EXHIBIT 10.2
================================================================================
SENIOR UNSECURED TERM LOAN 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,
The Lenders Party Hereto,
BANC OF AMERICA SECURITIES LLC and
DEUTSCHE BANK SECURITIES INC.,
as Joint Lead Arrangers and Joint Book Managers,
and
DEUTSCHE BANK SECURITIES INC. and
UBS SECURITIES LLC,
as Co-Syndication Agents
================================================================================
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms........................................................1
1.02 Other Interpretive Provisions.......................................31
1.03 Accounting Terms....................................................32
1.04 Rounding............................................................32
1.05 References to Agreements and Laws...................................32
1.06 Times of Day........................................................32
1.07 Timing of Payment or Performance....................................32
1.08 Currency Equivalents Generally......................................33
ARTICLE II
THE COMMITMENTS AND TERM LOANS
2.01 The Term Loans......................................................33
2.02 Borrowing, Conversions and Continuations of Term Loans..............33
2.03 Prepayments.........................................................34
2.04 Repayment of Term Loans.............................................36
2.05 Interest............................................................36
2.06 Fees................................................................36
2.07 Computation of Interest and Fees....................................36
2.08 Evidence of Indebtedness............................................37
2.09 Payments Generally..................................................37
2.10 Sharing of Payments.................................................39
ARTICLE III
TAXES, INCREASED COST PROTECTION AND ILLEGALITY
3.01 Taxes...............................................................40
3.02 Illegality..........................................................42
3.03 Inability to Determine Rates........................................42
3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves
on Eurodollar Rate Loans.........................................43
3.05 Funding Losses......................................................44
3.06 Matters Applicable to All Requests for Compensation.................44
3.07 Replacement of Lenders under Certain Circumstances..................45
3.08 Survival............................................................46
ARTICLE IV
CONDITIONS PRECEDENT TO THE TERM LOANS
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws............49
5.02 Authorization; No Contravention.....................................50
5.03 Governmental Authorization; Other Consents..........................50
5.04 Binding Effect......................................................50
5.05 Financial Statements; No Material Adverse Effect....................50
5.06 Litigation..........................................................52
5.07 No Default..........................................................52
5.08 Ownership of Property; Liens........................................52
5.09 Environmental Compliance............................................52
5.10 Insurance...........................................................53
5.11 Taxes...............................................................53
5.12 ERISA Compliance....................................................53
5.13 Subsidiaries; Equity Interests......................................54
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act..............................................54
5.15 Disclosure..........................................................54
5.16 Compliance with Laws................................................55
5.17 Intellectual Property; Licenses, Etc................................55
5.18 Solvency............................................................55
5.19 Tax Shelter Regulations.............................................55
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01 Financial Statements................................................56
6.02 Certificates; Other Information.....................................56
6.03 Notices.............................................................58
6.04 Payment of Obligations..............................................58
6.05 Preservation of Existence, Etc......................................59
6.06 Maintenance of Properties...........................................59
6.07 Maintenance of Insurance............................................59
6.08 Compliance with Laws................................................59
6.09 Books and Records...................................................59
6.10 Inspection Rights...................................................59
6.11 Use of Proceeds.....................................................60
6.12 Covenant to Guarantee Obligations...................................60
6.13 Compliance with Environmental Laws..................................60
ARTICLE VII
NEGATIVE COVENANTS
7.01 Liens...............................................................60
ii
7.02 Investments.........................................................63
7.03 Incurrence of Indebtedness..........................................65
7.04 Fundamental Changes.................................................66
7.05 Asset Sales.........................................................67
7.06 Restricted Payments.................................................68
7.07 Change in Nature of Business........................................72
7.08 Transactions with Affiliates........................................72
7.09 Burdensome Agreements...............................................72
7.10 Use of Proceeds.....................................................73
7.11 Amendments of Organization Documents................................73
7.12 Accounting Changes..................................................73
7.13 Amendment of Merger Agreement.......................................73
7.14 Holding Company.....................................................73
7.15 Prepayments, Amendments of Indebtedness.............................73
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default...................................................73
8.02 Remedies Upon Event of Default......................................75
8.03 Application of Funds................................................76
ARTICLE IX
ADMINISTRATIVE AGENT AND OTHER AGENTS
9.01 Appointment and Authorization of Agents.............................77
9.02 Delegation of Duties................................................77
9.03 Liability of Agents.................................................77
9.04 Reliance by Agents..................................................77
9.05 Notice of Default...................................................78
9.06 Credit Decision; Disclosure of Information by Agents................78
9.07 Indemnification of Agents...........................................79
9.08 Agents in their Individual Capacities...............................79
9.09 Successor Agents....................................................80
9.10 Administrative Agent May File Proofs of Claim.......................80
9.11 Guaranty Matters....................................................81
9.12 Other Agents; Arrangers and Managers................................81
9.13 Appointment of Supplemental Administrative Agents...................81
ARTICLE X
MISCELLANEOUS
10.01 Amendments, Etc.....................................................82
10.02 Notices and Other Communications; Facsimile Copies..................83
10.03 No Waiver; Cumulative Remedies......................................84
10.04 Attorney Costs, Expenses and Taxes..................................84
10.05 Indemnification by the Borrower.....................................85
iii
10.06 Payments Set Aside..................................................86
10.07 Successors and Assigns..............................................86
10.08 Confidentiality.....................................................89
10.09 Setoff..............................................................90
10.10 Interest Rate Limitation............................................90
10.11 Counterparts........................................................90
10.12 Integration.........................................................91
10.13 Survival of Representations and Warranties..........................91
10.14 Severability........................................................91
10.15 Tax Forms...........................................................91
10.16 Governing Law.......................................................93
10.17 Waiver of Right to Trial by Jury....................................93
10.18 Binding Effect......................................................94
SIGNATURES...................................................................S-1
iv
SCHEDULES
I Guarantors
2.01 Commitments and Pro Rata Shares
5.05 Supplement to Interim Financial Statements
5.09 Environmental Matters
5.13 Subsidiaries and Other Equity Investments
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 Term Note
C Compliance Certificate
D Assignment and Assumption
E-1 Parent Guaranty
E-2 Subsidiary Guaranty
F-1 Opinion Matters - Counsel to Loan Parties
F-2 Opinion Matters - Local Counsel to Loan Parties
G Assumption Agreement
v
SENIOR UNSECURED TERM LOAN AGREEMENT
This SENIOR UNSECURED TERM LOAN 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, and BANK OF
AMERICA, N.A., as Administrative Agent.
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 simultaneously with the consummation of
the First Merger, the Lenders make Term Loans to the Company in an aggregate
amount of $135,000,000 to pay, among other things, the cash consideration for
the Acquisition and the First Merger.
The Lenders have indicated their willingness to lend 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 and the Supplemental Administrative Agents (if any).
"Agreement" means this Senior Unsecured Term Loan Agreement.
"Applicable Rate" means a percentage per annum equal to (A) for
Eurodollar Rate Loans, 3.75% and (B) for Base Rate Loans, 2.75%.
"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.
"Asset Sale" means: (i) the sale, lease, conveyance or other
disposition of any assets or rights; provided, that the sale, lease, conveyance
or other disposition of all or substantially all of the assets of Holdings, the
Borrower and its Subsidiaries taken as a whole will be governed by Section
2.03(b)(i) and/or Section 7.04 hereof and not by Section 7.05; and (ii) the
issuance or sale of Equity Interests by any of the Borrower's Subsidiaries or
the sale of Equity Interests in any of its Subsidiaries.
