution of food, and all applicable rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority, in each case whether or not having the force of law.
"Food Security Act" means the Food Security Act of 1985, and any
successor statute thereto, including all rules and regulations thereunder, all
as the same may be in effect from time to time.
"Foreign Lender" has the meaning specified in Section 10.15(a)(i).
"Foreign Subsidiary" means any direct or indirect Subsidiary of the
Borrower which is not a Domestic Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve System of
the United States.
"Fund" means any Person (other than a natural person) that is engaged
in making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.
"Funded Debt" of any Person means Indebtedness of such Person that by
its terms matures more than one (1) year after the date of its creation or
matures within one (1) year
19
from any date of determination but is renewable or extendible, at the option of
such Person, to a date more than one (1) year after such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one (1) year after such date.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Granting Lender" has the meaning specified in Section 10.07(g).
"Guarantee" means, as to any Person, without duplication, any (a) any
obligation, contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Guarantors" means, collectively, Holdings and the Subsidiaries of the
Borrower listed on Schedule I and each other Subsidiary of the Borrower that
shall be required to execute and deliver a guaranty or guaranty supplement
pursuant to Section 6.12.
"Guaranty" means, collectively, the Parent Guaranty and the Subsidiary
Guaranty.
20
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedge Bank" means any Person that is a Lender or an Affiliate of a
Lender, in its capacity as a party to a Secured Hedge Agreement.
"Holdings" has the meaning specified in the introductory paragraph to
this Agreement.
"Holdings Consolidated Leverage Ratio" means, with respect to the
Consolidated Parties on a consolidated basis, as of the end of any fiscal
quarter of the Borrower for the four (4) fiscal quarter period ending on such
date, the ratio of (a) Consolidated Funded Indebtedness (net of cash and Cash
Equivalents on hand) of the Consolidated Parties on the last day of such period
to (b) Consolidated EBITDA of the Consolidated Parties for such period.
"Honor Date" has the meaning specified in Section 2.03(c)(i).
"ICC" has the meaning specified in Section 2.03(h).
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) the maximum amount of all letters of credit (including standby and
commercial), bankers' acceptances, bank guaranties, surety bonds,
performance bonds and similar instruments issued or created by or for the
account of such Person;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);
(e) 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 and mortgage, industrial revenue bond, industrial development
bond and similar financings), whether or not such indebtedness shall have
been assumed by such Person or is limited in recourse;
(f) all Attributable Indebtedness;
21
(g) all obligations of such Person in respect of Disqualified Equity
Interests; and
(h) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of Indebtedness of any Person for purposes
of clause (e) shall be deemed to be equal to the lesser of (i) the aggregate
unpaid amount of such Indebtedness and (ii) the fair market value of the
property encumbered thereby as determined by such Person in good faith.
"Indemnified Liabilities" has the meaning set forth in Section 10.05.
"Indemnitees" has the meaning set forth in Section 10.05.
"Information" has the meaning specified in Section 10.08.
"Information Memorandum" means the confidential information memorandum
dated October 2003 used by the Arrangers in connection with the syndication of
the Commitments.
"Intellectual Property Security Agreement" means, collectively, the
intellectual property security agreement, substantially in the form of Exhibit I
hereto together with each other intellectual property security agreement
supplements executed and delivered pursuant to Section 6.12.
"Interest Coverage Ratio" means, with respect to the Borrower Parties
on a consolidated basis, as of the end of any fiscal quarter of the Borrower for
the four (4) fiscal quarter period ending on such date with respect to the
Borrower Parties on a consolidated basis, the ratio of (a) Consolidated EBITDA
of the Borrower Parties to (b) Consolidated Interest Charges of the Borrower
Parties; provided, that when calculating the Interest Coverage Ratio,
Consolidated Interest Charges shall be equal to, (i) for the period ending March
31, 2004, Consolidated Interest Charges for the fiscal quarter ending March 31,
2004 multiplied by four (4); (ii) for the period ending June 30, 2004,
Consolidated Interest Charges calculated for the two (2) fiscal quarters ending
June 30, 2004 multiplied by two (2); and (iii) for the period ending September
30, 2004, Consolidated Interest Charges for the three (3) fiscal quarters ending
September 30, 2004 multiplied by one and one-third (1-1/3).
"Interest Payment Date" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date of the Facility under which such Loan was made; provided, however,
that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the
respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
22
Rate Loan (including a Swing Line Loan), the last Business Day of each March,
June, September and December and the Maturity Date of the Facility under which
such Loan was made.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, or to the extent available, nine or twelve months
thereafter, as selected by the Borrower in its Committed Loan Notice; provided,
that:
(a) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(c) no Interest Period shall extend beyond the Maturity Date of the
Facility under which such Loan was made.
"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of Equity Interests or debt or other securities of another
Person, (b) a loan, advance or capital contribution to, Guarantee or assumption
of debt of, or purchase or other acquisition of any other debt or equity
participation or interest in, another Person, including any partnership or joint
venture interest in such other Person and any arrangement pursuant to which the
investor incurs debt of the type referred to in clause (h) of the definition of
"Indebtedness" set forth in this Section 1.01 in respect of such Person, (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of all or substantially all of the property and assets or business of another
Person or assets constituting a business unit, line of business or division of
such Person, or (d) the Disposition of any property for less than the fair
market value thereof (other than Dispositions under Sections 7.05(d), (e), (h)
and (j). For purposes of covenant compliance, the amount of any Investment shall
be the amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.
"Investors LLC" means MF Investors, LLC, a Delaware limited liability
company.
"IP Rights" has the meaning set forth in Section 5.17.
"IP Security Agreement Supplement" has the meaning specified in the
Security Agreement.
"IRS" means the United States Internal Revenue Service.
23
"Joint Venture" means (a) any Person which would constitute an "equity
method investee" of the Borrower or any of its Subsidiaries, (b) any other
Person designated by the Borrower in writing to the Administrative Agent (which
designation shall be irrevocable) as a "Joint Venture" for purposes of this
Credit Agreement and more than 50% but less than 100% of whose Equity Interests
are directly owned by the Borrower or any of its Subsidiaries, and (c) any
Person in whom the Borrower or any of its Subsidiaries beneficially owns any
Equity Interest that is not a Subsidiary.
"Junior Financing" has the meaning specified in Section 7.14.
"Junior Financing Documentation" means the Senior Unsecured Term Loan
Agreement, the Senior Subordinated Notes, the Senior Subordinated Notes
Indenture or any documentation governing any other Junior Financing.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law, including all Food Industry
Laws.
"L/C Advance" means, with respect to each Revolving Credit Lender,
such Lender's funding of its participation in any L/C Borrowing in accordance
with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Revolving Credit Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit,
the issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of
Letters of Credit hereunder, or any successor issuer of Letters of Credit
hereunder.
"L/C Obligations" means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph to
this Agreement and, as the context requires, includes the L/C Issuer and the
Swing Line Lender.
"Lending Office" means, as to any Lender, the office or offices of
such Lender described as such in such Lender's Administrative Questionnaire, or
such other office or offices as a Lender may from time to time notify the
Borrower and the Administrative Agent.
24
"Letter of Credit" means any letter of credit issued hereunder and
shall include the Existing Letters of Credit. A Letter of Credit may be a
commercial letter of credit or a standby letter of credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is five (5) days
prior to the scheduled Maturity Date then in effect for the Revolving Credit
Facility (or, if such day is not a Business Day, the next preceding Business
Day).
"Letter of Credit Sublimit" means an amount equal to $15,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Revolving
Credit Facility.
"Leverage Ratio" means, with respect to the Borrower Parties on a
consolidated basis, as of the end of any fiscal quarter of the Borrower for the
four (4) fiscal quarter period ending on such date, the ratio of (a)
Consolidated Funded Indebtedness (net of cash and Cash Equivalents on hand) of
the Borrower Parties on the last day of such period to (b) Consolidated EBITDA
of the Borrower Parties for such period.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real
property, and any Capitalized Lease having substantially the same economic
effect as any of the foregoing).
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Term Loan, a Revolving Credit Loan or a Swing Line
Loan.
"Loan Documents" means, collectively, (a) for purposes of this
Agreement and the Notes and any amendment, supplement or other modification
hereof or thereof and for all other purposes other than for purposes of the
Guaranty and the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii)
the Guaranty, (iv) the Collateral Documents, (v) the Fee Letter and (vi) each
Letter of Credit Application and (b) for purposes of the Guaranty and the
Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the Guaranty,
(iv) the Collateral Documents, (v) each Letter of Credit Application, (vi) the
Fee Letter, (vii) each Secured Hedge Agreement, and (viii) the Assumption
Agreement.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Management Shareholders" means Gregg A. Ostrander and the other
members of management of the Borrower or its Subsidiaries who are investors in
Investors LLC on the Closing Date.
"Master Agreement" has the meaning specified in the definition of
"Swap Contract".
25
"Material Adverse Effect" means (a) a material adverse effect on the
business, operations, assets, liabilities (actual or contingent) or condition
(financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole,
(b) a material adverse effect on the ability of the Borrower or the Loan Parties
(taken as a whole) to perform their respective obligations under any Loan
Document to which the Borrower or any of the Loan Parties is a party or (c) a
material adverse effect on the rights and remedies of the Lenders under any Loan
Document.
"Maturity Date" means (a) with respect to the Revolving Credit
Facility, the earlier of (i) November 21, 2009 and (ii) the date of termination
in whole of the Revolving Credit Commitments, the Letter of Credit Commitments,
and the Swing Line Commitments pursuant to Section 2.06(a) or 8.02, and (b) with
respect to the Term Facility, the earlier of (i) November 21, 2010 and (ii) the
date of termination in whole of the Term Commitments pursuant to Section 2.06(a)
or 8.02.
"Maximum Rate" has the meaning specified in Section 10.10.
"Merger Agreement" has the meaning specified in the Preliminary
Statements to this Agreement.
"Mergers" has the meaning specified in the Preliminary Statements to
this Agreement.
"MFI" has the meaning specified in the Preliminary Statements to this
Agreement.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto.
"Mortgage" means, collectively, the deeds of trust, trust deeds and
mortgages made by the Loan Parties in favor or for the benefit of the
Administrative Agent on behalf of the Lenders substantially in the form of
Exhibit H (with such changes as may be customary to account for local law
matters), together with each other mortgage executed and delivered pursuant to
Section 6.12.
"Mortgage Policies" has the meaning specified in Section 6.14(b)(ii).
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"MWPDA" means the Minnesota Wholesale Produce Dealers Act (Minnesota
Statutes, Ch. 27).
"Net Cash Proceeds" means:
(a) with respect to the Disposition of any asset by Holdings or any of
its Subsidiaries or any Casualty Event, the excess, if any, of (i) the sum
of cash and Cash Equivalents received in connection with such Disposition
or Casualty Event (including
26
any cash or Cash Equivalents received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and
when so received and, with respect to any Casualty Event, any insurance
proceeds or condemnation awards in respect of such Casualty Event received
by or paid to or for the account of Holdings or any of its Subsidiaries)
over (ii) the sum of (A) the principal amount of any Indebtedness that is
secured by the asset subject to such Disposition or Casualty Event and that
is repaid in connection with such Disposition or Casualty Event (other than
Indebtedness under the Loan Documents), (B) the out-of-pocket expenses
incurred by Holdings or such Subsidiary in connection with such Disposition
or Casualty Event, (C) income taxes reasonably estimated to be actually
payable within two (2) years of the date of the relevant Disposition or
Casualty Event as a result of any gain recognized in connection therewith,
and (D) any reserve for adjustment in respect of (x) the sale price of such
asset or assets established in accordance with GAAP and (y) any liabilities
associated with such asset or assets and retained by the Borrower or any of
its Subsidiaries after such sale or other disposition thereof, including,
without limitation, pension and other post-employment benefit liabilities
and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction and it being
understood that "Net Cash Proceeds" shall include, without limitation, any
cash or Cash Equivalents (i) received upon the Disposition of any non-cash
consideration received by the Borrower or any of its Subsidiaries in any
such Disposition and (ii) upon the reversal (without the satisfaction of
any applicable liabilities in cash in a corresponding amount) of any
reserve described in clause (D) of the preceding sentence or, if such
liabilities have not been satisfied in cash and such reserve not reversed
within three hundred and sixty-five (365) days after such Disposition or
Casualty Event, the amount of such reserve;
(b) with respect to the issuance of any Equity Interest by Holdings or
any of its Subsidiaries, the excess of (i) the sum of the cash and Cash
Equivalents received in connection with such sale over (ii) the investment
banking fees, underwriting discounts and commissions, and other
out-of-pocket expenses and other customary expenses, incurred by Holdings
or such Subsidiary in connection with such sale; and
(c) with respect to the incurrence or issuance of any Indebtedness by
Holdings or any of its Subsidiaries, the excess, if any, of (i) the sum of
the cash received in connection with such sale over (ii) the investment
banking fees, underwriting discounts and commissions, and other
out-of-pocket expenses and other customary expenses, incurred by Holdings
or such Subsidiary in connection with such sale.
"Non-Consenting Lender" has the meaning specified in Section 3.07(d).
"Nonrenewal Notice Date" has the meaning specified in Section
2.03(b)(iii).
"Note" means a Term Note or a Revolving Credit Note, as the context
may require.
"Notice of Intent to Cure" has the meaning specified in Section
6.02(b).
"NPL" means the National Priorities List under CERCLA.
27
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party of any proceeding under any Debtor Relief Laws naming such Person as
the debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding. Without limiting the generality of the
foregoing, the Obligations of the Loan Parties under the Loan Documents include
(a) the obligation to pay principal, interest, Letter of Credit commissions,
charges, expenses, fees, Attorney Costs, indemnities and other amounts payable
by any Loan Party under any Loan Document and (b) the obligation of any Loan
Party to reimburse any amount in respect of any of the foregoing that any
Lender, in its sole discretion, may elect to pay or advance on behalf of such
Loan Party.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" has the meaning specified in Section 3.01(b).
"Outstanding Amount" means (a) with respect to the Term Loans,
Revolving Credit Loans and Swing Line Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Term Loans, Revolving Credit Loans (including any
refinancing of outstanding unpaid drawings under Letters of Credit or L/C Credit
Extensions as a Revolving Credit Borrowing) and Swing Line Loans, as the case
may be, occurring on such date; and (b) with respect to any L/C Obligations on
any date, the amount of such L/C Obligations on such date after giving effect to
any L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements of outstanding unpaid drawings under any Letters of Credit
(including any refinancing of outstanding unpaid drawings under Letters of
Credit or L/C Credit Extensions as a Revolving Credit Borrowing) or any
reductions in the maximum amount available for drawing under Letters of Credit
taking effect on such date.
"PACA" means the Perishable Agricultural Commodities Act, 7
U.S.C.(S) 499a, et seq. and its implementing regulations.
"Parent Guaranty" means the Parent Guaranty made by Holdings in favor
of the Administrative Agent on behalf of the Lenders, substantially in the form
of Exhibit F-1.
"Participant" has the meaning specified in Section 10.07(d).
28
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by any Loan Party or
any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five (5) plan years.
"Permitted Acquisition" has the meaning specified in Section 7.02(i).
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Equity Issuance" means any sale or issuance of any Equity
Interests (other than Disqualified Equity Interests) of Holdings (and, after a
Qualifying IPO, of the Borrower) to the extent (a) permitted hereunder and (b)
the Net Cash Proceeds of which are not required to be applied to the prepayment
of the Loans pursuant to Section 2.05(b).
"Permitted Holdco Debt" has the meaning specified in Section
7.03(c)(iii).
"Permitted Refinancing " means, with respect to any Person, any
modification, refinancing, refunding, renewal or extension of any Indebtedness
of such Person; provided that (a) the principal amount (or accreted value, if
applicable) thereof does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so modified, refinanced, refunded, renewed or
extended except by an amount equal to a reasonable premium or other reasonable
amount paid, and fees and expenses reasonably incurred, in connection with such
modification, refinancing, refunding, renewal or extension and by an amount
equal to any existing commitments unutilized thereunder or as otherwise
permitted pursuant to Section 7.03, (b) such modification, refinancing,
refunding, renewal or extension has a final maturity date equal to or later than
the final maturity date of, and has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of, the Indebtedness being
modified, refinanced, refunded, renewed or extended, (c) if the Indebtedness
being modified, refinanced, refunded, renewed or extended is subordinated in
right of payment to the Obligations, such modification, refinancing, refunding,
renewal or extension is subordinated in right of payment to the Obligations on
terms at least as favorable to the Lenders as those contained in the
documentation governing the Indebtedness being modified, refinanced, refunded,
renewed or extended, (d) the terms and conditions (including, if applicable, as
to collateral) of any such modified, refinanced, refunded, renewed or extended
Indebtedness are not materially less favorable to the Loan Parties or the
Lenders than the terms and conditions of the Indebtedness being modified,
refinanced, refunded, renewed or extended, (e) such modification, refinancing,
refunding, renewal or extension is incurred by the Person who is the obligor on
the Indebtedness being modified, refinanced, refunded, renewed or extended, and
(f) at the time thereof, no Default shall have occurred and be continuing.
"Permitted Subordinated Indebtedness" means any unsecured Indebtedness
of the Borrower that (a) is expressly subordinated to the prior payment in full
in cash of the Obligations on terms and conditions no less favorable to the
Lenders than the terms and
29
conditions of the Senior Subordinated Notes, (b) will not mature prior to the
date that is ninety-one (91) days after the Maturity Date of the Term Facility,
(c) has no scheduled amortization or payments of principal prior to the Maturity
Date of the Term Facility, and (d) has covenant, default and remedy provisions
no more restrictive, or mandatory prepayment, repurchase or redemption
provisions no more onerous or expansive in scope, than those contained in the
Senior Subordinated Notes Indenture, taken as a whole; provided any such
Indebtedness shall constitute Permitted Subordinated Indebtedness only if (i)
both before and after giving effect to the issuance or incurrence thereof, no
Default or Event of Default shall have occurred and be continuing, and (ii) if
the amount of such Indebtedness issued or incurred in any fiscal quarter exceeds
$5,000,000, the Chief Financial Officer of the Borrower shall have delivered an
officer's certificate demonstrating Pro Forma Compliance with the covenants set
forth in Section 7.11 in form and substance reasonably satisfactory to the
Administrative Agent, it being understood that any capitalized or paid-in-kind
interest or accreted principal on such Indebtedness shall not constitute an
issuance or incurrence of Indebtedness for purposes of this proviso.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by any Loan Party or, with respect to any
such plan that is subject to Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.
"Pledged Debt" has the meaning specified in the Security Agreement.
"Pledged Interests" has the meaning specified in the Security
Agreement.
"Post-Increase Revolving Lenders" has the meaning specified in Section
2.15(b).
"Post-Increase Term Lenders" has the meaning specified in Section
2.14(b).
"Pre-Increase Revolving Lenders" has the meaning specified in Section
2.15(b).
"Pre-Increase Term Lenders" has the meaning specified in Section
2.14(b).
"Pro Forma Basis", "Pro Forma Compliance" and "Pro Forma Effect"
means, for purposes of calculating compliance with Section 4.01(a)(x) and each
of the financial covenants set forth in Section 7.11 in respect of a Specified
Transaction, that such Specified Transaction and the following transactions in
connection therewith shall be deemed to have occurred as of the first day of the
applicable period of measurement in such covenant: (a) income statement items
(whether positive or negative) attributable to the property or Person subject to
such Specified Transaction, (i) in the case of the Dairy Disposition or a
Disposition of all or substantially all Equity Interests in any Subsidiary of
the Borrower or any division, product line, or facility used for operations of
the Borrower or any of its Subsidiaries, shall be excluded, and (ii) in the case
of a Permitted Acquisition or Investment described in the definition of
"Specified Transaction", shall be included, (b) any retirement of Indebtedness,
and (c) any Indebtedness incurred or assumed by the Borrower or any of its
Subsidiaries in connection therewith and if such Indebtedness has a floating or
formula rate, shall have an implied rate of interest for the applicable period
for purposes of this definition determined by utilizing the rate
30
which is or would be in effect with respect to such Indebtedness as at the
relevant date of determination, provided, that the foregoing pro forma
adjustments may be applied to the financial covenants set forth in Section 7.11
solely to the extent that such adjustments are consistent with the definition of
Consolidated EBITDA and give effect to events that are (x) directly attributable
to such transaction, (y) expected to have a continuing impact on the Borrower
and its Subsidiaries and (z) factually supportable.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitments of such Lender under the
applicable Facility or Facilities at such time and the denominator of which is
the amount of the Aggregate Commitments under the applicable Facility or
Facilities at such time; provided, that if the commitment of each Lender to make
Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have
been terminated pursuant to Section 8.02, then the Pro Rata Share of each Lender
shall be determined based on the Pro Rata Share of such Lender immediately prior
to such termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof. The initial Pro Rata Share of each Lender is set
forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Qualifying IPO" means the issuance by Holdings of its common Equity
Interests in an underwritten primary public offering (other than a public
offering pursuant to a registration statement on Form S-8) pursuant to an
effective registration statement filed with the SEC in accordance with the
Securities Act (whether alone or in connection with a secondary public
offering).
"Real Properties" means those properties listed on Schedule 1.01
hereto.
"Reduction Amount" has the meaning set forth in Section 2.05(b)(vi).
"Register" has the meaning set forth in Section 10.07(c).
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than events for which the thirty (30) day notice period
has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Term Loans or Revolving Credit Loans, a Committed
Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.
"Required Lenders" means, as of any date of determination, Lenders
having more than 50% of the sum of the (a) Total Outstandings (with the
aggregate amount of each Lender's risk participation and funded participation in
L/C Obligations and Swing Line Loans being deemed "held" by such Lender for
purposes of this definition), (b) aggregate unused Term Commitments and (c)
aggregate unused Revolving Credit Commitments; provided, that the unused Term
Commitment, unused Revolving Credit Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.
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"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of a Loan Party and,
as to any document delivered on the Closing Date, any vice president, secretary
or assistant secretary. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interest of
the Borrower or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, defeasance, acquisition, cancellation or
termination of any such Equity Interest, or on account of any return of capital
to the Borrower's stockholders, partners or members (or the equivalent Persons
thereof).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Loans of the same Type and, in the case of
Eurodollar Rate Loans, having the same Interest Period made by each of the
Revolving Credit Lenders pursuant to Section 2.01(b).
"Revolving Credit Commitment" means, as to each Revolving Credit
Lender, its obligation to (a) make Revolving Credit Loans to the Borrower
pursuant to Section 2.01(b), (b) purchase participations in L/C Obligations, and
(c) purchase participations in Swing Line Loans, in an aggregate principal
amount at any one time outstanding not to exceed the amount set forth opposite
such Lender's name on Schedule 2.01 under the caption "Revolving Credit
Commitment" or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement. The aggregate Commitment of all
Revolving Credit Lenders shall be $100,000,000 on the Closing Date, as such
amount may be adjusted from time to time in accordance with the terms of this
Agreement.
"Revolving Credit Commitments Increase Effective Date" has the meaning
specified in Section 2.15(b).
"Revolving Credit Facility" means, at any time, the aggregate amount
of the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Lender" means, at any time, any Lender that has a
Revolving Credit Commitment at such time.
"Revolving Credit Loan" has the meaning specified in Section 2.01(b).
"Revolving Credit Note" means a promissory note of the Borrower
payable to any Revolving Credit Lender or its registered assigns, in
substantially the form of Exhibit C-2 hereto, evidencing the aggregate
indebtedness of the Borrower to such Revolving Credit Lender resulting from the
Revolving Credit Loans made by such Revolving Credit Lender.
32
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Second Merger" has the meaning specified in the Preliminary
Statements to this Agreement.
"Secured Hedge Agreement" means any Swap Contract required or
permitted under Article VI or VII that is entered into by and between any Loan
Party and any Hedge Bank.
"Secured Obligations" has the meaning specified in the Security
Agreement.
"Secured Parties" means, collectively, the Administrative Agent, the
Lenders, the Hedge Banks, the Supplemental Administrative Agent and each
co-agent or sub-agent appointed by the Administrative Agent from time to time
pursuant to Section 9.01(c).
"Security Agreement" means, collectively, the Security Agreement
executed by the Loan Parties, substantially in the form of Exhibit G, together
with each other security agreement supplement executed and delivered pursuant to
Section 6.12.
"Security Agreement Supplement" has the meaning specified in the
Security Agreement.
"Senior Subordinated Notes" means the 8.00% unsecured senior
subordinated notes of the Borrower due 2013 in an aggregate principal amount of
$150,000,000 issued on the Closing Date, and any exchange notes issued in
exchange therefor, in each case, pursuant to the Senior Subordinated Notes
Indenture.
"Senior Subordinated Notes Indenture" means the Indenture dated as of
the Closing Date between Wells Fargo Bank Minnesota, National Association, the
Borrower and the Guarantors, together with all instruments and other agreements
in connection therewith, as may be amended, supplemented or otherwise modified
from time to time in accordance with the terms thereof, but only to the extent
permitted under the terms of the Loan Documents.
"Senior Unsecured Term Loan Agreement" means the Senior Unsecured Term
Loan Agreement dated as of the Closing Date among the Borrower, Holdings, Bank
of America, as administrative agent, and the other agents and lenders party
thereto.
"Senior Unsecured Term Loans" means the senior unsecured term loans of
the Borrower due 2011 in an aggregate principal amount of $135,000,000 made on
the Closing Date under the Senior Unsecured Term Loan Agreement.
"Solvent" and "Solvency" mean, with respect to any Person on any date
of determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will
33
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"SPC" has the meaning specified in Section 10.07(g).
"Specified Equity Issuances" means the sale or issuance by Holdings of
any of its Equity Interests in a public offering or in a private placement or
sale that is underwritten, managed, arranged, placed or initially purchased by
an investment bank (it being understood that the Sponsor is not an investment
bank), which, for the avoidance of doubt, does not include the sale or issuance
of any such Equity Interests to (a) the Equity Investors, their Affiliates,
related funds and limited partners, and (b) other Persons making additional
equity investments together with the Equity Investors after the Closing Date.
"Specified Transaction" means, for any applicable period, the
following transactions: (a) the Dairy Disposition and (b) any Permitted
Acquisition or any Investment (or series of related Investments) made pursuant
to Section 7.02(o) to the extent consisting of the contribution(s) or other
transfer(s) of any property (other than cash) to a Joint Venture for
consideration less than the fair market value of such property.
"Sponsor" means Thomas H. Lee Partners, L.P and its Affiliates.
"Sponsor Management Agreement" means the Management Agreement dated
the Closing Date between THL Managers V, LLC and the Borrower, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, but only to the extent permitted under the terms of the Loan
Documents.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Subsidiary Guarantor" means, collectively, the Subsidiaries of the
Borrower that are Guarantors.
"Subsidiary Guaranty" means, collectively, the Subsidiary Guaranty
made by the Subsidiary Guarantors in favor of the Administrative Agent on behalf
of the Lenders, substantially in the form of Exhibit F-2, together with each
other guaranty and guaranty supplement delivered pursuant to Section 6.12.
34
"Supplemental Administrative Agent" has the meaning specified in
Section 9.13 and "Supplemental Administrative Agents" shall have the
corresponding meaning.
"Surviving Corporation" has the meaning specified in the Preliminary
Statements to this Agreement.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant
to Section 2.04.
"Swing Line Facility" means the revolving credit facility made
available by the Swing Line Lender pursuant to Section 2.04.
"Swing Line Lender" means Bank of America in its capacity as provider
of Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.04(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
form of Exhibit B.
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$10,000,000 and (b) the Revolving Credit Commitments. The Swing Line Sublimit is
part of, and not in addition to, the Revolving Credit Facility Commitments.
35
"Synthetic Lease Obligation" means the monetary obligation of a Person
under a so-called synthetic, off-balance sheet or tax retention lease.
"Target Company" has the meaning specified in the Preliminary
Statements to this Agreement.
"Taxes" has the meaning specified in Section 3.01(a).
"Term Borrowing" means a borrowing consisting of simultaneous Term
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Term Lenders pursuant to Section
2.01(a).
"Term Commitment" means, as to each Term Lender, its obligation to
make Term Loans to the Borrower pursuant to Section 2.01(a) in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule 2.01 under the caption "Term Commitment"
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement. The aggregate Commitment of all Term Lenders
shall be $495,000,000 on the Closing Date, as such amount may be adjusted from
time to time in accordance with the terms of this Agreement.
"Term Commitments Increase Effective Date" has the meaning set forth
in Section 2.14(b).
"Term Facility" means, at any time, (a) prior to the initial advance
of the Term Loans, the aggregate Term Commitments of all Term Lenders at such
time, and (b) thereafter, the aggregate Term Loans of all Lenders at such time.
"Term Loan" means an advance made by any Term Lender under the Term
Facility.
"Term Lender" means, at any time, any Lender that has a Term
Commitment at such time.
"Term Note" means a promissory note of the Borrower payable to any
Term Lender or its registered assigns, in substantially the form of Exhibit C-1
hereto, evidencing the aggregate indebtedness of the Borrower to such Term
Lender resulting from the Term Loans made by such Term Lender.
"Threshold Amount" means $15,000,000.
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"Transaction" means, collectively, (a) the Equity Contributions, (b)
the Acquisition, the First Merger and the Second Merger, (c) the refinancing of,
and termination of all commitments with respect to, the Existing Credit
Agreement and the other outstanding Indebtedness of the Target Company, MFI and
their respective Subsidiaries, including, without
36
limitation, the Existing Notes tendered upon consummation of the Existing Notes
Tender Offer, except for such Indebtedness listed on Schedule 7.03 to remain
outstanding after the Closing Date and other Indebtedness permitted in
accordance with Section 7.03, (d) the issuance and sale of the Senior
Subordinated Notes, (e) the funding of the Term Loans, (f) the consummation of
any other transactions in connection with the foregoing, and (g) the payment of
the fees and expenses incurred in connection with any of the foregoing.
"Type" means, with respect to a Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.
"Uniform Commercial Code" means the Uniform Commercial Code as the
same may from time to time be in effect in the State of New York or the Uniform
Commercial Code (or similar code or statute) of another jurisdiction, to the
extent it may be required to apply to any item or items of Collateral.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
"U.S. Lender" has the meaning set forth in Section 10.15(b).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (ii) the then outstanding principal
amount of such Indebtedness.
"2003 Fourth Quarter" has the meaning set forth in Section 1.03(c).
1.02 Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder" and
words of similar import when used in any Loan Document shall refer to such
Loan Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
(iii) The term "including" is by way of example and not limitation.
37
(iv) The term "documents" includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words
"to" and "until" each mean "to but excluding;" and the word "through" means
"to and including."
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 Accounting Terms. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent
and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided, that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders a written reconciliation in
form and substance reasonably satisfactory to the Administrative Agent, between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.
(c) With respect to the time period commencing October 1, 2003 and
ending on December 31, 2003 (the "2003 Fourth Quarter"), and notwithstanding the
actual accounting periods for which any financial statements were prepared for
the 2003 Fourth Quarter, the 2003 Fourth Quarter shall be deemed to constitute
one accounting period and each of Consolidated Net Income and Consolidated
EBITDA shall be calculated with all applicable financing statements prepared for
the 2003 Fourth Quarter taken as a whole.
1.04 Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 References to Agreements and Laws. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to
38
the extent that such amendments, restatements, extensions, supplements and other
modifications are permitted by any Loan Document; and (b) references to any Law
shall include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.
1.06 Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.07 Timing of Payment or Performance. When the payment of any
obligation or the performance of any covenant, duty or obligation is stated to
be due or performance required on a day which is not a Business Day, the date of
such payment (other than as described in the definition of Interest Period) or
performance shall extend to the immediately succeeding Business Day.
1.08 Currency Equivalents Generally. Any amount specified in this
Agreement (other than in Articles II, IX and X) or any of the other Loan
Documents to be in Dollars shall also include the equivalent of such amount in
any currency other than Dollars, such equivalent amount to be determined at the
rate of exchange quoted by Bank of America in Charlotte, North Carolina at the
close of business on the Business Day immediately preceding any date of
determination thereof, to prime banks in New York, New York for the spot
purchase in the New York foreign exchange market of such amount in Dollars with
such other currency.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 The Loans. (a) The Term Borrowings. Subject to the terms and
conditions set forth herein, each Term Lender severally agrees to make a single
loan (consisting of a Term Loan) in an amount equal to its Pro Rata Share of the
Term Facility to the Borrower on (i) the Closing Date and (ii) if such Term
Lender has increased its Term Commitment pursuant to Section 2.14, the Term
Commitment Increase Effective Date. The Term Borrowing shall consist of Term
Loans made simultaneously by the Term Lenders in accordance with their
respective Pro Rata Share of the Term Facility. Amounts borrowed under this
Section 2.01(a) and repaid or prepaid may not be reborrowed. Term Loans may be
Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
(b) The Revolving Credit Borrowings. Subject to the terms and
conditions set forth herein, each Revolving Credit Lender severally agrees to
make loans (each such loan, a "Revolving Credit Loan") to the Borrower from time
to time, on any Business Day until the Maturity Date, in an aggregate amount not
to exceed at any time outstanding the amount of such Lender's Revolving Credit
Commitment; provided, however, that after giving effect to any Revolving Credit
Borrowing, (i) on the Closing Date, (A) the aggregate Outstanding Amount of all
Revolving Credit Loans plus the aggregate Outstanding Amount of all Swing Line
Loans shall not exceed $10,000,000 and (B) the aggregate Outstanding Amount of
all L/C Obligations shall not exceed $8,000,000, (ii) the Total Outstandings
shall not exceed the Aggregate Commitments, and (iii) the aggregate Outstanding
Amount of the Revolving Credit Loans of any Lender, plus such Lender's Pro Rata
Share of the Outstanding Amount of all L/C Obligations, plus such Lender's Pro
Rata Share of the Outstanding Amount of all Swing Line Loans shall not
39
exceed such Lender's Revolving Credit Commitment. Within the limits of each
Lender's Revolving Credit Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.01(b), prepay
under Section 2.05, and reborrow under this Section 2.01(b). Revolving Credit
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.
2.02 Borrowings, Conversions and Continuations of Loans. (a) Each Term
Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or
Revolving Credit Loans from one Type to the other, and each continuation of
Eurodollar Rate Loans shall be made upon the Borrower's irrevocable notice to
the Administrative Agent, which may be given by telephone. Each such notice must
be received by the Administrative Agent not later than 12:30 p.m. (Charlotte,
North Carolina time) (i) three (3) Business Days prior to the requested date of
any Borrowing of, continuation of Eurodollar Rate Loans or any conversion of
Base Rate Loans to Eurodollar Rate Loans, and (ii) one (1) Business Day before
the requested date of any Borrowing of Base Rate Loans. Each telephonic notice
by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower.
Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall
be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in
excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each
Borrowing of or conversion to Base Rate Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan
Notice (whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Term Borrowing, a Revolving Credit Borrowing, a conversion of Term
Loans or Revolving Credit Loans from one Type to the other, or a continuation of
Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Loans to be borrowed, converted or continued, (iv) the Type
of Loans to be borrowed or to which existing Term Loans or Revolving Credit
Loans are to be converted, and (v) if applicable, the duration of the Interest
Period with respect thereto. If the Borrower fails to specify a Type of Loan in
a Committed Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Term Loans or
Revolving Credit Loans shall be made as, or converted to, Base Rate Loans. Any
such automatic conversion to Base Rate Loans shall be effective as of the last
day of the Interest Period then in effect with respect to the applicable
Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to,
or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but
fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one (1) month.
(b) Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Pro Rata Share of
the applicable Term Loans or Revolving Credit Loans, and if no timely notice of
a conversion or continuation is provided by the Borrower, the Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described in Section 2.02(a). In the case of a Term Loan
Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall make
the amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent's Office not later than 1:00 p.m. on
the Business Day specified in the applicable Committed Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the
40
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower; provided, however, that if, on the date the Committed Loan
Notice with respect to such Borrowing is given by the Borrower, there are Swing
Line Loans or L/C Borrowings outstanding, then the proceeds of such Borrowing
shall be applied, first, to the payment in full of any such L/C Borrowings,
second, to the payment in full of any such Swing Line Loans, and third, to the
Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan unless the Borrower pays the amount due under Section 3.05
in connection therewith. During the existence of an Event of Default, no Loans
may be requested as, converted to or continued as Eurodollar Rate Loans without
the consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon determination of such interest rate. The
determination of the Eurodollar Rate by the Administrative Agent shall be
conclusive in the absence of manifest error. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders of any change in Bank of America's prime rate used in determining the
Base Rate promptly following the public announcement of such change.
(e) After giving effect to all Term Borrowings, all Revolving Credit
Borrowings, all conversions of Term Loans or Revolving Credit Loans from one
Type to the other, and all continuations of Term Loans or Revolving Credit Loans
as the same Type, there shall not be more than fifteen (15) Interest Periods in
effect.
(f) The failure of any Lender to make the Loan to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
2.03 Letters of Credit. (a) The Letter of Credit Commitment. (i)
Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees,
in reliance upon the agreements of the other Revolving Credit Lenders set forth
in this Section 2.03, (1) from time to time on any Business Day during the
period from the Closing Date until the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of the Borrower and to amend or renew
Letters of Credit previously issued by it, in accordance with Section 2.03(b),
and (2) to honor drafts under the Letters of Credit; and (B) the Revolving
Credit Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrower; provided, that the L/C Issuer shall not be
obligated to make any L/C Credit Extension with respect to any Letter of Credit,
and no Lender shall be obligated to participate in any Letter of Credit if as of
the date of such L/C Credit Extension, (x) the Total Outstandings would exceed
the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Revolving
Credit Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding
Amount of all L/C Obligations,
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plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line
Loans would exceed such Lender's Revolving Credit Commitment, or (z) the
Outstanding Amount of the L/C Obligations would exceed the Letter of Credit
Sublimit. Within the foregoing limits, and subject to the terms and conditions
hereof, the Borrower's ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that have
been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed
to have been issued pursuant hereto, and from and after the Closing Date shall
be subject to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall be under no obligation to issue any Letter
of Credit if:
(A) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer
from issuing such Letter of Credit, or any Law applicable to the L/C Issuer
or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over the L/C Issuer shall
prohibit, or request that the L/C Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is
not otherwise compensated hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which, in each case, the
L/C Issuer in good faith deems material to it;
(B) subject to Section 2.03(b)(iii), the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of
issuance or last renewal, unless the Required Lenders have approved such
expiry date;
(C) the expiry date of such requested Letter of Credit would occur
after the Letter of Credit Expiration Date, unless all the Lenders have
approved such expiry date;
(D) the issuance of such Letter of Credit would violate one or more
policies of the L/C Issuer; or
(E) such Letter of Credit is in an initial amount less than $50,000,
in the case of a commercial Letter of Credit, or $50,000, in the case of a
standby Letter of Credit, or is to be denominated in a currency other than
Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any Letter
of Credit if (A) the L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit. (i) Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrower delivered to the
L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer
of the Borrower. Such Letter of Credit Application must be
42
received by the L/C Issuer and the Administrative Agent not later than 12:30
p.m. at least two (2) Business Days (or such later date and time as the L/C
Issuer may agree in a particular instance in its sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail reasonably satisfactory to the L/C
Issuer: (A) the proposed issuance date of the requested Letter of Credit (which
shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof;
(D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full
text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the L/C Issuer may reasonably
request. In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and detail
reasonably satisfactory to the L/C Issuer (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a Business
Day); (C) the nature of the proposed amendment; and (D) such other matters as
the L/C Issuer may reasonably request.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit Application from the Borrower and, if not, the L/C Issuer will provide
the Administrative Agent with a copy thereof. Upon receipt by the L/C Issuer of
confirmation from the Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested date, issue
a Letter of Credit for the account of the Borrower or enter into the applicable
amendment, as the case may be. Immediately upon the issuance of each Letter of
Credit, each Revolving Credit Lender shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from the L/C Issuer a risk participation
in such Letter of Credit in an amount equal to the product of such Lender's Pro
Rata Share times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic renewal provisions (each, an
"Auto-Renewal Letter of Credit"); provided, that any such Auto-Renewal Letter of
Credit must permit the L/C Issuer to prevent any such renewal at least once in
each twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
(the "Nonrenewal Notice Date") in each such twelve-month period to be agreed
upon at the time such Letter of Credit is issued. Unless otherwise directed by
the L/C Issuer, the Borrower shall not be required to make a specific request to
the L/C Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the renewal of such Letter of Credit at any
time to an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the L/C Issuer shall not permit any such renewal if (A)
the L/C Issuer has determined that it would have no obligation at such time to
issue such Letter of Credit in its renewed form under the terms hereof (by
reason of the provisions of Section 2.03(a)(ii) or otherwise), or (B) it has
received notice (which may be by telephone or in writing) on or before the day
that is five (5) Business Days before the Nonrenewal Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to permit such
renewal or (2) from the Administrative Agent, any Revolving Credit
43
Lender or the Borrower that one or more of the applicable conditions specified
in Section 4.02 is not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or to
the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and
the Administrative Agent a true and complete copy of such Letter of Credit or
amendment.
(c) Drawings and Reimbursements; Funding of Participations. (i) Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof. If the L/C Issuer notifies the Borrower of such
payment prior to 11:00 a.m. (Charlotte, North Carolina time) on the date of any
payment by the L/C Issuer under a Letter of Credit (each such date, an "Honor
Date"), the Borrower shall reimburse the L/C Issuer through the Administrative
Agent in an amount equal to the amount of such drawing; provided, that if such
notice is not provided to the Borrower prior to 11:00 a.m. (Charlotte, North
Carolina time) on the Honor Date, then the Borrower shall reimburse the L/C
Issuer through the Administrative Agent in an amount equal to the amount of such
drawing on the next succeeding Business Day and such extension of time shall be
reflected in computing fees in respect of any such Letter of Credit. If the
Borrower fails to so reimburse the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Revolving Credit Lender of the Honor Date, the
amount of the unreimbursed drawing (the "Unreimbursed Amount"), and the amount
of such Revolving Credit Lender's Pro Rata Share thereof. In such event, the
Borrower shall be deemed to have requested a Revolving Credit Borrowing of Base
Rate Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02 for the principal amount of Base Rate Loans, but subject to the
amount of the unutilized portion of the Revolving Credit Commitments and the
conditions set forth in Section 4.02 (other than the delivery of a Committed
Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent
pursuant to this Section 2.03(c)(i) may be given by telephone if immediately
confirmed in writing; provided, that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Revolving Credit Lender (including the Lender acting as L/C
Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer at the
Administrative Agent's Office in an amount equal to its Pro Rata Share of the
Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in
such notice by the Administrative Agent, whereupon, subject to the provisions of
Section 2.03(c)(iii), each Revolving Credit Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to the Borrower in such amount.
The Administrative Agent shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Credit Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so refinanced,
which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the Default Rate. In such event, each Revolving
Credit Lender's
44
payment to the Administrative Agent for the account of the L/C Issuer pursuant
to Section 2.03(c)(ii) shall be deemed payment in respect of its participation
in such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03.
(iv) Until each Revolving Credit Lender funds its Revolving Credit
Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer
for any amount drawn under any Letter of Credit, interest in respect of such
Lender's Pro Rata Share of such amount shall be solely for the account of the
L/C Issuer.
(v) Each Revolving Credit Lender's obligation to make Revolving Credit
Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under
Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right which such Lender
may have against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Revolving Credit Lender's obligation to make
Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the
conditions set forth in Section 4.02 (other than delivery by the Borrower of a
Committed Loan Notice ). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for
the amount of any payment made by the L/C Issuer under any Letter of Credit,
together with interest as provided herein.
(vi) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount required to be
paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c)
by the time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled
to recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time
to time in effect. A certificate of the L/C Issuer submitted to any Revolving
Credit Lender (through the Administrative Agent) with respect to any amounts
owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.
(d) Repayment of Participations. (i) If, at any time after the L/C
Issuer has made a payment under any Letter of Credit and has received from any
Revolving Credit Lender such Lender's L/C Advance in respect of such payment in
accordance with Section 2.03(c), the Administrative Agent receives for the
account of the L/C Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Lender its Pro Rata
Share thereof (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's L/C Advance was
outstanding) in the same funds as those received by the Administrative Agent.
45
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.06 (including
pursuant to any settlement entered into by the L/C Issuer in its discretion),
each Revolving Credit Lender shall pay to the Administrative Agent for the
account of the L/C Issuer its Pro Rata Share thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that the Borrower may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law;
(v) any exchange, release or nonperfection of any Collateral, or any
release or amendment or waiver of or consent to departure from the Guaranty
or any other guarantee, for all or any of the Obligations of the Borrower
in respect of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
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The Borrower shall promptly examine a copy of each Letter of Credit
and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Borrower's instructions or other irregularity,
the Borrower will promptly notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Letter of Credit Application. The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, any
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for any of the
matters described in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Borrower which
the Borrower proves were caused by the L/C Issuer's willful misconduct or gross
negligence or the L/C Issuer's willful or grossly negligent failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C
Issuer may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuer shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent, (i)
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing and the
conditions set forth in Section 4.02 to a Revolving Credit Borrowing cannot then
be met, or (ii) if, as of the Letter of Credit Expiration Date, any Letter of
Credit may for any reason remain outstanding and partially or wholly undrawn,
the Borrower shall immediately Cash Collateralize the then Outstanding Amount of
all L/C Obligations (in an amount equal to such Outstanding Amount determined as
of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as
the case may be). For purposes hereof, "Cash Collateralize" means to pledge and
deposit with or deliver to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, as collateral for the L/C Obligations,
47
cash or deposit account balances ("Cash Collateral") pursuant to documentation
in form and substance reasonably satisfactory to the Administrative Agent and
the L/C Issuer (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. The Borrower hereby grants
to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders,
a security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America. If at any
time the Administrative Agent determines that any funds held as Cash Collateral
are subject to any right or claim of any Person other than the Administrative
Agent or that the total amount of such funds is less than the aggregate
Outstanding Amount of all L/C Obligations, the Borrower will, forthwith upon
demand by the Administrative Agent, pay to the Administrative Agent, as
additional funds to be deposited and held in the deposit accounts at Bank of
America as aforesaid, an amount equal to the excess of (a) such aggregate
Outstanding Amount over (b) the total amount of funds, if any, then held as Cash
Collateral that the Administrative Agent determines to be free and clear of any
such right and claim. Upon the drawing of any Letter of Credit for which funds
are on deposit as Cash Collateral, such funds shall be applied, to the extent
permitted under applicable law, to reimburse the L/C Issuer. To the extent the
amount of any Cash Collateral exceeds the then Outstanding Amount of such L/C
Obligations and so long as no Event of Default has occurred and is continuing,
the excess shall be refunded to the Borrower.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly agreed
by the L/C Issuer and the Borrower when a Letter of Credit is issued (including
any such agreement applicable to an Existing Letter of Credit), (i) the rules of
the "International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance shall apply to each commercial Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender in
accordance with its Pro Rata Share a Letter of Credit fee for each Letter of
Credit equal to the Applicable Rate times the daily maximum amount then
available to be drawn under such Letter of Credit (whether or not such maximum
amount is then in effect under such Letter of Credit if such maximum amount
increases periodically pursuant to the terms of such Letter of Credit). Such
letter of credit fees shall be computed on a quarterly basis in arrears. Such
letter of credit fees shall be due and payable on the first Business Day after
the end of each March, June, September and December, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the daily maximum amount of each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee with respect to each Letter of Credit in the amounts and at the
times specified in the Fee Letter. In
48
addition, the Borrower shall pay directly to the L/C Issuer for its own account
the customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the L/C Issuer relating to letters of
credit as from time to time in effect. Such customary fees and standard costs
and charges are due and payable within five (5) Business Days of demand and are
nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
2.04 Swing Line Loans. (a) The Swing Line. Subject to the terms and
conditions set forth herein, the Swing Line Lender agrees to make loans (each
such loan, a "Swing Line Loan") to the Borrower from time to time on any
Business Day until the Maturity Date in an aggregate amount not to exceed at any
time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact
that such Swing Line Loans, when aggregated with the Pro Rata Share of the
Outstanding Amount of Loans and L/C Obligations of the Lender acting as Swing
Line Lender, may exceed the amount of such Lender's Commitment; provided,
however, that after giving effect to any Swing Line Loan, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate
Outstanding Amount of the Revolving Credit Loans of any Lender, plus such
Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus
such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans
shall not exceed such Lender's Revolving Credit Commitment; provided, further,
that the Borrower shall not use the proceeds of any Swing Line Loan to refinance
any outstanding Swing Line Loan. Within the foregoing limits, and subject to the
other terms and conditions hereof, the Borrower may borrow under this Section
2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each
Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a
Swing Line Loan, each Revolving Credit Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Lender's Pro Rata Share times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon
the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $100,000, and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Revolving Credit Lender) prior to 2:00
p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing
Line Lender not to make such Swing Line Loan as a result of the limitations set
forth in
49
the proviso to the first sentence of Section 2.04(a), or (B) that one or more of
the applicable conditions specified in Section 4.02 is not then satisfied, then,
subject to the terms and conditions hereof, the Swing Line Lender will, not
later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower.
(c) Refinancing of Swing Line Loans. (i) The Swing Line Lender at any
time in its sole and absolute discretion may request, on behalf of the Borrower
(which hereby irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Revolving Credit Lender make a Base Rate Loan in an amount
equal to such Lender's Pro Rata Share of the amount of Swing Line Loans then
outstanding. Such request shall be made in writing (which written request shall
be deemed to be a Committed Loan Notice for purposes hereof) and in accordance
with the requirements of Section 2.02, without regard to the minimum and
multiples specified therein for the principal amount of Base Rate Loans, but
subject to the unutilized portion of the Aggregate Revolving Credit Commitments
and the conditions set forth in Section 4.02. The Swing Line Lender shall
furnish the Borrower with a copy of the applicable Committed Loan Notice
promptly after delivering such notice to the Administrative Agent. Each
Revolving Credit Lender shall make an amount equal to its Pro Rata Share of the
amount specified in such Committed Loan Notice available to the Administrative
Agent in immediately available funds for the account of the Swing Line Lender at
the Administrative Agent's Office not later than 1:00 p.m. on the day specified
in such Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii), each
Revolving Credit Lender that so makes funds available shall be deemed to have
made a Base Rate Loan to the Borrower in such amount. The Administrative Agent
shall remit the funds so received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by
such a Revolving Credit Borrowing in accordance with Section 2.04(c)(i), the
request for Base Rate Loans submitted by the Swing Line Lender as set forth
herein shall be deemed to be a request by the Swing Line Lender that each of the
Revolving Credit Lenders fund its risk participation in the relevant Swing Line
Loan and each Revolving Credit Lender's payment to the Administrative Agent for
the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be
deemed payment in respect of such participation.
(iii) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line
Lender shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the Federal Funds Rate from time to time in effect. A certificate of the Swing
Line Lender submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be conclusive absent
manifest error.
(iv) Each Revolving Credit Lender's obligation to make Revolving
Credit Loans or to purchase and fund risk participations in Swing Line Loans
pursuant to this Section 2.04(c) shall be absolute and unconditional and shall
not be affected by any
50
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Revolving Credit Lender's obligation to make Revolving Credit Loans pursuant to
this Section 2.04(c) is subject to the conditions set forth in Section 4.02. No
such funding of risk participations shall relieve or otherwise impair the
obligation of the Borrower to repay Swing Line Loans, together with interest as
provided herein.
(d) Repayment of Participations. (i) At any time after any Revolving
Credit Lender has purchased and funded a risk participation in a Swing Line
Loan, if the Swing Line Lender receives any payment on account of such Swing
Line Loan, the Swing Line Lender will distribute to such Lender its Pro Rata
Share of such payment (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's risk participation was
funded) in the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by the
Swing Line Lender under any of the circumstances described in Section 10.06
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Revolving Credit Lender shall pay to the Swing Line Lender
its Pro Rata Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is returned, at a
rate per annum equal to the Federal Funds Rate. The Administrative Agent will
make such demand upon the request of the Swing Line Lender.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Revolving Credit Lender funds its Base Rate Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender's Pro Rata
Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall
be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower shall make
all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.
2.05 Prepayments. (a) Optional. (i) The Borrower may, upon notice to
the Administrative Agent, at any time or from time to time voluntarily prepay
Loans in whole or in part without premium or penalty; provided, that (1) such
notice must be received by the Administrative Agent not later than 12:30 p.m.
(Charlotte, North Carolina time) (A) three (3) Business Days prior to any date
of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base
Rate Loans; (2) any prepayment of Eurodollar Rate Loans shall be in a principal
amount of $2,000,000 or a whole multiple of $500,000 in excess thereof; and (3)
any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or
a whole multiple of $100,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding. Each such notice shall specify
the date and amount of such prepayment and the Type(s) of Loans to be prepaid.
The Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Pro Rata Share of such
51
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each prepayment of the
outstanding Term Loans pursuant to this Section 2.05(a) shall be applied, first,
in direct order of maturities, to any principal repayment installments thereof
that are due within eighteen (18) months after the date of such prepayment, and
second, on a pro-rata basis, to the other principal repayment installments
thereof; and each such prepayment shall be paid to the Lenders in accordance
with their respective Pro Rata Shares.
(ii) The Borrower may, upon notice to the Swing Line Lender (with a
copy to the Administrative Agent), at any time or from time to time, voluntarily
prepay Swing Line Loans in whole or in part without premium or penalty;
provided, that (1) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the prepayment, and
(2) any such prepayment shall be in a minimum principal amount of $100,000. Each
such notice shall specify the date and amount of such prepayment. If such notice
is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.
(iii) Notwithstanding anything to the contrary contained in this
Agreement, the Borrower may rescind any notice of prepayment under Section
2.05(a)(i) or (a)(ii) if such prepayment would have resulted from a refinancing
of all of the Facilities, which refinancing shall not be consummated or shall
otherwise be delayed.
(b) Mandatory. (i) Within five (5) Business Days after financial
statements have been delivered pursuant to Section 6.01(a) and the related
Compliance Certificate has been delivered pursuant to Section 6.02(b), the
Borrower shall prepay an aggregate principal amount of Loans in an amount equal
to 50% of Excess Cash Flow for the fiscal year covered by such financial
statements commencing with the fiscal year ended December 31, 2004; provided,
that such percentage shall be reduced to (A) 25% if the Leverage Ratio as of the
last day of the prior fiscal year was less than 3.75:1.00 and (B) 0% if the
Leverage Ratio as of the last day of the prior fiscal year was less than
2.75:1.00.
(ii) (A) If (x) Holdings or any of its Subsidiaries Disposes of any
property or assets (other than any Disposition of any property or assets
permitted by Section 7.05(a), (b), (c), (d) (to the extent constituting a
Disposition by any Subsidiary that is not a Loan Party to a Loan Party), (e),
(g), (h), (i), (j) or (k)) or (y) any Casualty Event occurs, which in the
aggregate results in the realization or receipt by Holdings or such Subsidiary
of Net Cash Proceeds, in excess of $1,000,000, the Borrower shall (1) give
written notice to the Administrative Agent thereof on or prior to the date of
the realization or receipt of such Net Cash Proceeds and (2) except to the
extent the Borrower elects in such notice to reinvest all or a portion of such
Net Cash Proceeds in accordance with Section 2.05(b)(ii)(B) (which election may
only be made if no Event of Default has occurred and is then continuing), prepay
an aggregate principal amount of Loans in an amount equal to 100% of all Net
Cash Proceeds received therefrom within two (2) Business Days of receipt thereof
by Holdings or such Subsidiary.
52
(B) With respect to any Net Cash Proceeds realized or received with
respect to any Disposition (other than as specifically excluded in Section
2.05(b)(ii)(A)) or any Casualty Event, at the option of the Borrower, and so
long as no Event of Default shall have occurred and be continuing, the Borrower
may reinvest all or any portion of such Net Cash Proceeds in assets useful for
its business within three hundred and sixty-five (365) days (or, with respect to
the Net Cash Proceeds of a Casualty Event, five hundred and forty (540) days)
following receipt of such Net Cash Proceeds; provided, however, that if any Net
Cash Proceeds are no longer intended to be so reinvested at any time after
delivery of a notice of reinvestment election, an amount equal to any such Net
Cash Proceeds shall be immediately applied to the prepayment of the Loans as set
forth in this Section 2.05; provided, further, however, that no such Net Cash
Proceeds of a Casualty Event shall be reinvested for the repair or replacement
of property damaged or lost in such Casualty Event if the net book value of such
property exceeds $5,000,000 unless, after giving Pro Forma Effect to any
Indebtedness to be incurred in connection with such replacement or restoration,
the Loan Parties would be in compliance with the financial covenants set forth
in Section 7.11 as of the most recent fiscal quarter end preceding the date of
determination.
(iii) The Borrower shall prepay an aggregate principal amount of Loans
in an amount equal to 50% of all Net Cash Proceeds received from any Specified
Equity Issuance (if the Leveraged Ratio as of the last day of the prior fiscal
quarter is equal to or greater than 3.00: 1.00); provided, that such percentage
shall be reduced to 25% if the Leverage Ratio as of the last day of the prior
fiscal quarter was less than 3.00:1.00.
(iv) Upon the incurrence or issuance by Holdings or any of its
Subsidiaries of (A) any Indebtedness not expressly permitted to be incurred or
issued pursuant to Section 7.03 or (B) any Permitted Subordinated Indebtedness
under Section 7.03(a)(v), the Borrower shall prepay an aggregate principal
amount of Loans in an amount equal to 100% of all Net Cash Proceeds received
therefrom immediately upon receipt thereof by Holdings or such Subsidiary.
(v) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrower shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.05(b)(v)
unless after the prepayment in full of the Loans and Swing Line Loans the Total
Outstandings exceed the Aggregate Commitments then in effect.
(vi) Each prepayment of Loans pursuant to this Section 2.05(b) shall
be applied, first, in direct order of maturities, to any principal repayment
installments of the Term Facility that are due within six (6) months after the
date of such prepayment, second, on a pro-rata basis, to the other principal
repayment installments of the Term Facility and, thereafter, to the Revolving
Credit Facility (the amount of such prepayment, the "Reduction Amount") in the
manner set forth in clause (vii) of this Section 2.05(b); and each such
prepayment shall be paid to the Lenders in accordance with their respective Pro
Rata Shares.
(vii) The Revolving Credit Facility shall be permanently reduced by
the Reduction Amount on the date of the applicable prepayment and such
prepayment shall be, first, applied to prepay L/C Borrowings outstanding at such
time until all such L/C Borrowings are paid in full, second, applied to prepay
Swing Line Loans outstanding at such time until all such
53
Swing Line Loans are paid in full, third, applied to prepay Revolving Credit
Loans outstanding at such time until all such Revolving Credit Loans are paid in
full and, fourth, used to Cash Collateralize the L/C Obligations; and,
thereafter, the amount remaining, if any, after the prepayment in full of all
Loans and L/C Borrowings outstanding at such time and the L/C Obligations have
been Cash Collateralized in full may be retained by the Borrower for use in the
ordinary course of its business. Upon the drawing of any Letter of Credit which
has been Cash Collateralized, such funds shall be applied (without any further
action by or notice to or from the Borrower or any other Loan Party) to
reimburse the L/C Issuer or the Revolving Credit Lenders, as applicable.
(viii) Funding Losses, Etc. All prepayments under this Section 2.05
shall be made together with, in the case of any such prepayment of a Eurodollar
Rate Loan on a date other than the last day of an Interest Period therefor, any
amounts owing in respect of such Eurodollar Rate Loan pursuant to Section 3.05.
Notwithstanding any of the other provisions of Section 2.05(b), so long as no
Event of Default shall have occurred and be continuing, if any prepayment of
Eurodollar Rate Loans is required to be made under this Section 2.05(b), other
than on the last day of the Interest Period therefor, the Borrower may, in its
sole discretion, deposit the amount of any such prepayment otherwise required to
be made thereunder into a Cash Collateral Account until the last day of such
Interest Period, at which time the Administrative Agent shall be authorized
(without any further action by or notice to or from the Borrower or any other
Loan Party) to apply such amount to the prepayment of such Loans in accordance
with this Section 2.05(b). Upon the occurrence and during the continuance of any
Event of Default, the Administrative Agent shall also be authorized (without any
further action by or notice to or from the Borrower or any other Loan Party) to
apply such amount to the prepayment of the outstanding Loans in accordance with
this Section 2.05(b).
2.06 Termination or Reduction of Commitments. (a) Optional. The
Borrower may, upon written notice to the Administrative Agent, terminate the
unused portions of the Term Commitments, the Letter of Credit Sublimit, or the
unused Revolving Credit Commitments, or from time to time permanently reduce the
unused portions of the Term Commitments, the Letter of Credit Sublimit, or the
unused Revolving Credit Commitments; provided, that (i) any such notice shall be
received by the Administrative Agent five (5) Business Days prior to the date of
termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $500,000 or any whole multiple of $100,000 in excess thereof
and (iii) the Borrower shall not terminate or reduce the unused portions of the
Term Commitments, the Letter of Credit Sublimit, or the unused Revolving Credit
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments.
Notwithstanding the foregoing, the Borrower may rescind or postpone any notice
of termination of the Commitments if such termination would have resulted from a
refinancing of all of the Facilities, which refinancing shall not be consummated
or otherwise shall be delayed.
(b) Mandatory. (i) The Term Commitment of each Term Lender shall be
automatically and permanently reduced to $0 on the Closing Date.
(ii) The Revolving Credit Facility shall be automatically and
permanently reduced ratably among the Revolving Credit Lenders on each date on
which the prepayment of the Revolving Credit Facility is required to be made
pursuant to Section 2.05(b) by an amount
54
equal to the applicable Reduction Amount (regardless of whether any Revolving
Credit Loans, Swing Line Loans or Letters of Credit are then outstanding).
(iii) If after giving effect to any reduction or termination of unused
Commitments under this Section 2.06, the Letter of Credit Sublimit or the Swing
Line Sublimit exceeds the amount of the Revolving Credit Facility, such Sublimit
shall be automatically reduced by the amount of such excess.
(c) Application of Commitment Reductions; Payment of Fees. The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of unused portions of the Term Commitment, the Letter of Credit
Sublimit, or the unused Revolving Credit Commitment under this Section 2.06.
Upon any reduction of unused Commitments under a Facility, the Commitment of
each Lender under such Facility shall be reduced by such Lender's Pro Rata Share
of the amount by which such Facility is reduced (other than the termination of
the Commitment of any Lender as provided in Section 3.07). All commitment fees
accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.
2.07 Repayment of Loans. (a) Term Loans. The Borrower shall repay to
the Administrative Agent for the ratable account of the Term Lenders the
aggregate principal amount of all Term Loans outstanding in twenty-eight (28)
consecutive quarterly installments as follows (which installments shall be
reduced as a result of the application of prepayments in accordance with the
order of priority set forth in Section 2.05 or increased as a result of any
increase in the amount of Term Loans pursuant to Section 2.14 (such increased
amortization payments to be calculated in the same manner (and on the same
basis) as the schedule set forth below for the Term Loans made as of the Closing
Date)):
- -------------------------------------------------------------
Date Term Loan Principal Amortization Payment
- -------------------------------------------------------------
February 21, 2004, $ 1,237,500
- -------------------------------------------------------------
May 21, 2004, $ 1,237,500
- -------------------------------------------------------------
August 21, 2004, $ 1,237,500
- -------------------------------------------------------------
November 21, 2004 $ 1,237,500
- -------------------------------------------------------------
- -------------------------------------------------------------
February 21, 2005, $ 1,237,500
- -------------------------------------------------------------
May 21, 2005, $ 1,237,500
- -------------------------------------------------------------
August 21, 2005, $ 1,237,500
- -------------------------------------------------------------
November 21, 2005 $ 1,237,500
- -------------------------------------------------------------
- -------------------------------------------------------------
February 21, 2006, $ 1,237,500
- -------------------------------------------------------------
May 21, 2006, $ 1,237,500
- -------------------------------------------------------------
August 21, 2006, $ 1,237,500
- -------------------------------------------------------------
November 21, 2006 $ 1,237,500
- -------------------------------------------------------------
- -------------------------------------------------------------
February 21, 2007, $ 1,237,500
- -------------------------------------------------------------
May 21, 2007, $ 1,237,500
- -------------------------------------------------------------
August 21, 2007, $ 1,237,500
- -------------------------------------------------------------
55
- -------------------------------------------------------------
Date Term Loan Principal Amortization Payment
- -------------------------------------------------------------
November 21, 2007 $ 1,237,500
- -------------------------------------------------------------
- -------------------------------------------------------------
February 21, 2008, $ 1,237,500
- -------------------------------------------------------------
May 21, 2008, $ 1,237,500
- -------------------------------------------------------------
August 21, 2008, $ 1,237,500
- -------------------------------------------------------------
November 21, 2008 $ 1,237,500
- -------------------------------------------------------------
- -------------------------------------------------------------
February 21, 2009, $ 1,237,500
- -------------------------------------------------------------
May 21, 2009, $ 1,237,500
- -------------------------------------------------------------
August 21, 2009, $ 1,237,500
- -------------------------------------------------------------
November 21, 2009 $ 1,237,500
- -------------------------------------------------------------
- -------------------------------------------------------------
February 21, 2010, $116,325,000
- -------------------------------------------------------------
May 21, 2010, $116,325,000
- -------------------------------------------------------------
August 21, 2010, $116,325,000
- -------------------------------------------------------------
November 21, 2010 $116,325,000
- -------------------------------------------------------------
provided, however, that the final principal repayment installment of the Term
Loans shall be repaid on the Maturity Date and in any event shall be in an
amount equal to the aggregate principal amount of all Term Loans outstanding on
such date.
(b) Revolving Credit Loans. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Maturity Date for the Revolving Credit Facility the aggregate principal
amount of all Revolving Credit Loans outstanding on such date.
(c) Swing Line Loans. The Borrower shall repay each Swing Line Loan on
the earlier to occur of (i) the date five (5) Business Days after such Loan is
made and (ii) the Maturity Date.
2.08 Interest. (a) Subject to the provisions of Section 2.08(b), (i)
each Eurodollar Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on
the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate for Revolving
Credit Loans.
(b) While any Event of Default set forth in Section 8.01(a) or (f)
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
56
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09 Fees. In addition to certain fees described in Sections 2.03(i)
and (j):
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent
for the account of each Revolving Credit Lender in accordance with its Pro
Rata Share, a commitment fee equal to 0.50% per annum times the actual
daily amount by which the aggregate Revolving Credit Commitments exceed the
sum of (A) the Outstanding Amount of Revolving Credit Loans and (B) the
Outstanding Amount of L/C Obligations; provided, however, that any
commitment fee accrued with respect to any of the Commitments of a
Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the
Borrower so long as such Lender shall be a Defaulting Lender except to the
extent that such commitment fee shall otherwise have been due and payable
by the Borrower prior to such time; and provided, further that no
commitment fee shall accrue on any of the Commitments of a Defaulting
Lender so long as such Lender shall be a Defaulting Lender. The commitment
fee shall accrue at all times from the date hereof until the Maturity Date,
including at any time during which one or more of the conditions in Article
IV is not met, and shall be due and payable quarterly in arrears on the
last Business Day of each March, June, September and December, commencing
with the first such date to occur after the Closing Date, and on the
Maturity Date for the applicable Facility. The commitment fee shall be
calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be
computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect.
(b) Other Fees. (i) The Borrower shall pay to the Arrangers and the
Administrative Agent for their own respective accounts fees in the amounts
and at the times specified in the Fee Letter. Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Agents such fees as shall have been
separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
2.10 Computation of Interest and Fees. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of three hundred and sixty-five (365)
or three hundred and sixty-six (366) days, as the case may be, and actual days
elapsed. All other computations of fees and interest shall be made on the basis
of a three hundred and sixty (360) day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on
the basis of a three hundred and sixty-five (365) day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on
57
which the Loan or such portion is paid, provided, that any Loan that is repaid
on the same day on which it is made shall, subject to Section 2.12(a), bear
interest for one (1) day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
2.11 Evidence of Indebtedness. (a) The Credit Extensions made by each
Lender shall be evidenced by one or more accounts or records maintained by such
Lender and evidenced by one or more entries in the Register maintained by the
Administrative Agent, acting solely for purposes of Treasury Regulation Section
5f.103-1(c), as agent for the Borrower, in each case in the ordinary course of
business. The accounts or records maintained by the Administrative Agent and
each Lender shall be prima facie evidence absent manifest error of the amount of
the Credit Extensions made by the Lenders to the Borrower and the interest and
payments thereon. Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligation of the Borrower hereunder to
pay any amount owing with respect to the Obligations. In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through the Administrative
Agent, the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note payable to such Lender, which shall evidence such
Lender's Loans in addition to such accounts or records. Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable), amount
and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in Section
2.11(a), each Lender and the Administrative Agent shall maintain in accordance
with its usual practice accounts or records and, in the case of the
Administrative Agent, entries in the Register, evidencing the purchases and
sales by such Lender of participations in Letters of Credit and Swing Line
Loans. In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.
(c) Entries made in good faith by the Administrative Agent in the
Register pursuant to Sections 2.11(a) and (b), and by each Lender in its account
or accounts pursuant to Sections 2.11(a) and (b), shall be prima facie evidence
of the amount of principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register, each Lender and, in
the case of such account or accounts, such Lender, under this Agreement and the
other Loan Documents, absent manifest error; provided, that the failure of the
Administrative Agent or such Lender to make an entry, or any finding that an
entry is incorrect, in the Register or such account or accounts shall not limit
or otherwise affect the obligations of the Borrower under this Agreement and the
other Loan Documents.
2.12 Payments Generally. (a) All payments to be made by the Borrower
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff. Except as otherwise expressly provided herein, all
payments by the Borrower hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
Administrative Agent's Office in Dollars and in immediately available
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funds not later than 2:00 p.m. on the date specified herein. The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender's Lending Office. All payments received by the
Administrative Agent after 2:00 p.m. shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.
(b) If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Loans to be made in the
next succeeding calendar month, such payment shall be made on the immediately
preceding Business Day.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately
available funds, together with interest thereon in respect of each day from
and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds at the Federal Funds
Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall
forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period
from the date such amount was made available by the Administrative Agent to
the Borrower to the date such amount is recovered by the Administrative
Agent (the "Compensation Period") at a rate per annum equal to the Federal
Funds Rate from time to time in effect. When such Lender makes payment to
the Administrative Agent (together with all accrued interest thereon), then
such payment amount (excluding the amount of any interest which may have
accrued and been paid in respect of such late payment) shall constitute
such Lender's Loan included in the applicable Borrowing. If such Lender
does not pay such amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent may make a demand therefor upon the
Borrower, and the Borrower shall pay such amount to the Administrative
Agent, together with interest thereon for the Compensation Period at a rate
per annum equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
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A notice of the Administrative Agent to any Lender or the Borrower
with respect to any amount owing under this Section 2.12(c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit and Swing Line Loans are several and not
joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
(g) Whenever any payment received by the Administrative Agent under
this Agreement or any of the other Loan Documents is insufficient to pay in full
all amounts due and payable to the Administrative Agent and the Lenders under or
in respect of this Agreement and the other Loan Documents on any date, such
payment shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the order of priority set forth in
Section 8.03. If the Administrative Agent receives funds for application to the
Obligations of the Loan Parties under or in respect of the Loan Documents under
circumstances for which the Loan Documents do not specify the manner in which
such funds are to be applied, the Administrative Agent may, but shall not be
obligated to, elect to distribute such funds to each of the Lenders in
accordance with such Lender's Pro Rata Share of the sum of (a) the Outstanding
Amount of all Loans outstanding at such time and (b) the Outstanding Amount of
all L/C Obligations outstanding at such time, in repayment or prepayment of such
of the outstanding Loans or other Obligations then owing to such Lender.
2.13 Sharing of Payments. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it, or
the participations in L/C Obligations or in Swing Line Loans held by it, any
payment (whether voluntary, involuntary, through the exercise of any right of
setoff, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them and/or such subparticipations in the
participations in L/C Obligations or Swing Line Loans held by them, as the case
may be, as shall be necessary to cause such purchasing Lender to share the
excess payment in respect of such Loans or such participations, as the case may
be, pro rata with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender under any
of the circumstances described in Section 10.06 (including pursuant to any
settlement entered into by
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the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) 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, without further
interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of setoff, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section 2.13 and will in each case notify the Lenders following any such
purchases or repayments. Each Lender that purchases a participation pursuant to
this Section 2.13 shall from and after such purchase have the right to give all
notices, requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Lender were the original owner of the
Obligations purchased.
2.14 Increase in Term Commitments. (a) Provided there exists no
Default, upon notice to the Administrative Agent (which shall promptly notify
the Lenders), the Borrower may on up to three (3) different occasions (in the
aggregate with Section 2.15), request an increase in the Term Commitments by an
amount not exceeding $100,000,000; provided, that (i) after giving effect to any
such increase in the Term Commitments, the aggregate amount of increased
Commitments that have been effected pursuant to this Section 2.14 and Section
2.15 shall not exceed $100,000,000 at any time and (ii) any such increase shall
be in an aggregate amount of $500,000 or any whole multiple of $100,000 in
excess thereof. At the time of the sending of such notice, the Borrower (in
consultation with the Administrative Agent) shall specify the time period within
which each Lender is requested to respond (which shall in no event be less than
ten (10) Business Days from the date of delivery of such notice to the Lenders).
Each Lender shall notify the Administrative Agent within such time period
whether or not it agrees to increase its Term Commitment and, if so, whether by
an amount equal to, greater than, or less than its Pro Rata Share of such
requested increase. Any Lender not responding within such time period shall be
deemed to have declined to increase its Term Commitment. The Administrative
Agent shall notify the Borrower and each Lender of the Lenders' responses to
each request made hereunder. To achieve the full amount of a requested increase,
the Borrower may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance reasonably satisfactory to
the Administrative Agent and its counsel.
(b) If the Term Commitments are increased in accordance with this
Section 2.14, the Administrative Agent and the Borrower shall determine the
effective date (the "Term Commitments Increase Effective Date") and the final
allocation of such increase. The Administrative Agent shall promptly notify the
Borrower and the Lenders of the final allocation of such increase and the Term
Commitments Increase Effective Date. As a condition precedent to such increase,
the Borrower shall deliver to the Administrative Agent a certificate of each
Loan Party dated as of the Term Commitments Increase Effective Date signed by a
Responsible Officer of such Loan Party (i) certifying and attaching (A) the
resolutions adopted by such Loan Party approving or consenting to such increase
and (B) a pro forma Compliance Certificate
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demonstrating that, upon after giving Pro Forma Effect to such increase, the
Loan Parties would be in compliance with the financial covenants set forth in
Section 7.11, and (ii) in the case of the Borrower, certifying that, before and
after giving effect to such increase, (A) the representations and warranties
contained in Article V and the other Loan Documents are true and correct in all
material respects on and as of the Term Commitments Increase Effective Date,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they are true and correct in all material
respects as of such earlier date, and except that for purposes of this Section
2.14, the representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to subsections (a) and (b), respectively, of Section 6.01, and (B) no
Default exists. On each Term Commitments Increase Effective Date, each of the
Lenders having an Term Loan prior to such Term Commitments Increase Effective
Date (the "Pre-Increase Term Lenders") shall assign to any Lender making an
additional Term Loan on the Term Commitments Increase Effective Date (the
"Post-Increase Term Lenders"), and such Post-Increase Term Lenders shall
purchase from each Pre-Increase Term Lenders, at the principal amount thereof,
such interests in the Term Loans outstanding on such Term Commitments Increase
Effective Date as shall be necessary in order that, after giving effect to all
such assignments and purchases, such Term Loans will be held by Pre-Increase
Term Lenders and Post-Increase Term Lenders ratably in accordance with the
Outstanding Amount of Term Loans and increased Term Commitments after giving
effect to such increased Term Commitments.
(c) This Section shall supersede any provisions in Section 2.06(b)(i),
2.13 or 10.01 to the contrary.
2.15 Increase in Revolving Credit Commitments. (a) Provided there
exists no Default, upon notice to the Administrative Agent (which shall promptly
notify the Lenders), the Borrower may on up to three (3) different occasions (in
the aggregate with Section 2.14) request an increase in the Revolving Credit
Commitments by an amount not exceeding $50,000,000; provided, that (i) after
giving effect to any such increase in the Revolving Credit Commitments, the
aggregate amount of increased Commitments that have been effected pursuant to
Section 2.14 and this Section 2.15 shall not exceed $100,000,000 at any time and
(ii) any such increase shall be in an aggregate amount of $500,000 or any whole
multiple of $100,000 in excess thereof. At the time of the sending of such
notice, the Borrower (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall in no event be less than ten (10) Business Days from the date of delivery
of such notice to the Lenders). Each Lender shall notify the Administrative
Agent within such time period whether or not it agrees to increase its Revolving
Credit Commitment and, if so, whether by an amount equal to, greater than, or
less than its Pro Rata Share of such requested increase. Any Lender not
responding within such time period shall be deemed to have declined to increase
its Revolving Credit Commitment. The Administrative Agent shall notify the
Borrower and each Lender of the Lenders' responses to each request made
hereunder. To achieve the full amount of a requested increase, the Borrower may
also invite additional Eligible Assignees to become Lenders pursuant to a
joinder agreement in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.
(b) If the Revolving Credit Commitments are increased in accordance
with this Section 2.15, the Administrative Agent and the Borrower shall
determine the effective date
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(the "Revolving Credit Commitments Increase Effective Date") and the final
allocation of such increase. The Administrative Agent shall promptly notify the
Borrower and the Lenders of the final allocation of such increase and the
Revolving Credit Commitments Increase Effective Date. As a condition precedent
to such increase, the Borrower shall deliver to the Administrative Agent a
certificate of each Loan Party dated as of the Revolving Credit Commitments
Increase Effective Date signed by a Responsible Officer of such Loan Party (i)
certifying and attaching (A) the resolutions adopted by such Loan Party
approving or consenting to such increase and (B) a pro forma Compliance
Certificate demonstrating that, upon after giving pro forma effect to such
increase, the Loan Parties would be in compliance with the financial covenants
set forth in Section 7.11, and (ii) in the case of the Borrower, certifying
that, before and after giving effect to such increase, (A) the representations
and warranties contained in Article V and the other Loan Documents are true and
correct in all material respects on and as of the Revolving Credit Commitments
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct in all material respects as of such earlier date, and except that
for purposes of this Section 2.15, the representations and warranties contained
in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to subsections (a) and (b), respectively,
of Section 6.01, and (B) no Default exists. On each Revolving Credit Commitments
Increase Effective Date, each of the Lenders having a Revolving Credit
Commitment prior to such Revolving Credit Commitments Increase Effective Date
(the "Pre-Increase Revolving Lenders") shall assign to any Lender which is
acquiring a new or additional Revolving Credit Commitment on the Revolving
Credit Commitments Increase Effective Date (the "Post-Increase Revolving
Lenders"), and such Post-Increase Revolving Lenders shall purchase from each
Pre-Increase Revolving Lenders, at the principal amount thereof, such interests
in the Revolving Loans and participation interests in L/C Obligations and Swing
Line Loans outstanding on such Revolving Credit Commitments Increase Effective
Date as shall be necessary in order that, after giving effect to all such
assignments and purchases, such Revolving Loans and participation interests in
L/C Obligations and Swing Line Loans will be held by Pre-Increase Revolving
Lenders and Post-Increase Revolving Lenders ratably in accordance with their
Revolving Credit Commitments after giving effect to such increased Revolving
Credit Commitments.
(c) This Section 2.15 shall supersede any provisions in Section 2.13
or 10.01 to the contrary.