Notwithstanding the foregoing, the following items shall not be deemed
to be Asset Sales:
2
(i) any single transaction or series of related transactions that
involves assets having a fair market value of less than $5,000,000;
(ii) a transfer of assets between or among Holdings and its
Subsidiaries;
(iii) an issuance or sale of Equity Interests by a Subsidiary of the
Borrower to the Borrower or to another Subsidiary of the Borrower;
(iv) the sale, lease, sublease, license, sublicense or consignment, as
the case may be, of equipment, inventory, or other assets in the ordinary
course of business, including leases with a duration of no greater than
twenty-four months with respect to facilities which are temporarily not in
use or pending their disposition;
(v) the sale or other disposition of cash or Cash Equivalents;
(vi) a Restricted Payment or Investment that is permitted by Section
7.06 and/or Section 7.02;
(vii) the licensing of intellectual property to third Persons on
customary terms as determined by the Board of Directors in good faith;
(viii) any sale or disposition of any property or equipment that has
become damaged, worn-out, obsolete, condemned, given over in lieu of deed
or otherwise unsuitable or not required for the ordinary course of the
business of the Borrower and its Subsidiaries; and
(ix) any sale of Equity Interests in, or Indebtedness or other
securities of, a Subsidiary of the Borrower that is not a Guarantor.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit D.
"Assumption Agreement" has the meaning specified in Article IV.
"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.
3
"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 Term Loan that bears interest based on the
Base Rate.
"Board of Directors" means (i) with respect to a corporation, the
board of directors of the corporation or committee thereof authorized to
exercise the power of the board of directors of such corporation; (ii) with
respect to a partnership, the Board of Directors of the general partner of the
partnership; and (iii) with respect to any other Person, the board or committee
of such Person serving a similar function.
"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 the borrowing on the Closing Date 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 Lenders pursuant to
Section 2.01.
"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.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following types of Investments, to
the extent owned by the Borrower or any of its Subsidiaries:
(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;
4
(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;
(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.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980.
5
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Change of Control" shall have the meaning specified in the Senior
Subordinated Notes Indenture.
"Closing Date" means the first date all the conditions precedent in
Article IV are satisfied or waived in accordance therewith.
"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.
"Commitment" means, as to each Lender, its obligation to make Term
Loans to the Borrower pursuant to Section 2.01 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 "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 Lenders shall be
$135,000,000 on the Closing Date, as such amount may be adjusted from time to
time in accordance with the terms of this Agreement.
"Committed Loan Notice" means a notice of (a) the Borrowing, (b) a
conversion of Term Loans from one Type to the other, or (c) 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
2.09(c)(ii).
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"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 clause (vi) of the second sentence of
Section 7.06,
(iii) depreciation and amortization expense,
(iv) letter of credit fees,
6
(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 under the definition of Permitted Debt,
(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,
7
(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,
(xx) losses from discontinued operations not to exceed $2,000,000
during any period of four (4) consecutive fiscal quarters, and
(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, 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 of the Senior Leverage Ratio or
the Interest Coverage Ratio, no more than 15% of the 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. 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,
(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,
8
(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 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.
9
"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 Consolidated
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 2.03, as determined in
accordance with GAAP.
"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.
"Control" has the meaning specified in the definition of "Affiliate."
"Credit Agreement" means that certain Credit Agreement, dated as of
the date hereof, by and among the Borrower, THL Food Products Holding Co., Bank
of America, N.A., as Administrative Agent, Deutsche Bank Securities Inc. and UBS
Securities LLC, as Co-Syndication Agents, and the other Lenders named therein
providing for up to $495,000,000 in term loan borrowings and $100,000,000 of
revolving credit borrowings, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced, restated,
substituted or refinanced in whole or in part from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including adding Subsidiaries of the Borrower as additional
borrowers or guarantors thereunder) all or any portion of the Indebtedness under
such agreement or any successor or replacement agreement and whether by the same
or any other agent, lender or group of lenders.
"Credit Facilities" means one or more debt facilities (including,
without limitation, the Credit Agreement), commercial paper facilities or
indentures, in each case with banks or other institutional lenders or a trustee
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables), letters
of credit or issuances of notes, in each case, as amended, restated, modified,
renewed, refunded, replaced, restated, substituted or refinanced in whole or in
part from time to time.
10
"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 Term 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 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.
"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.
"Dollar" and "$" mean lawful money of the United States.
11
"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, and (ii) 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.
"Equity Contributions" means, collectively, (a) the contribution by
the Sponsor and by the Management Shareholders to Investors LLC of an aggregate
amount not less than $315,000,000, (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 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
12
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.
"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 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,
13
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 Term Loan that bears interest at a rate
based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Excess Proceeds" has the meaning specified in Section 7.05.
"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) net
proceeds of any Permitted Equity Issuance consummated subsequent to the Closing
Date, (c) to the extent not required at such time to prepay the Term Loans
pursuant to Section 2.03(b)(ii), consideration consisting of the Net Proceeds of
any Asset Sale by Holdings or any of its Subsidiaries, (d) net proceeds of the
incurrence or issuance of any Permitted Subordinated Indebtedness permitted
under Section 7.03 and (e) 25% of the amount of Excess Cash Flow (as defined in
the Credit Agreement), or any similar term in any other Credit Agreement, 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 Indebtedness" means Indebtedness outstanding on the date
hereof, other than under the Credit Agreement, the Senior Subordinated Notes
Indenture and this Agreement.
"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
14
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).
"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.
"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.
15
"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 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.
16
"Guaranty" means, collectively, the Parent Guaranty and the Subsidiary
Guaranty.
"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.
"Holdings" has the meaning specified in the introductory paragraph to
this Agreement.
"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;
(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
17
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.
"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 Term Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to such Term
Loan and the Maturity Date; 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 Rate Loan, the last Business Day of each
March, June, September and December and the Maturity Date.
"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.
18
"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) an Asset Sale of any property for less than the fair market
value thereof. 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.
"IRS" means the United States Internal Revenue Service.
"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
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 7.06.
"Junior Financing Documentation" means 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.
"Lender" has the meaning specified in the introductory paragraph to
this Agreement.
19
"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.
"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 Documents" means, collectively, this Agreement, the Notes, the
Guaranty, and 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.
"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.
"Master Agreement" has the meaning specified in the definition of
"Swap Contract".
"Maturity Date" means November 21, 2011.
"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.
"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
20
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 Proceeds" means, the aggregate cash proceeds received by the
Borrower or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale or disposition of such non-cash consideration,
including, without limitation, legal, accounting and investment banking fees,
and sales commissions, and any relocation expenses incurred as a result thereof,
in each case, after taking into account any available tax credits or deductions
and any tax sharing arrangements, and amounts required to be applied to the
repayment of Indebtedness (other than revolving credit Indebtedness, unless
there is a required reduction in commitments), secured by a Lien on the asset or
assets that were the subject of such Asset Sale and any (1) reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP and (2) reserve or payment with respect to 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, severance costs, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.
"Non-Consenting Lender" has the meaning specified in Section 3.07(c).