ARTICLE III
TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY
3.01 Taxes. (a) Except as provided in this Section 3.01, any and all
payments by the Borrower to or for the account of any Agent or any Lender under
any Loan Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities
(including additions to tax, penalties and interest) with respect thereto,
excluding, in the case of each Agent and each Lender, taxes imposed on or
measured by its overall net income or overall gross income (including branch
profits), and franchise (and similar) taxes imposed on it in lieu of net income
taxes, by the jurisdiction (or any political subdivision thereof) under the Laws
of which such Agent or such Lender, as the case may be, is organized or
maintains a
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Lending Office, and all liabilities (including additions to tax, penalties and
interest) with respect thereto (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to any Agent or any Lender, (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 3.01), each
of such Agent and such Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions, (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within thirty (30) days after the date of such payment, the
Borrower shall furnish to such Agent or Lender (as the case may be) the original
or a certified copy of a receipt evidencing payment thereof to the extent such a
receipt is issued therefor, or other written proof of payment thereof that is
reasonably satisfactory to the Administrative Agent.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise, property,
intangible or mortgage recording taxes or charges or similar levies which arise
from any payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any
Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Agent and each Lender for
(i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable under this Section
3.01) paid by such Agent and such Lender, and (ii) any liability (including
additions to tax, penalties, interest and expenses) arising therefrom or with
respect thereto, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority;
provided such Agent or Lender, as the case may be, provides the Borrower with a
written statement thereof setting forth in reasonable detail the basis and
calculation of such amounts. Payment under this Section 3.01(c) shall be made
within thirty (30) days after the date such Lender or such Agent makes a demand
therefor.
(d) The Borrower shall not be required pursuant to this Section 3.01
to pay any additional amount to, or to indemnify, any Lender or Agent, as the
case may be, to the extent that such Lender or such Agent becomes subject to
Taxes subsequent to the Closing Date (or, if later, the date such Lender or
Agent becomes a party to this Agreement) as a result of a change in the place of
organization of such Lender or Agent or a change in the lending office of such
Lender, except to the extent that any such change is requested or required by
the Borrower (and provided, that nothing in this clause (d) shall be construed
as relieving the Borrower from any obligation to make such payments or
indemnification in the event of a change that is a change in Law).
(e) If the forms provided by a Lender or an Agent pursuant to Section
10.15(a) at the time such Lender or such Agent, as the case may be, first
becomes a party to this Agreement indicate a United States withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender or Agent, as the case may be, provides
the appropriate forms certifying that a lesser rate applies, whereupon
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withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms; provided, however, that, if at the date of
the Assignment and Acceptance pursuant to which a Lender becomes a party to this
Agreement, the Lender assignor was entitled to payments under clause (a) of this
Section 3.01 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date.
(f) If any Lender or Agent determines that it has received a refund in
respect of any Taxes or Other Taxes as to which indemnification or additional
amounts have been paid to it by the Borrower pursuant to this Section 3.01, it
shall promptly remit such refund (including any interest included in such
refund) to the Borrower (to the extent that it determines that it can do so
without prejudice to the retention of the refund), net of all out-of-pocket
expenses of the Lender or Agent, as the case may be; provided, however, that the
Borrower, upon the request of the Lender or Agent, as the case may be, agrees
promptly to return such refund to such party in the event such party is required
to repay such refund to the relevant taxing authority. Such Lender or Agent, as
the case may be, shall, at the Borrower's request, provide the Borrower with a
copy of any notice of assessment or other evidence of the requirement to repay
such refund received from the relevant taxing authority (provided, that such
Lender or Agent may delete any information therein that such Lender or Agent
deems confidential). Nothing herein contained shall interfere with the right of
a Lender or Agent to arrange its tax affairs in whatever manner it thinks fit
nor oblige any Lender or Agent to claim any tax refund or to disclose any
information relating to its tax affairs or any computations in respect thereof
or require any Lender or Agent to do anything that would prejudice its ability
to benefit from any other refunds, credits, reliefs, remissions or repayments to
which it may be entitled.
(g) Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of Section 3.01(a) or (c) with respect to such Lender it
will, if requested by the Borrower, use commercially reasonable efforts (subject
to such Lender's overall internal policies of general application and legal and
regulatory restrictions) to avoid the consequences of such event, including to
designate another Lending Office for any Loan or Letter of Credit affected by
such event; provided, that such efforts are made on terms that, in the
reasonable judgment of such Lender, cause such Lender and its Lending Office(s)
to suffer no material economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section 3.01(g) shall affect or postpone any of
the Obligations of the Borrower or the rights of such Lender pursuant to
Sections 3.01(a) and (c).
3.02 Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent),
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prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to
Base Rate Loans, either on the last day of the Interest Period therefor, if such
Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day,
or immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted. Each
Lender agrees to designate a different Lending Office if such designation will
avoid the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.
3.03 Inability to Determine Rates. If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, or that Dollar
deposits are not being offered to banks in the London interbank eurodollar
market for the applicable amount and the Interest Period of such Eurodollar Rate
Loan, the Administrative Agent will promptly so notify the Borrower and each
Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar
Rate Loans shall be suspended until the Administrative Agent (upon the
instruction of the Required Lenders) revokes such notice. Upon receipt of such
notice, the Borrower may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or, failing that, will be
deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurodollar Rate Loans. (a) If any Lender determines that as a result of the
introduction of or any change in or in the interpretation of any Law, in each
case after the date hereof, or such Lender's compliance therewith, there shall
be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining Eurodollar Rate Loans or (as the case may be) issuing or
participating in Letters of Credit, or a reduction in the amount received or
receivable by such Lender in connection with any of the foregoing (excluding for
purposes of this Section 3.04(a) any such increased costs or reduction in amount
resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern),
(ii) changes in the basis of taxation of overall net income or overall gross
income (including branch profits), and franchise (and similar) taxes imposed in
lieu of net income taxes, by the United States or any foreign jurisdiction or
any political subdivision of either thereof under the Laws of which such Lender
is organized or maintains a Lending Office, and (iii) reserve requirements
contemplated by Section 3.04(c), then from time to time upon demand of such
Lender setting forth in reasonable detail such increased costs (with a copy of
such demand to the Administrative Agent given in accordance with Section 3.06),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, in each case after the date hereof, or compliance by such Lender (or
its Lending Office) therewith, has the effect of reducing the rate of return on
the capital of such Lender or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder (taking into consideration
its policies with respect to capital adequacy and such Lender's desired return
on capital), then from
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time to time upon demand of such Lender setting forth in reasonable detail the
charge and the calculation of such reduced rate of return (with a copy of such
demand to the Administrative Agent given in accordance with Section 3.06), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction.
(c) The Borrower shall pay to each Lender, as long as such Lender
shall be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional interest on the unpaid principal amount
of each Eurodollar Rate Loan equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive in the absence of manifest
error), which shall be due and payable on each date on which interest is payable
on such Loan, provided the Borrower shall have received at least fifteen (15)
days' prior notice (with a copy to the Administrative Agent) of such additional
interest from such Lender. If a Lender fails to give notice fifteen (15) days
prior to the relevant Interest Payment Date, such additional interest shall be
due and payable fifteen (15) days from receipt of such notice.
(d) The Borrower shall not be required to compensate a Lender
pursuant to Section 3.04(a), (b) or (c) for any such
increased cost or reduction incurred more than one hundred and eighty (180) days
prior to the date that such Lender demands, or notifies the Borrower of its
intention to demand, compensation therefor; provided, that, if the circumstance
giving rise to such increased cost or reduction is retroactive, then such
180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
3.05 Funding Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any
Loan other than a Base Rate Loan on the date or in the amount notified by
the Borrower;
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
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3.06 Matters Applicable to All Requests for Compensation. (a) A
certificate of any Agent or any Lender claiming compensation under this Article
III and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, such Agent or such Lender may use any reasonable averaging and
attribution methods.
(b) With respect to any Lender's claim for compensation under Section
3.01, 3.02, 3.03 or 3.04, the Borrower shall not be required to compensate such
Lender for any amount incurred more than one hundred and eighty (180) days prior
to the date that such Lender notifies the Borrower of the event that gives rise
to such claim. If any Lender requests compensation by the Borrower under Section
3.04, the Borrower may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender to make or continue
from one Interest Period to another Eurodollar Rate Loans, or to convert Base
Rate Loans into Eurodollar Rate Loans, until the event or condition giving rise
to such request ceases to be in effect (in which case the provisions of Section
3.06(c) shall be applicable); provided, that such suspension shall not affect
the right of such Lender to receive the compensation so requested.
(c) If the obligation of any Lender to make or continue from one
Interest Period to another any Eurodollar Rate Loan, or to convert Base Rate
Loans into Eurodollar Rate Loans shall be suspended pursuant to Section 3.06(b)
hereof, such Lender's Eurodollar Rate Loans shall be automatically converted
into Base Rate Loans on the last day(s) of the then current Interest Period(s)
for such Eurodollar Rate Loans (or, in the case of an immediate conversion
required by Section 3.02, on such earlier date as required by Law) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 3.01, 3.02, 3.03 or 3.04 hereof that gave rise to such
conversion no longer exist:
(i) to the extent that such Lender's Eurodollar Rate Loans have been
so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Rate Loans shall be
applied instead to its Base Rate Loans; and
(ii) all Loans that would otherwise be made or continued from one
Interest Period to another by such Lender as Eurodollar Rate Loans shall be
made or continued instead as Base Rate Loans, and all Base Rate Loans of
such Lender that would otherwise be converted into Eurodollar Rate Loans
shall remain as Base Rate Loans.
(d) If any Lender gives notice to the Borrower (with a copy to the
Agent) that the circumstances specified in Section 3.01, 3.02, 3.03 or 3.04
hereof that gave rise to the conversion of such Lender's Eurodollar Rate Loans
pursuant to this Section 3.06 no longer exist (which such Lender agrees to do
promptly upon such circumstances ceasing to exist) at a time when Eurodollar
Rate Loans made by other Lenders are outstanding, such Lender's Base Rate Loans
shall be automatically converted, on the first day(s) of the next succeeding
Interest Period(s) for such outstanding Eurodollar Rate Loans, to the extent
necessary so that, after giving effect thereto, all Loans held by the Lenders
holding Eurodollar Rate Loans and by such Lender are held pro rata (as to
principal amounts, interest rate basis, and Interest Periods) in accordance with
their respective Commitments.
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3.07 Replacement of Lenders under Certain Circumstances. (a) If at any
time (i) the Borrower becomes obligated to pay additional amounts or indemnity
payments described in Section 3.01 or 3.04 as a result of any condition
described in such Sections or any Lender ceases to make Eurodollar Rate Loans as
a result of any condition described in Section 3.02 or 3.03, (ii) any Lender
becomes a Defaulting Lender or (iii) any Lender becomes a "Non-Consenting
Lender" (as defined below in this Section 3.07), then the Borrower may, on ten
(10) Business Days' prior written notice to the Administrative Agent and such
Lender, either (i) replace such Lender by causing such Lender to (and such
Lender shall be obligated to) assign pursuant to Section 10.07(b) (with the
assignment fee to be paid by the Borrower in such instance) all of its rights
and obligations under this Agreement to one or more Eligible Assignees;
provided, that neither the Administrative Agent nor any Lender shall have any
obligation to the Borrower to find a replacement Lender or other such Person or
(ii) terminate the Commitment of such Lender and repay all obligations of the
Borrower owing to such Lender relating to the Loans and participations held by
such Lender as of such termination date.
(b) Any Lender being replaced pursuant to Section 3.07(a) above shall
(i) execute and deliver an Assignment and Assumption with respect to such
Lender's Commitment and outstanding Loans and participations in L/C Obligations
and Swing Line Loans, and (ii) deliver any Notes evidencing such Loans to the
Borrower or Administrative Agent. Pursuant to such Assignment and Assumption,
(i) the assignee Lender shall acquire all or a portion, as the case may be, of
the assigning Lender's Commitment and outstanding Loans and participations in
L/C Obligations and Swing Line Loans, (ii) all obligations of the Borrower owing
to the assigning Lender relating to the Loans and participations so assigned
shall be paid in full by the assignee Lender to such assigning Lender
concurrently with such assignment and assumption and (iii) upon such payment
and, if so requested by the assignee Lender, delivery to the assignee Lender of
the appropriate Note or Notes executed by the Borrower, the assignee Lender
shall become a Lender hereunder and the assigning Lender shall cease to
constitute a Lender hereunder with respect to such assigned Loans, Commitments
and participations, except with respect to indemnification provisions under this
Agreement, which shall survive as to such assigning Lender.
(c) Notwithstanding anything to the contrary contained above, (i) the
Lender that acts as the L/C Issuer may not be replaced hereunder at any time
that it has any Letter of Credit outstanding hereunder unless arrangements
satisfactory to such L/C Issuer (including the furnishing of a back-up standby
letter of credit in form and substance, and issued by an issuer reasonably
satisfactory to such L/C Issuer or the depositing of cash collateral into a cash
collateral account in amounts and pursuant to arrangements reasonably
satisfactory to such L/C Issuer) have been made with respect to such outstanding
Letter of Credit and (ii) the Lender that acts as the Administrative Agent may
not be replaced hereunder except in accordance with the terms of Section 9.09.
(d) In the event that (i) the Borrower or the Administrative Agent has
requested the Lenders to consent to a departure or waiver of any provisions of
the Loan Documents or to agree to any amendment thereto, (ii) the consent,
waiver or amendment in question requires the agreement of all affected Lenders
in accordance with the terms of Section 10.01 or all the Lenders with respect to
a certain class of the Loans and (iii) the Required
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Lenders have agreed to such consent, waiver or amendment, then any Lender who
does not agree to such consent, waiver or amendment shall be deemed a
"Non-Consenting Lender."
3.08 Survival. All of the Borrower's obligations under this Article
III shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension. The obligation of each
Lender to make its initial Credit Extension hereunder is subject to satisfaction
of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each in form and substance reasonably satisfactory to
the Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement and each Guaranty;
(ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;
(iii) the Security Agreement, duly executed by each Loan Party,
together with:
(A) certificates representing the Pledged Interests referred
to therein accompanied by undated stock powers executed in blank
and instruments evidencing the Pledged Debt indorsed in blank,
(B) copies of proper financing statements, duly prepared for
filing under the Uniform Commercial Code in all jurisdictions
that the Administrative Agent may deem reasonably necessary or
desirable in order to perfect and protect the Liens created under
the Security Agreement, covering the Collateral described in the
Security Agreement,
(C) evidence that all other actions, recordings and filings
of or with respect to the Security Agreement that the
Administrative Agent may deem reasonably necessary or desirable
in order to perfect and protect the Liens created thereby shall
have been taken, completed or otherwise provided for in a manner
reasonably satisfactory to the Administrative Agent (including,
without limitation, receipt of duly executed payoff letters and
UCC-3 termination statements);
(iv) the Intellectual Property Security Agreement, duly executed
by each Loan Party, together with evidence that all action that the
Administrative Agent in its reasonable judgment may deem reasonably
necessary or desirable in
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order to perfect and protect the Liens created under the Intellectual
Property Security Agreement has been taken;
(v) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each
Loan Party as the Administrative Agent may require evidencing the
identity, authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer in connection with this
Agreement and the other Loan Documents to which such Loan Party is a
party or is to be a party;
(vi) such documents and certifications as the Administrative
Agent may reasonably require to evidence that each Loan Party is duly
organized or formed, and that each of the Borrower and the Guarantors
is validly existing, in good standing and qualified to engage in
business in each jurisdiction where its ownership, lease or operation
of properties or the conduct of its business requires such
qualification, except to the extent that failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect;
(vii) an opinion of Weil, Gotshal & Manges LLP, counsel to the
Loan Parties, addressed to each Agent and each Lender, as to the
matters set forth in Exhibit J-1, and as to such other matters
concerning the Loan Parties and the Loan Documents as the
Administrative Agent shall reasonably request;
(viii) opinions of local counsel for the Loan Parties, addressed
to each Agent and each Lender, as to the matters set forth in Exhibit
J-2, and as to such other matters concerning the Loan Parties and the
Loan Documents as the Administrative Agent shall reasonably request;
(ix) a certificate signed by a Responsible Officer of the
Borrower certifying that there has been no event or circumstance since
December 31, 2002, that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse
Effect;
(x) a certificate of the Responsible Officer of each of Holdings
and the Borrower certifying that (A) the "Consolidated EBITDA" as
defined in, and calculated in accordance with, the Existing Credit
Agreement after giving Pro Forma Effect to the Dairy Disposition of
the Borrower and its Subsidiaries for the twelve-month period ended
September 30, 2003 was not less than $141,800,000, (B) the ratio of
Consolidated Funded Indebtedness of the Borrower and its Subsidiaries
at the Closing Date to the "Consolidated EBITDA" as defined in, and
calculated in accordance with, the Existing Credit Agreement after
giving Pro Forma Effect to the Dairy Disposition of the Borrower and
its Subsidiaries for the twelve-month period ended on the last day of
the fiscal quarter ended September 30, 2003, was not greater than
5.65:1, and (C) the pro forma financial statements delivered pursuant
to Section 5.05(d) were prepared in good faith on the basis of the
assumptions stated therein, which assumptions are fair in light of the
then existing conditions;
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(xi) a certificate attesting to the Solvency of the Loan Parties
(taken as a whole) after giving effect to the Transaction, from the
Chief Financial Officer of the Borrower;
(xii) the financial statements described in Sections 5.05(a), (b)
and (d);
(xiii) a certified copy of the Sponsor Management Agreement;
(xiv) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect;
(xv) certified copies of the Merger Agreement, duly executed by
the parties thereto, together with all agreements, instruments and
other documents delivered in connection therewith as the
Administrative Agent shall reasonably request;
(xvi) (A) copies of certificates of merger or other confirmation
reasonably satisfactory to the Lenders to be filed with the Secretary
of State of the State of Delaware for each Merger, (B) confirmation
from the Target Company and the Company, or their respective counsel
that such certificates are to be so filed immediately after such
confirmation and (C) on the Closing Date, but after the consummation
of the Transaction, certified copies of such certificates of the
consummation of the First Merger and the Second Merger from the
Secretary of State of the State of Delaware;
(xvii) an assumption agreement in substantially the form of
Exhibit K hereto (the "Assumption Agreement"), duly executed by the
Surviving Corporation in connection with the Mergers;
(xviii) a Committed Loan Notice or Letter of Credit Application,
as applicable, relating to the initial Credit Extension; and
(xix) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent reasonably may require.
(b) All fees and expenses required to be paid on or before the Closing
Date shall have been paid in full in cash.
(c) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or,
to the knowledge of any Loan Party or any of its Subsidiaries, threatened
before any Governmental Authority or arbitrator that could be reasonably
likely to have a Material Adverse Effect.
(d) All governmental authorizations and all material third party
consents and approvals necessary in connection with the Transaction shall
have been obtained (without the imposition of any conditions that are not
reasonably acceptable to the Administrative Agent) and shall remain in
effect; all applicable waiting periods in connection with the Transaction
shall have expired without any action being taken by any Governmental
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Authority (including, without limitation, the expiration of the requisite
waiting period under the Hart Scott-Rodino Antitrust Improvements Act of
1975), and no Law shall be applicable in the reasonable judgment of the
Administrative Agent, in each case that restrains, prevents or imposes
materially adverse conditions upon the Transaction.
(e) The information contained in the Information Memorandum, as
supplemented to the Closing Date and taken as a whole, shall be complete
and correct in all material respects, and no changes, occurrences or
developments shall have occurred, and no information shall have been
received or discovered by the Administrative Agent that, either
individually or in the aggregate, could reasonably be expected to (1) have
(or have had) a material adverse effect on business, operations, assets,
liabilities (actual or contingent), results of operations or condition
(financial or otherwise) of the Consolidated Parties, taken as a whole, (2)
adversely affect (or has adversely affected) the ability of the Borrower or
any Guarantor to perform its obligations under any of the Loan Documents or
(3) adversely affect (or has adversely affected) the rights and remedies of
the Lenders under the applicable loan documentation.
(f) The Merger Agreement shall be in full force and effect.
(g) Simultaneously with the initial Credit Extension, the Equity
Contributions, Acquisition and the First Merger shall be consummated in
accordance with the terms of the Merger Agreement, without any waiver or
amendment not reasonably satisfactory to the Administrative Agent, and in
compliance with all applicable requirements of Law and, after giving effect
to the Transaction, (i) at least 20% of the consolidated capitalization of
Holdings shall be in the form of common Equity Interests and (ii) no less
than 75% of such common Equity Interests shall have been contributed in
cash (and not through any direct or indirect rollover of any direct or
indirect Equity Interests in the Target Company).
(h) Immediately following the First Merger, the Second Merger shall be
consummated.
(i) The Administrative Agent shall be reasonably be satisfied with (A)
any amendments, modification and supplements to the Merger Agreement, and
(B) all agreements, instruments and documents relating to each other aspect
of the Transaction.
(j) The Borrower shall have received at least (i) $150,000,000 in
gross cash proceeds from the sale of the Senior Subordinated Notes and (ii)
at least $135,000,000 in gross cash proceeds from the Senior Unsecured Term
Loans.
4.02 Conditions to All Credit Extensions. The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower and each other
Loan Party contained in Article V or any other Loan Document shall be true
and correct in all material respects on and as of the date of such Credit
Extension, except to the extent that
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such representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct in all material respects as of
such earlier date, and except that for purposes of this Section 4.02, the
representations and warranties contained in Sections 5.05(a) and (b) shall
be deemed to refer to the most recent statements furnished pursuant to
Sections 6.01(a) and (b), respectively.
(b) No Default shall exist, or would result from such proposed Credit
Extension or from the application of the proceeds therefrom.
(c) The Administrative Agent and, if applicable, the L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Borrower represents and warrants to the
Agents and the Lenders that:
5.01 Existence, Qualification and Power; Compliance with Laws. Each
Loan Party and each of its Subsidiaries (a) is a Person duly organized or
formed, validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization, (b) has all requisite power and authority
to (i) own or lease its assets and carry on its business and (ii) execute,
deliver and perform its obligations under the Loan Documents and the Merger
Agreement to which it is a party, (c) is duly qualified and in good standing
under the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, (d) is in
compliance with all Laws and (e) has all requisite governmental licenses,
authorizations, consents and approvals to operate its business as currently
conducted; except in each case referred to in clause (c), (d) or (e), to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.02 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document and the Merger Agreement to
which such Person is a party, and the consummation of the Transaction, are
within such Loan Party's corporate or other powers, have been duly authorized by
all necessary corporate or other organizational action, and do not and will not
(a) contravene the terms of any of such Person's Organization Documents, (b)
conflict with or result in any breach or contravention of, or the creation of
any Lien under (other than as permitted by Section 7.01), or require any payment
(except for Indebtedness to be repaid on the Closing Date in connection with the
Transaction) to be made under (i) any Contractual Obligation to which such
Person is a party or affecting such Person or the properties of such Person or
any of its Subsidiaries or (ii) any order, injunction,
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writ or decree of any Governmental Authority or any arbitral award to which such
Person or its property is subject; or (c) violate any Law; except with respect
to any breach or contravention or payment (but not creation of Liens) referred
to in clause (b)(i), to the extent that such conflict, breach, contravention or
payment could not reasonably be expected to have a Material Adverse Effect.
5.03 Governmental Authorization; Other Consents. No material approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, or for the
consummation of the Transaction, (b) the grant by any Loan Party of the Liens
granted by it pursuant to the Collateral Documents, (c) the perfection or
maintenance of the Liens created under the Collateral Documents (including the
priority thereof) or (d) the exercise by the Administrative Agent or any Lender
of its rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for the approvals,
consents, exemptions, authorizations, actions, notices and filings which have
been duly obtained, taken, given or made and are in full force and effect and,
in the case of the Transactions, those approvals, consents, exemptions,
authorizations or other actions, notices or filings, the failure of which to
obtain or make could not reasonably be expected to have a Material Adverse
Effect. All applicable waiting periods in connection with the Transaction have
expired without any action having been taken by any Governmental Authority
restraining, preventing or imposing materially adverse conditions upon the
Transaction. The Acquisition and the Mergers have been consummated in accordance
with the Merger Agreement and, in all material respects, applicable Law.
5.04 Binding Effect. This Agreement and each other Loan Document has
been duly executed and delivered by each Loan Party that is party thereto. This
Agreement and each other Loan Document constitutes, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as such enforceability may be
limited by bankruptcy insolvency, reorganization, receivership, moratorium or
other laws affecting creditors' rights generally and by general principles of
equity.
5.05 Financial Statements; No Material Adverse Effect. (a) The Audited
Financial Statements fairly present in all material respects the financial
condition of MFI and its consolidated Subsidiaries as of the date thereof and
their results of operations for the period covered thereby in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein. During the period from December 31, 2002 to
and including the Closing Date, there has been (i) no sale, transfer or other
disposition by MFI or any of its consolidated Subsidiaries of any material part
of the business or property of MFI or any of its consolidated Subsidiaries,
taken as a whole, other than the Dairy Disposition and (ii) no purchase or other
acquisition by any of them of any business or property (including any Equity
Interests of any other Person) material in relation to the consolidated
financial condition of MFI or any of its consolidated Subsidiaries, taken as a
whole, in each case, which is not reflected in the foregoing financial
statements or in the notes thereto or has not otherwise been disclosed in
writing to the Lenders prior to the Closing Date.
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(b) The unaudited consolidated financial statements of MFI and its
consolidated Subsidiaries for the fiscal quarters ended March 31, 2003, June 30,
2003 and September 30, 2003, and the related consolidated statements of income
or operations, shareholders' equity and cash flows for such fiscal quarters (i)
were prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, and meet the
requirements of Regulation S-X under the Securities Act of 1933, as amended, and
all other accounting rules and regulations of the SEC promulgated thereunder
applicable to a registration statement under such Act on Form S-1, and (ii)
fairly present in all material respects the financial condition of MFI and its
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby, subject to the absence of footnotes and to normal
year-end audit adjustments. From such date to the Closing Date, except as set
forth on Schedule 5.05, Holdings, MFI and their respective Subsidiaries have not
incurred any material Indebtedness and other liabilities, direct or contingent,
that, in accordance with GAAP, would be required to be disclosed in such
financial statements, other than in connection with the Transactions and which
are reflected in the pro forma financial statements delivered pursuant to clause
(d) below.
(c) Since the date of the Audited Financial Statements, there has been
no event or circumstance, either individually or in the aggregate, that has had
or could reasonably be expected to have a Material Adverse Effect.
(d) The (i) condensed consolidated pro forma balance sheet of MFI and
its Subsidiaries for the nine-month period ended September 30, 2003 and the
related consolidated pro forma statement of operations of MFI and its
Subsidiaries for the nine-month period then ended and (ii) the condensed
consolidated statement of operations of MFI and its Subsidiaries for the
twelve-month periods ended December 31, 2002 and September 30, 2003, certified
by the Chief Financial Officer of the Borrower, copies of which have been
furnished to each Lender, fairly present in all material respects the
consolidated pro forma financial condition of MFI and its Subsidiaries as at
such dates and the consolidated pro forma results of operations of MFI and its
Subsidiaries for the period ended on such date, in each case, giving pro forma
effect to the Transaction and the Dairy Disposition, all in accordance with GAAP
and meet the requirements of Regulation S-X under the Securities Act of 1933,
and all other accounting rules and regulations of the SEC promulgated thereunder
applicable to a registration statement under such Act on Form S-1.
(e) The consolidated forecasted balance sheets, statements of income
and statements of cash flows of MFI and its Subsidiaries delivered to the
Lenders pursuant to Section 4.01 or 5.05 were prepared in good faith on the
basis of the assumptions stated therein, which assumptions were reasonable in
light of the conditions existing at the time of delivery of such forecasts; it
being understood that actual results may vary from such forecasts and that such
variations may be material.
5.06 Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrower, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or against any
of their properties or revenues that (a) purport to affect or pertain to this
Agreement, any other Loan Document or, as of the Closing Date, the consummation
of the
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Transaction, or (b) either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
5.07 No Default. Neither the Borrower nor any Subsidiary is in default
under or with respect to, or a party to, any Contractual Obligation that could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
5.08 Ownership of Property; Liens. (a) Each Loan Party and each of its
Subsidiaries has good record and indefeasible title in fee simple to, or valid
leasehold interests in, all real property necessary in the ordinary conduct of
its business, free and clear of all Liens except for minor defects in title that
do not materially interfere with its ability to conduct its business or to
utilize such assets for their intended purposes and Liens permitted by Section
7.01.
(b) Set forth on Schedule 5.08(b) hereto is a complete and accurate
list of all real property owned by any Loan Party or any of its Subsidiaries, as
of the Closing Date, showing as of the date hereof the street address (to the
extent available), county or other relevant jurisdiction, state and record
owner.
(c) Set forth on Schedule 5.08(c) hereto is a complete and accurate
list of all leases of real property under which any Loan Party or any of its
Subsidiaries is the lessee as of the Closing Date, showing as of the date hereof
the street address (to the extent available), county or other relevant
jurisdiction, state, lessor and lessee.
(d) Except as set forth in Schedule 5.08(b), Schedules 5.08(c) and
5.08(d), there are no other locations where any tangible personal property of
any of the Loan Parties is or may be located (other than vehicles and assets
temporarily in transit or sent for repair).
5.09 Environmental Compliance. (a) There are no claims alleging
potential liability or responsibility for violation of any Environmental Law on
their respective businesses, operations and properties that could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Except as specifically disclosed in Schedule 5.09 or except as
could not reasonably be expected to have a Material Adverse Effect, (i) none of
the properties currently or formerly owned or operated by any Loan Party or any
of its Subsidiaries is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or is adjacent to any such
property; (ii) there are no and never have been any underground or aboveground
storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons
in which Hazardous Materials are being or have been treated, stored or disposed
on any property currently owned or operated by any Loan Party or any of its
Subsidiaries or, to its knowledge, on any property formerly owned or operated by
any Loan Party or any of its Subsidiaries; (iii) there is no asbestos or
asbestos-containing material on any property currently owned or operated by any
Loan Party or any of its Subsidiaries; and (iv) Hazardous Materials have not
been released, discharged or disposed of on any property currently or formerly
owned or operated by any Loan Party or any of its Subsidiaries except for such
releases, discharges or disposal that were in material compliance with
Environmental Laws.
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(c) The Properties do not contain any Hazardous Materials in amounts
or concentrations which (i) constitute, or constituted a violation of, (ii)
require remedial action under, or (iii) could give rise to liability under,
Environmental Laws, which violations, remedial actions and liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
(d) Except as specifically disclosed in Schedule 5.09, neither the
Borrower nor any of its Subsidiaries is undertaking, and has not completed,
either individually or together with other potentially responsible parties, any
investigation or assessment or remedial or response action relating to any
actual or threatened release, discharge or disposal of Hazardous Materials at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law except
for such investigation or assessment or remedial or response action that, in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect..
(e) All Hazardous Materials generated, used, treated, handled or
stored at, or transported to or from, any property currently or formerly owned
or operated by any Loan Party or any of its Subsidiaries have been disposed of
in a manner not reasonably expected to result in material liability to any Loan
Party or any of its Subsidiaries.
5.10 Insurance. The properties of the Borrower and its Subsidiaries
are insured with financially sound and reputable insurance companies, in such
amounts (after giving effect to any self-insurance reasonable and customary for
similarly situated Persons engaged in the same or similar businesses as the
Borrower and its Subsidiaries) with such deductibles and covering such risks as
are customarily carried by prudent companies engaged in similar businesses and
owning similar properties in localities where the Borrower or the applicable
Subsidiary operates.
5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal
and material state and other tax returns and reports required to be filed, and
have paid all Federal and material state and other taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those (a) which are not
overdue by more than thirty (30) days or (b) which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP or (c) with respect to which
the failure to make such filing or payment could not reasonably be expected to
have a Material Adverse Effect.
5.12 ERISA Compliance. (a) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other Federal or
state Laws. Each Plan that is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the knowledge of the Borrower and Holdings, nothing has
occurred which would prevent, or cause the loss of, such qualification. Each
Loan Party and each ERISA Affiliate have made all required contributions to each
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.
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(b) There are no pending or, to the knowledge of the Borrower and
Holdings, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could be reasonably be expected to have
a Material Adverse Effect. There has been no prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan that has resulted
or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has an "accumulated funding deficiency" (as defined
in Section 412 of the Code), whether or not waived, and no application for a
waiver of the minimum funding standard has been filed with respect to any
Pension Plan; (iii) neither any Loan Party nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any liability under Title IV of ERISA with
respect to any Pension Plan (other than premiums due and not delinquent under
Section 4007 of ERISA); (iv) neither any Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither any Loan Party nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA, except, with respect to each of the foregoing clauses of this Section
5.12(c), as could not reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Effect.
5.13 Subsidiaries; Equity Interests. As of the Closing Date, each Loan
Party has no Subsidiaries other than those specifically disclosed in Schedule
5.13, and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and non-assessable and are owned by a Loan Party
free and clear of all Liens except (i) those created under the Collateral
Documents and (ii) any nonconsensual Lien that is permitted under Section 7.01.
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act. (a) The Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the FRB),
or extending credit for the purpose of purchasing or carrying margin stock and
no proceeds of any Borrowings or drawings under any Letter of Credit will be
used to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
(b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940. Neither the making of any
Loan, nor the issuance of any Letters of Credit, nor the application of the
proceeds or repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated by the Loan Documents, will violate any provision of
any such Act or any rule, regulation or order of the SEC thereunder.
5.15 Disclosure. The Borrower has disclosed to the Agents and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries
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or any other Loan Party is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any Loan
Party to any Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
or any other Loan Document (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading; provided,
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time of preparation; it being understood that
such projections may vary from actual results and that such variances may be
material.
5.16 Compliance with Laws. Each Loan Party and its Subsidiaries is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.17 Intellectual Property; Licenses, Etc. Each Loan Party and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP Rights") that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, except to the extent such
conflicts, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. Set forth on Schedule 5.17 is a
complete and accurate list of all IP Rights owned or used by each Loan Party and
its Subsidiaries as of the Closing Date. To the knowledge of the Borrower, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any Loan
Party or any Subsidiary infringes upon any rights held by any other Person
except for such infringements, individually or in the aggregate, which could not
reasonably be expected to have a Material Adverse Effect. No claim or litigation
regarding any of the foregoing is pending or, to the knowledge of the Borrower,
threatened, which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
5.18 Solvency. The Loan Parties, on a consolidated basis, are Solvent.
5.19 Casualty, Etc. Neither the business nor the properties of any
Loan Party or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could reasonably be expected to have
a Material Adverse Effect.
5.20 Perfection, Etc. All filings and other actions necessary or
desirable to perfect and protect the Lien in the Collateral created under the
Collateral Documents have been
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duly made or taken or otherwise provided for in a manner reasonably acceptable
to Administrative Agent and are in full force and effect, and the Collateral
Documents create in favor of the Administrative Agent for the benefit of the
Secured Parties a valid and, together with such filings and other actions,
perfected first priority Lien in the Collateral, securing the payment of the
Secured Obligations, subject to Liens permitted by Section 7.01. The Loan
Parties are the legal and beneficial owners of the Collateral free and clear of
any Lien, except for the Liens created or permitted under the Loan Documents.
5.21 Tax Shelter Regulations. The Borrower does not intend to treat
the Loans and/or Letters of Credit and related transactions as being a
"reportable transaction" (within the meaning of Treasury Regulation Section
1.6011-4). In the event the Borrower determines to take any action inconsistent
with such intention, it will promptly notify the Administrative Agent thereof.
If the Borrower so notifies the Administrative Agent, the Borrower acknowledges
that one or more of the Lenders may treat its Loans and/or its interest in Swing
Line Loans and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such Treasury
Regulation.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, each of Holdings
and the Borrower shall, and shall (except in the case of the covenants set forth
in Sections 6.01, 6.02 and 6.03) cause each Subsidiary to:
6.01 Financial Statements. Deliver to the Administrative Agent for
further distribution to each Lender, in form and detail reasonably satisfactory
to the Administrative Agent:
(a) as soon as available, but in any event within ninety (90) days
after the end of each fiscal year of the Borrower, a consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of PricewaterhouseCoopers or any other
independent certified public accountant of nationally recognized standing,
which report and opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any "going concern"
or like qualification or exception or any qualification or exception as to
the scope of such audit;
(b) as soon as available, but in any event within forty-five (45) days
after the end of each of the first three (3) fiscal quarters of each fiscal
year of the Borrower, a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, and the related
consolidated statements of income or operations,
81
shareholders' equity and cash flows for such fiscal quarter and for the
portion of the fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal
year, all in reasonable detail and certified by a Responsible Officer of
the Borrower as fairly presenting in all material respects the financial
condition, results of operations, shareholders' equity and cash flows of
the Borrower and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes;
(c) at the time of delivery of the financial statements provided for
in Sections 6.01(a) and (b) above, divisional income statements for the egg
products division, the potato products division and the refrigerated
distribution division prepared in accordance with past practices; and
(d) as soon as available, but in any event no later than forty-five
(45) days after the end of each fiscal year, forecasts prepared by
management of the Borrower, in form reasonably satisfactory to the
Administrative Agent, of consolidated balance sheets, income statements and
cash flow statements of the Borrower and its Subsidiaries on a quarterly
basis for the remaining portion of the fiscal year following such fiscal
year then ended.
6.02 Certificates; Other Information. Deliver to the Administrative
Agent for further distribution to each Lender, in form and detail reasonably
satisfactory to the Administrative Agent and the Required Lenders:
(a) no later than five (5) days after the delivery of the financial
statements referred to in Section 6.01(a), a certificate of its independent
certified public accountants certifying such financial statements and
stating that in making the examination necessary therefor no knowledge was
obtained of any Event of Default under Section 7.11 or, if any such Event
of Default shall exist, stating the nature and status of such event;
(b) no later than five (5) days after the delivery of the financial
statements referred to in Sections 6.01(a) and (b), a duly completed
Compliance Certificate signed by a Responsible Officer of the Borrower and,
if such Compliance Certificate demonstrates an Event of Default of any
covenant under Section 7.11, the Equity Investors may deliver, together
with such Compliance Certificate, notice of their intent to cure (a "Notice
of Intent to Cure") such Event of Default through capital contributions or
the purchase of Equity Interests as contemplated pursuant to clause
(b)(xxii) and the final proviso of the definition of "Consolidated EBITDA";
provided, that the delivery of a Notice of Intent to Cure shall in no way
affect or alter the occurrence, existence or continuation of any such Event
of Default or the rights, benefits, powers and remedies of the
Administrative Agent and the Lenders under any Loan Document;
(c) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent
to the stockholders of the Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which the Borrower
may file or be required to file, copies of any report, filing
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or communication with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, or with any Governmental Authority that may be
substituted therefor, or with any national securities exchange, and in any
case not otherwise required to be delivered to the Administrative Agent
pursuant hereto;
(d) promptly after the furnishing thereof, copies of any requests or
notices received by any Loan Party (other than in the ordinary course of
business), statement or report furnished to any holder of debt securities
of any Loan Party or of any of its Subsidiaries pursuant to the terms of
any Junior Financing Documentation in a principal amount greater than the
Threshold Amount and not otherwise required to be furnished to the Lenders
pursuant to any other clause of this Section 6.02;
(e) promptly after the receipt thereof by any Loan Party or any of its
Subsidiaries, copies of each notice or other correspondence received from
the SEC (or comparable agency in any applicable non-U.S. jurisdiction)
concerning any material investigation or other material inquiry by such
agency regarding financial or other operational results of any Loan Party
or any of its Subsidiaries;
(f) promptly after the assertion or occurrence thereof, notice of any
environmental action against or of any noncompliance by any Loan Party or
any of its Subsidiaries with any Environmental Law or Environmental Permit
that could reasonably be expected to have a Material Adverse Effect;
(g) together with the delivery of each Compliance Certificate pursuant
to Section 6.02(b), (i) a report supplementing Schedule 5.17 and Schedules
5.08(b), 5.08(c) and 5.08(d) hereto, including, in the case of supplements
to Schedules 5.08(b), 5.08(c) and 5.08(d), an identification of all owned
and leased real property disposed of by any Loan Party or any of its
Subsidiaries since the delivery of the last supplements and a list and
description of all real property acquired or leased since the delivery of
the last supplements (including the street address (if available), county
or other relevant jurisdiction, state, and (A) in the case of the owned
real property, the record owner and (B) in the case of leases of property,
lessor and lessee), and (ii) a description of each event, condition or
circumstance during the last fiscal quarter covered by such Compliance
Certificate requiring a mandatory prepayment under Section 2.05(b);
(h) promptly after the furnishing thereof, copies of all financial
statements, forecasts, budgets or other similar information of Holdings
furnished to the lenders or holders of any Permitted Holdco Debt;
(i) promptly after the Borrower has notified the Administrative Agent
of any intention by the Borrower to treat the Loans and/or Letters of
Credit and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4), a duly completed copy
of IRS Form 8886 or any successor form; and
(j) promptly, such additional information regarding the business,
legal, financial or corporate affairs of any Loan Party or any Subsidiary,
or compliance with the
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terms of the Loan Documents, as the Administrative Agent or any Lender may
from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (b)
or Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided, that: (i)
the Borrower shall deliver paper copies of such documents to the Administrative
Agent for further distribution to each Lender until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify (which may be by facsimile or electronic mail)
the Administrative Agent of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
6.03 Notices. Promptly notify the Administrative Agent and each
Lender:
(a) of the occurrence of any Default; and
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including arising out of or resulting
from (i) breach or non-performance of, or any default under, a Contractual
Obligation of any Loan Party or any Subsidiary, (ii) any dispute,
litigation, investigation, proceeding or suspension between any Loan Party
or any Subsidiary and any Governmental Authority (including in connection
with any Food Industry Laws), (iii) the commencement of, or any material
development in, any litigation or proceeding affecting any Loan Party or
any Subsidiary, including pursuant to any applicable Environmental Laws and
or in respect of IP Rights, or (iv) the occurrence of any ERISA Event.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.
6.04 Payment of Obligations. Pay, discharge or otherwise satisfy as
the same shall become due and payable, all its obligations and
liabilities,including (a) all tax liabilities,
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assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such Indebtedness
except, in each case, to the extent the failure to pay or discharge the same
could not reasonably be expected to have a Material Adverse Effect.
6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain
in full force and effect its legal existence under the Laws of the jurisdiction
of its organization except in a transaction permitted by Section 7.04 or 7.05;
provided, however, that the Borrower and its Subsidiaries may consummate the
Acquisition and the Mergers, (b) take all reasonable action to maintain all
rights, privileges (including its good standing), permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect, and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.
6.06 Maintenance of Properties. (a) Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order, repair and condition, ordinary wear and tear
excepted and casualty or condemnation excepted, and (b) make all necessary
renewals, replacements, modifications, improvements, upgrades, extensions and
additions thereof or thereto in accordance with prudent industry practice.
6.07 Maintenance of Insurance. Maintain with financially sound and
reputable insurance companies, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts (after giving effect to any self-insurance reasonable and customary for
similarly situated Persons engaged in the same or similar businesses as the
Borrower and its Subsidiaries) as are customarily carried under similar
circumstances by such other Persons.
6.08 Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except if the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
6.09 Books and Records. Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be.
6.10 Inspection Rights. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom,
85
and to discuss its affairs, finances and accounts with its directors, officers,
and independent public accountants, all at the expense of the Borrower and at
such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
that, excluding any such visits and inspections during the continuation of an
Event of Default, only the Administrative Agent on behalf of the Lenders may
exercise rights under this Section 6.10 and the Administrative Agent shall not
exercise such rights more often than two times during any calendar year absent
the existence of an Event of Default and only one (1) such time shall be at the
Borrower's expense; provided, further that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.
The Administrative Agent and the Lenders shall give the Borrower the opportunity
to participate in any discussions with the Borrower's accountants.
6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for
general corporate purposes not in contravention of any Law or of any Loan
Document.
6.12 Covenant to Guarantee Obligations and Give Security. (a) Upon the
formation or acquisition of any new direct or indirect Subsidiaries by any Loan
Party or the acquisition of any personal property or fee owned real property
with a value in excess of $2,000,000 by any Loan Party, and such personal
property, in the reasonable judgment of the Administrative Agent, shall not
already be subject to a perfected Lien in favor of the Administrative Agent for
the benefit of the Secured Parties, then the Borrower shall, in each case at the
Borrower's expense:
(i) in connection with the formation or acquisition of a Subsidiary,
within thirty (30) days after such formation or acquisition or such longer
period, not to exceed an additional thirty (30) days, as the Administrative
Agent may agree in its sole discretion, (A) cause each such Subsidiary that
is not a Foreign Subsidiary, and cause each direct and indirect parent of
such Subsidiary (if it has not already done so), to duly execute and
deliver to the Administrative Agent a guaranty or guaranty supplement, in
form and substance reasonably satisfactory to the Administrative Agent,
guaranteeing the other Loan Parties' obligations under the Loan Documents,
and (B) deliver (or cause such direct and indirect parent to deliver)
certificates representing the Pledged Interests of such Subsidiary
accompanied by undated stock powers or other appropriate instruments of
transfer executed in blank and instruments evidencing the Pledged Debt of
such Subsidiary indorsed in blank to the Administrative Agent, together
with, if requested by the Administrative Agent, supplements to the Security
Agreement with respect to the pledge of any Equity Interests or
Indebtedness; provided, that only 65% of Equity Interests of any Foreign
Subsidiary shall be required to be pledged as Collateral.
(ii) within ten (10) days after such request, formation or
acquisition, or such longer period, not to exceed an additional thirty (30)
days, as the Administrative Agent may agree, furnish to the Administrative
Agent a description of the real and personal properties of the Loan Parties
and their respective Subsidiaries in detail reasonably satisfactory to the
Administrative Agent,
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(iii) within thirty (30) days after such request, formation or
acquisition, or such longer period, not to exceed an additional sixty (60)
days, as the Administrative Agent may agree in its sole discretion, duly
execute and deliver, and cause each such Subsidiary that is not a Foreign
Subsidiary to duly execute and deliver, to the Administrative Agent
Mortgages, Security Agreement Supplements, IP Security Agreement
Supplements and other security agreements, as specified by and in form and
substance reasonably satisfactory to the Administrative Agent (consistent
with the Security Agreement, IP Security Agreement and Mortgages), securing
payment of all the Obligations of the applicable Loan Party or such
Subsidiary, as the case may be, under the Loan Documents and constituting
Liens on all such properties,
(iv) within thirty (30) days after such request, formation or
acquisition, or such longer period, not to exceed an additional sixty (60)
days, as the Administrative Agent may agree in its sole discretion, take,
and cause such Subsidiary that is not a Foreign Subsidiary or such parent
to take, whatever action (including, without limitation, the recording of
Mortgages, the filing of Uniform Commercial Code financing statements, the
giving of notices and the endorsement of notices on title documents and
delivery of stock and membership interest certificates) may be necessary or
advisable in the reasonable opinion of the Administrative Agent to vest in
the Administrative Agent (or in any representative of the Administrative
Agent designated by it) valid and subsisting Liens on the properties
purported to be subject to the Mortgages, Security Agreement Supplements,
IP Security Agreement Supplements and security agreements delivered
pursuant to this Section 6.12, enforceable against all third parties in
accordance with their terms,
(v) within thirty (30) days after the request of the Administrative
Agent, deliver to the Administrative Agent, a signed copy of an opinion,
addressed to the Administrative Agent and the other Secured Parties, of
counsel for the Loan Parties reasonably acceptable to the Administrative
Agent as to such matters as the Administrative Agent may reasonably
request,
(vi) as promptly as practicable after the request of the
Administrative Agent, to the Administrative Agent with respect to each
parcel of real property owned or held by a Subsidiary that is not a Foreign
Subsidiary that is the subject of such request, title reports in scope,
form and substance reasonably satisfactory to the Administrative Agent and,
to the extent available, surveys and environmental assessment reports,
each, and
(vii) at any time and from time to time, promptly execute and deliver
any and all further instruments and documents and take all such other
action as the Administrative Agent in its reasonable judgment may deem
necessary or desirable in obtaining the full benefits of, or in perfecting
and preserving the Liens of, such guaranties, Mortgages, Security Agreement
Supplements, IP Security Agreement Supplements and security agreements; and
(b) Notwithstanding the foregoing, the Administrative Agent shall not
take a security interest in those assets as to which the Administrative Agent
shall determine, in its reasonable discretion, that the cost of obtaining such
Lien (including any mortgage, stamp,
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intangibles or other tax) are excessive in relation to the benefit to the
Lenders of the security afforded thereby.
6.13 Compliance with Environmental Laws. Except, in each case, to the
extent that the failure to do so could reasonably be expected to have a Material
Adverse Effect, comply, and cause all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and renew all
Environmental Permits necessary for its operations and properties; and conduct
any investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all Hazardous
Materials from any of its properties, in accordance with the requirements of all
Environmental Laws.
6.14 Further Assurances. (a) Promptly upon request by the
Administrative Agent, or any Lender through the Administrative Agent, (i)
correct any material defect or error that may be discovered in the execution,
acknowledgment, filing or recordation of any Loan Document or other document or
instrument relating to any Collateral, and (ii) do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, certificates, assurances and other instruments as the
Administrative Agent, or any Lender through the Administrative Agent, may
reasonably require from time to time in order to carry out more effectively the
purposes of the Loan Documents.
(b) By the date that is forty-five (45) days after the Closing Date,
as such time period may be extended, not to exceed an additional forty-five
(45) days, in the Administrative Agent's sole discretion, the Borrower
shall deliver the Mortgages covering the Real Properties duly executed by
the appropriate Loan Party, together with:
(i) evidence that counterparts of the Mortgages have been duly
executed, acknowledged and delivered and are in form suitable for filing or
recording in all filing or recording offices that the Administrative Agent
may deem reasonably necessary or desirable in order to create a valid and
subsisting perfected Lien on the property described therein in favor of the
Administrative Agent for the benefit of the Secured Parties and that all
filing and recording taxes and fees have been paid or otherwise provided
for in a manner reasonably satisfactory to the Administrative Agent;
(ii) fully paid American Land Title Association Lender's Extended
Coverage title insurance policies or the equivalent or other form available
in each applicable jurisdiction (the "Mortgage Policies") in form and
substance, with endorsements and in amount, reasonably acceptable to the
Administrative Agent (not to exceed the value of the Real Properties
covered thereby), issued, coinsured and reinsured by title insurers
reasonably acceptable to the Administrative Agent, insuring the Mortgages
to be valid subsisting Liens on the property described therein, free and
clear of all defects and encumbrances, subject to Liens permitted by
Section 7.01, and providing for such other affirmative insurance (including
endorsements for future advances under the Loan Documents) and such
coinsurance and direct access reinsurance as the Administrative Agent may
deem reasonably necessary or desirable;
88
(iii) American Land Title Association/American Congress on Surveying
and Mapping form surveys (to the extent available);
(iv) opinions of local counsel for the Loan Parties in states in which
the Real Properties are located, with respect to the enforceability and
perfection of the Mortgages and any related fixture filings substantially
in the form of Exhibit J-3 hereto, and otherwise in form and substance
reasonably satisfactory to the Administrative Agent; and
(v) such other evidence that all other actions that the Administrative
Agent may deem necessary or desirable in order to create valid and
subsisting Liens on the property described in the Mortgages has been taken.
6.15 Interest Rate Hedging. Enter into prior to sixty (60) days
following the Closing Date, and maintain at all times thereafter until the third
anniversary date of the Closing Date, protection against fluctuations in
interest rates pursuant to, as of such time, Eurodollar Rate Loans under this
Agreement having twelve (12) month Interest Periods and, thereafter, one or more
interest rate Swap Contracts with Persons reasonably acceptable to the
Administrative Agent and providing coverage in a notional amount, together with
the amount of Funded Debt of Holdings and its Subsidiaries on a consolidated
basis that is bearing interest at a fixed rate, at least equal to 50% of the
aggregate amount of all Funded Debt of Holdings and its Subsidiaries on a
consolidated basis.
Article VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder which is accrued and payable shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, Holdings and the
Borrower shall not, nor shall they permit any of their Subsidiaries to, directly
or indirectly:
7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired, or
sign or file or authorize the filing under the Uniform Commercial Code of any
jurisdiction a financing statement that names the Borrower or any of its
Subsidiaries as debtor, or sign any security agreement authorizing any secured
party thereunder to file such financing statement, other than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01 and
any modifications, replacements, renewals or extensions thereof; provided,
that (i) the Lien does not extend to any additional property other than (A)
after-acquired property that is affixed or incorporated into the property
covered by such Lien or financed by Indebtedness permitted under Section
7.03, and (B) and proceeds and products thereof and (ii) the renewal,
extension or refinancing of the obligations secured or benefited by such
Liens is permitted by Section 7.03;
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(c) Liens for taxes, assessments or governmental charges which are not
overdue for a period of more than thirty (30) days or which are being
contested in good faith and by appropriate proceedings diligently
conducted, if adequate reserves with respect thereto are maintained on the
books of the applicable Person in accordance with GAAP;
(d) statutory Liens of landlords, carriers, warehousemen, mechanics,
materialmen, repairmen or other like Liens arising in the ordinary course
of business which secure amounts not overdue for a period of more than
thirty (30) days or if more than thirty (30) days overdue, are unfiled and
no other action has been taken to enforce such Lien or which are being
contested in good faith and by appropriate proceedings diligently
conducted, if adequate reserves with respect thereto are maintained on the
books of the applicable Person;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts,
governmental contracts and leases (other than Indebtedness for borrowed
money), statutory obligations, surety, stay, customs and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(g) easements, rights-of-way, restrictions, encroachments, protrusions
and other similar encumbrances and minor title defects affecting real
property which, in the aggregate, do not in any case materially interfere
with the ordinary conduct of the business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting
an Event of Default under Section 8.01(h);
(i) Liens securing Indebtedness permitted under Sections 7.03(b)(v)
and (b)(xv); provided, that (i) such Liens attach concurrently with or
within one hundred and twenty (120) days after the acquisition, repair,
replacement or improvement (as applicable) of the property subject to such
Liens, (ii) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and the proceeds and the
products thereof and (iii) with respect to Capitalized Leases, such Liens
do not at any time extend to or cover any assets other than the assets
subject to such Capitalized Leases;
(j) Liens arising from operation of the statutory trust under PACA or
MWPDA or any comparable law, statute or regulation applicable to the
Borrower and its Subsidiaries and their respective operations based on
their businesses; provided, that such Liens do not secure past due account
payable balances exceeding $10,000,000 in the aggregate at any one time
outstanding, unless, in respect of any such account payables, (i)
appropriate legal or administrative action has been commenced and is being
diligently pursued or defended by the Borrower or the applicable Subsidiary
and (ii) the ability of
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the applicable vendor to enforce any such Lien provided under PACA or MWPDA
has been stayed or otherwise legally prohibited during the pendency of such
action;
(k) Liens on "farm products" (as defined in the Food Security Act) to
the extent, in the case of any such Lien, that such Lien (i) was created by
the Person (but not Holdings or any of its Subsidiaries) which sold such
property to the Borrower or any of its Subsidiaries and (ii) follows the
property solely by reason of the provisions of the Food Security Act
notwithstanding the transfer of title to such property to the Borrower or
any of its Subsidiaries;
(l) leases, licenses, subleases or sublicenses granted to others in
the ordinary course of business and not interfering in any material respect
with the business of the Borrower or any of its material Subsidiaries;
(m) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business;
(n) Liens (i) of a collection bank arising under Section 4-210 of the
Uniform Commercial Code on items in the course of collection, (ii)
attaching to commodity trading accounts or other commodities brokerage
accounts incurred in the ordinary course of business; and (iii) in favor of
a banking institution arising as a matter of law encumbering deposits
(including the right of set-off) and which are within the general
parameters customary in the banking industry;
(o) Liens (i) on cash advances in favor of the seller of any property
to be acquired in an Investment permitted pursuant to Sections 7.02(i) and
(o) to be applied against the purchase price for such Investment, and (ii)
consisting of an agreement to Dispose of any property in a Disposition
permitted under Section 7.05, in each case, solely to the extent such
Investment or Disposition, as the case may be, would have been permitted on
the date of the creation of such Lien;
(p) Liens on property of any Foreign Subsidiary securing Indebtedness
of such Foreign Subsidiary to the extent permitted under Section
7.03(b)(vi) or (b)(vii);
(q) Liens in favor of the Borrower or a Subsidiary of the Borrower
securing Indebtedness permitted under Section 7.03(b)(iv);
(r) Liens existing on property at the time of its acquisition or
existing on the property of any Person that becomes a Subsidiary after the
date hereof (other than Liens on the Equity Interests of any Person that
becomes a Subsidiary); provided, that (i) such Lien was not created in
contemplation of such acquisition or such Person becoming a Subsidiary,
(ii) such Lien does not extend to or cover any other assets or property
(other than the proceeds or products thereof), and (iii) the Indebtedness
secured thereby is permitted under Section 7.03(b)(v), (ix), or (xii);
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(s) Liens arising from precautionary UCC financing statement filings
regarding leases entered into by the Borrower or any of its Subsidiaries in
the ordinary course of business;
(t) any interest or title of a lessor, sublessor, licensee,
sublicensee, licensor or sublicensor under any lease or license agreement
in the ordinary course of business permitted by this Agreement;
(u) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for sale of goods entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business
permitted by this Agreement;
(v) Liens deemed to exist in connection with Investments in repurchase
agreements under Section 7.02;
(w) Liens encumbering reasonable customary initial deposits and margin
deposits and similar Liens attaching to commodity trading accounts or other
brokerage accounts incurred in the ordinary course of business and not for
speculative purposes;
(x) Permitted Encumbrances; and
(y) other Liens securing Indebtedness outstanding in an aggregate
principal amount not to exceed $20,000,000.
7.02 Investments. Make or hold any Investments, except:
(a) Investments held by the Borrower or such Subsidiary in the form of
Cash Equivalents;
(b) loans or advances to officers, directors and employees of the
Borrower and Subsidiaries (i) in an aggregate amount not to exceed
$3,500,000 at any time outstanding, for travel, entertainment, relocation
and analogous ordinary business purposes, and (ii) in connection with such
Person's purchase of Equity Interests of Holdings or Investors LLC in an
aggregate amount not to exceed $2,000,000;
(c) Investments (i) by Holdings or any of its Subsidiaries in any Loan
Party (including any new Subsidiary which becomes a Loan Party), and (ii)
by any Subsidiary of Holdings that is not a Loan Party in any other such
Subsidiary that is also not a Loan Party;
(d) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade
credit in the ordinary course of business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled
account debtors;
(e) Investments arising out of transactions permitted under Sections
7.01, 7.03, 7.04, 7.05 and 7.06;
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(f) Investments existing on the date hereof and set forth on Schedule
7.02 and any modification, replacement, renewal or extension thereof;
provided, that the amount of the original Investment is not increased
except by the terms of such Investment or as otherwise permitted by this
Section 7.02;
(g) Investments in Swap Contracts permitted under Section 7.03;
(h) promissory notes and other non-cash consideration received in
connection with Dispositions permitted by Section 7.05;
(i) the purchase or other acquisition of all or substantially all of
the property and assets or business of, any Person or of assets
constituting a business unit, a line of business or division of such
Person, or of all of the Equity Interests in a Person that, upon the
consummation thereof, will be wholly owned directly by the Borrower or one
or more of its wholly owned Subsidiaries (including, without limitation, as
a result of a merger or consolidation); provided, that, with respect to
each purchase or other acquisition made pursuant to this Section 7.02(i)
(each, a "Permitted Acquisition"):
(A) each applicable Loan Party and any such newly created or
acquired Subsidiary shall have complied with the requirements of
Section 6.12;
(B) the total cash and noncash consideration (including, without
limitation, the fair market value of all Equity Interests issued or
transferred to the sellers thereof, earnouts and other contingent
payment obligations to such sellers and all assumptions of
Indebtedness in connection therewith, but excluding any Excluded
Consideration) paid by or on behalf of the Borrower and its
Subsidiaries for any such purchase or other acquisition, when
aggregated with the total cash and noncash consideration paid by or on
behalf of the Borrower and its Subsidiaries for all other purchases
and other acquisitions made by the Borrower and its Subsidiaries
pursuant to this Section 7.02(i), shall not exceed $100,000,000;
(C) (1) immediately before and immediately after giving Pro Forma
Effect to any such purchase or other acquisition, no Default shall
have occurred and be continuing and (2) immediately after giving
effect to such purchase or other acquisition, (x) Holdings and its
Subsidiaries shall be in Pro Forma Compliance with all of the
covenants set forth in Section 7.11, such compliance to be determined
on the basis of the financial information most recently delivered to
the Administrative Agent and the Lenders pursuant to Section 6.01(a)
or (b) as though such purchase or other acquisition had been
consummated as of the first day of the fiscal period covered thereby
and evidenced by a certificate from the Chief Financial Officer of the
Borrower demonstrating such compliance calculation in reasonable
detail, (y) at least $25,000,000 of the Revolving Credit Facility
shall be available for the borrowing of Revolving Credit Loans; and
(D) the Borrower shall have delivered to the Administrative
Agent, on behalf of the Lenders, at least one (1) Business Day prior
to the date on which any
93
such purchase or other acquisition is to be consummated, a certificate
of a Responsible Officer, in form and substance reasonably
satisfactory to the Administrative Agent, certifying that all of the
requirements set forth in this clause (i) have been satisfied or will
be satisfied on or prior to the consummation of such purchase or other
acquisition;
(j) the Acquisition and the Mergers;
(k) Investments in the ordinary course of business consisting of (i)
endorsements for collection or deposit and (ii) customary trade
arrangements with customers consistent with past practices;
(l) Investments (including debt obligations and Equity Interests)
received in connection with the bankruptcy or reorganization of suppliers
and customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course of
business and upon the foreclosure with respect to any secured Investment or
other transfer of title with respect to any secured Investment;
(m) the licensing, sublicensing or contribution of IP Rights pursuant
to joint marketing arrangements with Persons other than Holdings and its
Subsidiaries;
(n) loans and advances to Holdings in lieu of, and not in excess of
the amount of (after giving effect to any other loans, advances or
Restricted Payments in respect thereof), Restricted Payments to the extent
permitted to be made to Holdings in accordance with Section 7.06; and
(o) so long as immediately after giving effect to any such Investment,
(i) no Event of Default has occurred and is continuing and (ii) at least
$25,000,000 of the Revolving Credit Facility shall be available for the
borrowing of Revolving Credit Loans, other Investments not exceeding
$65,000,000 in the aggregate in any fiscal year of the Borrower; provided,
however, that, such amount may be increased by the sum of (A) the Net Cash
Proceeds of Permitted Subordinated Indebtedness and (B) Permitted Equity
Issuances in an aggregate amount not to exceed $75,000,000; provided,
further, that, to the extent that any such Investment (or series of related
Investments) made pursuant to this clause (o) consists of the
contribution(s) or other transfer(s) of property (other than cash) having
an aggregate net book value in excess of $5,000,000 to a Joint Venture for
consideration less than the fair market value of such property, then the
Borrower shall have delivered to the Administrative Agent a pro forma
Compliance Certificate demonstrating that, upon after giving Pro Forma
Effect to such Investment(s), the Loan Parties would be in compliance with
the financial covenants set forth in Section 7.11.
7.03 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) in the case of the Borrower:
(i) Indebtedness in respect of Swap Contracts designed to hedge
against fluctuations in interest rates, foreign exchange rates or
commodities
94
pricing risks incurred in the ordinary course of business and
consistent with prudent business practice and not for speculative
purposes;
(ii) Indebtedness evidenced by the Senior Subordinated Notes and
any Permitted Refinancing thereof;
(iii) Indebtedness evidenced by the Existing Notes remaining
outstanding after giving effect to the consummation of the Existing
Notes Tender Offer;
(iv) Indebtedness evidenced by the Senior Unsecured Term Loans
and any Permitted Refinancing thereof; and
(v) Permitted Subordinated Indebtedness (A) in an aggregate
amount not to exceed $25,000,000 at any time outstanding, and (B) in
an aggregate amount in excess of $25,000,000 solely to the extent that
such excess amounts are applied to prepay the Loans pursuant to
Section 2.05(b)(iv);
(b) in the case of the Borrower and its Subsidiaries:
(i) Indebtedness of the Loan Parties under the Loan Documents;
(ii) Indebtedness outstanding on the date hereof and listed on
Schedule 7.03 and any modifications, refinancings, refundings,
renewals or extensions thereof; provided, that (A) the amount of such
Indebtedness is not increased at the time of such modification,
refinancing, refunding, renewal or extension except by an amount equal
to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and
by an amount equal to any existing commitments unutilized thereunder
or as otherwise permitted pursuant to this Section 7.03, and (B) the
terms and conditions (including, if applicable, as to collateral and
subordination) of any such modified, extending, refunding or
refinancing Indebtedness are not materially less favorable to the Loan
Parties or the Lenders than the terms and conditions of the
Indebtedness being modified, extended, refunded or refinanced;
(iii) Guarantees of the Borrower and its Subsidiaries in respect
of Indebtedness of the Borrower or such Subsidiary otherwise permitted
hereunder;
(iv) Indebtedness of (A) any Loan Party owing to any other Loan
Party, (B) of any Subsidiary of the Borrower that is not a Loan Party
owed to (1) any other Subsidiary of Holdings that is not a Loan Party
or (2) Holdings or a Loan Party in respect of an Investment permitted
under Section 7.02(c) or Section 7.02(o), and (C) of any Loan Party to
any Subsidiary of Holdings which is not a Loan Party; provided, that
all such Indebtedness of any Loan Party in this clause (iv)(C) must be
expressly subordinated to the Obligations;
(v) Attributable Indebtedness and purchase money obligations
(including obligations in respect of mortgage, industrial revenue
bond, industrial
95
development bond and similar financings) to finance the purchase,
repair or improvement of fixed or capital assets within the
limitations set forth in Section 7.01(i); provided, however, that the
aggregate amount of all such Indebtedness at any one time outstanding
shall not exceed $20,000,000;
(vi) Indebtedness of Foreign Subsidiaries in an aggregate
principal amount at any time outstanding for all such Persons taken
together not exceeding $20,000,000;
(vii) Indebtedness in respect of Swap Contracts designed to hedge
against foreign exchange rates or commodities pricing risks incurred
in the ordinary course of business and not for speculative purposes;
(viii) Indebtedness (other than for borrowed money) subject to
Liens permitted under Section 7.01;
(ix) Indebtedness of the Borrower and its Subsidiaries (A)
assumed in connection with any Permitted Acquisition or (B) owed to
the seller of any property acquired in a Permitted Acquisition on an
unsecured subordinated basis, in each case, so long as both
immediately prior and after giving effect thereto, (x) no Event of
Default shall exist or result therefrom, and (y) Holdings and its
Subsidiaries will be in Pro Forma Compliance with the covenants set
forth in Section 7.11, after giving effect to such Permitted
Acquisition and the incurrence or issuance of such Indebtedness and
any Permitted Refinancing thereof;
(x) Indebtedness representing deferred compensation to employees
of the Borrower and its Subsidiaries;
(xi) Indebtedness consisting of promissory notes issued by any
Loan Party to current or former officers, directors and employees,
their respective estates, spouses or former spouses to finance the
purchase or redemption of Equity Interests of Holdings or Investors
LLC permitted by Section 7.06;
(xii) Indebtedness incurred by the Borrower or its Subsidiaries
in a Permitted Acquisition or Disposition under agreements providing
for the adjustment of the purchase price or similar adjustments;
(xiii) Indebtedness consisting of obligations of the Borrower or
its Subsidiaries under deferred compensation or other similar
arrangements incurred by such Person in connection with the
Transaction and Permitted Acquisitions in an aggregate amount not to
exceed $5,000,000;
(xiv) Indebtedness in respect of netting services, overdraft
protections and similar arrangements in each case in connection with
deposit accounts; and
(xv) Indebtedness in an aggregate principal amount not to exceed
$20,000,000 at any time outstanding.
96
(c) in the case of the Holdings:
(i) Indebtedness under the Loan Documents;
(ii) Guarantees of the Senior Unsecured Term Loans;
(iii) unsecured Indebtedness of Holdings that ("Permitted Holdco
Debt") (A) is not subject to any Guarantee by the Borrower or any of
its Subsidiaries, (B) will not mature prior to the date that is
ninety-one (91) after the Maturity Date of the Term Facility, (C) has
no scheduled amortization or payments of principal, (D) does not
permit any payments in cash of interest or other amounts in respect of
the principal thereof for at least five (5) years from the date of the
issuance or incurrence thereof, and (E) has mandatory prepayment,
repurchase or redemption, covenant, default and remedy provisions
customary for senior discount notes of an issuer that is the parent of
a borrower under senior secured credit facilities, and in any event,
with respect to covenant, default and remedy provisions, no more
restrictive than those contained in the Senior Subordinated Notes
Indenture, taken as a whole (other than provisions customary for
senior discount notes of a holding company); provided, any such
Indebtedness shall constitute Permitted Holdco Debt only if (i) both
before and after giving effect to the issuance or incurrence thereof,
no Default or Event of Default shall have occurred and be continuing,
(ii) after giving Pro Forma Effect to the issuance or incurrence
thereof, the Holdings Consolidated Leverage Ratio shall be less than
6.00: 1.00 and the Leverage Ratio shall be less than 4.25: 1.00, (iii)
if the amount of such Indebtedness issued or incurred in any fiscal
quarter exceeds $5,000,000, the Chief Financial Officer of Holdings or
the Borrower shall have delivered an officer's certificate
demonstrating Pro Forma Compliance with the covenants set forth in
Section 7.11 in form and substance reasonably satisfactory to the
Administrative Agent, it being understood that any capitalized or
paid-in-kind interest or accreted principal on such Indebtedness shall
not constitute an issuance or incurrence of Indebtedness for purposes
of this proviso;
(iv) unsecured Guarantees of obligations of its Subsidiaries in
the ordinary course of business;
(v) Indebtedness permitted pursuant to clause (b)(iv) above;
(vi) Indebtedness owed to the seller of any property acquired in
a Permitted Acquisition on an unsecured subordinated basis so long as,
if applicable, Holdings complies with the proviso in Section
7.06(f)(v) (whether or not any Restricted Payment is made to
Holdings); and
(vii) Indebtedness of the type described in Sections
7.03(b)(viii), (xi) and (xii).
7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a series
of transactions) all or
97
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except that, so long as no Default exists or would
result therefrom:
(a) any Subsidiary may merge with (i) the Borrower (including a
merger, the purpose of which is to reorganize the Borrower into a new
jurisdiction), provided, that the Borrower shall be the continuing or
surviving Person or the surviving Person shall expressly assume the
obligations of the Borrower pursuant to documents reasonably acceptable to
the Administrative Agent, or (ii) any one or more other Subsidiaries,
provided, that when any Guarantor is merging with another Subsidiary, (A)
the Guarantor shall be the continuing or surviving Person or (B) to the
extent constituting an Investment, such Investment must be a permitted
Investment in or Indebtedness of a Subsidiary which is not a Loan Party in
accordance with Sections 7.02 and 7.03;
(b) any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to
another Subsidiary; provided, that if the transferor in such a transaction
is a Guarantor, then (i) the transferee must either be the Borrower or a
Guarantor or (ii) to the extent constituting an Investment, such Investment
must be a permitted Investment in or Indebtedness of a Subsidiary which is
not a Loan Party in accordance with Sections 7.02 and 7.03, respectively;
(c) any Subsidiary may merge with any other Person in order to effect
an Investment permitted pursuant to Section 7.02; provided, that (i) the
continuing or surviving Person shall be a Subsidiary, which together with
each of its Subsidiaries, shall have complied with the requirements of
Section 6.12 or (ii) to the extent constituting an Investment, such
Investment must be a permitted Investment in accordance with Section 7.02;
(d) the Borrower and its Subsidiaries may consummate the Acquisition
and the Mergers; and
(e) a merger, dissolution, liquidation, consolidation or Disposition,
the purpose of which is to effect a Disposition permitted pursuant to
Section 7.05.
7.05 Dispositions. Make any Disposition or enter into any agreement to
make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired, in the ordinary course of business and Dispositions
of property no longer used in the conduct of the business of the Borrower
and its Subsidiaries;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of property to the extent that (i) such property is
exchanged for credit against the purchase price of similar replacement
property or (ii) the proceeds of such Disposition are promptly applied to
the purchase price of such replacement property;
98
(d) Dispositions of property by any Subsidiary to the Borrower or to a
Subsidiary; provided, that if the transferor of such property is a
Guarantor (i) the transferee thereof must either be the Borrower or a
Guarantor or (ii) to the extent such transaction constitutes an Investment,
such transaction is permitted under Section 7.02;
(e) Dispositions permitted by Sections 7.04 and 7.06 (solely with
respect to reissuances of Equity Interests of treasury stock of Holdings);
(f) Dispositions by the Borrower and its Subsidiaries of property
pursuant to sale-leaseback transactions; provided, that (i) the fair market
value of all property so Disposed of shall not exceed $25,000,000 from and
after the Closing Date and (ii) the purchase price for such property shall
be paid to the Borrower or such Subsidiary for not less than 75% cash
consideration;
(g) Dispositions of Cash Equivalents;
(h) Dispositions of accounts receivable in connection with the
collection or compromise thereof;
(i) licensing or sublicensing of IP Rights in the ordinary course of
business on customary terms;
(j) intercompany sales of property in the ordinary course of business;
(k) leases, subleases, licenses or sublicenses of property in the
ordinary course of business and which do not materially interfere with the
business of Holdings and its Subsidiaries;
(l) transfers of property subject to Casualty Events upon receipt of
the Net Cash Proceeds of such Casualty Event; and
(m) Dispositions by the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.05; provided, that (i) at the time of such
Disposition, no Event of Default shall exist or would result from such
Disposition, (ii) the aggregate book value of all property Disposed of in
reliance on this clause (m) shall not exceed $50,000,000 and (iii) the
purchase price for such property shall be paid to the Borrower or such
Subsidiary for not less than 75% cash consideration;
provided, however, that (x) any Disposition of any property pursuant to this
Section 7.05 (except pursuant to Sections 7.05(d), (e), (h) and (j)), shall be
for no less than the fair market value of such property at the time of such
Disposition and (y) if the net book value of any property subject to any
Disposition pursuant to Section 7.05(f) or (m) exceeds $5,000,000, prior to any
Disposition of such property pursuant to Section 7.05(f) or (m), the Borrower
shall deliver to the Administrative Agent a pro forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
the Loan Parties would be in compliance with the financial covenants set forth
in Section 7.11. To the extent any Collateral is Disposed of as expressly
permitted by this Section 7.05, such Collateral shall be sold free and clear of
the Liens
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created by the Loan Documents, and the Administrative Agent shall be authorized
to take any actions deemed appropriate in order to effect the foregoing.
7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, except:
(a) each Subsidiary may make Restricted Payments to the Borrower and
to Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of Equity Interests of such Subsidiary based on their relative
ownership interests);
(b) Holdings and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the Equity Interests
(other than Disqualified Equity Interests) of such Person;
(c) so long as no Default shall have occurred and be continuing or
would result therefrom, Holdings (and, from and after a Qualifying IPO of
the Borrower, the Borrower) may make Restricted Payments with the proceeds
received from any Permitted Equity Issuance or Permitted Subordinated Debt
to the extent not required to prepay the Loans pursuant to Section 2.05(b);
(d) the Borrower may make Restricted Payments made on the Closing Date
to consummate the Acquisition, the Mergers and the other Transactions;
(e) to the extent constituting Restricted Payments, the Borrower and
its Subsidiaries may enter into transactions expressly permitted by Section
7.04 or 7.08;
(f) any Subsidiary of Holdings may make Restricted Payments to
Holdings:
(i) the proceeds of which will be used to pay the tax liability
for the relevant jurisdiction in respect of consolidated, combined,
unitary or affiliated returns for the relevant jurisdiction of
Holdings attributable to the Borrower and its Subsidiaries determined
as if the Borrower and its Subsidiaries filed separate separately;
(ii) the proceeds of which shall be used by Holdings to pay its
(or to make a Restricted Payment to Investors LLC to enable it to pay)
operating expenses incurred in the ordinary course of business and
other corporate overhead costs and expenses (including, without
limitation, administrative, legal, accounting and similar expenses
provided by third parties), which are reasonable and customary and
incurred in the ordinary course of business, in an aggregate amount
not to exceed $500,000 in any fiscal year plus any reasonable and
customary indemnification claims made by directors or officers of
Holdings attributable to the ownership or operations of the Borrower
and its Subsidiaries;
(iii) the proceeds of which shall be used by Holdings to pay its
(or to make a Restricted Payment to Investors LLC to enable it to pay)
franchise taxes;
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(iv) the proceeds of which will be used to repurchase the Equity
Interests of Holdings (or to make a Restricted Payment to Investors
LLC to enable it to repurchase it's Equity Interest) from directors,
employees or members of management of Holdings or any Subsidiary (or
their estate, family members, spouse and/or former spouse), in an
aggregate amount not in excess of $3,000,000 in any calendar year plus
the proceeds of any key-man life insurance maintained by Holdings or
any of its Subsidiaries; provided, that the Borrower may carry-over
and make in any subsequent calendar year or years, in addition to the
amount for such calendar year, the amount not utilized in the prior
calendar year or years up to a maximum of $12,000,000;
(v) to finance any Investment permitted to be made pursuant to
Section 7.02; provided, that (A) such Restricted Payment shall be made
concurrently with the closing of such Investment and (B) Holdings
shall, immediately following the closing thereof, cause (1) all
property acquired (whether assets or Equity Interests) to be
contributed to the Borrower or its Subsidiaries or (2) the merger (to
the extent permitted in Section 7.04) of the Person formed or acquired
into the Borrower or its Subsidiaries in order to consummate such
Permitted Acquisition;
(vi) repurchases of Equity Interests of Holdings deemed to occur
upon the non-cash exercise of stock options and warrants; and
(g) in addition to the foregoing Restricted Payments, the Borrower may
make additional Restricted Payments to Holdings the proceeds of which may
be utilized by Holdings to make additional Restricted Payments, in an
aggregate amount not to exceed (A) $1,000,000 (such amount to be increased
to (x) $20,000,000 if the Leverage Ratio is less than 4.00: 1.00 and (y)
$30,000,000 if the Leverage Ratio is less than 3.50: 1.00) plus (B) without
duplication, 50% of Consolidated Net Income for the period (taken as one
accounting period) commencing with the fiscal quarter ending March 31, 2004
and ending on the date of Holding's most recently ended fiscal quarter for
which financial statements required to be delivered pursuant to Section
6.01(a) or (b) are available at the time of such Restricted Payment (or, if
Consolidated Net Income for such period is negative, less 100% of such
deficit) minus (C) the sum of all Restricted Payments made pursuant to the
foregoing clause (B); provided, that if at any time, the amount of
Restricted Payments described in clause (C) exceeds such percentage of
Consolidated Net Income under clause (B), an amount equal to such excess
shall reduce the amount, if any, then available under clause (A), but not
less than an amount equal to $1,000,000; and
(h) from and after a Qualifying IPO of the Borrower, the Borrower may
make the Restricted Payments referred to in clauses (f)(iv), (f)(vi) or
(g).
7.07 Change in Nature of Business. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the date hereof or any business reasonably
related or ancillary thereto.
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7.08 Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of the Borrower, whether or not in the ordinary course
of business, other than (a) transactions among Loan Parties, (b) on fair and
reasonable terms substantially as favorable to the Borrower or such Subsidiary
as would be obtainable by the Borrower or such Subsidiary at the time in a
comparable arm's length transaction with a Person other than an Affiliate, (c)
the payment of fees and expenses in connection with the consummation of the
Transactions, (d) so long as no Event of Default shall have occurred and be
continuing under Section 8.01(f), the payment of fees to the Sponsor pursuant to
the Sponsor Management Agreement, (e) equity issuances by Holdings permitted
under Section 7.06, (f) loans and other transactions by Holdings and its
Subsidiaries to the extent permitted under this Article VII, (g) customary fees
may be paid to any directors of Holdings and reimbursement of reasonable
out-of-pocket costs of the directors of Holdings, (h) Holdings and its
Subsidiaries may enter into employment and severance arrangements with officers
and employees in the ordinary course of business and (i) Holdings and its
Subsidiaries may make payments pursuant to the tax sharing agreements among
Holdings and its Subsidiaries.