"Non-Recourse Debt" means Indebtedness:
(i) as to which neither the Borrower nor any of its Subsidiaries (a)
provides credit support of any kind (including any undertaking, agreement
or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise, or (c) constitutes the
lender;
(ii) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against a Subsidiary of
the Borrower) would permit upon notice, lapse of time or both any holder of
any other Indebtedness (other than the Term Loans) of the Borrower or any
of its Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and
(iii) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Borrower or any of
its Subsidiaries.
"Note" means a promissory note of the Borrower payable to any Lender
or its registered assigns, in substantially the form of Exhibit B hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender resulting
from the Term Loans made by such Lender.
"NPL" means the National Priorities List under CERCLA.
21
"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 Term Loan, 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, 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, on any date, the aggregate outstanding
principal amount of the Term Loans after giving effect to the Borrowing and any
prepayments or repayments thereof.
"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 E-1.
"Participant" has the meaning specified in Section 10.07(d).
"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).
22
"Permitted Debt", means
(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 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 Credit Agreement (including
any outstanding commitments thereunder) as in effect as of the date
hereof; and
(v) Permitted Subordinated Indebtedness in an aggregate amount
not to exceed $25,000,000 at any time outstanding;
(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 definition of Permitted
Debt or 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
23
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 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, no Event of Default
shall exist or result therefrom, after giving effect to such Permitted
Acquisition and the incurrence or issuance of such Indebtedness and
such Indebtedness is otherwise permitted under this definition of
Permitted Debt, and, in each case, any Permitted Refinancing of such
Indebtedness;
(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 under Section 7.06;
(xii) Indebtedness incurred by the Borrower or its Subsidiaries
in a Permitted Acquisition or an Asset Sale 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;
24
(xiv) Indebtedness in respect of netting services, overdraft
protections and similar arrangements in each case in connection with
deposit accounts;
(xv) Indebtedness in an aggregate principal amount not to exceed
$20,000,000 at any time outstanding; and
(xvi) Guarantees of the Indebtedness of the Borrower and its
Subsidiaries evidenced by the Credit Agreement as in effect as of the
date hereof;
(c) in the case of the Holdings:
(i) Indebtedness under the Loan Documents;
(ii) Guarantees of the Indebtedness evidenced by the Credit
Agreement (including any outstanding commitments thereunder) as in
effect as the date hereof;
(iii) Permitted Holdco Debt;
(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; and
(vii) Indebtedness of the type described in clauses (b)(viii),
(xi) and (xii) above.
"Permitted Encumbrances" has the meaning specified in deeds of trust,
trust deeds and mortgages entered into by the Loan Parties pursuant to the
Credit Agreement.
"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 (a) extent permitted hereunder and (b)
the net proceeds of which are not required to be applied to the prepayment of
any Credit Facilities.
"Permitted Holdco Debt" means unsecured Indebtedness of Holdings that
(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) days after the
Maturity Date, (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
25
discount notes of a holding company); provided any such Indebtedness shall
constitute Permitted Holdco Debt only if both before and after giving effect to
the issuance or incurrence thereof, no Default or Event of Default shall have
occurred and be continuing.
"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
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 conditions of the Senior Subordinated Notes, (b) will not mature prior
to the date that is ninety-one (91) days after the Maturity Date, (c) has no
scheduled amortization or payments of principal prior to the Maturity Date, and
(d) has covenant, default and remedy provisions no more restrictive, or
mandatory prepayment, repurchase or redemption provisions not 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 both before and after giving effect
to the issuance or incurrence thereof, no Default or Event of Default shall have
occurred and be continuing.
"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.
26
"Pro Forma Effect" means, for purposes of calculating compliance with
clause (a)(vii) of Article IV in respect of the Dairy Disposition, that such
Dairy Disposition and the transactions in connection therewith shall be deemed
to have occurred as of the first day of the applicable period of measurement in
compliance with the following: (a) income statement items (whether positive or
negative) attributable to the property or Person subject to the Dairy
Disposition shall be excluded, and (b) any retirement of Indebtedness.
"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 Commitment of such Lender at such
time and the denominator of which is the amount of the aggregate Commitments at
such time; provided, that if the commitment of each Lender to make Term Loans
has been terminated, 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).
"Register" has the meaning set forth in Section 10.07(c).
"Replacement Assets" means (1) non-current tangible assets that will
be used or useful in a business permitted by Section 7.07 or (2) all or
substantially all of the assets of a business permitted by Section 7.07 or a
majority of the voting Equity Interests of any Person engaged in a business
permitted by Section 7.07 that will become on the date of acquisition thereof a
Subsidiary.
"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.
"Required Lenders" means, as of any date of determination, Lenders
having more than 50% of the aggregate Outstanding Amount of Term Loans;
provided, that any unused Commitments, and the portion of the aggregate
Outstanding Amount of the Term Loans held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.
"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
27
such Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
"Restricted Payment" has the meaning specified in Section 7.06.
"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.
"Senior Debt" means:
(i) all Indebtedness of the Borrower Parties outstanding under the
Credit Agreement (and the other Loan Documents (as defined therein)) and
this Agreement and all Swap Contracts with respect thereto or hereto,
whether outstanding on the date hereof or incurred thereafter;
(ii) all other Indebtedness of the Borrower Parties that is not
subordinated in right of payment to the Obligations hereunder (including,
any guarantee related thereto); and
(iii) all obligations with respect to the items listed in the
preceding clauses (i) and (ii) (including any interest accruing after the
commencement by or against any Loan Party of any proceedings under any Debt
Relief Laws, whether or not such interest is an allowed claim under
applicable law).
"Senior Leverage Ratio" means, with respect to the Borrower Parties,
as of the end of any fiscal quarter of the Borrower Parties 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) which constitutes Senior
Debt of the Borrower Parties on a consolidated basis on the last day of such
period to (b) Consolidated EBITDA.
"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.
28
"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 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).
"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 E-2, together with each
other guaranty and guaranty supplement delivered pursuant to Section 6.12.
"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
29
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).
"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 Facility" means, at any time, (a) prior to the initial advance
of the Term Loans, the aggregate Commitments of all 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 Lender under the Term
Facility.
"Threshold Amount" means $15,000,000.
"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 limitation, the Existing Notes
tendered upon consummation of the Existing Notes Tender Offer, except for
Indebtedness under the Credit Agreement, the Senior Subordinated Notes Indenture
and this Agreement, and the Existing Indebtedness to remain outstanding after
the Closing Date, (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.
30
"Type" means, with respect to a Term Loan, its character as a Base
Rate Loan or a Eurodollar Rate Loan.
"2003 Fourth Quarter" has the meaning set forth in Section 1.03(c).
"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, as
applicable.
"United States" and "U.S." mean the United States of America.
"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.
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.
(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.
31
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 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 is required on a day which is not a Business Day, the date
of such payment (other than as described
32
in the definition of Interest Period) or performance shall extent 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 TERM LOANS
2.01 The Term Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make, on the Closing Date, a single loan
(consisting of a Term Loan) in an amount equal to its Pro Rata Share of the Term
Facility to the Borrower. The Borrowing shall consist of Term Loans made
simultaneously by the Lenders in accordance with their respective Pro Rata
Shares. Amounts borrowed under this Section 2.01 and repaid or prepaid may not
be reborrowed. Term Loans may be Base Rate Loans or Eurodollar Rate Loans, as
further provided herein.
2.02 Borrowing, Conversions and Continuations of Term Loans. (a) The
Borrowing, each conversion of Term 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 the Borrowing of Eurodollar Rate Loans, or any
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 the 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. The Borrowing of, and each
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. The
Borrowing of or each 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 the Borrowing, a conversion of Term Loans from one
Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing (which shall be the Closing Date), conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Term Loans to be borrowed, converted or continued, (iv) the
Type of Term Loans to be borrowed or to which existing Term 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 Term Loan in a
Committed Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the Term 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
33
the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans. If the Borrower requests the Borrowing of, a conversion to, or a
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 Term 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 the Borrowing, each Lender shall make the amount of its
Term 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 Article IV, the 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.
(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 in Section 3.05 in
connection therewith. During the existence of an Event of Default, no Term 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 the Borrowing, all conversions of Term
Loans from one Type to the other, and all continuations of Term Loans as the
same Type, there shall not be more than ten (10) Interest Periods in effect.
(f) The failure of any Lender to make the Term Loan to be made by it
as part of the Borrowing hereunder shall not relieve any other Lender of its
obligation, hereunder to make its Term Loan on the date of such Borrowing, but
no Lender shall be responsible for the failure of any other Lender to make the
Term Loan to be made by such other Lender on the date of the Borrowing.
2.03 Prepayments. (a) Optional. (i) The Borrower may, upon notice to
the Administrative Agent, at any time or from time to time voluntarily prepay
the Term Loans in whole or in part; provided, that to the extent the Borrower
makes a voluntary prepayment of any Term Loans within three (3) years after the
Closing Date, such prepayment shall be made with a
34
premium such that the aggregate amount of such voluntary prepayment shall be in
an amount equal to (1) 103% of the principal amount prepaid if such voluntary
prepayment is made within one (1) year after the Closing Date, (2) 102% of the
principal amount prepaid if such voluntary prepayment is made within two (2)
years after the Closing Date, and (3) 101% of the principal amount prepaid if
such voluntary prepayment is made within three (3) years after the Closing Date.
The prepayment of any Term Loans after the third anniversary of the Closing Date
shall be made without premium or penalty. Any notice of prepayment must be
received by the Administrative Agent not later than 12:30 p.m. (Charlotte, North
Caroline 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 Term 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 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. Any prepayment of a
Base Rate Loan shall be accompanied by all accrued interest thereon.
(ii) Notwithstanding anything to the contrary contained in this
Agreement, the Borrower may rescind any notice of prepayment under Section
2.03(a) above if such prepayment would have resulted from a refinancing of the
total amount of the Term Facility, which refinancing shall not be consummated or
shall otherwise be delayed.
(b) Mandatory. (i) Within ten (10) Business Days after the occurrence
of a Change of Control, the Borrower shall prepay any and all outstanding Term
Loans with a premium such that the aggregate amount of such prepayment shall be
in an amount equal to 101% of the unpaid principal amount of the Term Loans.
(ii) If Holdings or any of its Subsidiaries conducts an Asset Sale
which, after giving effect to Section 7.05 hereof, gives rise to any Excess
Proceeds, the Borrower shall give written notice to the Administrative Agent
thereof on or prior to the date on which the Borrower shall be required to
prepay the Term Loans from such Excess Proceeds and shall prepay an aggregate
principal amount of Term Loans in an amount as indicated in Section 7.05 within
two (2) Business Days of receipt thereof by Holdings or such Subsidiary;
provided, that to the extent the Borrower makes such a mandatory prepayment of
any Term Loans within three (3) years after the Closing Date, such prepayment
shall be made with a premium such that the aggregate amount of such mandatory
prepayment shall be in an amount equal to (1) 103% of the principal amount
prepaid if such mandatory prepayment is made within one (1) year after the
Closing Date, (2) 102% of the principal amount prepaid if such mandatory
prepayment is made within two (2) years after the Closing Date, and (3) 101% of
the principal amount prepaid if such mandatory prepayment is made within three
(3) years after the Closing Date . The prepayment of any Term Loans after the
third anniversary of the Closing Date shall be made without premium or penalty.
35
(iii) Funding Losses, Etc. All prepayments under this Section 2.03
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 2.03(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 2.03(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 the Term Loans in
accordance with this Section 2.03(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
Term Loans in accordance with this Section 2.03(b).
2.04 Repayment of Term Loans. The Borrower shall repay to the
Administrative Agent on the Maturity Date for the ratable account of the Lenders
the aggregate principal amount of all Term Loans outstanding on such date.
2.05 Interest. (a) Subject to the provisions of Section 2.05(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; and (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.
(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.
(c) Interest on each Term 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.
2.06 Fees. 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.
2.07 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
36
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 Term Loan for the day on which the Term
Loan is made, and shall not accrue on a Term Loan, or any portion thereof, for
the day on which the Term Loan or such portion is paid, provided, that any Term
Loan that is repaid on the same day on which it is made shall, subject to
Section 2.09(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.
2.08 Evidence of Indebtedness. (a) The Borrowing 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 Borrowing 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 Term
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 Term Loans and payments with respect thereto.
(b) 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 Section 2.08(a), and by each Lender in its account or
accounts pursuant to Section 2.08(a), 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.
2.09 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
37
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 Term Loan included in the 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 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.
38
A notice of the Administrative Agent to any Lender or the Borrower
with respect to any amount owing under this Section 2.09(c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds
for any Term 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 Borrowing 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 Term Loans are
several and not joint. The failure of any Lender to make any Term Loan 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 Term Loan.
(f) Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Term 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 Term 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 Outstanding Amount of all
Term Loans, in repayment or prepayment of such of the outstanding Term Loans or
other Obligations then owing to such Lender.
2.10 Sharing of Payments. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Term Loans made 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 Term Loans made by them as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Term Loans
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 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
39
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 2.10 and will in each case notify the Lenders
following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section 2.10 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.
ARTICLE III
TAXES, INCREASED COST 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 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").
40
(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
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 Assumption 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
41
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 Term Loan 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), 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 Term 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 the Borrowing
of, or a
42
conversion to or continuation of Eurodollar Rate Loans or, failing that, will be
deemed to have converted such request into a request for 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 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 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 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 Term 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 Term 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
43
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 Term
Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Term 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 Term Loan) to prepay, borrow, continue or convert
any Term 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 Term 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 Term 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.
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
44
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 Term 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 Term 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.
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 Term 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 Term Loans, and (ii) deliver any Notes
evidencing such Term 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 Term Loans, (ii) all obligations of the Borrower owing to the
assigning Lender relating to the Term Loans and participations so assigned shall
be paid in full by the assignee Lender to such assigning Lender concurrently
with such assignment and
45
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 Term Loans, except with respect to indemnification
provisions under this Agreement, which shall survive as to such assigning
Lender.
(c) 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 and (iii) the Required 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 Commitments and repayment of all other
Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO the term loans
The obligation of each Lender to make its advance of Term Loans
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) 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;
(iv) 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;
46
(v) (A) 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 F-1, and as to such other matters
concerning the Loan Parties and the Loan Documents as the
Administrative Agent shall reasonably request and (B) opinions of
local counsel for the Loan Parties, addressed to each Agent and each
Lender, as to the matters set forth in Exhibit F-2, and as to such
other matters concerning the Loan Parties and the Loan Documents as
the Administrative Agent shall reasonably request;
(vi) 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;
(vii) 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;
(viii) 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;
(ix) the financial statements described in Sections 5.05(a), (b)
and (d);
(x) a certified copy of the Sponsor Management Agreement;
(xi) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect;
(xii) 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;
(xiii) (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
47
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;
(xiv) an assumption agreement in substantially the form of
Exhibit G hereto (the "Assumption Agreement"), duly executed by the
Surviving Corporation in connection with the Mergers;
(xv) a Committed Loan Notice relating to the Borrowing; and
(xvi) 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
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 confidential information
memorandum dated October 2003 and used by the Arrangers in connection with
the syndication of the Commitments, 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.