7.09 Burdensome Agreements. Enter into or permit to exist any
Contractual Obligation (other than this Agreement or any other Loan Document)
that limits the ability (a) of any Subsidiary of the Borrower to make Restricted
Payments to the Borrower or any Guarantor which is a Subsidiary of the Borrower
or to otherwise transfer property to or invest in the Borrower or any Guarantor,
except for any agreement in effect (i) on the date hereof, (ii) at the time any
Subsidiary becomes a Subsidiary of the Borrower, so long as such agreement was
not entered into solely in contemplation of such Person becoming a Subsidiary of
the Borrower, (iii) representing Indebtedness of a Subsidiary of the Borrower
which is not a Loan Party which is permitted by Section 7.03, or (iv) in
connection with any Disposition permitted by Section 7.05, and (b) of the
Borrower or any Loan Party to create, incur, assume or suffer to exist Liens on
property of such Person for the benefit of the Lenders with respect to the
Facilities and the Obligations or under the Loan Documents except for (i)
negative pledges and restrictions on Liens in favor of any holder of
Indebtedness permitted under Section 7.03 but solely to the extent any negative
pledge relates to the property financed by or the subject of such Indebtedness
or (ii) customary restrictions on leases, subleases, licenses or asset sale
agreements otherwise permitted hereby so long as such restrictions may relate to
the assets subject thereto.
7.10 Use of Proceeds. Use the proceeds of any Credit Extension,
whether directly or indirectly, to purchase or carry margin stock (within the
meaning of Regulation U of the FRB) or to extend credit to others for the
purpose of purchasing or carrying margin stock or to refund Indebtedness
originally incurred for such purpose.
7.11 Financial Covenants. (a) Leverage Ratio. Permit the Leverage
Ratio as of the end of any fiscal quarter of the Borrower set forth below to be
greater than the ratio set forth below opposite such period:
- ------------------------------------------------------------------
Fiscal Year March 31 June 30 September 30 December 31
- ------------------------------------------------------------------
2004 5.95: 1.00 5.95: 1.00 5.95: 1.00 5.95: 1.00
- ------------------------------------------------------------------
2005 5.75: 1.00 5.75: 1.00 5.50: 1.00 5.50: 1.00
- ------------------------------------------------------------------
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- ------------------------------------------------------------------
2006 5.25: 1.00 5.25: 1.00 5.00: 1.00 5.00: 1.00
- ------------------------------------------------------------------
2007 5.00: 1.00 5.00: 1.00 4.50: 1.00 4.50: 1.00
- ------------------------------------------------------------------
2008 4.50: 1.00 4.50: 1.00 4.25: 1.00 4.25: 1.00
- ------------------------------------------------------------------
2009 4.25: 1.00 4.25: 1.00 4.00: 1.00 4.00: 1.00
- ------------------------------------------------------------------
2010 4.00: 1.00 4.00: 1.00 4.00: 1.00 4.00: 1.00
- ------------------------------------------------------------------
(b) Interest Coverage Ratio. Permit the Interest Coverage Ratio as of
the end of any fiscal quarter of the Borrower as set forth below to be less than
the ratio set forth below opposite such fiscal quarter:
- ------------------------------------------------------------------
Fiscal Year March 31 June 30 September 30 December 31
- ------------------------------------------------------------------
2004 2.10: 1.00 2.10: 1.00 2.10: 1.00 2.10: 1.00
- ------------------------------------------------------------------
2005 2.15: 1.00 2.15: 1.00 2.25: 1.00 2.25: 1.00
- ------------------------------------------------------------------
2006 2.25: 1.00 2.25: 1.00 2.25: 1.00 2.50: 1.00
- ------------------------------------------------------------------
2007 2.50: 1.00 2.50: 1.00 2.50: 1.00 2.75: 1.00
- ------------------------------------------------------------------
2008 2.75: 1.00 2.75: 1.00 2.75: 1.00 2.75: 1.00
- ------------------------------------------------------------------
2009 3.00: 1.00 3.00: 1.00 3.00: 1.00 3.00: 1.00
- ------------------------------------------------------------------
2010 3.00: 1.00 3.00: 1.00 3.00: 1.00 3.00: 1.00
- ------------------------------------------------------------------
7.12 Amendments of Organization Documents. Amend any of its
Organization Documents in a manner materially adverse to the Administrative
Agent or the Lenders.
7.13 Accounting Changes. Make any change in fiscal year.
7.14 Prepayments, Etc. of Indebtedness. (a) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner any of the Senior Unsecured Term Loans, the Senior Subordinated Notes,
any Permitted Subordinated Indebtedness and any Permitted Holdco Debt
(collectively, "Junior Financing") or make any payment in violation of any
subordination terms of any Junior Financing Documentation, except (i) the
prepayment of the Senior Unsecured Term Loans (other than any Permitted
Refinancing thereof), to the extent paid out of Excess Cash Flow after
prepayment required under Section 2.05(b)(i), (ii) the refinancing thereof with
the Net Cash Proceeds of any further incurrence of Permitted Subordinated
Indebtedness, Permitted Holdco Debt or Permitted Equity Issuance, in each case,
to the extent not required to prepay any Loans or Facility pursuant to Section
2.05(b) and (iii) the conversion of any Junior Financing to Equity Interests
(other than Disqualified Equity Interests), or (b) amend, modify or change in
any manner materially adverse to the interests of the Administrative Agent or
the Lenders any term or condition of any Junior Financing Documentation.
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7.15 Amendment of Merger Agreement. Amend, modify or supplement the
Merger Agreement or waive or otherwise consent to any change or departure from
any of the terms or conditions of the Merger Agreement in any manner materially
adverse to the Administrative Agent or the Lenders.
7.16 Equity Interests of the Borrower and Subsidiaries. (a) (i) Permit
the Borrower or any of its Subsidiaries to own directly or indirectly less than
90% of the Equity Interests of any of the Domestic Subsidiaries except as a
result of or in connection with a dissolution, merger, consolidation or
Disposition of a Subsidiary permitted by Section 7.04, 7.05 or an Investment in
any Person permitted under Section 7.02;
(ii) Permit the Borrower or any of its Subsidiaries to own directly or
indirectly less than 90% of the Equity Interests of any of the Foreign
Subsidiaries except (A) to qualify directors where required by applicable Law or
to satisfy other requirements of applicable Law with respect to the ownership of
Equity Interests of Foreign Subsidiaries, (B) in the case of Trilogy Egg
Products Inc., a Canadian corporation, or (C) as a result of or in connection
with a dissolution, merger, consolidation or disposition of a Subsidiary
permitted by Section 7.04, 7.05 or an Investment in any Person permitted under
Section 7.02, or
(b) Create, incur, assume or suffer to exist any Lien on any Equity
Interests of the Borrower (other than non-consensual Liens arising solely by
operation of law).
7.17 Holding Company. (a) In the case of Holdings, (i) conduct,
transact or otherwise engage in any business or operations other than those
incidental to its ownership of the Equity Interests of the Borrower, the
performance of the Loan Documents and any transactions that Holdings is
permitted to enter into or consummate under this Article VII or (ii) incur any
Indebtedness other than Indebtedness permitted pursuant to Section 7.03(c); or
(b) Other than in connection with a Qualifying IPO, permit the
Borrower to be a Subsidiary that is not wholly owned by Holdings.
7.18 Designated Senior Debt. Designate any other Indebtedness of the
Borrower or any of its Subsidiaries as "Designated Senior Debt" (or any
comparable term) under, and as defined in, the Senior Subordinated Notes
Indenture or any other applicable Junior Financing Documentation.
Article VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any of the following shall constitute an Event
of Default:
(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i)
when and as required to be paid herein, any amount of principal of any
Loan, or (ii) within five (5) Business Days after the same becomes due, any
interest on any Loan or any other amount payable hereunder or with respect
to any other Loan Document; or
104
(b) Specific Covenants. The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Sections 6.03(a), 6.05
(solely with respect to Holdings and the Borrower) or 6.11 or Article VII;
provided, that any Event of Default under Section 7.11 is subject to cure
as contemplated by the last proviso set forth in the definition of
"Consolidated EBITDA"; or
(c) Other Defaults. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in Section 8.01(a) or (b) above)
contained in any Loan Document on its part to be performed or observed and
such failure continues for thirty (30) days after notice thereof by the
Administrative Agent to the Borrower; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of
the Borrower or any other Loan Party herein, in any other Loan Document, or
in any document required to be delivered in connection herewith or
therewith shall be incorrect or misleading in any material respect when
made or deemed made; or
(e) Cross-Default. (i) Any Loan Party or any Subsidiary (A) fails to
make any payment beyond the applicable grace period with respect thereto,
if any (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) in respect of any Indebtedness (other than
Indebtedness hereunder) having an aggregate principal amount of more than
the Threshold Amount, or (B) fails to observe or perform any other
agreement or condition relating to any such Indebtedness, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to become due or
to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any of its
Subsidiaries institutes or consents to the institution of any proceeding
under any Debtor Relief Law, or makes an assignment for the benefit of
creditors; or applies for or consents to the appointment of any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar
officer for it or for all or any material part of its property; or any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of such
Person and the appointment continues undischarged or unstayed for sixty
(60) calendar days; or any proceeding under any Debtor Relief Law relating
to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for sixty (60) calendar days, or an order for relief is entered in
any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any
Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant
of attachment or execution or similar process is issued or levied against
all or any material part of the property of any such Person and is not
released, vacated or fully bonded within sixty (60) days after its issue or
levy; or
105
(h) Judgments. There is entered against any Loan Party or any
Subsidiary a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered
by independent third-party insurance as to which the insurer has been
notified of such judgment or order and does not deny coverage) and there is
a period of sixty (60) consecutive days during which a stay of enforcement
of such judgment, by reason of a pending appeal or otherwise, is not in
effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of any Loan Party under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount which
could reasonably be expected to result in a Material Adverse Effect, or
(ii) any Loan Party or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount which could reasonably be
expected to result in a Material Adverse Effect; or
(j) Invalidity of Loan Documents. Any provision of any Loan Document,
at any time after its execution and delivery and for any reason other than
as expressly permitted hereunder or thereunder (including as a result of a
transaction permitted under Section 7.04 or 7.05) or satisfaction in full
of all the Obligations, ceases to be in full force and effect; or any Loan
Party contests in writing the validity or enforceability of any provision
of any Loan Document; or any Loan Party denies that it has any or further
liability or obligation under any Loan Document (other than as a result of
repayment in full of the Obligations and termination of the Aggregate
Commitments), or purports to revoke or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control; or
(l) Collateral Document. Any Collateral Document after delivery
thereof pursuant to Section 4.01 or 6.12 shall for any reason (other than
pursuant to the terms thereof including as a result of a transaction
permitted under Section 7.04 or 7.05) cease to create a valid and perfected
first priority lien on and security interest in the Collateral covered
thereby, subject to Liens permitted under Section 7.01; or
(m) Junior Financing Documentation. (i) Any of the Obligations of the
Loan Parties under the Loan Documents for any reason shall cease to be
"Designated Senior Debt" (or any comparable term) or "Senior Debt" (or any
comparable term) under, and as defined in, the Senior Subordinated Notes
Indenture and any other applicable Junior Financing Documentation or (ii)
the subordination provisions set forth in the Senior Subordinated Notes
Indenture (or comparable provisions in any other Junior Financing
Documentation) shall, in whole or in part, cease to be effective or cease
to be legally valid, binding and enforceable against the holders of the
Senior Subordinated Notes or any other Junior Financing, if applicable.
106
8.02 Remedies Upon Event of Default. If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or may,
with the consent of, the Required Lenders, take any or all of the following
actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or
applicable Law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
8.03 Application of Funds. After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting
fees, indemnities, expenses and other amounts (including Attorney Costs
payable under Section 10.04 and amounts payable under Article III) payable
to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest)
payable to the Lenders (including Attorney Costs payable under Section
10.05 and amounts payable under Article III), ratably among them in
proportion to the amounts described in this clause Second payable to them;
107
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and L/C Borrowings, ratably among
the Lenders in proportion to the respective amounts described in this
clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings and the termination value
under Secured Hedge Obligations, ratably among the Lenders in proportion to
the respective amounts described in this clause Fourth held by them;
Fifth, to the Administrative Agent for the account of the L/C Issuer,
to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit;
Sixth, to the payment of all other Obligations of the Loan Parties
owing under or in respect of the Loan Documents that are due and payable to
the Administrative Agent and the other Secured Parties on such date,
ratably based upon the respective aggregate amounts of all such Obligations
owing to the Administrative Agent and the other Secured Parties on such
date; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX
ADMINISTRATIVE AGENT AND OTHER AGENTS
9.01 Appointment and Authorization of Agents. (a) Each Lender hereby
irrevocably appoints, designates and authorizes the Administrative Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Loan Document, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, nor shall any Agent have or be deemed
to have any fiduciary relationship with any Lender or participant, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against any Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" herein and in the other Loan
Documents with reference to any Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
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(b) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (i) provided to the
Agents in this Article IX with respect to any acts taken or omissions suffered
by the L/C Issuer in connection with Letters of Credit issued by it or proposed
to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term "Agent" as used in
this Article IX and in the definition of "Agent-Related Person" included the L/C
Issuer with respect to such acts or omissions, and (ii) as additionally provided
herein with respect to the L/C Issuer.
(c) The Administrative Agent shall also act as the "collateral agent"
under the Loan Documents, and each of the Lenders (in its capacities as a
Lender, Swing Line Lender (if applicable), L/C Issuer (if applicable) and a
potential Hedge Bank) hereby irrevocably appoints and authorizes the
Administrative Agent to act as the agent of such Lender for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Secured Obligations, together with such
powers and discretion as are reasonably incidental thereto. In this connection,
the Administrative Agent, as "collateral agent" (and any co-agents, sub-agents
and attorneys-in-fact appointed by the Administrative Agent pursuant to Section
9.02 for purposes of holding or enforcing any Lien on the Collateral (or any
portion thereof) granted under the Collateral Documents, or for exercising any
rights and remedies thereunder at the direction of the Administrative Agent),
shall be entitled to the benefits of all provisions of this Article IX
(including, without limitation, Section 9.07, as though such co-agents,
sub-agents and attorneys-in-fact were the "collateral agent" under the Loan
Documents) as if set forth in full herein with respect thereto.
9.02 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document (including for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents or of exercising any rights and
remedies thereunder) by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
9.03 Liability of Agents. No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or the perfection or
priority of any Lien or security interest created or purported to be created
under the Collateral Documents, or for any failure of any Loan Party or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
or participant to ascertain or to inquire as to the observance or
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performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party or any Affiliate thereof.
9.04 Reliance by Agents. (a) Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by such Agent. Each
Agent shall be fully justified in failing or refusing to take any action under
any Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders (or such greater number of Lenders as may be expressly required hereby
in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
9.05 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to any Event of Default as may be directed by the
Required Lenders in accordance with Article VIII; provided, however, that unless
and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable or in the best interest of the Lenders.
9.06 Credit Decision; Disclosure of Information by Agents. Each Lender
acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any Loan
Party or any Affiliate thereof, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender as to any matter,
including whether Agent-Related Persons have disclosed material information in
their
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possession. Each Lender represents to each Agent that it has, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Loan Parties and their respective
Subsidiaries, and all applicable bank or other regulatory Laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower and the other Loan Parties
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
the other Loan Parties. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by any Agent herein, such
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the Loan
Parties or any of their respective Affiliates which may come into the possession
of any Agent-Related Person.
9.07 Indemnification of Agents. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Agent-Related Person's own gross negligence or willful misconduct; provided,
however, that no action taken in accordance with the directions of the Required
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section 9.07; provided, further, that to the extent the L/C
Issuer is entitled to indemnification under this Section 9.07 solely in its
capacity and role as L/C Issuer, only the Revolving Credit Lenders shall be
required to indemnify the L/C Issuer in accordance with this Section 9.07. In
the case of any investigation, litigation or proceeding giving rise to any
Indemnified Liabilities, this Section 9.07 applies whether any such
investigation, litigation or proceeding is brought by any Lender or any other
Person. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section 9.07 shall survive termination of the Aggregate
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.
9.08 Agents in their Individual Capacities. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire Equity
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Interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with each of the Loan Parties and their
respective Affiliates as though Bank of America were not the Administrative
Agent or the L/C Issuer hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, Bank of
America or its Affiliates may receive information regarding any Loan Party or
its Affiliates (including information that may be subject to confidentiality
obligations in favor of such Loan Party or such Affiliate) and acknowledge that
the Administrative Agent shall be under no obligation to provide such
information to them. With respect to its Loans, Bank of America shall have the
same rights and powers under this Agreement as any other Lender and may exercise
such rights and powers as though it were not the Administrative Agent or the L/C
Issuer, and the terms "Lender" and "Lenders" include Bank of America in its
individual capacity.
9.09 Successor Agents. The Administrative Agent may resign as the
Administrative Agent upon thirty (30) days' notice to the Lenders. If the
Administrative Agent resigns under this Agreement, the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall be consented to by the Borrower at all times other than
during the existence of an Event of Default under Section 8.01(f) (which consent
of the Borrower shall not be unreasonably withheld or delayed). If no successor
agent is appointed prior to the effective date of the resignation of the
Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrower, a successor agent from among the Lenders.
Upon the acceptance of its appointment as successor agent hereunder, the Person
acting as such successor agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent,"
shall mean such successor administrative agent and/or supplemental
administrative agent, as the case may be, and the retiring Administrative
Agent's appointment, powers and duties as the Administrative Agent shall be
terminated. After the retiring Administrative Agent's resignation hereunder as
the Administrative Agent, the provisions of this Article IX and Sections 10.04
and 10.05 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent under this Agreement. If no
successor agent has accepted appointment as the Administrative Agent by the date
which is thirty (30) days following the retiring Administrative Agent's notice
of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above. Upon the
acceptance of any appointment as the Administrative Agent hereunder by a
successor and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such amendments or supplements to the
Mortgages, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, the Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, discretion, privileges, and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents. After the retiring
Administrative Agent's resignation hereunder as the Administrative Agent, the
provisions of this Article IX shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Administrative Agent.
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9.10 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, L/C Obligations and
all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of
the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the Agents
and their respective agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
9.11 Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Administrative Agent, at its option and in its discretion,
(a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations not yet accrued and payable) and the
expiration or termination of all Letters of Credit, (ii) that is sold or to
be sold as part of or in connection with any sale permitted hereunder or
under any other Loan Document, or (iii) subject to Section 10.01, if
approved, authorized or ratified in writing by the Required Lenders;
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(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on
such property that is permitted by Section 7.01(i); and
(c) to release any Guarantor from its obligations under the Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
its interest in particular types or items of property, or to release any
Guarantor from its obligations under the Guaranty pursuant to this Section 9.11.
In each case as specified in this Section 9.11, the Administrative Agent will,
at the Borrower's expense, execute and deliver to the applicable Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents, or to release such Guarantor from its obligations
under the Guaranty, in each case in accordance with the terms of the Loan
Documents and this Section 9.11.
9.12 Other Agents; Arrangers and Managers. None of the Lenders or
other Persons identified on the facing page or signature pages of this Agreement
as a "co-syndication agent," "co-documentation agent", "co-agent," "book
manager," "lead manager," "arranger," "lead arranger" or "co-arranger" shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without limiting
the foregoing, none of the Lenders or other Persons so identified shall have or
be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
9.13 Appointment of Supplemental Administrative Agents. (a) It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any Law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case the Administrative Agent
deems that by reason of any present or future Law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, the Administrative Agent is hereby authorized
to appoint an additional individual or institution selected by the
Administrative Agent in its sole discretion as a separate trustee, co-trustee,
administrative agent, collateral agent, administrative sub-agent or
administrative co-agent (any such additional individual or institution being
referred to herein individually as a "Supplemental Administrative Agent" and
collectively as "Supplemental Administrative Agents").
(b) In the event that the Administrative Agent appoints a Supplemental
Administrative Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to the
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Administrative Agent to the extent, and
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only to the extent, necessary to enable such Supplemental Administrative Agent
to exercise such rights, powers and privileges with respect to such Collateral
and to perform such duties with respect to such Collateral, and every covenant
and obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Administrative Agent shall run to and
be enforceable by either the Administrative Agent or such Supplemental
Administrative Agent, and (ii) the provisions of this Article IX and of Section
9.07 (obligating the Borrower to pay the Administrative Agent's expenses and to
indemnify the Administrative Agent) that refer to the Administrative Agent shall
inure to the benefit of such Supplemental Administrative Agent and all
references therein to the Administrative Agent shall be deemed to be references
to the Administrative Agent and/or such Supplemental Administrative Agent, as
the context may require.
(c) Should any instrument in writing from the Borrower, Holdings or
any other Loan Party be required by any Supplemental Administrative Agent so
appointed by the Administrative Agent for more fully and certainly vesting in
and confirming to him or it such rights, powers, privileges and duties, the
Borrower or Holdings, as applicable, shall, or shall cause such Loan Party to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by the Administrative Agent. In case any Supplemental Administrative
Agent, or a successor thereto, shall die, become incapable of acting, resign or
be removed, all the rights, powers, privileges and duties of such Supplemental
Administrative Agent, to the extent permitted by Law, shall vest in and be
exercised by the Administrative Agent until the appointment of a new
Supplemental Administrative Agent.
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall:
(a) extend or increase the Commitment of any Lender without the
written consent of each Lender directly affected thereby (it being
understood that a waiver of any condition precedent set forth in Section
4.02 or the waiver of any Event of Default, mandatory prepayment or
mandatory reduction of the Commitments shall not constitute an extension or
increase of any Commitment of any Lender);
(b) postpone any date scheduled for any payment of principal or
interest under Section 2.07 or 2.08 without the written consent of each
Lender directly affected thereby, it being understood that the waiver of
any mandatory prepayment of the Term Loans shall not constitute a
postponement of any date scheduled for the payment of principal or
interest;
(c) reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (iii) of the second
proviso to this Section 10.01)
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any fees or other amounts payable hereunder or under any other Loan
Document without the written consent of each Lender directly affected
thereby, it being understood that any change to the definition of Leverage
Ratio or in the component definitions thereof shall not constitute a
reduction in the rate; provided, however, that only the consent of the
Required Lenders shall be necessary to amend the definition of "Default
Rate" or to waive any obligation of the Borrower to pay interest at the
Default Rate;
(d) change the order of application of any reduction in the
Commitments or any prepayment of Loans between the Facilities from the
application thereof set forth in the applicable provisions of Section
2.05(b) or 2.06(b), respectively, in any manner that materially and
adversely affects the Lenders under such Facilities without the written
consent of Lenders having more than 50% of the Aggregate Credit Exposures
then in effect within each of the following classes of Commitments, Loans
and other Credit Extensions: (i) the class consisting of the Revolving
Credit Commitment combined on an aggregate basis, and (ii) the class
consisting of the Term Commitment combined on an aggregate basis;
(e) change any provision of this Section 10.01, the definition of
"Required Lenders" or Section 2.06(c) without the written consent of each
Lender;
(f) other than in a transaction permitted under Section 7.05, release
all or substantially all of the Collateral in any transaction or series of
related transactions, without the written consent of each Lender; or
(g) other than in connection with a transaction permitted under
Section 7.04 or 7.05, release all or substantially all of the value of the
Guaranty, without the written consent of each Lender;
and provided, further that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Swing Line Lender in addition to the Lenders required above, affect the
rights or duties of the Swing Line Lender under this Agreement; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of, or any fees or other amounts payable to, the Administrative
Agent under this Agreement or any other Loan Document; and (iv) Section 10.07(g)
may not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at the
time of such amendment, waiver or other modification; and (v) the Fee Letter may
be amended, or rights or privileges thereunder waived, in a writing executed
only by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender (it being understood
that any Commitments or Loans held or deemed held by any Defaulting Lender shall
be excluded for a vote of the Lenders hereunder requiring any consent of the
Lenders).
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10.02 Notices and Other Communications; Facsimile Copies. (a) General.
Unless otherwise expressly provided herein, all notices and other communications
provided for hereunder or any other Loan Document shall be in writing (including
by facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to Section
10.02(c)) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent, the L/C Issuer or
the Swing Line Lender, to the address, facsimile number, electronic mail
address or telephone number specified for such Person on Schedule 10.02 or
to such other address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to the
other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, the L/C Issuer and the
Swing Line Lender.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four (4) Business Days
after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when
sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of Section
10.02(c)), when delivered; provided, however, that notices and other
communications to the Administrative Agent, the L/C Issuer and the Swing Line
Lender pursuant to Article II shall not be effective until actually received by
such Person. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Agents and the Lenders. The Administrative Agent may also
require that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Agents and Lenders. The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including telephonic
Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on
behalf of the Borrower even if
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(i) such notices were not made in a manner specified herein, were incomplete or
were not preceded or followed by any other form of notice specified herein, or
(ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify each Agent-Related Person and
each Lender from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Borrower in the absence of gross negligence or willful misconduct. All
telephonic notices to the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.03 No Waiver; Cumulative Remedies. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder or under any other Loan Document
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided, and provided under
each other Loan Document, are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law.
10.04 Attorney Costs, Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all reasonable costs and expenses
incurred in connection with the preparation, negotiation, syndication and
execution of this Agreement and the other Loan Documents, and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs of Shearman & Sterling LLP, and (b) to pay
or reimburse the Administrative Agent and each Lender for all reasonable costs
and expenses incurred in connection with the enforcement of any rights or
remedies under this Agreement or the other Loan Documents (including all such
costs and expenses incurred during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs of counsel
to the Administrative Agent). The foregoing costs and expenses shall include all
search, filing, recording, title insurance and appraisal charges and fees and
taxes related thereto, and other out-of-pocket expenses incurred by any Agent.
All amounts due under this Section 10.04 shall be paid within twenty (20)
Business Days after invoiced or demand therefor. The agreements in this Section
10.04 shall survive the termination of the Aggregate Commitments and repayment
of all other Obligations. If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it hereunder or under any Loan Document,
such amount may be paid on behalf of such Loan Party by the Administrative Agent
or any Lender, in its sole discretion.
10.05 Indemnification by the Borrower. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and, in the case of any funds,
trustees and advisors and attorneys-in-fact (collectively the "Indemnitees")
from and against any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses and
disbursements (including Attorney Costs (which shall be limited to one (1)
counsel to the Administrative Agent and the Lenders, unless (x) the interests of
the Administrative Agent and the Lenders are sufficiently divergent, in which
case one (1) additional counsel may be
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appointed, and (y) if the interests of any Lender or group of Lenders (other
than all of the Lenders) are distinctly or disproportionately affected, one (1)
additional counsel for such Lender or group of Lenders)) of any kind or nature
whatsoever which may at any time be imposed on, incurred by or asserted against
any such Indemnitee in any way relating to or arising out of or in connection
with (a) the execution, delivery, enforcement, performance or administration of
any Loan Document or any other agreement, letter or instrument delivered in
connection with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit
or the use or proposed use of the proceeds therefrom (including any refusal by
the L/C Issuer to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), or (c) any actual or alleged presence or
release of Hazardous Materials on or from any property currently or formerly
owned or operated by the Borrower, any Subsidiary or any other Loan Party, or
any Environmental Liability related in any way to the Borrower, any Subsidiary
or any other Loan Party, or (d) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory (including any investigation of, preparation
for, or defense of any pending or threatened claim, investigation, litigation or
proceeding) and regardless of whether any Indemnitee is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"), in all cases, whether
or not caused by or arising, in whole or in part, out of the negligence of the
Indemnitee; provided, that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or breach of the Loan Documents by such
Indemnitee. No Indemnitee shall be liable for any damages arising from the use
by others of any information or other materials obtained through IntraLinks or
other similar information transmission systems in connection with this
Agreement, nor shall any Indemnitee or any Loan Party have any liability for any
special, punitive, indirect or consequential damages relating to this Agreement
or any other Loan Document or arising out of its activities in connection
herewith or therewith (whether before or after the Closing Date). In the case of
an investigation, litigation or other proceeding to which the indemnity in this
Section 10.05 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnitee or any other Person,
whether or not any Indemnitee is otherwise a party thereto and whether or not
any of the transactions contemplated hereunder or under any of the other Loan
Documents is consummated. All amounts due under this Section 10.05 shall be
payable within twenty (20) Business Days after demand therefor. The agreements
in this Section 10.05 shall survive the resignation of the Administrative Agent,
the replacement of any Lender, the termination of the Aggregate Commitments and
the repayment, satisfaction or discharge of all the other Obligations.
10.06 Payments Set Aside. To the extent that any payment by or on
behalf of the Borrower is made to any Agent or any Lender, or any Agent or any
Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by such Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally
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intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by any Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
10.07 Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of Section 10.07(b), (ii) by
way of participation in accordance with the provisions of Section 10.07(d),
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 10.07(f) or (iv) to an SPC in accordance with the
provisions of Section 10.07(g) (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in Section 10.07(d) and, to the extent
expressly contemplated hereby, the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this Section 10.07(b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); provided, that (i) except in the
case of an assignment of the entire remaining amount of the assigning Lender's
Commitment and the Loans at the time owing to it or in the case of an assignment
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the applicable Commitment is not then in
effect, the outstanding principal balance of the Loan of the assigning Lender
subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of
the Trade Date, shall not be less than $5,000,000, in the case of any assignment
in respect of the Revolving Credit Facility, or $1,000,000, in the case of any
assignment in respect of the Term Facility, unless each of the Administrative
Agent and, so long as no Event of Default in respect of Section 8.01(a) or (f)
has occurred and is continuing, the Borrower otherwise consents (each such
consent not to be unreasonably withheld or delayed); (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement with respect to
the Loans or the Commitment assigned, except that this clause (ii) shall not (x)
apply to rights in respect of Swing Line Loans or (y) prohibit any Lender from
assigning all or a portion of its rights and obligations among separate
Facilities on a non-pro rata basis; (iii) any assignment of a Revolving Credit
Commitment must be approved by the Administrative Agent, the L/C Issuer and the
Swing Line Lender unless the Person that is the proposed assignee is itself a
Revolving Credit Lender (whether or not the proposed assignee would otherwise
qualify as an Eligible Assignee); (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and
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recordation fee of $3,500 (except, in the case of contemporaneous assignments by
any Lender to one or more Approved Funds, only a single processing and recording
fee shall be payable for such assignments); and (v) the assigning Lender shall
deliver any Notes evidencing such Loans to the Borrower or the Administrative
Agent. Subject to acceptance and recording thereof by the Administrative Agent
pursuant to Section 10.07(c), from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date of
such assignment). Upon request, and the surrender by the assigning Lender of its
Note, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this clause (b) shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with Section 10.07(d).
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts (and related interest amounts) of the Loans, L/C
Obligations (specifying the Unreimbursed Amounts), L/C Borrowings and amounts
due under Section 2.03, owing to, each Lender pursuant to the terms hereof from
time to time (the "Register"). The entries in the Register shall be conclusive,
absent manifest error, and the Borrower, the Agents and the Lenders shall treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower,
any Agent and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or Highland Capital Management, L.P. or any of its
Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participations in L/C Obligations and/or Swing Line Loans) owing to it);
provided, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Agents and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided, that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that
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directly affects such Participant. Subject to Section 10.07(e), the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 3.01,
3.04 and 3.05 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 10.07(b). To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.09 as
though it were a Lender, provided, such Participant agrees to be subject to
Section 2.13 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01, 3.04 or 3.05 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant shall not be entitled to the
benefits of Section 3.01 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 10.15 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided, that no such pledge
or assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto and no
Lender may pledge all or part of its rights to Highland Capital Management, L.P.
or any its Affiliates or Subsidiaries.
(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided, that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrower under
this Agreement (including its obligations under Section 3.01 or 3.04), (ii) no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement for which a Lender would be liable, and (iii) the Granting Lender
shall for all purposes, including the approval of any amendment, waiver or other
modification of any provision of any Loan Document, remain the lender of record
hereunder. The making of a Loan by an SPC hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Loan were made by
such Granting Lender. Notwithstanding anything to the contrary contained herein,
any SPC may (i) with notice to, but without prior consent of the Borrower and
the Administrative Agent and with the payment of a processing fee of $3,500,
assign all or any portion of its right to receive payment with respect to any
Loan to the Granting Lender and (ii) disclose on a confidential basis any
non-public information relating to its funding of Loans to any rating agency,
commercial paper dealer or provider of any surety or Guarantee or credit or
liquidity enhancement to such SPC.
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(h) Notwithstanding anything to the contrary contained herein, any
Lender that is a Fund may create a security interest in all or any portion of
the Loans owing to it and the Note, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security for
such obligations or securities; provided, that unless and until such trustee
actually becomes a Lender in compliance with the other provisions of this
Section 10.07, (i) no such pledge shall release the pledging Lender from any of
its obligations under the Loan Documents, (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents even
though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise, and (iii) no Lender may
create a security interest in favor of Highland Capital Management, L.P. or any
of its Affiliates or Subsidiaries.
(i) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitments and Loans pursuant to
Section 10.07(b), Bank of America may, (i) upon thirty (30) days' notice to the
Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon thirty (30)
days' notice to the Borrower, resign as Swing Line Lender. In the event of any
such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be
entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line
Lender hereunder; provided, however, that no failure by the Borrower to appoint
any such successor shall affect the resignation of Bank of America as L/C Issuer
or Swing Line Lender, as the case may be. If Bank of America resigns as L/C
Issuer, it shall retain all the rights and obligations of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
If Bank of America resigns as Swing Line Lender, it shall retain all the rights
of the Swing Line Lender provided for hereunder with respect to Swing Line Loans
made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.04(c).
10.08 Confidentiality. Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested by any regulatory authority; (c) to
the extent required by applicable Laws or regulations or by any subpoena or
similar legal process; (d) to any other party to this Agreement; (e) subject to
an agreement containing provisions substantially the same as those of this
Section 10.08 (or as may otherwise be reasonably acceptable to the Borrower), to
any Eligible Assignee of or Participant in, or any prospective Eligible Assignee
of or Participant in, any of its rights or obligations under this Agreement; (f)
with the consent of the Borrower; (g) to the extent such Information becomes
publicly available other than as a result of a breach of this Section 10.08; (h)
to any state, Federal or foreign authority or examiner (including the National
Association of Insurance Commissioners or any other similar organization)
regulating any Lender; or (i) to any rating agency when required by it (it being
understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information relating to the
Loan Parties received by it from such Lender). In addition, the Agents and the
Lenders may disclose the existence of this Agreement and information about this
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Agreement to market data collectors, similar service providers to the lending
industry, and service providers to the Agents and the Lenders in connection with
the administration and management of this Agreement, the other Loan Documents,
the Commitments, and the Credit Extensions. For the purposes of this Section
10.08, "Information" means all information received from any Loan Party relating
to any Loan Party or its business, other than any such information that is
publicly available to any Agent or any Lender prior to disclosure by any Loan
Party other than as a result of a breach of this Section 10.08; provided, that,
in the case of information received from a Loan Party after the date hereof,
such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section 10.08 shall be considered to have complied with its obligation
to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. Notwithstanding anything (express or implied) herein
or in any other Loan Document to the contrary, "Information" shall not include,
and the Administrative Agent, each Lender and each Loan Party may disclose
without limitation of any kind, any information with respect to the "tax
treatment" and "tax structure" (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated hereby and thereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Administrative Agent or such Lender or Loan Party relating
to such tax treatment and tax structure.
10.09 Setoff. In addition to any rights and remedies of the Lenders
provided by Law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by Law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other Indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to such Lender hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not such Agent or such Lender shall have
made demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or Indebtedness. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off 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 the Administrative Agent and each Lender under this
Section 10.09 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) that the Administrative Agent and such
Lender may have. Notwithstanding anything herein or in any other Loan Document
to the contrary, in no event shall the assets of any Foreign Subsidiary
constitute security, or shall the proceeds of such assets be available for,
payment of the Obligations of the Borrower or any Domestic Subsidiary, it being
understood that (a) the Equity Interests of any Foreign Subsidiary does not
constitute such an asset and (b) the provisions hereof shall not limit, reduce
or otherwise diminish in any respect the Borrower's obligations to make any
mandatory prepayment pursuant to Section 2.05(b)(ii).
10.10 Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan
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Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the "Maximum Rate"). If any Agent or any Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by an Agent or a Lender exceeds the Maximum
Rate, such Person may, to the extent permitted by applicable Law, (a)
characterize any payment that is not principal as an expense, fee, or premium
rather than interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the contemplated term of the Obligations
hereunder.
10.11 Counterparts. This Agreement and each other Loan Document may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. Delivery
by telecopier of an executed counterpart of a signature page to this Agreement
and each other Loan Document shall be effective as delivery of an original
executed counterpart of this Agreement and such other Loan Document. The Agents
may also require that any such documents and signatures delivered by telecopier
be confirmed by a manually-signed original thereof; provided, that the failure
to request or deliver the same shall not limit the effectiveness of any document
or signature delivered by telecopier.
10.12 Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided, that the inclusion of
supplemental rights or remedies in favor of the Agents or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement. Each
Loan Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.
10.13 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by each Agent
and each Lender, regardless of any investigation made by any Agent or any Lender
or on their behalf and notwithstanding that any Agent or any Lender may have had
notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.
10.14 Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby. The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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10.15 Tax Forms. (a) (i) Each Lender and Agent that is not a "United
States person" within the meaning of Section 7701(a)(30) of the Code (each, a
"Foreign Lender") shall deliver to the Borrower and the Administrative Agent,
prior to receipt of any payment subject to withholding under the Code (or upon
accepting an assignment of an interest herein), two duly signed, properly
completed copies of either IRS Form W-8BEN or any successor thereto (relating to
such Foreign Lender and entitling it to an exemption from, or reduction of,
United States withholding tax on all payments to be made to such Foreign Lender
by the Borrower or any other Loan Party pursuant to this Agreement or any other
Loan Document) or IRS Form W-8ECI or any successor thereto (relating to all
payments to be made to such Foreign Lender by the Borrower or any other Loan
Party pursuant to this Agreement or any other Loan Document) or such other
evidence reasonably satisfactory to the Borrower and the Administrative Agent
that such Foreign Lender is entitled to an exemption from, or reduction of,
United States withholding tax, including any exemption pursuant to Section
881(c) of the Code, and in the case of a Foreign Lender claiming such an
exemption under Section 881(c) of the Code, a certificate that establishes in
writing to the Borrower and the Administrative Agent that such Foreign Lender is
not (i) a "bank" as defined in Section 881(c)(3)(A) of the Code, (ii) a
10-percent shareholder within the meaning of Section 871(h)(3)(B) of the Code,
and (iii) a controlled foreign corporation related to the Borrower with the
meaning of Section 864(d) of the Code. Thereafter and from time to time, each
such Foreign Lender shall (A) promptly submit to the Borrower and the
Administrative Agent such additional duly completed and signed copies of one or
more of such forms or certificates (or such successor forms or certificates as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is reasonably satisfactory to the
Borrower and the Administrative Agent of any available exemption from, or
reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by the Borrower or other Loan Party pursuant to this
Agreement, or any other Loan Document, in each case, (1) on or before the date
that any such form, certificate or other evidence expires or becomes obsolete,
(2) after the occurrence of any event requiring a change in the most recent
form, certificate or evidence previously delivered by it to the Borrower and the
Administrative Agent and (3) from time to time thereafter if reasonably
requested by the Borrower or the Administrative Agent, and (B) promptly notify
the Borrower and the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction.
(ii) Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or payable
to such Foreign Lender under any of the Loan Documents (for example, in the case
of a typical participation by such Foreign Lender), shall deliver to the
Borrower and the Administrative Agent on the date when such Foreign Lender
ceases to act for its own account with respect to any portion of any such sums
paid or payable, and at such other times as may be necessary in the
determination of the Borrower or the Administrative Agent (in either case, in
the reasonable exercise of its discretion), (A) two duly signed completed copies
of the forms or statements required to be provided by such Foreign Lender as set
forth above, to establish the portion of any such sums paid or payable with
respect to which such Foreign Lender acts for its own account that is not
subject to United States withholding tax, and (B) two duly signed completed
copies of IRS Form W-8IMY (or any successor thereto), together with any
information such Foreign Lender chooses to transmit with such form, and any
other certificate or statement of exemption required under
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the Code, to establish that such Foreign Lender is not acting for its own
account with respect to a portion of any such sums payable to such Foreign
Lender.
(iii) The Borrower shall not be required to pay any additional amount
or any indemnity payment under Section 3.01 to (A) any Foreign Lender with
respect to any Taxes required to be deducted or withheld on the basis of the
information, certificates or statements of exemption such Lender transmits with
an IRS Form W-8IMY pursuant to this Section 10.15(a), (B) any Foreign Lender if
such Foreign Lender shall have failed to satisfy the foregoing provisions of
this Section 10.15(a), or (C) any U.S. Lender if such U.S. Lender shall have
failed to satisfy the provisions of Section 10.15(b); provided, that if such
Lender shall have satisfied the requirement of this Section 10.15(a) or Section
10.15(b), as applicable, on the date such Lender became a Lender or ceased to
act for its own account with respect to any payment under any of the Loan
Documents, nothing in this Section 10.15(a) or Section 10.15(b) shall relieve
the Borrower of its obligation to pay any amounts pursuant to Section 3.01 in
the event that, as a result of any change in any applicable Law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.
(iv) The Administrative Agent may deduct and withhold any taxes
required by any Laws to be deducted and withheld from any payment under any of
the Loan Documents.
(b) Each Lender and Agent that is a "United States person" within the
meaning of Section 7701(a)(30) of the Code (each, a "U.S. Lender") shall deliver
to the Administrative Agent and the Borrower two duly signed, properly completed
copies of IRS Form W-9 on or prior to the Closing Date (or on or prior to the
date it becomes a party to this Agreement), certifying that such U.S. Lender is
entitled to an exemption from United States backup withholding tax, or any
successor form. If such U.S. Lender fails to deliver such forms, then the
Administrative Agent may withhold from any payment to such U.S. Lender an amount
equivalent to the applicable backup withholding tax imposed by the Code.
(c) If any Governmental Authority asserts that the Borrower or the
Administrative Agent did not properly withhold or backup withhold, as the case
may be, any tax or other amount from payments made to or for the account of any
Foreign Lender or U.S. Lender, such Foreign Lender or U.S. Lender shall
indemnify the Borrower and the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Borrower and the Administrative Agent under this Section 10.15,
and costs and expenses (including Attorney Costs) of the Borrower and the
Administrative Agent. The obligation of the Foreign Lenders or U.S. Lenders,
severally, under this Section 10.15 shall survive the termination of the
Aggregate Commitments, repayment of all other Obligations hereunder and the
resignation of the Administrative Agent.
10.16 Governing Law. (a) THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, the LAW OF THE STATE OF
NEW YORK.
127
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, EACH
Agent AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, EACH Agent AND
EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
10.17 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION 10.17 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.18 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent shall have
been notified by each Lender, Swing Line Lender and the L/C Issuer that each
such Lender, Swing Line Lender and the L/C Issuer has executed it and thereafter
shall be binding upon and inure to the benefit of the Borrower, each Agent and
each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders except as permitted by
Section 7.04.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
128
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
THL FOOD PRODUCTS CO.
By: /s/ John D. Reedy
----------------------------------------
Name: John D. Reedy
Title: Chief Financial Officer and Treasurer
THL FOOD PRODUCTS HOLDING CO.
By: /s/ John D. Reedy
----------------------------------------
Name: John D. Reedy
Title: Chief Financial Officer and Treasurer
BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ Illegible
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
BANK OF AMERICA, N.A., as a Lender, L/C
Issuer and Swing Line Lender
By: /s/ Illegible
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
DEUTSCHE BANK SECURITIES INC.,
as Co-Syndication Agent
By: /s/ Illegible
----------------------------------------
Name: Illegible
Title: Director
DEUTSCHE BANK SECURITIES INC.,
as Co-Syndication Agent
By: /s/ Illegible
----------------------------------------
Name: Illegible
Title: Managing Director
UBS SECURITIES LLC,
as Co-Syndication Agent
By: /s/ John C. Crockett
----------------------------------------
Name: John C. Crockett
Title: Director
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent
By: /s/ W. Jerome McDermott
----------------------------------------
Name: W. Jerome McDermott
Title: Duly Authorized Signatory
COOPERATIVE CENTRALE RAIFFEISEN -
BOERENLEENBANK B.A., "RABOBANK
INTERNATIONAL," NEW YORK BRANCH,
as Co-Documentation Agent and as Lender
By: /s/ Michael Laurie
----------------------------------------
Name: Michael Laurie
Title: Executive Director
By: /s/ Brett Delfino
----------------------------------------
Name: Brett Delfino
Title: Executive Director
LENDER
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ Chris Droussious
----------------------------------------
Name: Chris Droussious
Title: Vice President
LENDER
CAPITAL FARM CREDIT
By: /s/ Robert P. Abbott
----------------------------------------
Name: Robert P. Abbott
Title: Vice President - Commercial Loans
LENDER
CREDIT INDUSTRIEL ET COMMERCIAL
By: /s/ Sean Mounier
----------------------------------------
Name: Sean Mounier
Title: First Vice President
By: /s/ Anthony Rock
----------------------------------------
Name: Anthony Rock
Title: Vice President
LENDER
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH
By: /s/ Scottye Lindsey
----------------------------------------
Name: Scottye Lindsey
Title: Vice President
By: /s/ Mary Kay Coyle
----------------------------------------
Name: Mary Kay Coyle
Title: Managing Director
LENDER
FARM CREDIT BANK OF TEXAS
By: /s/ Eric J. Paul
----------------------------------------
Name: Eric J. Paul
Title: Vice President
LENDER
FARM CREDIT SERVICES OF AMERICA, FLCA
By: /s/ Steven L. Moore
----------------------------------------
Name: Steven L. Moore
Title: Vice President
LENDER
KZH CYPRESSTREE-1 LLC
By: /s/ Susan Lee
----------------------------------------
Name: Susan Lee
Title: Authorized Agent
LENDER
KZH ING-2 LLC
By: /s/ Susan Lee
----------------------------------------
Name: Susan Lee
Title: Authorized Agent
LENDER
KZH PONDVIEW LLC
By: /s/ Susan Lee
----------------------------------------
Name: Susan Lee
Title: Authorized Agent
LENDER
KZH RIVERSIDE LLC
By: /s/ Dorian Herrera
----------------------------------------
Name: Dorian Herrera
Title: Authorized Agent
LENDER
KZH SOLEIL LLC
By: /s/ Dorian Herrera
----------------------------------------
Name: Dorian Herrera
Title: Authorized Agent
LENDER
KZH SOLEIL-2 LLC
By: /s/ Dorian Herrera
----------------------------------------
Name: Dorian Herrera
Title: Authorized Agent
LENDER
KZH STERLING LLC
By: /s/ Susan Lee
----------------------------------------
Name: Susan Lee
Title: Authorized Agent
LENDER
NATEXIS BANQUES POPULAIRES
By: /s/ Tefta Ghilaga
----------------------------------------
Name: Tefta Ghilaga
Title: Vice President
By: /s/ Kristen Brainard
----------------------------------------
Name: Kristen Brainard
Title: Associate
LENDER
NORTHWEST FARM CREDIT SERVICES, PCA
By: /s/ Jim D. Allen
----------------------------------------
Name: Jim D. Allen
Title: Senior Vice President
LENDER
OAK BROOK BANK
By: /s/ Henry Wessel
----------------------------------------
Name: Henry Wessel
Title: Vice President
LENDER
SUN TRUST BANK
By: /s/ Michael Lapresi
----------------------------------------
Name: Michael Lapresi
Title: Director
LENDER
UBS LOAN FINANCE LLC
By: /s/ Patricia O'Kicki
----------------------------------------
Name: Patricia O'Kicki
Title: Director
By: /s/ Joselin Fernandes
----------------------------------------
Name: Joselin Fernandes
Title: Associate Director - Banking Products
Services, U.S.
EXHIBIT C-1
FORM OF TERM NOTE
-----------
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to or registered assigns (the "Lender"), in
---------------------
accordance with the provisions of the Agreement (as hereinafter defined), the
aggregate unpaid principal amount of each Term Loan made by the Lender to the
Borrower under that certain Credit Agreement, dated as of November [_],2003 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "Agreement;" the terms defined therein being used herein as
therein defined), among the Borrower, Holdings, the Lenders from time to time
party thereto, Bank of America, N.A., as Administrative Agent, L/C Issuer and
Swing Line Lender, and the other Agents named therein.
The Borrower promises to pay interest on the aggregate unpaid
principal amount of each Term Loan made by the Lender to the Borrower under the
Agreement from the date of such Loan until such principal amount is paid in
full, at such interest rates and at such times as provided in the Agreement. All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in Dollars in immediately available funds at the
Administrative Agent's Office. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.
This Term Note is one of the Term Notes referred to in the Agreement,
is entitled to the benefits thereof and may be prepaid in whole or in part
subject to the terms and conditions provided therein. This Term Note is also
entitled to the benefits of the Guaranty and is secured by the Collateral. Upon
the occurrence and continuation of one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid on this Term Note
shall become, or may be declared to be, immediately due and payable all as
provided in the Agreement. Term Loans made by the Lender shall be evidenced by
one or more loan accounts or records maintained by the Lender in the ordinary
course of business. The Lender may also attach schedules to this Term Note and
endorse thereon the date, amount and maturity of its Loans and payments with
respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Term Note.
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Form of Note
1
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
MICHAEL FOODS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Form of Note
1
LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of Outstanding
End of Principal or Principal
Type of Amount of Interest Interest Paid Balance Notation
Date Loan Made Loan Made Period This Date This Date Made By
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Form of Note
1
EXHIBIT C-2
FORM OF REVOLVING CREDIT NOTE
-----------
FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises
to pay to or registered assigns (the "Lender"), in
---------------------
accordance with the provisions of the Agreement (as hereinafter defined), the
aggregate unpaid principal amount of each Revolving Credit Loan from time to
time made by the Lender to the Borrower under that certain Credit Agreement,
dated as of November [ ],2003 (as amended, restated, extended, supplemented or
---
otherwise modified in writing from time to time, the "Agreement;" the terms
defined therein being used herein as therein defined), among the Borrower,
Holdings, the Lenders from time to time party thereto, Bank of America, N.A., as
Administrative Agent, L/C Issuer and Swing Line Lender, and the other Agents
named therein.
The Borrower promises to pay interest on the aggregate unpaid
principal amount of each Revolving Credit Loan from time to time made by the
Lender to the Borrower under the Agreement from the date of such Loan until such
principal amount is paid in full, at such interest rates and at such times as
provided in the Agreement. All payments of principal and interest shall be made
to the Administrative Agent (or, in the case of Swing Line Loans, to the Swing
Line Lender) for the account of the Lender in Dollars in immediately available
funds at the Administrative Agent's Office. If any amount is not paid in full
when due hereunder, such unpaid amount shall bear interest, to be paid upon
demand, from the due date thereof until the date of actual payment (and before
as well as after judgment) computed at the per annum rate set forth in the
Agreement.
This Revolving Credit Note is one of the Revolving Credit Notes
referred to in the Agreement, is entitled to the benefits thereof and may be
prepaid in whole or in part subject to the terms and conditions provided
therein. This Revolving Credit Note is also entitled to the benefits of the
Guaranty and is secured by the Collateral. Upon the occurrence and continuation
of one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Revolving Credit Note shall become, or may be
declared to be, immediately due and payable all as provided in the Agreement.
Revolving Credit Loans made by the Lender shall be evidenced by one or more loan
accounts or records maintained by the Lender in the ordinary course of business.
The Lender may also attach schedules to this Revolving Credit Note and endorse
thereon the date, amount and maturity of its Revolving Credit Loans and payments
with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Revolving Credit Note.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Form of Note
1
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
MICHAEL FOODS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Form of Note
2
LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of Outstanding
End of Principal or Principal
Type of Amount of Interest Interest Paid Balance Notation
Date Loan Made Loan Made Period This Date This Date Made By
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Form of Note
3
EXHIBIT F-1
FORM OF PARENT GUARANTY
PARENT GUARANTY dated as of November 20, 2003 (the "Guaranty") made by
THL FOOD PRODUCTS HOLDING CO., a Delaware corporation (the "Guarantor"), in
favor of the Secured Parties (as defined in the Credit Agreement referred to
below).
PRELIMINARY STATEMENT
THL Food Products Co., a Delaware corporation (the "Borrower"), and a
wholly owned subsidiary of the Guarantor, is party to a Credit Agreement dated
as of November 20, 2003 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"; the capitalized
terms defined therein and not otherwise defined herein being used herein as
therein defined) with the Guarantor, certain Lenders party thereto, Bank of
America, N.A., as the L/C Issuer, the Swing Line Lender and the Administrative
Agent, and the other Agents named therein. The Guarantor will derive substantial
direct and indirect benefits from the transactions contemplated by the Credit
Agreement. It is a condition precedent to the making of Loans and the issuance
of Letters of Credit by the Lenders under the Credit Agreement and the entry by
the Hedge Banks into Secured Hedge Agreements from time to time that the
Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Loans and to issue Letters of Credit under the Credit
Agreement and the Hedge Banks to enter into Secured Hedge Agreements from time
to time, the Guarantor hereby agrees as follows:
Section 1. Guaranty. (a) The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees the punctual payment, whether at
scheduled maturity or by acceleration, demand or otherwise, of all Obligations
of each other Loan Party now or hereafter existing under or in respect of the
Loan Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premiums, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the "Guaranteed
Obligations"), and agrees to pay any and all expenses incurred by the
Administrative Agent or any other Secured Party in enforcing any rights under
this Guaranty or any other Loan Document (including reasonable fees, expenses
and disbursements of any law firm or other external counsel to the
Administrative Agent). Without limiting the generality of the foregoing, the
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any other Loan Party to any Secured
Party under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.
(b) The Guarantor hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to any Secured Party under
this Guaranty or the Subsidiary Guaranty or any other guaranty, the Guarantor
will contribute, to the maximum extent
permitted by law, such amounts to each other guarantor so as to maximize the
aggregate amount paid to the Secured Parties under or in respect of the Loan
Documents.
Section 2. Guaranty Absolute. The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto. The Obligations of the Guarantor under or in
respect of this Guaranty are independent of the Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against the Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrower or any other Loan Party or whether the
Borrower or any other Loan Party is joined in any such action or actions. The
liability of the Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and the Guarantor hereby irrevocably waives
any defenses it may now have or hereafter acquire in any way relating to, any or
all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other Obligations
of any other Loan Party under or in respect of the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or any of
its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any Collateral
or any other collateral, or any taking, release or amendment or waiver of, or
consent to departure from, any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of Collateral or any other collateral,
or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner
of sale or other disposition of any Collateral or any other collateral for all
or any of the Guaranteed Obligations or any other Obligations of any Loan Party
under the Loan Documents or any other assets of any Loan Party or any of its
Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party now or
hereafter known to such Secured Party (the Guarantor waiving any duty on the
part of the Secured Parties to disclose such information);
(g) the failure of any other Person to execute or deliver any other
guaranty or agreement or the release or reduction of liability of any other
guarantor or surety with respect to the Guaranteed Obligations; or
2
(h) any other circumstance or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a defense
available to, or a discharge of, any Loan Party or any other guarantor or
surety.
This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Secured Party or any other Person
upon the insolvency, bankruptcy or reorganization of the Borrower or any other
Loan Party or otherwise, all as though such payment had not been made.
Section 3. Waivers and Acknowledgments. (a) The Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that any
Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.
(b) The Guarantor hereby unconditionally and irrevocably waives any
right to revoke this Guaranty and acknowledges that this Guaranty is continuing
in nature and applies to all Guaranteed Obligations, whether existing now or in
the future.
(c) The Guarantor hereby unconditionally and irrevocably waives (i)
any defense arising by reason of any claim or defense based upon an election of
remedies by any Secured Party that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of the Guarantor or other rights of the
Guarantor to proceed against any of the other Loan Parties, any other guarantor
or any other Person or any Collateral and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the Obligations of the
Guarantor hereunder.
(d) The Guarantor acknowledges that the Administrative Agent may, in
accordance with the Loan Documents, without notice to or demand upon the
Guarantor and without affecting the liability of the Guarantor under this
Guaranty, foreclose under any mortgage by nonjudicial sale, and the Guarantor
hereby waives any defense to the recovery by the Administrative Agent and the
other Secured Parties against the Guarantor of any deficiency after such
nonjudicial sale and any defense or benefits that may be afforded by applicable
law.
(e) The Guarantor hereby unconditionally and irrevocably waives any
duty on the part of any Secured Party to disclose to the Guarantor any matter,
fact or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party or any
of its Subsidiaries now or hereafter known by such Secured Party.
(f) The Guarantor acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 2 and this Section 3 are
knowingly made in contemplation of such benefits.
3
Section 4. Subrogation. The Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
the Guarantor's Obligations under or in respect of this Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrower,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, all Letters of Credit and all
Secured Hedge Agreements shall have expired or been terminated and the
Commitments shall have expired or been terminated. If any amount shall be paid
to the Guarantor in violation of the immediately preceding sentence at any time
prior to the latest of (a) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, (b) the Maturity
Date and (c) the latest date of expiration or termination of all Letters of
Credit and all Secured Hedge Agreements, such amount shall be received and held
in trust for the benefit of the Secured Parties, shall be segregated from other
property and funds of the Guarantor and shall forthwith be paid or delivered to
the Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Loan Documents, or to be held
as Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (i) the Guarantor shall make payment to any
Secured Party of all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash, (iii) the Maturity Date shall have occurred and
(iv) all Letters of Credit and all Secured Hedge Agreements shall have expired
or been terminated, the Secured Parties will, at the Guarantor's request and
expense, execute and deliver to the Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to the Guarantor of an interest in the Guaranteed
Obligations resulting from such payment made by the Guarantor pursuant to this
Guaranty.
Section 5. Payments Free and Clear of Taxes, Etc. Any and all payments
by the Guarantor under this Guaranty or any other Loan Document shall be made,
in accordance with the terms of the Credit Agreement, free and clear of and
without deduction for any and all present or future Taxes.
Section 6. Representations and Warranties. The Guarantor hereby makes
each representation and warranty made in the Loan Documents by the Borrower with
respect to the Guarantor and the Guarantor hereby further represents and
warrants as follows:
(a) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
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(b) The Guarantor has, independently and without reliance upon any
Secured Party and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty and each other Loan Document to which it is or is to be a party, and
the Guarantor has established adequate means of obtaining from each other Loan
Party on a continuing basis information pertaining to, and is now and on a
continuing basis will be completely familiar with, the business, condition
(financial or otherwise), operations, performance, properties and prospects of
such other Loan Party.
Section 7. Covenants. The Guarantor covenants and agrees that, so long
as any part of the Guaranteed Obligations shall remain unpaid, any Letter of
Credit shall be outstanding, any Lender shall have any Commitment or any Secured
Hedge Agreement shall be in effect, the Guarantor will perform and observe, and
cause the Borrower and each of its Subsidiaries to perform and observe, all of
the terms, covenants and agreements set forth in the Loan Documents on its or
their part to be performed or observed or that the Borrower has agreed to cause
its Subsidiaries to perform or observe
Section 8. Amendments, Etc. No amendment or waiver of any provision of
this Guaranty and no consent to any departure by the Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed by the
Administrative Agent, the Required Lenders and the Guarantor, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all of the Secured Parties
(other than any Lender that is, at such time, a Defaulting Lender), (a) reduce
or limit the obligations of the Guarantor hereunder, release the Guarantor
hereunder or otherwise limit the Guarantor's liability with respect to the
Obligations owing to the Secured Parties under or in respect of the Loan
Documents, (b) postpone any date fixed for payment hereunder or (c) change any
provision of this Section 8.
Section 9. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy or telex
communication or facsimile transmission) and mailed, telegraphed, telecopied,
telexed, faxed or delivered to it, if to the Guarantor, addressed to it in care
of the Borrower at the Borrower's address specified in Section 10.02 of the
Credit Agreement, if to any Agent or any Lender, at its address specified in
Section 10.02 of the Credit Agreement, if to any Hedge Bank, at its address
specified in the Secured Hedge Agreement to which it is a party, or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party. All such notices and other communications shall be
deemed to be given or made at such time as shall be set forth in Section 10.02
of the Credit Agreement. Delivery by telecopier of an executed counterpart of a
signature page to any amendment or waiver of any provision of this Guaranty
shall be effective as delivery of an original executed counterpart thereof.
Section 10. No Waiver; Remedies. No failure on the part of any Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
5
Section 11. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 8.02 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 8.02, each Agent and each Lender and each of
their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender or such
Affiliate to or for the credit or the account of the Guarantor against any and
all of the Obligations of the Guarantor now or hereafter existing under the Loan
Documents, irrespective of whether such Agent or such Lender shall have made any
demand under this Guaranty or any other Loan Document and although such
Obligations may be unmatured. Each Agent and each Lender agrees promptly to
notify the Guarantor after any such set-off and application; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Agent and each Lender and their
respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Agent, such Lender and their respective Affiliates may have.
Section 12. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty, (ii)
the Maturity Date and (iii) the latest date of expiration or termination of all
Letters of Credit and all Secured Hedge Agreements, (b) be binding upon the
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Secured Parties and their successors, transferees and
assigns. Without limiting the generality of clause (c) of the immediately
preceding sentence, any Secured Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitments, the Loans owing to it
and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party herein or otherwise, in each case as and to the extent
provided in Section 10.07 of the Credit Agreement. The Guarantor shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Secured Parties.
Section 13. Execution in Counterparts. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.
Section 14. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a) This Guaranty shall be governed by, and construed in accordance with, the
laws of the State of New York.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
6
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
GUARANTY, THE GUARANTOR CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
(c) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, CLAIM, DEMAND OR CAUSE OF ACTION (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
THL FOOD PRODUCTS HOLDING CO.
By
-------------------------------------
Title: Chief Financial Officer and
Treasurer
EXHIBIT F-2
FORM OF SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY dated as of November 20, 2003 (the "Guaranty")
made by the Persons listed on the signature pages hereof under the caption
"Subsidiary Guarantors" and the Additional Guarantors (as defined in Section
8(b)) (such Persons so listed and the Additional Guarantors being, collectively,
the "Guarantors" and, individually, each a "Guarantor") in favor of the Secured
Parties (as defined in the Credit Agreement referred to below).
PRELIMINARY STATEMENT
THL Food Products Co., a Delaware corporation (the "Borrower"), is
party to a Credit Agreement dated as of November 20, 2003 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"; the capitalized terms defined therein and not otherwise defined
herein being used herein as therein defined) with THL Food Products Holding Co.,
certain Lenders party thereto, Bank of America, N.A., as the L/C Issuer, the
Swing Line Lender and the Administrative Agent, and the other Agents named
therein. Each Guarantor may receive, directly or indirectly, a portion of the
proceeds of the Loans under the Credit Agreement and will derive substantial
direct and indirect benefits from the transactions contemplated by the Credit
Agreement. It is a condition precedent to the making of Loans and the issuance
of Letters of Credit by the Lenders under the Credit Agreement and the entry by
the Hedge Banks into Secured Hedge Agreements from time to time that each
Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Loans and to issue Letters of Credit under the Credit
Agreement and the Hedge Banks to enter into Secured Hedge Agreements from time
to time, each Guarantor, jointly and severally with each other Guarantor, hereby
agrees as follows:
Section 15. Guaranty; Limitation of Liability. (a) Each Guarantor
hereby, jointly and severally, absolutely, unconditionally and irrevocably
guarantees the punctual payment, whether at scheduled maturity or by
acceleration, demand or otherwise, of all Obligations of each other Loan Party
now or hereafter existing under or in respect of the Loan Documents (including,
without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing Obligations), whether direct or
indirect, absolute or contingent, and whether for principal, interest, premiums,
fees, indemnities, contract causes of action, costs, expenses or otherwise (such
Obligations being the "Guaranteed Obligations"), and agrees to pay any and all
expenses incurred by the Administrative Agent or any other Secured Party in
enforcing any rights under this Guaranty or any other Loan Document (including
reasonable fees, expenses and disbursements of any law firm or other external
counsel to the Administrative Agent). Without limiting the generality of the
foregoing, each Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Loan Party to any Secured Party under or in respect of the Loan Documents but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving such other Loan
Party.
(b) Each Guarantor, and by its acceptance of this Guaranty, the
Administrative Agent and each other Secured Party, hereby confirms that it is
the intention of all such Persons that this Guaranty and the Obligations of each
Guarantor hereunder not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign,
federal or state law to the extent applicable to this Guaranty and the
Obligations of each Guarantor hereunder. To effectuate the foregoing intention,
the Administrative Agent, the other Secured Parties and the Guarantors hereby
irrevocably agree that the Obligations of each Guarantor under this Guaranty at
any time shall be limited to the maximum amount as will result in the
Obligations of such Guarantor under this Guaranty not constituting a fraudulent
transfer or conveyance. For purposes hereof, "Bankruptcy Law" means any
proceeding of the type referred to in Section 8.01(f) of the Credit Agreement or
Title 11, U.S. Code, or any similar foreign, federal or state law for the relief
of debtors.
(c) Each Guarantor hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to any Secured Party under
this Guaranty or the Parent Guaranty or any other guaranty, such Guarantor will
contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and Holdings so as to maximize the aggregate amount paid to the
Secured Parties under or in respect of the Loan Documents.
Section 16. Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto. The Obligations of each Guarantor under or
in respect of this Guaranty are independent of the Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrower or any other Loan Party or whether the
Borrower or any other Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now have or hereafter acquire in any way relating to, any or
all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other Obligations
of any other Loan Party under or in respect of the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or any of
its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any Collateral
or any other collateral, or any taking, release or amendment or waiver of, or
consent to departure from, any other guaranty, for all or any of the Guaranteed
Obligations;
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(d) any manner of application of Collateral or any other collateral,
or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner
of sale or other disposition of any Collateral or any other collateral for all
or any of the Guaranteed Obligations or any other Obligations of any Loan Party
under the Loan Documents or any other assets of any Loan Party or any of its
Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party now or
hereafter known to such Secured Party (each Guarantor waiving any duty on the
part of the Secured Parties to disclose such information);
(g) the failure of any other Person to execute or deliver this
Guaranty, any Guaranty Supplement (as hereinafter defined) or any other guaranty
or agreement or the release or reduction of liability of any Guarantor or other
guarantor or surety with respect to the Guaranteed Obligations; or
(h) any other circumstance or any existence of or reliance on any
representation by any Secured Party that might otherwise constitute a defense
available to, or a discharge of, any Loan Party or any other guarantor or
surety.
This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any Secured Party or any other Person
upon the insolvency, bankruptcy or reorganization of the Borrower or any other
Loan Party or otherwise, all as though such payment had not been made.
Section 17. Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that any
Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any
right to revoke this Guaranty and acknowledges that this Guaranty is continuing
in nature and applies to all Guaranteed Obligations, whether existing now or in
the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i)
any defense arising by reason of any claim or defense based upon an election of
remedies by any Secured Party that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such
3
Guarantor or other rights of such Guarantor to proceed against any of the other
Loan Parties, any other guarantor or any other Person or any Collateral and (ii)
any defense based on any right of set-off or counterclaim against or in respect
of the Obligations of such Guarantor hereunder.
(d) Each Guarantor acknowledges that the Administrative Agent may, in
accordance with the Loan Documents, without notice to or demand upon such
Guarantor and without affecting the liability of such Guarantor under this
Guaranty, foreclose under any mortgage by nonjudicial sale, and each Guarantor
hereby waives any defense to the recovery by the Administrative Agent and the
other Secured Parties against such Guarantor of any deficiency after such
nonjudicial sale and any defense or benefits that may be afforded by applicable
law.
(e) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of any Secured Party to disclose to such Guarantor any matter,
fact or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party or any
of its Subsidiaries now or hereafter known by such Secured Party.
(f) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by the
Loan Documents and that the waivers set forth in Section 2 and this Section 3
are knowingly made in contemplation of such benefits.
Section 18. Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's Obligations under or in respect of this Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrower,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, all Letters of Credit and all
Secured Hedge Agreements shall have expired or been terminated and the
Commitments shall have expired or been terminated. If any amount shall be paid
to any Guarantor in violation of the immediately preceding sentence at any time
prior to the latest of (a) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, (b) the Maturity
Date and (c) the latest date of expiration or termination of all Letters of
Credit and all Secured Hedge Agreements, such amount shall be received and held
in trust for the benefit of the Secured Parties, shall be segregated from other
property and funds of such Guarantor and shall forthwith be paid or delivered to
the Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Loan Documents, or to be held
as Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If
4
(i) any Guarantor shall make payment to any Secured Party of all or any part of
the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Guaranty shall have been paid in full in cash, (iii)
the Maturity Date shall have occurred and (iv) all Letters of Credit and all
Secured Hedge Agreements shall have expired or been terminated, the Secured
Parties will, at such Guarantor's request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment made by such Guarantor pursuant to this Guaranty.
Section 19. Payments Free and Clear of Taxes, Etc. Any and all
payments by any Guarantor under this Guaranty or any other Loan Document shall
be made, in accordance with the terms of the Credit Agreement, free and clear of
and without deduction for any and all present or future Taxes.
Section 20. Representations and Warranties. Each Guarantor hereby
makes each representation and warranty made in the Loan Documents by the
Borrower with respect to such Guarantor and each Guarantor hereby further
represents and warrants as follows:
(a) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(b) Such Guarantor has, independently and without reliance upon any
Secured Party and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty and each other Loan Document to which it is or is to be a party, and
such Guarantor has established adequate means of obtaining from each other Loan
Party on a continuing basis information pertaining to, and is now and on a
continuing basis will be completely familiar with, the business, condition
(financial or otherwise), operations, performance, properties and prospects of
such other Loan Party.
Section 21. Covenants. Each Guarantor covenants and agrees that, so
long as any part of the Guaranteed Obligations shall remain unpaid, any Letter
of Credit shall be outstanding, any Lender shall have any Commitment or any
Secured Hedge Agreement shall be in effect, such Guarantor will perform and
observe, and cause each of its Subsidiaries to perform and observe, all of the
terms, covenants and agreements set forth in the Loan Documents on its or their
part to be performed or observed or that the Borrower has agreed to cause such
Guarantor or such Subsidiaries to perform or observe.
Section 22. Amendments, Guaranty Supplements, Etc. (a) No amendment or
waiver of any provision of this Guaranty and no consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by the Administrative Agent, the Required Lenders and the
Guarantors and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all of the Secured Parties (other than any Lender that is, at such
time, a Defaulting Lender), (a) reduce or limit the obligations of any Guarantor
hereunder, release any Guarantor hereunder or otherwise limit any Guarantor's
liability with respect to the Obligations owing to the Secured
5
Parties under or in respect of the Loan Documents except as provided in the next
succeeding sentence, (b) postpone any date fixed for payment hereunder or (c)
change any provision of this Section 8. Upon the sale of a Guarantor to the
extent permitted in accordance with the terms of the Loan Documents, such
Guarantor shall be automatically released from this Guaranty.
(b) Upon the execution and delivery by any Person of a guaranty
supplement in substantially the form of Exhibit A hereto (each, a "Guaranty
Supplement"), (i) such Person shall be referred to as an "Additional Guarantor"
and shall become and be a Guarantor hereunder, and each reference in this
Guaranty to a "Guarantor" shall also mean and be a reference to such Additional
Guarantor, and each reference in any other Loan Document to a "Subsidiary
Guarantor" shall also mean and be a reference to such Additional Guarantor, and
(ii) each reference herein to "this Guaranty", "hereunder", "hereof" or words of
like import referring to this Guaranty, and each reference in any other Loan
Document to the "Subsidiary Guaranty", "thereunder", "thereof" or words of like
import referring to this Guaranty, shall mean and be a reference to this
Guaranty as supplemented by such Guaranty Supplement.
Section 23. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication or facsimile transmission) and mailed, telegraphed,
telecopied, telexed, faxed or delivered to it, if to any Guarantor, addressed to
it in care of the Borrower at the Borrower's address specified in Section 10.02
of the Credit Agreement, if to any Agent or any Lender, at its address specified
in Section 10.02 of the Credit Agreement, if to any Hedge Bank, at its address
specified in the Secured Hedge Agreement to which it is a party, or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party. All such notices and other communications shall be
deemed to be given or made at such time as shall be set forth in Section 10.02
of the Credit Agreement. Delivery by telecopier of an executed counterpart of a
signature page to any amendment or waiver of any provision of this Guaranty or
of any Guaranty Supplement to be executed and delivered hereunder shall be
effective as delivery of an original executed counterpart thereof.
Section 24. No Waiver; Remedies. No failure on the part of any Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
Section 25. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 8.02 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 8.02, each Agent and each Lender and each of
their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender or such
Affiliate to or for the credit or the account of any Guarantor against any and
all of the Obligations of such Guarantor now or hereafter existing under the
Loan Documents, irrespective of whether such Agent or such Lender shall have
made any demand under this Guaranty or any other Loan Document and although such
6
Obligations may be unmatured. Each Agent and each Lender agrees promptly to
notify such Guarantor after any such set-off and application; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Agent and each Lender and their
respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Agent, such Lender and their respective Affiliates may have.
Section 26. Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty, (ii)
the Maturity Date and (iii) the latest date of expiration or termination of all
Letters of Credit and all Secured Hedge Agreements, (b) be binding upon each
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Secured Parties and their successors, transferees and
assigns. Without limiting the generality of clause (c) of the immediately
preceding sentence, any Secured Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitments, the Loans owing to it
and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party herein or otherwise, in each case as and to the extent
provided in Section 10.07 of the Credit Agreement. No Guarantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Secured Parties.
Section 27. Execution in Counterparts. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.
Section 28. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a) This Guaranty shall be governed by, and construed in accordance with, the
laws of the State of New York.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO.
7
(c) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
8
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
MICHAEL FOODS OF DELAWARE, INC.
By
--------------------------------------
Title: Executive Vice President,
Chief Financial Officer and Treasurer
CASA TRUCKING, INC.
By
--------------------------------------
Title: Chief Financial Officer and
Vice President - Finance
CRYSTAL FARMS REFRIGERATED
DISTRIBUTION COMPANY
By
--------------------------------------
Title: Vice President - Finance
KMS DAIRY, INC.
By
--------------------------------------
Title: Vice President - Finance
MINNESOTA PRODUCTS, INC.
By
--------------------------------------
Title: Chief Financial Officer and
Vice President - Finance
NORTHERN STAR CO.
By
--------------------------------------
Title: Vice President - Finance
PAPETTI'S HYGRADE EGG PRODUCTS, INC.
By
--------------------------------------
Title: Vice President - Finance
M.G. WALDBAUM COMPANY
By
--------------------------------------
Title: Vice President - Finance
9
FARM FRESH FOODS, INC.
By
--------------------------------------
Title: Chief Financial Officer and
Vice President - Finance
PAPETTI ELECTROHEATING CORPORATION
By
--------------------------------------
Title: Vice President - Finance
WFC, INC.
By
--------------------------------------
Title: Vice President - Finance
WISCO FARM COOPERATIVE
By
--------------------------------------
Title: Vice President - Finance
10
Exhibit A
To The
Subsidiary Guaranty
FORM OF SUBSIDIARY GUARANTY SUPPLEMENT
--------- --, ----
Bank of America, N.A., as Administrative Agent
[Address of Administrative Agent]
Attention:
---------
Credit Agreement dated as of November 20, 2003 among
THL Food Products Co., a Delaware corporation (the "Borrower"),
THL Food Products Holding Co.,
the Lenders party to the Credit Agreement,
Bank of America, N.A.,
as the L/C Issuer, Swing Line Lender and Administrative Agent,
and the other Agents party to the Credit Agreement
Ladies and Gentlemen:
Reference is made to the above-captioned Credit Agreement and to the
Subsidiary Guaranty referred to therein (such Subsidiary Guaranty, as in effect
on the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, together with this Subsidiary Guaranty Supplement
(the "Guaranty Supplement"), being the "Subsidiary Guaranty"). The capitalized
terms defined in the Subsidiary Guaranty or in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.
Section 1. Guaranty; Limitation of Liability. (a) The undersigned
hereby, jointly and severally with the other Guarantors absolutely,
unconditionally and irrevocably guarantees the punctual payment, whether at
scheduled maturity or by acceleration, demand or otherwise, of all Obligations
of each other Loan Party now or hereafter existing under or in respect of the
Loan Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premium, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent
or any other Secured Party in enforcing any rights under this Guaranty
Supplement, the Subsidiary Guaranty or any other Loan Document. Without limiting
the generality of the foregoing, the undersigned's liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party to any Secured Party under or in respect of the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
such other Loan Party.(b) The undersigned, and by its acceptance of this
Guaranty Supplement, the Administrative Agent and
each other Secured Party, hereby confirms that it is the intention of all such
Persons that this Guaranty Supplement, the Subsidiary Guaranty and the
Obligations of the undersigned hereunder and thereunder not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law to the extent applicable to this Guaranty
Supplement, the Subsidiary Guaranty and the Obligations of the undersigned
hereunder and thereunder. To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the undersigned hereby
irrevocably agree that the Obligations of the undersigned under this Guaranty
Supplement and the Subsidiary Guaranty at any time shall be limited to the
maximum amount as will result in the Obligations of the undersigned under this
Guaranty Supplement and the Subsidiary Guaranty not constituting a fraudulent
transfer or conveyance.
(c) The undersigned hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to any Secured Party under
this Guaranty Supplement, the Subsidiary Guaranty, the Parent Guaranty or any
other guaranty, the undersigned will contribute, to the maximum extent permitted
by applicable law, such amounts to each other Guarantor and each other guarantor
so as to maximize the aggregate amount paid to the Secured Parties under or in
respect of the Loan Documents.
Section 2. Obligations Under the Guaranty. The undersigned hereby
agrees, as of the date first above written, to be bound as a Guarantor by all of
the terms and conditions of the Subsidiary Guaranty to the same extent as each
of the other Guarantors thereunder. The undersigned further agrees, as of the
date first above written, that each reference in the Subsidiary Guaranty to an
"Additional Guarantor" or a "Guarantor" shall also mean and be a reference to
the undersigned, and each reference in any other Loan Document to a "Subsidiary
Guarantor" or a "Loan Party" shall also mean and be a reference to the
undersigned.Section 3. Representations and Warranties. The undersigned hereby
makes each representation and warranty set forth in Section 6 of the Subsidiary
Guaranty to the same extent as each other Guarantor.Section 4. Delivery by
Telecopier. Delivery of an executed counterpart of a signature page to this
Guaranty Supplement by telecopier shall be effective as delivery of an original
executed counterpart of this Guaranty Supplement.Section 5. Governing Law;
Jurisdiction; Waiver of Jury Trial, Etc. (a) This Guaranty Supplement shall be
governed by, and construed in accordance with, the laws of the State of New
York.(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS GUARANTY SUPPLEMENT, EACH
GUARANTOR CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GUARANTOR IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
(c) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY CLAIM, DEMAND, ACTION OR CAUSE OF
12
ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
Very truly yours,
[NAME OF ADDITIONAL GUARANTOR]
By
---------------------------
13
EXHIBIT G
FORM OF SECURITY AGREEMENT
SECURITY AGREEMENT dated November 20, 2003 made by THL FOOD PRODUCTS
CO., a Delaware corporation (the "Borrower"), THL FOOD PRODUCTS HOLDING CO., a
Delaware corporation ("Holdings"), the other Persons listed on the signature
pages hereof and the Additional Grantors (as hereinafter defined) (the Borrower,
Holdings, the Persons so listed and the Additional Grantors being, collectively,
the "Grantors"), to BANK OF AMERICA, N.A., as administrative agent (in such
capacity, together with any successor administrative agent, the "Administrative
Agent") for the Secured Parties.
PRELIMINARY STATEMENTS.
(1) The Borrower has entered into a Credit Agreement dated of even
date herewith (said Agreement, as it may hereafter be amended, amended and
restated, supplemented or otherwise modified from time to time, being the
"Credit Agreement") with Holdings, the Lenders, the L/C Issuer and the Agents.
(2) Pursuant to the Credit Agreement, the Grantors are entering into
this Agreement in order to grant to the Administrative Agent for the ratable
benefit of the Secured Parties a security interest in the Collateral (as
hereinafter defined).
(3) It is a condition precedent to the making of Loans and the
issuance of Letters of Credit by the Lenders under the Credit Agreement and the
entry into Secured Hedge Agreements by the Hedge Banks from time to time that
the Grantors shall have granted the assignment and security interest and made
the pledge and assignment contemplated by this Agreement.
(4) Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Loan Documents.
(5) Terms defined in the Credit Agreement and not otherwise defined in
this Agreement are used in this Agreement as defined in the Credit Agreement.