48
(g) Simultaneously with the Borrowing, 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 (i) have received at least $150,000,000 in
gross cash proceeds from the sale of the Senior Subordinated Notes and (ii)
have an availability of at least $595,000,000 under the Credit Agreement.
(k) 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 the
Borrowing, except to the extent that 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.
(l) No Default shall exist, or would result from the proposed
Borrowing or from the application of the proceeds therefrom.
(m) The Administrative Agent shall have received a Committed Loan
Notice in accordance with the requirements hereof.
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
49
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, 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 or (b) the exercise by the Administrative Agent
or any Lender of its rights under the Loan 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,
50
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.
(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, 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
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 Article IV or this Section 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
51
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 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. 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.
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.
(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.
52
(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.
(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.
53
(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.
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 the Borrowings 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
Term Loan, 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 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
54
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. 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 Tax Shelter Regulations. The Borrower does not intend to treat
the Term Loans 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 Term Loans 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 Term
Loan or other Obligation hereunder which is accrued and payable shall remain
unpaid or unsatisfied, 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:
55
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, 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:
56
(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;
(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;
(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 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) promptly after the Borrower has notified the Administrative Agent
of any intention by the Borrower to treat the Term Loans 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;
(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; and
(i) promptly, such additional information regarding the business,
legal, financial or corporate affairs of any Loan Party or any Subsidiary,
or compliance with the terms of the Loan Documents, as the Administrative
Agent or any Lender may from time to time reasonably request.
57
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, 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
58
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 examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at the expense of the Lenders
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
59
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 (2) 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 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 Borrowing as
contemplated by the Preliminary Statements hereto.
6.12 Covenant to Guarantee Obligations. Upon the formation or
acquisition of any new direct or indirect Subsidiaries by any Loan Party, then
the Borrower shall, in each case at the Borrower's expense, 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,
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.
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.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Term
Loan or other Obligation hereunder which is accrued and payable shall remain
unpaid or unsatisfied, 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:
60
(a) Liens pursuant to any collateral documents entered into with
respect to the Credit Agreement and any Credit Facilities;
(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;
(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 of the type described in and to the
extent permitted under clause (b)(v) or clause (b)(xv) of the definition of
Permitted Debt; 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
61
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 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 an Asset Sale
permitted under Section 7.05, in each case, solely to the extent such
Investment or Asset Sale, 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 by clause (b)(vi) or
clause (b)(vii) of the definition of Permitted Debt;
(q) Liens in favor of the Borrower or a Subsidiary of the Borrower
securing Indebtedness consisting of Indebtedness of (A) any Loan
62
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), or (C) 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 (C)
must be expressly subordinated to the Obligations and any Liens in respect
thereof shall be subordinated to the Liens of the Credit Agreement;
(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 by clause (b)(ix) or clause (b)(xii) of the
definition of Permitted Debt;
(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) other Liens securing Indebtedness outstanding in an aggregate
principal amount not to exceed $20,000,000; and
(y) Permitted Encumbrances.
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
63
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;
(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 designed to hedge against
fluctuations in interest rates, foreign exchange rates or commodities
pricing risks incurred in the ordinary course of business and consistent
with prudent business practice and not for speculative purposes;
(h) promissory notes and other non-cash consideration received in
connection with Asset Sales 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
64
and its Subsidiaries pursuant to this Section 7.02(i), shall not
exceed $100,000,000;
(C) 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
(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 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
no Event of Default has occurred and is continuing, 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 proceeds of Permitted Subordinated Indebtedness and (B) Permitted
Equity Issuances in an aggregate amount not to exceed $75,000,000.
7.03 Incurrence of Indebtedness. Directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to (collectively, "incur"), or
permit to be incurred, any Indebtedness, except (a) the Borrower and its
Subsidiaries may incur Senior Debt (and, after a Qualifying IPO, the Borrower
may issue Disqualified Equity Interests) if the Senior Leverage Ratio for the
Borrower's most recently ended four (4) full fiscal quarters for which internal
financial statements are available
65
immediately preceding the date on which such additional Senior Debt is incurred
would have been less than 4.75 to 1.00, (b) the Borrower and its Subsidiaries
may incur Permitted Subordinated Indebtedness (and, after a Qualifying IPO, the
Borrower may issue Disqualified Equity Interests) if the Interest Coverage Ratio
for the Borrower's most recently ended four (4) full fiscal quarters for which
internal financing statements are available immediately preceding the date on
which such Permitted Subordinated Indebtedness is incurred (or such Disqualified
Equity Interests are issued) would have been greater than 2.00:1.00, and (c)
Holdings, the Borrower and its Subsidiaries may incur Permitted Debt; in the
cases of clauses (a) and (b), determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if such Indebtedness had
been incurred or Disqualified Equity Interests had been issued, as the case may
be, at the beginning of such four (4) quarter period.
For purposes of determining compliance with this Section 7.03, in the
event that any proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt, or is entitled to be incurred pursuant to clause
(a) or (b) of this Section 7.03, the Borrower will be permitted to classify such
item of Indebtedness on the date of its incurrence, and from time to time may
reclassify, in any manner that complies with this Section 7.03 at such time.
Indebtedness under the Credit Agreement and Senior Subordinated Notes on the
date hereof shall be deemed to have been incurred on the date hereof in reliance
on the definition of Permitted Debt.
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 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
66
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 Asset Sale,
the purpose of which is to effect an Asset Sale permitted pursuant to
Section 7.05.
7.05 Asset Sales. Consummate, or permit any of its Subsidiaries to
consummate, an Asset Sale unless (a) Holdings, the Borrower or any Subsidiary of
the Borrower, as the case may, be receives consideration at the time of such
Asset Sale at least equal to the fair market value of the assets or Equity
Interests issued or sold or otherwise disposed of, (b) such fair market value is
determined by the Borrower's Board of Directors and evidenced by a resolution of
the Board of Directors set forth in an officers' certificate delivered to the
Administrative Agent, and (c) at least seventy five-percent (75%) of the
consideration therefor received by Holdings, the Borrower or such Subsidiary is
in the form of cash, Cash Equivalents or Replacement Assets or a combination
thereof. For purposes of clause (c) immediately above, each of the following
shall be deemed to be cash:
(a) any liabilities (as shown on Holdings', the Borrower's or such
Subsidiary's most recent balance sheet) of Holdings, the Borrower or any
such Subsidiary (other than contingent liabilities and liabilities that are
by their terms subordinated to the Senior Subordinated Notes or any
guarantees related thereto) that are assumed by the transferee of any such
assets and, in the case of liabilities other than Non-Recourse Debt, where
Holdings, the Borrower and all such Subsidiaries are released from any
further liability in connection therewith; and
(b) any securities, notes or other obligations received by Holdings,
the Borrower or any such Subsidiary from such transferee that are within
one hundred and eighty (180) days of receipt thereof converted by Holdings,
the Borrower or such Subsidiary into cash (to the extent of the cash
received in that conversion).
For purposes of clause (c) above, any liabilities of Holdings, the
Borrower or any such Subsidiary that are not assumed by the transferee of such
assets in respect of which Holdings, the Borrower and all such Subsidiaries are
not released from any future liabilities in connection therewith shall not be
considered consideration.
Within three hundred and sixty-five (365) days after the receipt of
any Net Proceeds from an Asset Sale, the Borrower may apply such Net Proceeds at
its option:
(1) to repay Senior Debt and, if the Senior Debt repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire all or substantially all of the assets of, or a
majority of the voting Equity Interests of, another Person engaged in a
business permitted by Section 7.07;
67
(3) to acquire other assets, including investments in property, or to
make capital expenditures, that, in either case, are used or useful in a
business permitted by Section 7.07; or
(4) any combination of the foregoing.
Pending the final application of any such Net Proceeds, the Borrower
may temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited hereunder.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $15,000,000, the Borrower will
prepay the Term Loans in accordance with Section 2.03(b)(ii). The amount of Term
Loans prepaid will be as more specifically set forth in Section 2.03(b)(ii) plus
accrued and unpaid interest to the date of prepayment, and will be payable in
cash. If the aggregate principal amount of Term Loans exceeds the amount of
Excess Proceeds, the Term Loans shall be prepaid on a pro rata basis based on
the principal amount of the Term Loans. Upon completion of each such prepayment
of the Term Loans the amount of Excess Proceeds shall be reset at zero.
7.06 Restricted Payments. Directly or indirectly, or permit any
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or make any other payment or
distribution on account of Holdings' or any of its Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with
any merger or consolidation involving the Borrower or any of its
Subsidiaries), other than (A) dividends or distributions payable in Equity
Interests (other than Disqualified Equity Interests) of Holdings, the
Borrower or a Subsidiary of the Borrower or (B) dividends or distributions
by any Subsidiary of the Borrower to the Borrower or any of its
Subsidiaries;
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Borrower) any Equity Interests of the Borrower
or Holdings;
(iii) make any payment of principal or premium on or with respect to,
or purchase, redeem, defease or otherwise acquire or retire for value, any
Permitted Holdco Debt, any Permitted Subordinated Indebtedness or the
Senior Subordinated Notes (collectively, "Junior Financing") except a
payment of principal at the stated maturity thereof or in connection with a
Permitted Refinancing otherwise permitted hereunder (all such payments and
other actions set forth in clauses (i) through (iii) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(A) no Default shall have occurred and be continuing or would
occur as a consequence thereof; and
68
(B) the Borrower would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four (4)
fiscal quarters then ended, have been permitted to incur at least
$1.00 of additional Indebtedness under each of clauses (a) and (b)
under Section 7.03; and
(C) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Holdings and its
Subsidiaries after the date hereof (excluding Restricted Payments
permitted by clauses (ii), (iii), (vi), (vii), (viii), (x) and (xi) of
the next succeeding paragraph), is less than the sum, without
duplication, of:
(1) 50% of the Consolidated Net Income of the Borrower for
the period (taken as one accounting period) beginning on the date
hereof and ending on the date of the Borrower's most recently
ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100%
of such deficit), plus
(2) 100% of the aggregate net proceeds (including the fair
market value of property) received by the Borrower subsequent to
the date hereof as a contribution to its common Equity Interests
or from the issue or sale of Equity Interests of the Borrower
(other than net proceeds from the issue and sale of Disqualified
Equity Interests) or from the issuance or sale of convertible or
exchangeable Disqualified Equity Interests or convertible or
exchangeable debt securities of the Borrower that have been
converted into or exchanged for such Equity Interests (other than
Equity Interests (or Disqualified Equity Interests or debt
securities) sold to a Subsidiary of the Borrower).
The preceding provisions will not prohibit:
(i) the payment of any dividend within sixty (60) days after the date
of declaration thereof, if at such date of declaration such payment would
have complied with the provisions of this Agreement;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of Holdings, the Borrower or
any Subsidiary of the Borrower or of any Equity Interests of the Borrower
or Holdings in exchange for, or out of the net proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Borrower)
of, Equity Interests of Holdings or, after a Qualifying IPO, the Borrower
(other than Disqualified Equity Interests); provided, that the amount of
any such net proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded
from clause (C)(2) of the preceding sentence;
69
(iii) the repayment, defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of Holdings, the Borrower or any
Subsidiary with the net proceeds from an incurrence of Permitted
Subordinated Indebtedness;
(iv) the payment of any dividend by a Subsidiary of the Borrower to
the holders of any series or class of its common Equity Interests on a pro
rata basis;
(v) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Borrower or Holdings and any
distribution, loan or advance to Holdings (or by Holdings to Investors LLC)
for the repurchase, redemption or other acquisition or retirement for value
of any Equity Interests of Holdings (or by Investors LLC of its Equity
Interests), in each case held by any former or current employees, officers,
directors or consultants of Holdings, the Borrower or any of its
Subsidiaries or their respective estates, spouses, former spouses or family
members under any management equity plan or stock option or other
management or employee benefit plan upon the death, disability or
termination of employment of such Persons, in an amount not to exceed
$3,000,000 in any calendar year; provided, that the Borrower and Holdings
may carry over and make in subsequent calendar years, in addition to the
amounts permitted for such calendar year, the amount of such purchases,
redemptions or other acquisitions or retirements for value permitted to
have been made but not made in any preceding calendar year up to a maximum
of $9,000,000 in any calendar year; and provided, further that such amount
in any calendar year may be increased by an amount not to exceed (x) the
net proceeds from the sale of Equity Interests (other than Disqualified
Equity Interests) of Holdings, the Borrower (or Investors LLC to the extent
such net proceeds are contributed to the common equity of Holdings) to
employees, officers, directors or consultants of Holdings, the Borrower and
its Subsidiaries that occurs after the date hereof (to the extent the cash
proceeds from the sale of such Equity Interests have not otherwise been
applied to the payment of Restricted Payments pursuant to clause (ii) above
or previously applied to the payment of Restricted Payments pursuant to
this clause (v)) plus (y) the cash proceeds of key man life insurance
policies received by the Borrower and its Subsidiaries after the date
hereof less any amounts previously applied to the payment of Restricted
Payments pursuant to this clause (v); provided, further that cancellation
of Indebtedness owing to Holdings, the Borrower or its Subsidiaries from
employees, officers, directors and consultants of Holdings, the Borrower or
any of its Subsidiaries in connection with a repurchase of Equity Interests
of Investors LLC , Holdings or the Borrower from such Persons will not be
deemed to constitute a Restricted Payment for purposes of this covenant or
any other provisions of this Agreement; provided, further that the net
proceeds from such sales of Equity Interests described in clause (x) of
this clause (v) shall be excluded from clause (C)(2) of the preceding
sentence to the extent such proceeds have been or are applied to the
payment of Restricted Payments pursuant to this clause (v);
(vi) the payment of dividends or other distributions or the making of
loans or advances to Holdings (or by Holdings to Investors LLC) in amounts
required for Holdings (or Investors LLC) to pay franchise taxes and other
fees required to maintain its existence and provide for all other operating
costs of Holdings (and Investors LLC) to the extent attributable to the
ownership or operation of the Borrower and its Subsidiaries,
70
including, without limitation, in respect of director fees and expenses,
administrative, legal and accounting services provided by third parties and
other costs and expenses including all costs and expenses with respect to
filings with the SEC, of up to an aggregate under this clause (vi) of
$500,000 per fiscal year plus any indemnification claims made by directors
or officers of Holdings attributable to the ownership or operation of the
Borrower and its Subsidiaries;
(vii) the payment of dividends or other distributions by the Borrower
to Holdings in amounts required to pay the tax obligations of Holdings
attributable to the Borrower and its Subsidiaries determined as if the
Borrower and its Subsidiaries had filed a separate consolidated, combined
or unitary return for the relevant taxing jurisdiction; provided, that any
refunds received by Holdings attributable to the Borrower or any of its
Subsidiaries shall promptly be returned by Holdings to the Borrower through
a contribution to the Equity Interests of, or the purchase of Equity
Interests (other than Disqualified Equity Interests) of the Borrower from
the Borrower; and provided, further that the amount of any such
contribution or purchase shall be excluded from clause (C)(2) of the