Further, unless otherwise defined in this Agreement or in the Credit Agreement,
terms defined in Article 8 or 9 of the UCC (as defined below) are used in this
Agreement as such terms are defined in such Article 8 or 9 (including Accounts,
Certificated Security, Chattel Paper, Commercial Tort Claims, Commodity Account,
Commodity Contract, Deposit Accounts, Documents, Equipment, Farm Products,
Financial Assets, Fixtures, General Intangibles, Goods, Instruments, Inventory,
Investment Property, Letter of Credit Rights, Securities Accounts, Securities
Intermediary, Security, Security Entitlements and Supporting Obligations). "UCC"
means the Uniform Commercial Code as defined in the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Loans and issue Letters of Credit under the Credit
Agreement and to induce the Hedge Banks to enter into Secured Hedge Agreements
from time to time, each Grantor hereby agrees with the Administrative Agent for
the ratable benefit of the Secured Parties as follows:
Section 6. Grant of Security. Each Grantor hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in, such Grantor's right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the "Collateral"):
(a) all Accounts;
(b) all cash and Cash Equivalents;
(c) all Chattel Paper;
(d) all Commercial Tort Claims (including, without limitation, the
Commercial Tort Claims set forth on Schedule IV hereto);
(e) all Deposit Accounts;
(f) all Documents;
(g) all Equipment;
(h) all Farm Products;
(i) all Fixtures;
(j) all General Intangibles;
(k) all Goods;
(l) all Instruments;
(m) all Inventory;
(n) all Letter-of-Credit Rights;
(o) the following (the "Security Collateral"):
(i) all indebtedness evidenced by promissory notes or other
instruments from time to time owed to such Grantor (the "Pledged Debt"),
and all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Debt;
(ii) all Equity Interests from time to time acquired, owned or held by
such Grantor in any manner, including, without limitation, the Equity
Interests of each Grantor set forth opposite such Grantor's name on and
otherwise described on Schedule II (such Equity Interests, together with
the Pledged Equity, being the "Pledged Equity"), and the certificates, if
any, representing such additional shares or units or other Equity
Interests, and all dividends, distributions, return of capital, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in
2
exchange for any or all of such shares or other Equity Interests and all
subscription warrants, rights or options issued thereon or with respect
thereto; provided that such Grantor shall not be required to pledge, and
the terms "Pledged Equity" and "Security Collateral" used in this Agreement
shall not include any Equity Interests in any Foreign Subsidiary acquired,
owned or otherwise held by such Grantor which, when aggregated with all of
the other shares of stock in such Foreign Subsidiary pledged by such
Grantor, would result in more than 65% of the shares of stock in such
Foreign Subsidiary entitled to vote (within the meaning of Treasury
Regulation Section 1.956-2(c)(2) promulgated under the Code) (the "Voting
Foreign Stock") being pledged to the Administrative Agent, on behalf of the
Secured Parties under this Agreement; provided, further, that all of the
shares of stock or units or other Equity Interests in such Foreign
Subsidiary not entitled to vote (within the meaning of Treasury Regulation
Section 1.956-2(c)(2) promulgated under the Code) (the "Non-Voting Foreign
Stock") shall be pledged by such Grantor; and
(iii) all Investment Property and all Financial Assets, and all
dividends, distributions, return of capital, interest, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange therefor and all subscription
warrants, rights or options issued thereon or with respect thereto;
(p) all contracts and agreements between any Grantor and one or more
additional parties (including, without limitation, any Swap Contracts, licensing
agreements and any partnership agreements, joint venture agreements, limited
liability company agreements) and the IP Agreements (as hereinafter defined), in
each case as such agreements may be amended, amended and restated, supplemented
or otherwise modified from time to time (collectively, the "Assigned
Agreements"), including, without limitation, all rights of such Grantor to
receive moneys due and to become due under or pursuant to the Assigned
Agreements, (all such Collateral being the "Agreement Collateral"), but
excluding any contract or agreement to the extent that (but only as long as) the
terms thereof prohibit the assignment of, or granting a security interest in,
such contract or agreement (it being understood and agreed, however, (i) that
notwithstanding the foregoing, all rights to payment for money due or to become
due pursuant to any such excluded contract shall be subject to the security
interests created by this Agreement and (ii) such excluded contact or agreement
shall otherwise be subject to the security interests created by this Agreement
upon receiving any necessary approvals or waivers permitting the assignment
thereof);
(q) the following (collectively, the "Intellectual Property
Collateral"):
(i) all patents, patent applications, utility models and statutory
invention registrations, all inventions claimed or disclosed therein and
all improvements thereto ("Patents");
(ii) all trademarks, service marks, domain names, trade dress, logos,
designs, slogans, trade names, business names, corporate names and other
source identifiers, whether registered or unregistered (provided that no
security interest shall be granted in United States intent-to-use trademark
applications to the extent that, and solely during the period in which, the
grant of a security interest therein would impair the validity or
3
enforceability of such intent-to-use trademark applications under
applicable federal law), together, in each case, with the goodwill
symbolized thereby ("Trademarks");
(iii) all copyrights, including, without limitation, copyrights in
Computer Software (as hereinafter defined), internet web sites and the
content thereof, whether registered or unregistered ("Copyrights");
(iv) all computer software, programs and databases (including, without
limitation, source code, object code and all related applications and data
files), firmware and documentation and materials relating thereto, together
with any and all maintenance rights, service rights, programming rights,
hosting rights, test rights, improvement rights, renewal rights and
indemnification rights and any substitutions, replacements, improvements,
error corrections, updates and new versions of any of the foregoing
("Computer Software");
(v) all confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production processes
and techniques, inventions, research and development information, databases
and data, including, without limitation, technical data, financial,
marketing and business data, pricing and cost information, business and
marketing plans and customer and supplier lists and information
(collectively, "Trade Secrets"), and all other intellectual, industrial and
intangible property of any type, including, without limitation, industrial
designs and mask works;
(vi) all registrations and applications for registration for any of
the foregoing, including, without limitation, those registrations and
applications for registration set forth in Schedule III hereto (as such
Schedule III may be supplemented from time to time by supplements to this
Agreement, each such supplement being substantially in the form of Exhibit
C hereto (an "IP Security Agreement Supplement") executed by such Grantor
to the Administrative Agent from time to time), together with all reissues,
divisions, continuations, continuations-in-part, extensions, renewals and
reexaminations thereof;
(vii) all tangible embodiments of the foregoing, all rights in the
foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto;
(viii) all agreements, permits, consents, orders and franchises
relating to the license, development, use or disclosure of any of the
foregoing to which such Grantor, now or hereafter, is a party or a
beneficiary ("IP Agreements"); and
(ix) any and all claims for damages and injunctive relief for past,
present and future infringement, dilution, misappropriation, violation,
misuse or breach with respect to any of the foregoing, with the right, but
not the obligation, to sue for and collect, or otherwise recover, such
damages;
4
(r) all books and records (including, without limitation, customer
lists, credit files, printouts and other computer output materials and records)
of such Grantor pertaining to any of the Collateral;
(s) and all other tangible and intangible personal property of
whatever nature whether or not covered by Article 9 of the UCC; and
(t) all proceeds of, collateral for, income, royalties and other
payments now or hereafter due and payable with respect to, and Supporting
Obligations relating to, any and all of the Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral.
Section 7. Security for Obligations. This Agreement secures, in the
case of each Grantor, the payment of all Obligations of such Grantor now or
hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such Obligations being the "Secured
Obligations").
Section 8. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Administrative
Agent of any of the rights hereunder shall not release any Grantor from any of
its duties or obligations under the contracts and agreements included in the
Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
Section 9. Delivery and Control of Security Collateral. (a) All
certificates representing or evidencing the Pledged Equity and all instruments
representing or evidencing the Pledged Debt in an aggregate principal amount in
excess of $3,000,000 shall be delivered to and held by or on behalf of the
Administrative Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the
Administrative Agent. During the continuation of an Event of Default, the
Administrative Agent shall have the right, at any time in its discretion and
without notice to any Grantor, to i. transfer to or to register in the name of
the Administrative Agent or any of its nominees any or all of the Security
Collateral, subject only to the revocable rights specified in Section 11(a), 2.
exchange certificates or instruments representing or evidencing Security
Collateral for certificates or instruments of smaller or larger denominations,
and 3. convert Security Collateral consisting of financial assets credited to
any Securities Account to Security Collateral consisting of financial assets
held directly by the Administrative Agent, and to convert Security Collateral
consisting of financial assets held
5
directly by the Administrative Agent to Security Collateral consisting of
financial assets credited to any Securities Account.
(b) During the continuation of an Event of Default, promptly upon the
request of the Administrative Agent, with respect to any Security Collateral in
which any Grantor has any right, title or interest and that constitutes an
uncertificated security, such Grantor will cause the issuer thereof either (i)
to register the Administrative Agent as the registered owner of such security or
(ii) to agree in an authenticated record with such Grantor and the
Administrative Agent that such issuer will comply with instructions with respect
to such security originated by the Administrative Agent without further consent
of such Grantor, such authenticated record to be in form and substance
satisfactory to the Administrative Agent. During the continuation of an Event of
Default, with respect to any Security Collateral in which any Grantor has any
right, title or interest and that is not an uncertificated security, promptly
upon the request of the Administrative Agent, such Grantor will notify each such
issuer of Pledged Equity that such Pledged Equity is subject to the security
interest granted hereunder.
(c) During the continuation of an Event of Default, promptly upon the
request of the Administrative Agent, such Grantor will notify each such issuer
of Pledged Debt that such Pledged Debt is subject to the security interest
granted hereunder.
Section 10. Maintaining Electronic Chattel Paper, Transferable Records
and Letter-of-Credit Rights and Giving Notice of Commercial Tort Claims. So long
as any Loan or any other Obligation of any Loan Party under any Loan Document
shall remain unpaid, any Letter of Credit shall be outstanding, any Secured
Hedge Agreement shall be in effect or any Lender shall have any Commitment:
(a) During the continuation of an Event of Default, promptly upon the
request of the Administrative Agent, each Grantor will maintain all (i)
Electronic Chattel Paper so that the Administrative Agent has control of the
Electronic Chattel Paper in the manner specified in Section 9-105 of the UCC and
(ii) all transferable records so that the Administrative Agent has control of
the transferable records in the manner specified in Section 16 of the Uniform
Electronic Transactions Act, as in effect in the jurisdiction governing such
transferable record ("UETA"); and
(b) Each Grantor will give prompt notice to the Administrative Agent
of any Commercial Tort Claim that may arise in the future and will promptly
execute or otherwise authenticate a supplement to this Agreement, and otherwise
take all necessary action, to subject such Commercial Tort Claim to the first
priority security interest created under this Agreement.
Section 11. Representations and Warranties. Each Grantor represents
and warrants as follows:
(a) Such Grantor's exact legal name, as defined in Section 9-503(a) of
the UCC, is correctly set forth in Schedule I hereto. Such Grantor is located
(within the meaning of Section 9-307 of the UCC) and has its chief executive
office, in the state or jurisdiction set forth in Schedule I hereto. The
information set forth in Schedule I hereto with respect to such Grantor is true
and accurate in all material respects.
6
(b) All of the Equipment and Inventory of such Grantor are located at
the places specified therefor in Schedules 5.08(b), (c) and (d) to the Credit
Agreement. All Pledged Equity consisting of certificated securities have been
delivered to the Administrative Agent in accordance herewith.
(c) Such Grantor is the legal and beneficial owner of the Collateral
of such Grantor free and clear of any Lien, claim, option or right of others,
except for the security interest created under this Agreement, subject to Liens
permitted under Section 7.01 of the Credit Agreement.
(d) The Pledged Equity pledged by such Grantor hereunder has been duly
authorized and validly issued and is fully paid and non-assessable.
(e) The Pledged Equity pledged by such Grantor constitutes the
percentage of the issued and outstanding Equity Interests of the issuers thereof
indicated on Schedule II hereto.
(f) Upon the filing of appropriate financing statements, all actions
necessary to perfect the security interest in the Collateral of such Grantor
created under this Agreement with respect to which a Lien may be perfected by
filing pursuant to the Uniform Commercial Code shall have been duly made or
taken and are in full force and effect, and this Agreement creates in favor of
the Administrative Agent for the benefit of the Secured Parties a valid and,
together with such filings and other actions, perfected first priority security
interest in such Collateral of such Grantor, securing the payment of the Secured
Obligations.
(g) Except as could not reasonably be expected to have a Material
Adverse Effect as to itself and its Intellectual Property Collateral:
(i) To the Grantor's knowledge, the operation of such Grantor's
business as currently conducted or as contemplated to be conducted and the
use of the Intellectual Property Collateral in connection therewith do not
conflict with, infringe, misappropriate, dilute, misuse or otherwise
violate the intellectual property rights of any third party.
(ii) The Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable in whole or part, and to such
Grantor's knowledge, is valid and enforceable. Such Grantor is not aware of
any uses of any item of Intellectual Property Collateral that could be
expected to lead to such item becoming invalid or unenforceable.
(iii) Such Grantor has made or performed all filings, recordings and
other acts and has paid all required fees and taxes to maintain and protect
its interest in each and every item of Intellectual Property Collateral in
full force and effect throughout the world, and to protect and maintain its
interest therein including, without limitation, recordations of any of its
interests in the Patents and Trademarks with the U.S. Patent and Trademark
Office and in corresponding national and international patent offices, and
recordation of any of its interests in the Copyrights with the U.S.
Copyright Office and in corresponding national and international copyright
offices. Such Grantor has used proper statutory notice in connection with
its use of each patent, trademark and copyright in the Intellectual
Property Collateral.
7
(iv) To such Grantor's knowledge, (A) none of the Trade Secrets of
such Grantor has been used, divulged, disclosed or appropriated to the
detriment of such Grantor for the benefit of any other Person other than
such Grantor; (B) no employee, independent contractor or agent of such
Grantor has misappropriated any trade secrets of any other Person in the
course of the performance of his or her duties as an employee, independent
contractor or agent of such Grantor; and (C) no employee, independent
contractor or agent of such Grantor is in default or breach of any term of
any employment agreement, non-disclosure agreement, assignment of
inventions agreement or similar agreement or contract relating in any way
to the protection, ownership, development, use or transfer of such
Grantor's Intellectual Property Collateral.
(v) To such Grantor's knowledge, no Grantor or Intellectual Property
Collateral is subject to any outstanding consent, settlement, decree,
order, injunction, judgment or ruling restricting the use of any
Intellectual Property Collateral or that would impair the validity or
enforceability of such Intellectual Property Collateral.
Section 12. Further Assurances. (a) Each Grantor agrees that from time
to time, at the expense of such Grantor, such Grantor will promptly execute and
deliver, or otherwise authenticate, all further instruments and documents, and
take all further action that may be reasonably necessary or desirable, or that
the Administrative Agent may reasonably request, in order to perfect and protect
any pledge or security interest granted or purported to be granted by such
Grantor hereunder or to enable the Administrative Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral of such
Grantor. Without limiting the generality of the foregoing, each Grantor will,
upon the Administrative Agent's reasonable request, promptly with respect to
Collateral of such Grantor: i. if any such Collateral shall be evidenced by a
promissory note or other instrument or Chattel Paper, deliver and pledge to the
Administrative Agent hereunder such note or instrument or Chattel Paper duly
indorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance reasonably satisfactory to the Administrative Agent;
(ii) execute or authenticate and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices, as may be
reasonably necessary or desirable, or as the Administrative Agent may reasonably
request, in order to perfect and preserve the security interest granted or
purported to be granted by such Grantor hereunder; (iii) deliver and pledge to
the Administrative Agent for benefit of the Secured Parties certificates
representing Security Collateral that constitutes certificated securities,
accompanied by undated stock or bond powers executed in blank; (iv) during the
continuation of an Event of Default take all action necessary to ensure that the
Administrative Agent has control of Collateral consisting of Deposit Accounts,
Electronic Chattel Paper, Investment Property, Letter of Credit Rights and
transferable records as provided in Sections 9-104, 9-105, 9-106 and 9-107 of
the UCC and in Section 16 of UETA; and (v) deliver to the Administrative Agent
evidence that all other action that the Administrative Agent may deem reasonably
necessary or desirable in order to perfect and protect the security interest
created by such Grantor under this Agreement has been taken.
(b) Each Grantor hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
including, without limitation, one or more financing statements indicating that
such financing statements cover all assets or all personal property (or words of
similar effect) of such Grantor, in each case without
8
the signature of such Grantor, and regardless of whether any particular asset
described in such financing statements falls within the scope of the UCC or the
granting clause of this Agreement. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part thereof
shall be sufficient as a financing statement where permitted by law. Each
Grantor ratifies its authorization for the Administrative Agent to have filed
such financing statements, continuation statements or amendments filed prior to
the date hereof.
Section 13. As to Equipment and Inventory. Each Grantor will cause the
Equipment of such Grantor to be maintained and preserved in the same condition,
repair and working order as required under the Credit Agreement. Each Grantor
will promptly furnish to the Administrative Agent a statement respecting any
loss or damage exceeding $1,000,000 to any of the Equipment or Inventory of such
Grantor.
Section 14. Post-Closing Changes; Bailees; Collections on Assigned
Agreements and Accounts. (a) No Grantor will change its name, type of
organization, jurisdiction of organization, organizational identification number
or location from those set forth in Section 6(a) of this Agreement without first
giving at least 10 days' (or such lesser period of time as the Administrative
Agent may agree) prior written notice to the Administrative Agent and taking all
action required by the Administrative Agent for the purpose of perfecting or
protecting the security interest granted by this Agreement.
(b) During the continuation of an Event of Default, if any Collateral
of any Grantor is at any time in the possession or control of a warehouseman,
bailee or agent, upon the request of the Administrative Agent such Grantor will
(i) notify such warehouseman, bailee or agent of the security interest created
hereunder, (ii) instruct such warehouseman, bailee or agent to hold all such
Collateral solely for the Administrative Agent's account subject only to the
Administrative Agent's instructions, (iii) use commercially reasonable efforts,
to cause such warehouseman, bailee or agent to authenticate a record
acknowledging that it holds possession of such Collateral for the Administrative
Agent's benefit and shall act solely on the instructions of the Administrative
Agent without the further consent of the Grantor or any other Person, and (iv)
make such authenticated record available to the Administrative Agent.
(c) Except as otherwise provided in this subsection (c), each Grantor
will continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Accounts. In connection with such collections, such
Grantor may take (and, at the Administrative Agent's direction during the
continuation of an Event of Default, may take) such commercially reasonable
action as such Grantor (or the Administrative Agent) may deem necessary or
advisable to enforce collection thereof; provided, however, that the
Administrative Agent shall have the right at any time upon the occurrence and
during the continuance of an Event of Default and upon written notice to such
Grantor of its intention to do so, to notify the Obligors under any Accounts, of
the assignment of such Accounts, to the Administrative Agent and to direct such
Obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to the Administrative Agent and, upon such notification and
at the expense of such Grantor, to enforce collection of any such Accounts, to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done, and to otherwise
exercise all rights with respect to such Accounts, including, without
limitation, those set forth set forth in Section 9-607 of the UCC. After receipt
9
by any Grantor of the notice from the Administrative Agent referred to in the
proviso to the preceding sentence, (i) all amounts and proceeds (including,
without limitation, instruments) received by such Grantor in respect of the
Accounts, of such Grantor shall be received in trust for the benefit of the
Administrative Agent hereunder, shall be segregated from other funds of such
Grantor and shall be either (A) released to such Grantor to the extent permitted
under the terms of the Credit Agreement so long as no an Event of Default shall
have occurred and be continuing or (B) if any Event of Default shall have
occurred and be continuing, applied as provided in Section 8.03 of the Credit
Agreement and (ii) such Grantor will not adjust, settle or compromise the amount
or payment of any Account, release wholly or partly any Obligor thereof, or
allow any credit or discount thereon. No Grantor will permit or consent to the
subordination of its right to payment under any of the Accounts to any other
indebtedness or obligations of the Obligor thereof.
Section 15. As to Intellectual Property Collateral. (a) With respect
to each item of its Intellectual Property Collateral, each Grantor agrees to
take, at its expense, all commercially reasonable steps, including, without
limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authority, to (i) maintain the validity and
enforceability of such Intellectual Property Collateral and maintain such
Intellectual Property Collateral in full force and effect, and (ii) pursue the
registration and maintenance of each patent, trademark, or copyright
registration or application, now or hereafter included in such Intellectual
Property Collateral of such Grantor, including, without limitation, the payment
of required fees and taxes, the filing of responses to office actions issued by
the U.S. Patent and Trademark Office, the U.S. Copyright Office or other
governmental authorities, the filing of applications for renewal or extension,
the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the
filing of divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings, except to the extent failure to
act could not reasonably be expected to cause a Material Adverse Effect.
(b) Except as could not be reasonably expected to have a Material
Adverse Effect, no Grantor shall do or permit any act or knowingly omit to do
any act whereby any of its Intellectual Property Collateral may lapse or become
invalid or unenforceable or placed in the public domain.
(c) Except where failure to do so could not reasonably be expected to
cause a Material Adverse Effect, each Grantor shall take all commercially
reasonable steps which it or the Administrative Agent (during the continuation
of an Event of Default) deems reasonable and appropriate under the circumstances
to preserve and protect each item of its Intellectual Property Collateral,
including, without limitation, maintaining the quality of any and all products
or services used or provided in connection with any of the Trademarks,
consistent with the quality of the products and services as of the date hereof,
and taking all steps necessary to ensure that all licensed users of any of the
Trademarks use such consistent standards of quality.
(d) With respect to its Intellectual Property Collateral, each Grantor
agrees to execute or otherwise authenticate an agreement, in substantially the
form set forth in Exhibit B hereto or otherwise in form and substance
satisfactory to the Administrative Agent (an "Intellectual Property Security
Agreement"), for recording the security interest granted
10
hereunder to the Administrative Agent in such Intellectual Property Collateral
with the U.S. Patent and Trademark Office, the U.S. Copyright Office and any
other governmental authorities necessary to perfect the security interest
hereunder in such Intellectual Property Collateral.
(e) Each Grantor agrees that should it obtain an ownership interest in
any item of the type set forth in Section 1(q) that is not on the date hereof a
part of the Intellectual Property Collateral ("After-Acquired Intellectual
Property") (i) the provisions of this Agreement shall automatically apply
thereto, and (ii) any such After-Acquired Intellectual Property and, in the case
of trademarks, the goodwill symbolized thereby, shall automatically become part
of the Intellectual Property Collateral subject to the terms and conditions of
this Agreement with respect thereto. Each Grantor shall give prompt written
notice to the Administrative Agent identifying the After-Acquired Intellectual
Property, and such Grantor shall, concurrently with the delivery of financial
statements under Section 6.01(b) of the Credit Agreement, execute and deliver to
the Administrative Agent, or otherwise authenticate, an agreement substantially
in the form of Exhibit C hereto or otherwise in form and substance satisfactory
to the Administrative Agent (an "IP Security Agreement Supplement") covering
such After-Acquired Intellectual Property which IP Security Agreement Supplement
shall be recorded with the U.S. Patent and Trademark Office, the U.S. Copyright
Office and any other governmental authorities necessary to perfect the security
interest hereunder in such After-Acquired Intellectual Property.
Section 16. Voting Rights; Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Security Collateral of such
Grantor or any part thereof for any purpose other than originate
Entitlement Orders with respect to any Securities Account or Commodity
Account; provided however, that such Grantor will not exercise or refrain
from exercising any such right if such action would have a material adverse
effect on the value of the Security Collateral or any part thereof.
(ii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the Security
Collateral of such Grantor if and to the extent that the payment thereof is
not otherwise prohibited by the terms of the Loan Documents; provided,
however, that any and all
(1) dividends, interest and other distributions paid or payable
other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in
exchange for, any Security Collateral,
(2) dividends and other distributions paid or payable in cash in
respect of any Security Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus and
(3) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Security
Collateral
11
shall be, and shall be forthwith delivered to the Administrative Agent
to hold as, Security Collateral and shall, if received by such
Grantor, be received in trust for the benefit of the Administrative
Agent, be segregated from the other property or funds of such Grantor
and be forthwith delivered to the Administrative Agent as Security
Collateral in the same form as so received (with any necessary
indorsement).
(iii) The Administrative Agent will execute and deliver (or cause
to be executed and delivered) to each Grantor all such proxies and
other instruments as such Grantor may reasonably request for the
purpose of enabling such Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends or interest payments that it is
authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of each Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 11(a)(i) shall,
upon notice to such Grantor by the Administrative Agent, cease and (y)
to receive the dividends, interest and other distributions that it
would otherwise be authorized to receive and retain pursuant to
Section 11(a)(ii) shall automatically cease, and all such rights shall
thereupon become vested in the Administrative Agent, which shall
thereupon have the sole right to exercise or refrain from exercising
such voting and other consensual rights and to receive and hold as
Security Collateral such dividends, interest and other distributions.
(ii) All dividends, interest and other distributions that are
received by any Grantor contrary to the provisions of paragraph (i) of
this Section 11(b) shall be received in trust for the benefit of the
Administrative Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Administrative Agent
as Security Collateral in the same form as so received (with any
necessary indorsement).
(iii) The Administrative Agent shall be authorized to exercise
exclusive control over all Deposit Accounts, Securities Accounts and
Commodity Accounts.
Section 17. Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the terms of the Credit Agreement, or (ii) create or
suffer to exist any Lien upon or with respect to any of the Collateral of such
Grantor except for the pledge, assignment and security interest created under
this Agreement and Liens permitted under the Credit Agreement.
(b) Each Grantor agrees that it will (i) cause each issuer of the
Pledged Equity pledged by such Grantor not to issue any Equity Interests or
other securities in addition to or in substitution for the Pledged Equity issued
by such issuer, except to such Grantor, and (ii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all additional
Equity Interests or other securities (subject to Section 1(o)(ii) with respect
to Voting Foreign Stock).
12
Section 18. Administrative Agent Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints the Administrative Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, upon the occurrence
and during the continuance of an Event of Default, in the Administrative Agent's
discretion, to take any action and to execute any instrument that the
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Administrative Agent,
(b) to ask for, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral,
(c) to receive, indorse and collect any drafts or other instruments,
documents and Chattel Paper, in connection with clause (a) or (b) above, and
(d) to file any claims or take any action or institute any proceedings
that the Administrative Agent may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce compliance with the terms and
conditions of any Assigned Agreement or the rights of the Administrative Agent
with respect to any of the Collateral.
Section 19. Administrative Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may, but
without any obligation to do so and without notice, itself perform, or cause
performance of, such agreement, and the expenses of the Administrative Agent
incurred in connection therewith shall be payable by such Grantor under Section
17.
Section 20. The Administrative Agent's Duties. The powers conferred on
the Administrative Agent hereunder are solely to protect the Secured Parties'
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession and
the accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not any Secured Party has
or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.
Section 21. Remedies. If any Event of Default shall have occurred and
be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party upon
default under the UCC (whether or not the UCC
13
applies to the affected Collateral) and also may: (i) require each Grantor to,
and each Grantor hereby agrees that it will at its expense and upon request of
the Administrative Agent forthwith, assemble all or part of the Collateral as
directed by the Administrative Agent and make it available to the Administrative
Agent at a place and time to be designated by the Administrative Agent that is
reasonably convenient to both parties; (ii) without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Administrative Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable; (iii) occupy any premises
owned or to the extent lawful and permitted leased by any of the Grantors where
the Collateral or any part thereof is assembled or located for a reasonable
period in order to effectuate its rights and remedies hereunder or under law,
without obligation to such Grantor in respect of such occupation; and (iv)
exercise any and all rights and remedies of any of the Grantors under or in
connection with the Collateral, or otherwise in respect of the Collateral,
including, without limitation, (A) any and all rights of such Grantor to demand
or otherwise require payment of any amount under, or performance of any
provision of, the Assigned Agreements, the Accounts and the other Collateral,
(B) withdraw, or cause or direct the withdrawal, of all funds with respect to
the Deposit Accounts and (C) exercise all other rights and remedies with respect
to the Assigned Agreements, the Accounts and the other Collateral, including,
without limitation, those set forth in Section 9-607 of the UCC. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) days' notice to such Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The Administrative
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
(b) All payments received by any Grantor under or in connection with
any Assigned Agreement or otherwise in respect of the Collateral shall be
received in trust for the benefit of the Administrative Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Administrative Agent in the same form as so received (with any necessary
indorsement).
(c) The Administrative Agent may, without notice to any Grantor except
as required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against any funds
held with respect to any Deposit Account.
(d) If the Administrative Agent shall determine to exercise its right
to sell all or any of the Security Collateral of any Grantor pursuant to this
Section 16, each Grantor agrees that, upon request of the Administrative Agent,
such Grantor will, at its own expense, do or cause to be done all such other
acts and things as may be necessary to make such sale of such Security
Collateral or any part thereof valid and binding and in compliance with
applicable law.
(e) The Administrative Agent is authorized, in connection with any
sale of the Security Collateral pursuant to this Section 16, to deliver or
otherwise disclose to any prospective purchaser of the Security Collateral: (i)
any registration statement or prospectus, and
14
all supplements and amendments thereto; (ii) any information and projections;
and (iii) any other information in its possession relating to such Security
Collateral.
(f) Each Grantor acknowledges the impossibility of ascertaining the
amount of damages that would be suffered by the Secured Parties by reason of the
failure by such Grantor to perform any of the covenants contained in subsection
(d) above and, consequently, agrees that, if such Grantor shall fail to perform
any of such covenants, it will pay, as liquidated damages and not as a penalty,
an amount equal to the value of the Security Collateral on the date the
Administrative Agent shall demand compliance with subsection (d) above.
Section 22. Indemnity and Expenses. (a) Each Grantor agrees to
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct or breach
of this Agreement by the Secured Party.
(b) Each Grantor will upon demand pay to the Administrative Agent the
amount of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents, that
the Administrative Agent may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral of such
Grantor, (iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the other Secured Parties hereunder or (iv) the failure
by such Grantor to perform or observe any of the provisions hereof.
Section 23. Amendments; Waivers; Additional Grantors; Etc. (a) No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of the Administrative
Agent or any other Secured Party to exercise, and no delay in exercising any
right hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
(b) Upon the execution and delivery, or authentication, by any Person
of a security agreement supplement in substantially the form of Exhibit A hereto
(each a "Security Agreement Supplement"), (i) such Person shall be referred to
as an "Additional Grantor" and shall be and become a Grantor hereunder, and each
reference in this Agreement and the other Loan Documents to "Grantor" shall also
mean and be a reference to such Additional Grantor, and each reference in this
Agreement and the other Loan Documents to "Collateral" shall also mean and be a
reference to the Collateral of such Additional Grantor, and (ii) the
supplemental
15
schedules I through IV attached to each Security Agreement Supplement shall be
incorporated into and become a part of and supplement Schedules I through IV,
respectively, hereto, and the Administrative Agent may attach such supplemental
schedules to such Schedules; and each reference to such Schedules shall mean and
be a reference to such Schedules as supplemented pursuant to each Security
Agreement Supplement.
Section 24. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication or facsimile transmission) and mailed, telegraphed,
telecopied, telexed, faxed or delivered to it, if to any Grantor, addressed to
it in care of the Borrower at the Borrower's address specified in Section 10.02
of the Credit Agreement, if to the Administrative Agent, at its address
specified in Section 10.02 of the Credit Agreement. All such notices and other
communications shall be deemed to be given or made at such time as shall be set
forth in Section 10.02 of the Credit Agreement. Delivery by telecopier of an
executed counterpart of any amendment or waiver of any provision of this
Agreement or of any Security Agreement Supplement or Schedule hereto shall be
effective as delivery of an original executed counterpart thereof.
Section 25. Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the latest of (i)
the payment in full in cash of the Secured Obligations, (ii) the Maturity Date
and (iii) the termination or expiration of all Letters of Credit and all Secured
Hedge Agreements, (b) be binding upon each Grantor, its successors and assigns
and (c) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of the Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any
portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitments, the Loans owing to it
and the Note or Notes, if any, held by it) to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof
granted to such Lender herein or otherwise, in each case as provided in Section
10.07 of the Credit Agreement.
Section 26. Release; Termination. (a) Upon any sale, lease, transfer
or other disposition of any item of Collateral of any Grantor permitted by, and
in accordance with, the terms of the Loan Documents (other than sales of
Inventory in the ordinary course of business), the Administrative Agent will, at
such Grantor's expense, execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted hereby; provided,
however, that such Grantor shall have delivered to the Administrative Agent a
written request for release describing the item of Collateral and the terms of
the sale, lease, transfer or other disposition in reasonable detail, including,
without limitation, the price thereof and any expenses in connection therewith,
together with a form of release for execution by the Administrative Agent and a
certificate of such Grantor to the effect that the transaction is in compliance
with the Loan Documents and as to such other matters as the Administrative Agent
may request.
(b) Upon the latest of (i) the payment in full in cash of the Secured
Obligations, (ii) the Maturity Date and (iii) the termination or expiration of
all Letters of Credit and all Secured Hedge Agreements, the pledge and security
interest granted hereby shall
16
terminate and all rights to the Collateral shall revert to the applicable
Grantor. Upon any such termination, the Administrative Agent will, at the
applicable Grantor's expense, execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence such termination.
Section 27. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
Section 28. The Mortgages. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of any
Mortgage and the terms of such Mortgage are inconsistent with the terms of this
Agreement, then with respect to such Collateral, the terms of such Mortgage
shall be controlling in the case of fixtures and real estate leases, letting and
licenses of, and contracts and agreements relating to the lease of, real
property, and the terms of this Agreement shall be controlling in the case of
all other Collateral.
Section 29. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
17
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
THL FOOD PRODUCTS CO.
By
---------------------------------
Title: Chief Financial Officer
and Treasurer
Address for Notices:
---------------------------------
---------------------------------
THL FOOD PRODUCTS HOLDINGS CO.
By
---------------------------------
Title: Chief Financial Officer
and Treasurer
Address for Notices:
---------------------------------
---------------------------------
MICHAEL FOODS OF DELAWARE, INC.
By
---------------------------------
Title: Executive Vice President,
Chief Financial Officer and
Treasurer
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
CASA TRUCKING, INC.
By
---------------------------------
Title: Chief Financial Officer
and Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
CRYSTAL FARMS REFRIGERATED
DISTRIBUTION COMPANY
By
---------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
KMS DAIRY, INC.
By
---------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
19
MINNESOTA PRODUCTS, INC.
By
---------------------------------
Title: Chief Financial Officer
and Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
NORTHERN STAR CO.
By
---------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
PAPETTI'S HYGRADE EGG PRODUCTS, INC.
By
---------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
M.G. WALDBAUM COMPANY
By
---------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
20
FARM FRESH FOODS, INC.
By
---------------------------------
Title: Chief Financial Officer
and Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
PAPETTI ELECTROHEATING CORPORATION
By
---------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
WFC, INC.
By
---------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
WISCO FARM COOPERATIVE
By
---------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
21
EXHIBIT H
FORM OF MORTGAGE
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING ([STATE])
by and from
[MORTGAGOR], "Mortgagor"
to
BANK OF AMERICA, N.A.,
in its capacity as Agent, "Mortgagee"
Dated as of , 2003
--------------
[insert only if mortgage is capped: THE MAXIMUM PRINCIPAL INDEBTEDNESS
WHICH IS SECURED BY OR WHICH BY ANY CONTINGENCY MAY BE SECURED BY THIS MORTGAGE
IS $ .]
---------------
Location:
Municipality:
County:
State:
THE SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE FILING
TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE
DESCRIBED HEREIN
PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022-6069
Attention: Malcolm M. Kratzer, Esq.
File #8724-373
22
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING ([STATE])
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND
FIXTURE FILING ([STATE]) (this "Mortgage") is dated as of , 2003
--------------
by and from [MORTGAGOR], a [ ] [ ]
------------------- -------------------
("Mortgagor"), whose address is [ ] to BANK OF AMERICA, N.A.,
--------------------
a national association, as administrative agent (in such capacity, "Agent") for
the Secured Parties as defined in the Credit Agreement (defined below), having
an address at Independence Center, 15th Floor, NC1-001-15-04, 101 North Tryon
Street, Charlotte, North Carolina 28255 (Agent, together with its successors and
assigns, "Mortgagee").
[insert only if mortgage is capped: ANY PROVISION HEREIN TO THE CONTRARY
NOTWITHSTANDING, THE MAXIMUM PRINCIPAL INDEBTEDNESS WHICH IS SECURED BY OR WHICH
BY ANY CONTINGENCY MAY BE SECURED BY THIS MORTGAGE IS $[ ] (THE
-----------
"SECURED AMOUNT").]
DEFINITIONS
Definitions. All capitalized terms used herein without definition shall have the
respective meanings ascribed to them in that certain Credit Agreement dated as
of even date herewith, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time (the "Credit Agreement"),
among THL Food Products Co. and M-Foods Holdings, Inc. (collectively,
"Borrower"), THL Food Products Holding Co. and the other Secured Parties
identified therein. As used herein, the following terms shall have the following
meanings:
"Event of Default": An Event of Default under and as defined in the Credit
Agreement.
"Indebtedness": (1) All indebtedness of Mortgagor to Mortgagee or any of the
other Secured Parties under the Credit Agreement or any other Loan Document to
which Mortgagor is a party, including, without limitation (except as otherwise
set forth in Section 1(b) of the Subsidiary Guaranty), the sum of all (a)
principal, interest and other amounts owing under or evidenced or secured by the
Loan Documents, (b) principal, interest and other amounts which may hereafter be
lent by Mortgagee or any of the other Secured Parties under or in connection
with the Credit Agreement or any of the other Loan Documents, whether evidenced
by a promissory note or other instrument which, by its terms, is secured hereby,
and (c) obligations and liabilities of any nature now or hereafter existing
under or arising in connection with Letters of Credit and other extensions of
credit under the Credit Agreement or any of the other Loan Documents and
reimbursement obligations in respect thereof, together with interest and other
amounts payable with respect thereto, and (2) all other indebtedness,
obligations and liabilities now or hereafter existing of any kind of Mortgagor
to Mortgagee or any of the other Secured Parties under documents which recite
that they are intended to be secured by this Mortgage. The Credit Agreement
contains a revolving credit facility which permits Borrower to borrow certain
principal amounts, repay all or a portion of such principal amounts, and
reborrow the amounts previously paid to the Secured Parties, all upon
satisfaction of certain conditions stated in the Credit Agreement. [use only if
mortgage is capped: Subject to the provisions of Section 2.2, this] [This]
Mortgage secures all advances and re-advances under the Credit Agreement,
including, without limitation, those under the revolving credit facility
contained therein.
"Mortgaged Property": The fee interest in the real property described in Exhibit
A attached hereto and incorporated herein by this reference, together with any
greater estate in such real property as hereafter may be acquired by Mortgagor
(the "Land"), and all of Mortgagor's right, title and interest in and to (1) all
improvements now owned or hereafter acquired by Mortgagor, now or at any time
situated, placed or constructed upon the Land (the "Improvements"; the Land and
Improvements are collectively referred to as the "Premises"), (2) all materials,
supplies, equipment, apparatus and other items of personal property now owned or
hereafter acquired by Mortgagor and now or hereafter attached to, installed in
or used in connection with any of the Improvements or the Land, and water, gas,
electrical, telephone, storm and sanitary sewer facilities and all other
utilities whether or not situated in easements (the "Fixtures"), (3) all goods,
accounts, general intangibles, instruments, documents, chattel paper and all
other personal property of any kind or character, including such items of
personal property as defined in the UCC (defined below), now owned or hereafter
acquired by Mortgagor and now or hereafter affixed to, placed upon, used in
connection with, arising from or otherwise related to the Premises (the
"Personalty"), (4) all reserves, escrows or impounds required under the Credit
Agreement or any of the other Loan Documents and all deposit accounts maintained
by Mortgagor with respect to the Mortgaged Property (the "Deposit Accounts"),
(5) all leases, licenses, concessions, occupancy agreements or other agreements
(written or oral, now or at any time in effect) to which Mortgagor is a party
which grant to any Person a possessory interest in, or the right to use, all or
any part of the Mortgaged Property, together with all related security and other
deposits (the "Leases"), (6) all of the rents, revenues, royalties, income,
proceeds, profits, security and other types of deposits, and other benefits paid
or payable by parties to the Leases for using, leasing, licensing possessing,
operating from, residing in, selling or otherwise enjoying the Mortgaged
Property (the "Rents"), (7) all other agreements, such as construction
contracts, architects' agreements, engineers' contracts, utility contracts,
maintenance agreements, management agreements, service contracts, listing
agreements, guaranties, warranties, permits, licenses, certificates and
entitlements in any way relating to the construction, use, occupancy, operation,
maintenance, enjoyment or ownership of the Mortgaged Property (the "Property
Agreements"), (8) all rights, privileges, tenements, hereditaments,
rights-of-way, easements, appendages and appurtenances appertaining to the
foregoing, (9) all property tax refunds payable to Mortgagor with respect to the
Mortgaged Property (the "Tax Refunds"), (10) all accessions, replacements and
substitutions for any of the foregoing and all proceeds thereof (the
"Proceeds"), (11) all insurance policies, unearned premiums therefor and
proceeds from such policies covering any of the above property now or hereafter
acquired by Mortgagor (the "Insurance"), and (12) all awards, damages,
remunerations, reimbursements, settlements or compensation heretofore made or
hereafter to be made by any governmental authority pertaining to any
condemnation or other taking (or any purchase in lieu thereof) of all or any
portion of the Land, Improvements, Fixtures or Personalty (the "Condemnation
Awards"). As used in this Mortgage, the term "Mortgaged Property" shall mean all
or, where the context permits or requires, any portion of the above or any
interest therein.