preceding sentence;
(viii) repurchases of Equity Interests deemed to occur upon the
cashless exercise of stock options and warrants;
(ix) other Restricted Payments not otherwise permitted by this Section
7.06 in an aggregate amount not to exceed $30,000,000;
(x) Restricted Payments to holders of equity interests of the Target
Company contemplated by the Merger Agreement, including in connection with
any post-closing purchase price adjustments pursuant to the Merger
Agreement;
(xi) the declaration and payment of dividends and distributions to
holders of any class or series of Disqualified Equity Interests of the
Borrower or any of its Subsidiaries issued or incurred in accordance with
Section 7.03;
(xii) following the first Qualifying IPO of the Borrower or Holdings
after the date of this Agreement, the payment of dividends on the
Borrower's common stock (and, in the case of a Qualifying IPO of Holdings,
solely for the purpose of the payment of dividends to Holdings to enable it
to pay dividends on Holdings' common stock) in an amount not to exceed six
percent (6%) per annum of the gross proceeds of such Qualifying IPO
received by Holdings, or the Borrower;
(xiii) dividends paid after September 30, 2004 in an amount equal to
any reduction in taxes actually realized by the Borrower and its
Subsidiaries in the form of cash refunds or from deductions when applied to
offset income or gain as a direct result of (I) the tender costs, including
the costs of any premium paid or interest expense, incurred in connection
with the Existing Notes Tender Offer, prior to the Mergers, (II) swap
termination costs incurred in connection with terminating interest rate
swap arrangements in respect to Indebtedness being refinanced as
contemplated in the offering memorandum for the Senior Subordinated Notes,
(III) compensation expense incurred in
71
connection with the repurchase or rollover of stock options or transaction
bonuses, or (IV) the write off of deferred financing charges as a result of
the refinancing contemplated in the offering memorandum for the Senior
Subordinated Notes, in the case of each of clauses (I) through (IV) in
connection with the Mergers; provided, that the aggregate amount of
dividends pursuant to this clause (xiii) shall not exceed $30,000,000;
provided, however, that in the case of clauses (ii), (iii), (iv), (v), (vi),
(ix), (xi), (xii), and (xiii) above, no Default or Event of Default has occurred
and is continuing.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by Holdings, the Borrower
or such Subsidiary, as the case may be, pursuant to the Restricted Payment. The
fair market value of any assets or securities that are required to be valued for
the purposes hereof shall, if the fair market value thereof exceeds $2,000,000,
be determined by the Board of Directors whose resolution with respect thereto
shall be delivered to the Administrative Agent. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $15,000,000. Not later than the date of making any
Restricted Payment, the Borrower shall deliver to the Administrative Agent a
certificate of a Responsible Officer stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 7.06 were computed.
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.
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 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 (a) on the date hereof, (b) at the
72
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, (c) representing Indebtedness of a Subsidiary of the
Borrower which is not a Loan Party which is permitted by Section 7.03, or (d) in
connection with any Asset Sale permitted by Section 7.05.
7.10 Use of Proceeds. Use the proceeds of the Borrowing, 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 Amendments of Organization Documents. Amend any of its
Organization Documents in a manner materially adverse to the Administrative
Agent or the Lenders.
7.12 Accounting Changes. Make any change in fiscal year.
7.13 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.
7.14 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 Permitted Holdco Debt, and Indebtedness otherwise
permitted by clause (c) of the definition of Permitted Debt; or
(b) Other than in connection with a Qualifying IPO, permit the
Borrower to be a Subsidiary that is not wholly owned by Holdings.
7.15 Prepayments, Amendments of Indebtedness. (a) Make any payment in
violation of any subordination terms of any Junior Financing Documentation, 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.
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 Term
Loan, or (ii) within five (5) Business Days after the same becomes due, any
interest on any Term Loan or any other amount payable hereunder or with
respect to any other Loan Document; or
73
(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;
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-Acceleration. A default by Holdings, the Borrower or any
Subsidiary under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by Holdings, the Borrower or any of its
Subsidiaries (or the payment of which is guaranteed by the Borrower or any
of its Subsidiaries) whether such Indebtedness or guarantee now exists, or
is created after the date hereof, if that default (i) is caused by a
failure to make any payment when due at final maturity of any such
Indebtedness (a "Payment Default") or (ii) results in the acceleration of
such Indebtedness prior to its express maturity, and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates to the
Threshold Amount or more; 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
74
(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 Commitments),
or purports to revoke or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control; or
(l) Junior Financing Documentation. (i) Any of the Obligations of the
Loan Parties under the Loan Documents for any reason shall cease to be
"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.
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 unpaid principal amount of all outstanding Term 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
75
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; and
(b) 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 Term Loans shall
automatically terminate, the unpaid principal amount of all outstanding Term
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable, 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 Term Loans have automatically become immediately
due and payable), 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;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Term Loans, 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 Term Loans, ratably among the Lenders in proportion
to the respective amounts described in this clause Fourth held by them;
Fifth, 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 on such date, ratably based upon the respective
aggregate amounts of all such Obligations owing to the Administrative Agent
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.
76
ARTICLE IX
ADMINISTRATIVE AGENT AND OTHER AGENTS
9.01 Appointment and Authorization of Agents. Each Lender hereby
irrevocably appoints, designates and authorizes each 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.
9.02 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document 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 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 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
77
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 Article IV, 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 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
78
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. 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
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 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 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, and the
terms "Lender" and "Lenders" include Bank of America in its individual capacity.
79
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 without any other or further act or deed on the part of any other
Lender. 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, 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.
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 Term Loan 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 Term Loans 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 2.06
and 10.04) allowed in such judicial proceeding; and
80
(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 2.06 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 Guaranty Matters. (a) The Lenders irrevocably authorize the
Administrative Agent, at its option and in its discretion, 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.
(b) Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority 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 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-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
81
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) 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 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 2.04 or 2.05 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 Term Loan, or (subject to clause (i) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender directly
affected thereby; 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;
82
(d) change any provision of this Section 10.01 or the definition of
"Required Lenders" without the written consent of each Lender;
(e) 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 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 (ii) 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
Term Loans are being funded by an SPC at the time of such amendment, waiver or
other modification. 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 Term 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).
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 or the Administrative Agent, 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 and the Administrative Agent.
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 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.