"Obligations": All of the agreements, covenants, conditions, warranties,
representations and other obligations of Mortgagor under the Credit Agreement
and the other Loan Documents to which it is a party.
"Permitted Liens": Liens described in Sections 7.01 of the Credit Agreement.
24
"UCC": The Uniform Commercial Code of [STATE] or, if the creation, perfection
and enforcement of any security interest herein granted is governed by the laws
of a state other than [STATE], then, as to the matter in question, the Uniform
Commercial Code in effect in that state.
GRANT [INSERT ONLY IF MORTGAGE IS CAPPED: ; REVOLVING LOAN]
Grant. To secure the full and timely payment of the Indebtedness and the full
and timely performance of the Obligations, Mortgagor MORTGAGES, GRANTS,
BARGAINS, ASSIGNS, SELLS, CONVEYS and CONFIRMS, to Mortgagee the Mortgaged
Property, subject, however, only to the matters that are set forth on Exhibit B
attached hereto (the "Permitted Encumbrances") and to Permitted Liens, TO HAVE
AND TO HOLD the Mortgaged Property to Mortgagee, and Mortgagor does hereby bind
itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to
the Mortgaged Property unto Mortgagee.
Treatment of Borrowings and Repayments. [insert only if mortgage is capped:
Pursuant to the Credit Agreement, the amount of the Indebtedness may increase
and decrease from time to time as the Secured Parties advance, Borrower repays,
and the Secured Parties re-advance sums pursuant to the Credit Agreement. For
purposes of this Mortgage, so long as the balance of the Indebtedness equals or
exceeds the Secured Amount, the amount of the Indebtedness secured by this
Mortgage shall at all times equal only the Secured Amount. Such Secured Amount
represents only a portion of the first sums advanced by the Secured Parties in
respect of the Indebtedness.
Reduction of Secured Amount. [insert only if mortgage is capped: The Secured
Amount shall be reduced only by the last and final sums that Borrower repays
with respect to the Indebtedness and shall not be reduced by any intervening
repayments of the Indebtedness. So long as the balance of the Indebtedness
exceeds the Secured Amount, any payments and repayments of the Indebtedness
shall not be deemed to be applied against, or to reduce, the portion of the
Indebtedness secured by this Mortgage. Such payments shall instead be deemed to
reduce only such portions of the Indebtedness as are secured by other collateral
located outside of the State of [STATE].
WARRANTIES, REPRESENTATIONS AND COVENANTS
Mortgagor warrants, represents and covenants to Mortgagee as follows:
Title to Mortgaged Property and Lien of this Instrument. Mortgagor owns the
Mortgaged Property free and clear of any liens, claims or interests, except the
Permitted Encumbrances and Permitted Liens. This Mortgage creates valid,
enforceable first priority liens and security interests against the Mortgaged
Property, except for Permitted Encumbrances and Permitted Liens.
First Lien Status. Mortgagor shall preserve and protect the first lien and
security interest status of this Mortgage. If any lien or security interest
other than a Permitted Encumbrance or a Permitted Lien is asserted against the
Mortgaged Property, Mortgagor shall promptly, and at its expense, (a) give
Mortgagee a detailed written notice of such lien or security interest (including
origin, amount and other terms), and (b) pay the underlying claim in full or
take such other action so as to cause it to be released or contest the same as
required by and in compliance with
25
the Credit Agreement (including, if applicable under the Credit Agreement, the
requirement of providing a bond or other security satisfactory to Mortgagee).
Payment and Performance. Mortgagor covenants and agrees that, so long as any
part of the Obligations shall remain unpaid, any Letter of Credit shall be
outstanding, any Secured Party shall have any Commitment or any Secured Hedge
Agreement shall be in effect, Mortgagor shall perform and observe all of the
terms, covenants and agreements set forth in the Loan Documents on its part to
be performed or observed (including without limitation the Subsidiary Guaranty)
or that Borrower has agreed to cause Mortgagor to perform or observe.
Replacement of Fixtures and Personalty. Mortgagor shall not, without the prior
written consent of Mortgagee, permit any of the Fixtures or Personalty owned or
leased by Mortgagor to be removed at any time from the Land or Improvements,
unless the removed item is removed temporarily for maintenance and repair or is
permitted to be removed by the Credit Agreement.
Inspection. Mortgagor shall permit Mortgagee, and the other Secured Parties, and
their respective agents, representatives and employees, upon reasonable prior
notice to Mortgagor, to inspect the Mortgaged Property and all books and records
of Mortgagor located thereon, and to conduct such environmental and engineering
studies as Mortgagee or the other Secured Parties may require, provided that
such inspections and studies shall not materially interfere with the use and
operation of the Mortgaged Property.
Insurance; Condemnation Awards and Insurance Proceeds.
Insurance. Mortgagor shall maintain or cause to be maintained with financially
sound and reputable insurance companies, insurance with respect to the Mortgaged
Property against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts (after giving effect to any self-insurance reasonable and customary for
similarly situated Persons engaged in the same or similar businesses as the
Mortgagor) as are customarily carried under similar circumstances by such
Persons. Subject to Mortgagor's right to self-insure set forth in the foregoing
sentence, each such policy of insurance shall name Mortgagee as the loss payee
(or, in the case of liability insurance, an additional insured) thereunder for
the ratable benefit of the Secured Parties, and shall provide for at least 30
days' prior written notice of any material modification or cancellation of such
policy. In addition to the foregoing, if any portion of the Mortgaged Property
is located in an area identified by the Federal Emergency Management Agency as
an area having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968 (or any amendment or
successor act thereto), then Mortgagor shall maintain, or cause to be
maintained, with a financially sound and reputable insurer, flood insurance in
an amount sufficient to comply with all applicable rules and regulations
promulgated pursuant to such Act.
Condemnation Awards. All Condemnation Awards awarded to Mortgagor shall be
reinvested and/or applied in accordance with the terms of the Credit Agreement,
including without limitation Section 2.05(b) thereof.
26
Insurance Proceeds. All proceeds of any insurance policies required under the
Loan Documents relating to the Mortgaged Property shall be reinvested and/or
applied in accordance with the terms of the Credit Agreement, including without
limitation Section 2.05(b) thereof.
[INTENTIONALLY OMITTED]
DEFAULT AND FORECLOSURE
Remedies. Upon the occurrence and during the continuance of an Event of Default,
Mortgagee may, at Mortgagee's election, exercise any or all of the following
rights, remedies and recourses:
Acceleration. Subject to any provisions of the Loan Documents providing for the
automatic acceleration of the Indebtedness upon the occurrence of certain Events
of Default, declare the Indebtedness to be immediately due and payable, without
further notice, presentment, protest, notice of intent to accelerate, notice of
acceleration, demand or action of any nature whatsoever (each of which hereby is
expressly waived by Mortgagor), whereupon the same shall become immediately due
and payable.
Entry on Mortgaged Property. Enter the Mortgaged Property and take exclusive
possession thereof and of all books, records and accounts relating thereto or
located thereon. If Mortgagor remains in possession of the Mortgaged Property
following the occurrence and during the continuance of an Event of Default, and
without Mortgagee's prior written consent, Mortgagee may invoke any legal
remedies to dispossess Mortgagor.
Operation of Mortgaged Property. Hold, lease, develop, manage, operate or
otherwise use the Mortgaged Property upon such terms and conditions as Mortgagee
may deem reasonable under the circumstances (making such repairs, alterations,
additions and improvements and taking other actions, from time to time, as
Mortgagee deems necessary or desirable), and apply all Rents and other amounts
collected by Mortgagee in connection therewith in accordance with the provisions
of Section 5.7.
Foreclosure and Sale. Institute proceedings for the complete foreclosure of this
Mortgage by judicial action or by power of sale, in which case the Mortgaged
Property may be sold for cash or credit in one or more parcels. With respect to
any notices required or permitted under the UCC, Mortgagor agrees that ten (10)
days' prior written notice shall be deemed commercially reasonable. At any such
sale by virtue of any judicial proceedings, power of sale, or any other legal
right, remedy or recourse, the title to and right of possession of any such
property shall pass to the purchaser thereof, and to the fullest extent
permitted by law, Mortgagor shall be completely and irrevocably divested of all
of its right, title, interest, claim, equity, equity of redemption, and demand
whatsoever, either at law or in equity, in and to the property sold and such
sale shall be a perpetual bar both at law and in equity against Mortgagor, and
against all other Persons claiming or to claim the property sold or any part
thereof, by, through or under Mortgagor. Mortgagee or any of the Secured Parties
may be a purchaser at such sale. If Mortgagee or such other Secured Party is the
highest bidder, Mortgagee or such other Secured Party may credit the portion of
the purchase price that would be distributed to Mortgagee or such other Secured
Party against the Indebtedness in lieu of paying cash. In the event this
Mortgage is foreclosed by judicial action, appraisement of the Mortgaged
Property is waived.
27
Receiver. Make application to a court of competent jurisdiction for, and obtain
from such court as a matter of strict right and without notice to Mortgagor or
regard to the adequacy of the Mortgaged Property for the repayment of the
Indebtedness, the appointment of a receiver of the Mortgaged Property, and
Mortgagor irrevocably consents to such appointment. Any such receiver shall have
all the usual powers and duties of receivers in similar cases, including the
full power to rent, maintain and otherwise operate the Mortgaged Property upon
such terms as may be approved by the court, and shall apply such Rents in
accordance with the provisions of Section 5.7.
Other. Exercise, with respect to the Mortgaged Property only, all other rights,
remedies and recourses granted under the Loan Documents or otherwise available
at law or in equity.
Separate Sales. The Mortgaged Property may be sold in one or more parcels and in
such manner and order as Mortgagee in its sole discretion may elect. The right
of sale arising out of any Event of Default shall not be exhausted by any one or
more sales.
Remedies Cumulative, Concurrent and Nonexclusive. Mortgagee shall have all
rights, remedies and recourses granted in the Loan Documents and available at
law or equity (including the UCC), which rights (a) shall be cumulative and
concurrent, (b) may be pursued separately, successively or concurrently against
Mortgagor or others obligated under the Loan Documents, or against the Mortgaged
Property, or against any one or more of them, at the sole discretion of
Mortgagee, (c) may be exercised as often as occasion therefor shall arise, and
the exercise or failure to exercise any of them shall not be construed as a
waiver or release thereof or of any other right, remedy or recourse, and (d) are
intended to be, and shall be, nonexclusive. No action by Mortgagee in the
enforcement of any rights, remedies or recourses under the Loan Documents or
otherwise at law or equity shall be deemed to cure any Event of Default.
Release of and Resort to Collateral. Mortgagee may release, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Mortgaged Property, any part of the
Mortgaged Property without, as to the remainder, in any way impairing,
affecting, subordinating or releasing the lien or security interest created in
or evidenced by the Loan Documents or their status as a first and prior lien and
security interest in and to the Mortgaged Property. For payment of the
Indebtedness, Mortgagee may resort to any other security in such order and
manner as Mortgagee may elect.
Waiver of Redemption, Notice and Marshalling of Assets. To the fullest extent
permitted by law, Mortgagor hereby irrevocably and unconditionally waives and
releases (a) to the extent not inconsistent with the terms of the Credit
Agreement and the Subsidiary Guaranty, all benefit that might accrue to
Mortgagor by virtue of any present or future statute of limitations or law or
judicial decision exempting the Mortgaged Property from attachment, levy or sale
on execution or providing for any stay of execution, exemption from civil
process, redemption or extension of time for payment, (b) all notices of any
Event of Default other than any notices specifically required to be given under
any Loan Document, (c) all notices of Mortgagee's election to exercise or the
actual exercise of any right, remedy or recourse provided for under any Loan
Document, other than any notices specifically required to be given under any
Loan Document, and (d) any right to a marshalling of assets or a sale in inverse
order of alienation.
28
Discontinuance of Proceedings. If Mortgagee or any other Secured Party shall
have proceeded to invoke any right, remedy or recourse permitted under the Loan
Documents and shall thereafter elect to discontinue or abandon it for any
reason, Mortgagee or such other Secured Party, as the case may be, shall have
the unqualified right to do so and, in such an event, Mortgagor, Mortgagee and
the other Secured Parties shall be restored to their former positions with
respect to the Indebtedness, the Obligations, the Loan Documents, the Mortgaged
Property and otherwise, and the rights, remedies, recourses and powers of
Mortgagee and the other Secured Parties shall continue as if the right, remedy
or recourse had never been invoked, but no such discontinuance or abandonment
shall waive any Event of Default which may then exist or the right of Mortgagee
or any other Secured Party thereafter to exercise any right, remedy or recourse
under the Loan Documents for such Event of Default.
Application of Proceeds. The proceeds of any sale of, and the Rents and other
amounts generated by the holding, leasing, management, operation or other use of
the Mortgaged Property, shall be applied by Mortgagee (or the receiver, if one
is appointed) in the following order unless otherwise required by applicable
law:
first, to the payment of the costs and expenses of taking possession of the
Mortgaged Property and of holding, using, leasing, repairing, improving and
selling the same, including, without limitation (1) receiver's fees and
expenses, including the repayment of the amounts evidenced by any receiver's
certificates, (2) court costs, (3) attorneys' and accountants' fees and
expenses, and (4) costs of advertisement;
second, to the payment of the Indebtedness and performance of the Obligations in
the manner and order of preference provided under Section 8.03 of the Credit
Agreement, and
thereafter, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as other required under applicable
law.
Occupancy After Foreclosure. Any sale of the Mortgaged Property or any part
thereof in accordance with Section 5.1(d) will divest all right, title and
interest of Mortgagor in and to the property sold. Subject to applicable law,
any purchaser at a foreclosure sale will receive immediate possession of the
property purchased. If Mortgagor retains possession of such property or any part
thereof subsequent to such sale, Mortgagor will be considered a tenant at
sufferance of the purchaser, and will, if Mortgagor remains in possession after
demand to remove, be subject to eviction and removal, forcible or otherwise,
with or without process of law.
Additional Advances and Disbursements; Costs of Enforcement.
Upon the occurrence and during the continuance of any Event of Default,
Mortgagee and each of the other Secured Parties shall have the right, but not
the obligation, to cure such Event of Default in the name and on behalf of
Mortgagor. All sums advanced and expenses incurred at any time by Mortgagee or
any other Secured Party under this Section 5.9, or otherwise under this Mortgage
or any of the other Loan Documents or applicable law, shall, subject to any
limitations thereon contained in any Loan Document, be payable on demand and
shall bear interest from and including the date that such sum is advanced or
expense incurred, to and excluding the date of
29
reimbursement, at the interest rate applicable to Base Rate Loans pursuant to
Section 2.08(a) of the Credit Agreement (provided that following the occurrence
and during the continuance of any Event of Default set forth in Section 8.01(a)
or (f) of the Credit Agreement, interest shall accrue on such sums at the
Default Rate applicable to Base Rate Loans pursuant to Section 2.08(b) of the
Credit Agreement), and all such sums, together with interest thereon, shall be
secured by this Mortgage.
Mortgagor shall pay all expenses (including reasonable attorneys' fees and
expenses) of or incidental to the perfection and enforcement of this Mortgage,
or the enforcement, compromise or settlement of the Indebtedness or any claim
under this Mortgage, and for the curing thereof, or for defending or asserting
the rights and claims of Mortgagee in respect thereof, by litigation or
otherwise.
No Mortgagee in Possession. Neither the enforcement of any of the remedies under
this Article 5, the assignment of the Rents and Leases under Article 6, the
security interests under Article 7, nor any other remedies afforded to Mortgagee
under the Loan Documents, at law or in equity shall cause Mortgagee or any other
Secured Party to be deemed or construed to be a mortgagee in possession of the
Mortgaged Property, to obligate Mortgagee or any other Secured Party to lease
the Mortgaged Property or attempt to do so, or to take any action, incur any
expense, or perform or discharge any obligation, duty or liability whatsoever
under any of the Leases or otherwise.
ASSIGNMENT OF RENTS AND LEASES
Assignment. In furtherance of and in addition to the assignment made by
Mortgagor in Section 2.1 of this Mortgage, Mortgagor hereby absolutely and
unconditionally assigns, sells, transfers and conveys to Mortgagee all of its
right, title and interest in and to all Leases, whether now existing or
hereafter entered into, and all of its right, title and interest in and to all
Rents. This assignment is an absolute assignment and not an assignment for
additional security only. So long as no Event of Default shall have occurred and
be continuing, Mortgagor shall have a revocable license from Mortgagee to
exercise all rights extended to the landlord under the Leases, including the
right to receive and collect all Rents and to hold the Rents in trust for use in
the payment and performance of the Obligations and to otherwise use the same.
The foregoing license is granted subject to the conditional limitation that no
Event of Default shall have occurred and be continuing. Upon the occurrence and
during the continuance of an Event of Default, whether or not legal proceedings
have commenced, and without regard to waste, adequacy of security for the
Obligations or solvency of Mortgagor, the license herein granted shall
automatically expire and terminate, without notice to Mortgagor by Mortgagee
(any such notice being hereby expressly waived by Mortgagor to the extent
permitted by applicable law).
Perfection Upon Recordation. Mortgagor acknowledges that Mortgagee has taken all
actions necessary to obtain, and that upon recordation of this Mortgage
Mortgagee shall have, to the extent permitted under applicable law, a valid and
fully perfected, first priority, present assignment of the Rents arising out of
the Leases and all security for such Leases. Mortgagor acknowledges and agrees
that upon recordation of this Mortgage Mortgagee's interest in the Rents shall
be deemed to be present and fully perfected, "choate" and enforced as to
Mortgagor and to the extent permitted under applicable law, all third parties,
including, without limitation,
30
any subsequently appointed trustee in any case under Title 11 of the United
States Code (the "Bankruptcy Code"), without the necessity of commencing a
foreclosure action with respect to this Mortgage, making formal demand for the
Rents, obtaining the appointment of a receiver or taking any other affirmative
action.
Bankruptcy Provisions. Without limitation of the absolute nature of the
assignment of the Rents hereunder, Mortgagor and Mortgagee agree that (a) this
Mortgage shall constitute a "security agreement" for purposes of Section 552(b)
of the Bankruptcy Code, (b) the security interest created by this Mortgage
extends to property of Mortgagor that comprises the Mortgaged Property and was
acquired before the commencement of a case in bankruptcy and to all amounts paid
as Rents and (c) such security interest shall extend to all Rents acquired by
the estate after the commencement of any case in bankruptcy.
No Merger of Estates. So long as part of the Indebtedness and the Obligations
secured hereby remain unpaid and undischarged, the fee and leasehold estates to
the Mortgaged Property shall not merge, but shall remain separate and distinct,
notwithstanding the union of such estates either in Mortgagor, Mortgagee, any
tenant or any third party by purchase or otherwise.
SECURITY AGREEMENT
Security Interest. This Mortgage constitutes a "security agreement" on personal
property within the meaning of the UCC and other applicable law and with respect
to the Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property
Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards. To this
end, Mortgagor grants to Mortgagee a first and prior security interest in the
Personalty, Fixtures, Leases, Rents, Deposit Accounts, Property Agreements, Tax
Refunds, Proceeds, Insurance, Condemnation Awards and all other Mortgaged
Property which is personal property to secure the payment of the Indebtedness
and performance of the Obligations, and agrees that Mortgagee shall have all the
rights and remedies of a secured party under the UCC with respect to such
property. Any notice of sale, disposition or other intended action by Mortgagee
with respect to the Personalty, Fixtures, Leases, Rents, Deposit Accounts,
Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards
sent to Mortgagor at least ten (10) days prior to any action under the UCC shall
constitute reasonable notice to Mortgagor. In the event of any inconsistency
between the terms of this Mortgage and the terms of the Security Agreement with
respect to the collateral covered both therein and herein, the Security
Agreement shall control and govern to the extent of any such inconsistency.
Financing Statements. Mortgagor shall prepare and deliver to Mortgagee such
financing statements, and shall execute and deliver to Mortgagee such documents,
instruments and further assurances, in each case in form and substance
satisfactory to Mortgagee, as Mortgagee may, from time to time, reasonably
consider necessary to create, perfect and preserve Mortgagee's security interest
hereunder. Mortgagor hereby irrevocably authorizes Mortgagee to cause financing
statements (and amendments thereto and continuations thereof) and any such
documents, instruments and assurances to be recorded and filed, at such times
and places as may be required or permitted by law to so create, perfect and
preserve Mortgagee's security interest in the Mortgaged Property hereunder.
Mortgagor represents and warrants to Mortgagee that Mortgagor's jurisdiction of
organization is the State of [STATE]. After the date of this
31
Mortgage, Mortgagor shall not change its name, type of organization,
organizational identification number (if any), jurisdiction of organization or
location (within the meaning of the UCC) without complying in full with the
terms of the Loan Documents with respect to any such changes.
Fixture Filing. This Mortgage shall also constitute a "fixture filing" for the
purposes of the UCC against all of the Mortgaged Property which is or is to
become fixtures. The information provided in this Section 7.3 is provided so
that this Mortgage shall comply with the requirements of the UCC for a mortgage
instrument to be filed as a financing statement. Mortgagor is the "Debtor" and
its name and mailing address are set forth in the preamble of this Mortgage
immediately preceding Article 1. Mortgagee is the "Secured Party" and its name
and mailing address from which information concerning the security interest
granted herein may be obtained are also set forth in the preamble of this
Mortgage immediately preceding Article 1. A statement describing the portion of
the Mortgaged Property comprising the fixtures hereby secured is set forth in
Section 1.1(c) of this Mortgage. Mortgagor represents and warrants to Mortgagee
that Mortgagor is the record owner of the Mortgaged Property, the employer
identification number of Mortgagor is [ ] and the organizational
----------
identification number of Mortgagor is [ ].
-----------
[INTENTIONALLY OMITTED]
MISCELLANEOUS
Notices. Any notice required or permitted to be given under this Mortgage shall
be given in accordance with Section 10.02 of the Credit Agreement.
Covenants Running with the Land. All Obligations contained in this Mortgage are
intended by Mortgagor and Mortgagee to be, and shall be construed as, covenants
running with the Mortgaged Property. As used herein, "Mortgagor" shall refer to
the party named in the first paragraph of this Mortgage and to any subsequent
owner of all or any portion of the Mortgaged Property. All Persons who may have
or acquire an interest in the Mortgaged Property shall be deemed to have notice
of, and be bound by, the terms of the Credit Agreement and the other Loan
Documents; provided, however, that no such party shall be entitled to any rights
thereunder without the prior written consent of Mortgagee.
Attorney-in-Fact. Mortgagor hereby irrevocably appoints Mortgagee as its
attorney-in-fact, which agency is coupled with an interest and with full power
of substitution, with full authority in the place and stead of Mortgagor and in
the name of Mortgagor or otherwise (a) to execute and/or record any notices of
completion, cessation of labor or any other notices that Mortgagee deems
necessary and appropriate to protect Mortgagee's interest, if Mortgagor shall
fail to do so promptly after written request by Mortgagee, (b) upon the issuance
of a deed pursuant to the foreclosure of this Mortgage or the delivery of a deed
in lieu of foreclosure, to execute all instruments of assignment, conveyance or
further assurance with respect to the Leases, Rents, Deposit Accounts, Property
Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards in favor of
the grantee of any such deed and as may be necessary or desirable for such
purpose, (c) to prepare and file or record financing statements and continuation
statements, and to prepare, execute and file or record applications for
registration and like papers necessary to
32
create, perfect or preserve Mortgagee's security interests and rights in or to
any of the Mortgaged Property, and (d) after the occurrence and during the
continuance of any Event of Default, to perform any obligation of Mortgagor
hereunder; provided, however, that (1) Mortgagee shall not under any
circumstances be obligated to perform any obligation of Mortgagor; (2) any sums
advanced by Mortgagee in such performance shall be added to and included in the
Indebtedness and shall bear interest at the highest rate at which interest is
then computed on any portion of the Indebtedness; (3) Mortgagee as such
attorney-in-fact shall only be accountable for such funds as are actually
received by Mortgagee; and (4) Mortgagee shall not be liable to Mortgagor or any
other person or entity for any failure to take any action which it is empowered
to take under this Section 9.3.
Successors and Assigns. This Mortgage shall be binding upon and inure to the
benefit of Mortgagee, the other Secured Parties and Mortgagor and their
respective successors and assigns. Mortgagor shall not, without the prior
written consent of Mortgagee, assign any rights, duties or obligations
hereunder.
No Waiver. Any failure by Mortgagee or the other Secured Parties to insist upon
strict performance of any of the terms, provisions or conditions of this
Mortgage shall not be deemed to be a waiver of same, and Mortgagee and the other
Secured Parties shall have the right at any time to insist upon strict
performance of all of such terms, provisions and conditions.
Credit Agreement. If any conflict or inconsistency exists between this Mortgage
and the Credit Agreement, the Credit Agreement shall govern.
Release or Reconveyance. Upon payment in full of the Indebtedness and
performance in full of the Obligations or upon a sale or other disposition of
the Mortgaged Property permitted by the Credit Agreement, Mortgagee, at
Mortgagor's request and expense, shall promptly release the liens and security
interests created by this Mortgage or reconvey the Mortgaged Property to
Mortgagor.
Waiver of Stay, Moratorium and Similar Rights. Mortgagor agrees, to the full
extent that it may lawfully do so, that it will not at any time insist upon or
plead or in any way take advantage of any stay, marshalling of assets,
extension, redemption or moratorium law now or hereafter in force and effect so
as to prevent or hinder the enforcement (consistent with the terms of the Credit
Agreement) of the provisions of this Mortgage or the Indebtedness or Obligations
secured hereby, or any rights or remedies provided hereunder in favor of
Mortgagee or any other Secured Party.
Applicable Law. The provisions of this Mortgage regarding the creation,
perfection and enforcement of the liens and security interests herein granted
shall be governed by and construed under the laws of the state in which the
Mortgaged Property is located. All other provisions of this Mortgage shall be
governed by the laws of the State of New York (including, without limitation,
Section 5-1401 of the General Obligations Law of the State of New York).
Headings. The Article, Section and Subsection titles hereof are inserted for
convenience of reference only and shall in no way alter, modify or define, or be
used in construing, the text of such Articles, Sections or Subsections.
33
Severability. If any provision of this Mortgage shall be held by any court of
competent jurisdiction to be unlawful, void or unenforceable for any reason,
such provision shall be deemed severable from and shall in no way affect the
enforceability and validity of the remaining provisions of this Mortgage.
Entire Agreement. This Mortgage and the other Loan Documents embody the entire
agreement and understanding between Mortgagee and Mortgagor relating to the
subject matter hereof and thereof and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof. Accordingly, the Loan Documents may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties. There are
no unwritten oral agreements between the parties.
Mortgagee as Agent; Successor Agents.
Agent has been appointed to act as Agent hereunder by the other Secured Parties.
Agent shall have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain from
taking any action (including, without limitation, the release or substitution of
the Mortgaged Property) in accordance with the terms of the Credit Agreement,
any related agency agreement among Agent and the other Secured Parties
(collectively, as amended, amended and restated, supplemented or otherwise
modified or replaced from time to time, the "Agency Documents") and this
Mortgage. Mortgagor and all other Persons shall be entitled to rely on releases,
waivers, consents, approvals, notifications and other acts of Agent, without
inquiry into the existence of required consents or approvals of the Secured
Parties therefor.
Mortgagee shall at all times be the same Person that is Agent under the Agency
Documents. Written notice of resignation by Agent pursuant to the Agency
Documents shall also constitute notice of resignation as Agent under this
Mortgage. Removal of Agent pursuant to any provision of the Agency Documents
shall also constitute removal as Agent under this Mortgage. Appointment of a
successor Agent pursuant to the Agency Documents shall also constitute
appointment of a successor Agent under this Mortgage. Upon the acceptance of any
appointment as Agent by a successor Agent under the Agency Documents, that
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent as the
Mortgagee under this Mortgage, and the retiring or removed Agent shall promptly
(i) assign and transfer to such successor Agent all of its right, title and
interest in and to this Mortgage and the Mortgaged Property, and (ii) execute
and deliver to such successor Agent such assignments and amendments and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Agent of the liens and security interests created
hereunder, whereupon such retiring or removed Agent shall be discharged from its
duties and obligations under this Mortgage. After any retiring or removed
Agent's resignation or removal hereunder as Agent, the provisions of this
Mortgage and the Agency Documents shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Mortgage while it was Agent
hereunder.
LOCAL LAW PROVISIONS
34
[To Come]
[The remainder of this page has been intentionally left blank]
35
IN WITNESS WHEREOF, Mortgagor has on the date set forth in the acknowledgement
hereto, effective as of the date first above written, caused this instrument to
be duly EXECUTED AND DELIVERED by authority duly given.
MORTGAGOR: [MORTGAGOR], a [ ]
--------
[ ]
--------------
By:
---------------------------------
Name:
Title:
[STATE-APPROPRIATE NOTARY BLOCK]
EXHIBIT A
Legal Description of premises located at [ADDRESS OF PROPERTY]:
EXHIBIT B
PERMITTED ENCUMBRANCES
Those exceptions set forth in Schedule B of that certain policy of title
insurance issued to Mortgagee by Chicago Title Insurance Company on or about the
date hereof pursuant to commitment number [ ].
----------------
EXHIBIT I
FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY AGREEMENT (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "IP Security
Agreement") dated November 20, 2003, is made by the Persons listed on the
signature pages hereof (collectively, the "Grantors") in favor of Bank of
America, N.A., as administrative agent (the "Administrative Agent") for the
Secured Parties (as defined in the Credit Agreement referred to below).
WHEREAS, THL Food Products Co., a Delaware corporation, has entered
into a Credit Agreement dated as of November 20, 2003 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), with THL Food Products Holding Co., a Delaware corporation
("Holdings"), Bank of America, N.A., as the L/C Issuer, the Swing Line Lender
and the Administrative Agent, the other Agents named therein and the Lenders
party thereto. Terms defined in the Credit Agreement and not otherwise defined
herein are used herein as defined in the Credit Agreement.
WHEREAS, as a condition precedent to the making of the Loans and the
issuance of Letters of Credit by the Lenders under the Credit Agreement and the
entry into Secured Hedge Agreements by the Hedge Banks from time to time, each
Grantor has executed and delivered that certain Security Agreement dated
November 20, 2003 made by the Grantors to the Administrative Agent (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Security Agreement").
WHEREAS, under the terms of the Security Agreement, the Grantors have
granted to the Administrative Agent, for the ratable benefit of the Secured
Parties, a security interest in, among other property, certain intellectual
property of the Grantors, and have agreed as a condition thereof to execute this
IP Security Agreement for recording with the U.S. Patent and Trademark Office,
the United States Copyright Office and any other appropriate governmental
authorities.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees as follows:
Section 29. Grant of Security. Each Grantor hereby grants to the
Administrative Agent for the ratable benefit of the Secured Parties a security
interest in all of such Grantor's right, title and interest in and to the
following (the "Collateral"):
(a) the patents and patent applications set forth in Schedule A
hereto (the "Patents");
(b) the trademark and service mark registrations and applications
set forth in Schedule B hereto (provided that no security interest
shall be granted in United States intent-to-use trademark applications
to the extent that, and solely during the period in which, the grant
of a security interest therein would impair the validity or
enforceability of such intent-to-use trademark applications under
2
applicable federal law), together with the goodwill symbolized thereby
(the "Trademarks");
(c) all copyrights, whether registered or unregistered, now owned
or hereafter acquired by such Grantor, including, without limitation,
the copyright registrations and applications and exclusive copyright
licenses set forth in Schedule C hereto (the "Copyrights");
(d) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the foregoing, all rights in the foregoing provided by
international treaties or conventions, all rights corresponding
thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto;
(e) any and all claims for damages and injunctive relief for
past, present and future infringement, dilution, misappropriation,
violation, misuse or breach with respect to any of the foregoing, with
the right, but not the obligation, to sue for and collect, or
otherwise recover, such damages; and
(f) any and all proceeds of, collateral for, income, royalties
and other payments now or hereafter due and payable with respect to,
and supporting obligations relating to, any and all of the Collateral
of or arising from any of the foregoing.
Section 30. Security for Obligations. The grant of a security interest
in, the Collateral by each Grantor under this IP Security Agreement secures the
payment of all Obligations of such Grantor now or hereafter existing under or in
respect of the Loan Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, contract causes of action, costs,
expenses or otherwise.
Section 31. Recordation. Each Grantor authorizes and requests that the
Register of Copyrights, the Commissioner for Patents and the Commissioner for
Trademarks and any other applicable government officer record this IP Security
Agreement.
Section 32. Execution in Counterparts. This IP Security Agreement may
be executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement.
Section 33. Grants, Rights and Remedies. This IP Security Agreement
has been entered into in conjunction with the provisions of the Security
Agreement. Each Grantor does hereby acknowledge and confirm that the grant of
the security interest hereunder to, and the rights and remedies of, the
Administrative Agent with respect to the Collateral are more fully set forth in
the Security Agreement, the terms and provisions of which are incorporated
herein by reference as if fully set forth herein.
3
Section 34. Governing Law. This IP Security Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, each Grantor has caused this IP Security Agreement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
THL FOOD PRODUCTS CO.
By
----------------------------------------------
Title: Chief Financial Officer and Treasurer
Address for Notices:
-------------------------------------------------
-------------------------------------------------
THL FOOD PRODUCTS HOLDINGS CO.
By
----------------------------------------------
Title: Chief Financial Officer and Treasurer
Address for Notices:
-------------------------------------------------
-------------------------------------------------
MICHAEL FOODS OF DELAWARE, INC.
By
----------------------------------------------
Title: Executive Vice President, Chief
Financial Officer and Treasurer
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
CASA TRUCKING, INC.
By
----------------------------------------------
Title: Chief Financial Officer and Vice
President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
CRYSTAL FARMS REFRIGERATED
DISTRIBUTION COMPANY
By
----------------------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
5
KMS DAIRY, INC.
By
----------------------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
MINNESOTA PRODUCTS, INC.
By
----------------------------------------------
Title: Chief Financial Officer and Vice
President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
NORTHERN STAR CO.
By
----------------------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
6
PAPETTI'S HYGRADE EGG PRODUCTS, INC.
By
----------------------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
M.G. WALDBAUM COMPANY
By
----------------------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
FARM FRESH FOODS, INC.
By
----------------------------------------------
Title: Chief Financial Officer and Vice
President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
7
PAPETTI ELECTROHEATING CORPORATION
By
----------------------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
WFC, INC.
By
----------------------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
WISCO FARM COOPERATIVE
By
----------------------------------------------
Title: Vice President - Finance
Address for Notices:
c/o Michael Foods, Inc.
301 Carlson Parkway, Suite 400
Minnetonka, Minnesota 55305
Attn: Mark Witmer
8
EXHIBIT K
FORM OF ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT, dated as of November 20, 2003, made by Michael
Foods, Inc., a Delaware corporation (formerly known as M-Foods Holdings, Inc.,
"Michael Foods"), in favor of BANK OF AMERICA, N.A., as Administrative Agent (in
such capacity, the "Administrative Agent") for the banks and other financial
institutions or entities (the "Lenders") parties to the Credit Agreement
referred to below. All capitalized terms not defined herein shall have the
meanings given to them in such Credit Agreement.
W I T N E S S E T H:
WHEREAS, THL Food Products Co., a Delaware corporation (the
"Company"), THL Food Products Holding Co., a Delaware corporation ("Holdings"),
the Lenders, the Administrative Agent, the other Agents, the Swing Line Lender
and the L/C Issuer named therein have entered into the Credit Agreement dated as
of November 20, 2003 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Company,
Holdings and certain of the Subsidiary Guarantors have entered into the Security
Agreement (as amended, supplemented or otherwise modified from time to time, the
"Security Agreement"), in favor of the Administrative Agent for the benefit of
the Lenders;
WHEREAS, simultaneously herewith, pursuant to the Agreement and Plan
of Merger dated as of October 10, 2003 (the "Merger Agreement") between
Holdings, the Company, M-Foods Investors, LLC, M-Foods Holdings, Inc. ("M-Foods
Holdings"), and certain other stockholders of M-Foods Holdings, the Company has
merged (the "First Merger") with and into M-Foods Holdings with M-Foods Holdings
being the surviving corporation (the "Surviving Corporation") and, immediately
thereupon, Michael Foods, Inc., a Minnesota corporation and wholly-owned direct
subsidiary of M-Foods Holdings ("MFI"), has merged (the "Second Merger", and
together with the First Merger, the "Mergers") with and into the Surviving
Corporation with the Surviving Corporation being the surviving corporation.
Thereafter the Surviving Corporation has changed its name to Michael Foods,
Inc., a Delaware corporation.
WHEREAS, this Assumption Agreement is executed and delivered pursuant
to the Credit Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Credit Agreement. By executing and delivering this Assumption
Agreement, Michael Foods hereby assumes all rights, title, interests,
obligations and liabilities of all and whatever nature of the Company under the
Credit Agreement, the Security Agreement and each of the other Loan Documents
(in furtherance of and in addition to, and not in lieu of, any assumption or
deemed assumption by operation of law) from and after the date hereof with the
same force and effect as if originally the "Borrower" under the Credit Agreement
and a "Grantor" under the Security Agreement and, to the extent the Company was
a party thereto,
9
each other Loan Document. Without limiting the generality of the foregoing,
Michael Foods hereby expressly agrees to observe and perform and be bound by all
of the terms, covenants, representations, warranties, and agreements contained
in the Credit Agreement and each other Loan Document delivered thereunder which
are binding upon, and to be observed or performed by, the Borrower. Michael
Foods hereby ratifies and confirms the validity of, and all of its obligations
and liabilities (including the Obligations) under, the Credit Agreement and such
other Loan Documents. Michael Foods hereby represents and warrants that after
giving effect to this Assumption Agreement, each of the representations and
warranties contained in Section 5 of the Credit Agreement is true and correct in
all material respects on and as of the date hereof.
2. Effect on the Credit Agreement and Loan Documents. On and after the
effectiveness of this Assumption Agreement, each reference in each of the Credit
Agreement and each other Loan Document to the "Borrower," or words to that
effect shall mean and be a reference to Michael Foods and Michael Foods shall be
the "Borrower" for all purposes of the Credit Agreement and the other Loan
Documents.
3. Governing Law. This Assumption Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
4. Loan Document. This Agreement shall constitute a Loan Document.
10
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
MICHAEL FOODS, INC.
(formerly known as M-Foods Holdings, Inc.)
By:
----------------------------------------
Name: John D. Reedy
Title: Chief Financial Officer and
Treasurer
Acknowledged:
THL FOOD PRODUCTS HOLDING CO.
By:
--------------------------------
Name: John D. Reedy
Title: Chief Financial Officer and Treasurer
BANK OF AMERICA, N.A., as Administrative Agent
By:
--------------------------------
Name:
------------------------------