83
(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) purportedly given by or on behalf of the Borrower even
if (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
out-of-pocket expenses incurred by any Agent. All amounts due under this Section
10.04 shall be paid within
84
twenty (20) Business Days after invoiced or demand therefor. The agreements in
this Section shall survive the termination of the 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, 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 appointed, and (y) if the interest 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, Term Loan or the use or proposed use of the
proceeds therefrom, 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
85
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 shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the
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 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 Term 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 Term 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 Term Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the outstanding principal balance of the Term 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 $1,000,000, 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
86
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 Term Loans or the Commitment assigned; (iii)
the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and 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 (iv) the assigning Lender shall deliver
any Notes evidencing such Term 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 Term Loans 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 Term 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
87
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 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 2.10 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 Term 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 Term Loan, and (ii) if an SPC
elects not to exercise such option or otherwise fails to make all or any part of
such Term Loan, the Granting Lender shall be obligated to make such Term 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 Term Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Term 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 Term Loan to the
Granting Lender and
88
(ii) disclose on a confidential basis any non-public information relating to its
funding of Term Loans to any rating agency, commercial paper dealer or provider
of any surety or Guarantee or credit or liquidity enhancement to such SPC.
(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 Term 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 Term 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.
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
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 Borrowing. 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
89
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.
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 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 Term 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
90
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 the Borrowing, and shall
continue in full force and effect as long as any Term Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied.
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.
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
91
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 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
92
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
under this Section 10.15 shall survive the termination of the 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.
(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
93
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 that each such Lender 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
provided in Section 7.04.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
94
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: Illegible
Title:
BANK OF AMERICA, N.A., as a Lender
By: /s/ Illegible
---------------------------------------
Name: Illegible
Title:
DEUTSCHE BANK SECURITIES INC.,
as Co-Syndication Agent
By: /s/ Illegible
----------------------------------------
Name: Illegible
Title: Managing Director
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
LENDER
KZH SOLEIL-2 LLC
By: /s/ Dorian Herrera
----------------------------------------
Name: Dorian Herrera
Title: Authorized Agent
EXHIBIT B
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 Senior Unsecured Term Loan 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, 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 Term 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 Note is one of the 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 Note is also entitled to the
benefits of the Guaranty. 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 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
Note and endorse thereon the date, amount and maturity of its Term 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 Note.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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:
----------------------------------
2
LOANS AND PAYMENTS WITH RESPECT THERETO
Amount of Outstanding
Type of Amount of End of Principal or Principal
Term Loan Term Loan Interest Interest Paid Balance Notation
Date Made Made Period This Date This Date Made By
- ---- --------- --------- -------- ------------- ----------- --------
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
EXHIBIT E-1
FORM OF PARENT GUARANTY
PARENT GUARANTY dated as of Dated as of November 20, 2003 (the
"Guaranty") made by THL FOOD PRODUCTS HOLDING CO., a Delaware corporation (the
"Guarantor"), in favor of the Lender 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 Senior Unsecured Term
Loan 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 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 Term Loans by the Lenders under the Credit
Agreement 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 Term Loans, 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 Lender (the Administrative Agent and the
Lenders are herein collectively referred to as the "Lender Parties", and
individually, each a "Lender 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 Lender 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 Lender 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 Lender 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
Lender 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, release or amendment or waiver of, or consent to
departure from, any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(e) any failure of any Lender 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 Lender Party (the Guarantor waiving any duty
on the part of the Lender Parties to disclose such information);
(f) 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
(g) any other circumstance or any existence of or reliance on any
representation by any Lender 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
2
any Lender 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
Lender Party protect or insure any Lien or exhaust any right or take any action
against any Loan Party or any other Person.
(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 Lender 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 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 hereby unconditionally and irrevocably waives any
duty on the part of any Lender 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 Lender Party.
(e) 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.
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 Lender Party against the Borrower, any
other Loan Party or any other insider guarantor, 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 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
3
of the Guaranteed Obligations and all other amounts payable under this Guaranty
and (b) the Maturity Date, such amount shall be received and held in trust for
the benefit of the Lender 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
in trust for the benefit of the Lender Parties in respect of any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising. If
(i) the Guarantor shall make payment to any Lender 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 and
(iii) the Maturity Date shall have occurred, the Lender 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. (a) 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.
(b) The Guarantor has, independently and without reliance upon any
Lender 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, 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
4
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 Lender 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 Lender
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, 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 Lender
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 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.
5
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 and
(ii) the Maturity Date and (b) be binding upon the Guarantor, its successors and
assigns and (c) inure to the benefit of and be enforceable by the Lender Parties
and their successors, transferees and assigns. Without limiting the generality
of clause (c) of the immediately preceding sentence, any Lender 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 Term 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 Lender 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 Lender 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 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.
6
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 E-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 Lender
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 Senior Unsecured Term Loan 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 Administrative Agent, and the other Agents named therein. Each Guarantor may
receive, directly or indirectly, a portion of the proceeds of the Term 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 Term Loans by the Lenders under the Credit
Agreement 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 Term Loans under the Credit Agreement 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 Lender (the
Administrative Agent and the Lenders are herein collectively referred to as the
"Lender Parties", and individually, each a "Lender 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
Lender 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 Lender, 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 Lenders 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 Lender 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 Lender
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
Lender 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, release or amendment or waiver of, or consent to
departure from, any other guaranty, for all or any of the Guaranteed
Obligations;
2
(d) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(e) any failure of any Lender 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 Lender Party (each Guarantor waiving any
duty on the part of the Lender Parties to disclose such information);
(f) 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
(g) any other circumstance or any existence of or reliance on any
representation by any Lender 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 Lender 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
Lender Party protect or insure any Lien or exhaust any right or take any action
against any Loan Party or any other Person.
(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 Lender Party that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other guarantor
or any other Person 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 hereby unconditionally and irrevocably waives any
duty on the part of any Lender 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 Lender Party.
3
(e) 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 Lender Party against the Borrower, any
other Loan Party or any other insider guarantor, 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 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 and (b) the Maturity Date, such amount shall be
received and held in trust for the benefit of the Lender 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 in trust for the benefit of the Lender Parties in
respect of any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (i) any Guarantor shall make payment to any
Lender 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 and (iii) the Maturity Date shall have occurred,
the Lender 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:
4
(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
Lender 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, 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 Lender Parties (other than any Lender that is, at such
time, a Defaulting Lender), (i) 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 Lender Parties under or
in respect of the Loan Documents except as provided in the next succeeding
sentence, (ii) postpone any date fixed for payment hereunder or (iii) 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
5
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, 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 Lender
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
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 and the
Maturity Date and (b) be binding upon each Guarantor, its successors and assigns
and (c) inure to the benefit of and be enforceable by the Lender Parties and
their successors, transferees and assigns. Without limiting the generality of
clause (c) of the immediately preceding sentence, any Lender 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 Term 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 Lender 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
6
assign its rights hereunder or any interest herein without the prior written
consent of the Lender Party.
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.
(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.
7
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
FARM FRESH FOODS, INC.
By
-------------------------------------
Title: 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
Exhibit A
To The
Subsidiary Guaranty
FORM OF SUBSIDIARY GUARANTY SUPPLEMENT
,
--------- -- ----
Bank of America, N.A., as Administrative Agent
[Address of Administrative Agent]
Attention:
---------
Senior Unsecured Term Loan Agreement (the "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 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 Lender (the Administrative Agent and the Lenders are herein
collectively referred to as the "Lender Parties", and individually, each a
"Lender 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 Lender 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 Lender 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 Lender 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 Lender 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 Lender 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 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
-------------------------------------
Title:
EXHIBIT G
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 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, 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 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, to the extent
the Company was a party thereto, 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.
5
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: