EXHIBIT 10.1
EXECUTION COPY
CREDIT AGREEMENT
Dated as of April 10, 2001
among
MICHAEL FOODS, INC.
as Borrower,
M-FOODS HOLDINGS, INC.
and
THE SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE LENDERS
FROM TIME TO TIME PARTY HERETO,
BANK OF AMERICA, N. A.,
as Agent,
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Running Manager,
and
BEAR, STEARNS & CO.,
as Syndication Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS..............................................................................1
1.1 DEFINITIONS.......................................................................1
1.2 COMPUTATION OF TIME PERIODS......................................................33
1.3 ACCOUNTING TERMS.................................................................33
SECTION 2 CREDIT FACILITIES.......................................................................34
2.1 REVOLVING LOANS..................................................................34
2.2 LETTER OF CREDIT SUBFACILITY.....................................................36
2.3 SWINGLINE LOAN SUBFACILITY.......................................................41
2.4 TRANCHE A TERM LOAN..............................................................44
2.5 TRANCHE B TERM LOAN..............................................................46
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES..........................................48
3.1 DEFAULT RATE.....................................................................48
3.2 EXTENSION AND CONVERSION.........................................................48
3.3 PREPAYMENTS......................................................................49
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT..........................52
3.5 FEES.............................................................................52
3.6 CAPITAL ADEQUACY.................................................................54
3.7 LIMITATION ON EURODOLLAR LOANS...................................................54
3.8 ILLEGALITY.......................................................................55
3.9 REQUIREMENTS OF LAW..............................................................55
3.10 TREATMENT OF AFFECTED LOANS......................................................56
3.11 TAXES............................................................................57
3.12 COMPENSATION.....................................................................59
3.13 PRO RATA TREATMENT...............................................................60
3.14 SHARING OF PAYMENTS..............................................................61
3.15 PAYMENTS, COMPUTATIONS, ETC......................................................61
3.16 EVIDENCE OF DEBT.................................................................63
3.17 REPLACEMENT OF AFFECTED LENDERS..................................................63
SECTION 4 GUARANTY................................................................................64
4.1 THE GUARANTY.....................................................................64
4.2 OBLIGATIONS UNCONDITIONAL........................................................65
4.3 REINSTATEMENT....................................................................66
4.4 CERTAIN ADDITIONAL WAIVERS.......................................................66
4.5 REMEDIES.........................................................................66
4.6 RIGHTS OF CONTRIBUTION...........................................................67
4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.......................................68
SECTION 5 CONDITIONS..............................................................................68
5.1 CLOSING CONDITIONS...............................................................68
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT...........................................73
SECTION 6 REPRESENTATIONS AND WARRANTIES..........................................................73
6.1 FINANCIAL CONDITION..............................................................73
6.2 NO MATERIAL CHANGE...............................................................74
6.3 ORGANIZATION AND GOOD STANDING...................................................75
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS....................................75
6.5 NO CONFLICTS.....................................................................75
6.6 NO DEFAULT.......................................................................76
6.7 OWNERSHIP........................................................................76
6.8 INDEBTEDNESS.....................................................................76
6.9 LITIGATION.......................................................................76
6.10 TAXES............................................................................76
6.11 COMPLIANCE WITH LAW..............................................................77
6.12 ERISA............................................................................77
6.13 CORPORATE STRUCTURE; CAPITAL STOCK, ETC..........................................78
6.14 GOVERNMENTAL REGULATIONS, ETC....................................................78
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT...........................................79
6.16 ENVIRONMENTAL MATTERS............................................................79
6.17 INTELLECTUAL PROPERTY............................................................80
6.18 SOLVENCY.........................................................................80
6.19 INVESTMENTS......................................................................80
6.20 BUSINESS LOCATIONS...............................................................81
6.21 DISCLOSURE.......................................................................81
6.22 BROKERS' FEES....................................................................81
6.23 LABOR MATTERS....................................................................81
6.24 NATURE OF BUSINESS...............................................................81
SECTION 7 AFFIRMATIVE COVENANTS...................................................................81
7.1 INFORMATION COVENANTS............................................................82
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.........................................85
7.3 BOOKS AND RECORDS................................................................85
7.4 COMPLIANCE WITH LAW..............................................................85
7.5 PAYMENT OF TAXES AND OTHER CLAIMS................................................85
7.6 INSURANCE........................................................................86
7.7 MAINTENANCE OF PROPERTY..........................................................86
7.8 USE OF PROCEEDS..................................................................87
7.9 AUDITS/INSPECTIONS...............................................................87
7.10 FINANCIAL COVENANTS..............................................................87
7.11 ADDITIONAL GUARANTORS............................................................88
7.12 PLEDGED ASSETS...................................................................88
7.13 INTEREST RATE PROTECTION.........................................................90
7.14 FURTHERANCE ASSURANCES...........................................................90
SECTION 8 NEGATIVE COVENANTS......................................................................90
8.1 INDEBTEDNESS.....................................................................91
8.2 LIENS............................................................................92
8.3 NATURE OF BUSINESS...............................................................95
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC..........................................95
8.5 ASSET DISPOSITIONS...............................................................95
8.6 INVESTMENTS......................................................................96
8.7 RESTRICTED PAYMENTS..............................................................99
8.8 OTHER INDEBTEDNESS..............................................................100
8.9 TRANSACTIONS WITH AFFILIATES....................................................100
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; DAIRY RESTRUCTURING DOCUMENTS............101
8.11 LIMITATION ON RESTRICTED ACTIONS................................................101
8.12 OWNERSHIP OF SUBSIDIARIES.......................................................101
8.13 SALE LEASEBACKS.................................................................102
8.14 NO FURTHER NEGATIVE PLEDGES.....................................................102
SECTION 9 EVENTS OF DEFAULT......................................................................103
9.1 EVENTS OF DEFAULT...............................................................103
9.2 ACCELERATION; REMEDIES..........................................................105
SECTION 10 AGENCY PROVISIONS.....................................................................106
10.1 APPOINTMENT, POWERS AND IMMUNITIES..............................................106
10.2 RELIANCE BY AGENT...............................................................107
10.3 DEFAULTS........................................................................107
10.4 RIGHTS AS A LENDER..............................................................107
10.5 INDEMNIFICATION.................................................................108
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.........................................108
10.7 SUCCESSOR AGENT.................................................................109
10.8 SYNDICATION AGENT...............................................................109
SECTION 11 MISCELLANEOUS.........................................................................109
11.1 NOTICES.........................................................................109
11.2 RIGHT OF SET-OFF; ADJUSTMENTS...................................................111
11.3 BENEFIT OF AGREEMENT............................................................111
11.4 NO WAIVER; REMEDIES CUMULATIVE..................................................113
11.5 EXPENSES; INDEMNIFICATION.......................................................114
11.6 AMENDMENTS, WAIVERS AND CONSENTS................................................115
11.7 COUNTERPARTS....................................................................116
11.8 HEADINGS........................................................................116
11.9 SURVIVAL........................................................................117
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE................................117
11.11 SEVERABILITY....................................................................117
11.12 ENTIRETY........................................................................118
11.13 BINDING EFFECT; TERMINATION.....................................................118
11.14 CONFIDENTIALITY.................................................................118
11.15 SOURCE OF FUNDS.................................................................119
11.16 REGULATION D....................................................................119
11.17 CONFLICT........................................................................119
SCHEDULES
Schedule 1.1A Scheduled Financial Information
Schedule 1.1B Existing Letters of Credit
Schedule 2.1(a) Lenders
Schedule 6.1 Undisclosed Liabilities
Schedule 6.4 Required Consents, Authorizations, Notices and Filings
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13A Corporate Structure
Schedule 6.13B Subsidiaries
Schedule 6.16 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.20(a) Mortgaged Properties
Schedule 6.20(b) Collateral Locations
Schedule 6.20(c) Chief Executive Offices/Jurisdiction of
Incorporation/Principal Places of Business
Schedule 6.22 Broker's Fees
Schedule 6.23 Labor Matters
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
Schedule 8.2 Liens
Schedule 8.6 Investments
Schedule 8.9 Affiliate Transactions
EXHIBITS
Exhibit 1.1A Form of Investor Pledge Agreement
Exhibit 1.1B Form of Pledge Agreement
Exhibit 1.1C Form of Security Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(d) Form of Swingline Note
Exhibit 2.4(f) Form of Tranche A Term Note
Exhibit 2.5(f) Form of Tranche B Term Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(d) Form of Officer's Compliance Certificate
Exhibit 7.11 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of April 10, 2001 (as amended,
modified, restated or supplemented from time to time, the "CREDIT AGREEMENT"),
is by and among MICHAEL FOODS, INC., a Minnesota corporation (the "BORROWER"),
M-FOODS HOLDINGS, INC., a Delaware corporation (the "PARENT"), the Subsidiary
Guarantors (as defined herein), the Lenders (as defined herein), BANK OF
AMERICA, N. A., as Agent for the Lenders (in such capacity, the "AGENT") and
BEAR, STEARNS & CO., as Syndication Agent for the Lenders (in such capacity, the
"SYNDICATION AGENT").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide credit
facilities in an aggregate principal amount of $470,000,000 (the "CREDIT
FACILITIES") for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested Credit
Facilities available to the Borrower on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"ACQUIRED COMPANY" means Michael Foods, Inc., a Minnesota
corporation and, prior to the Closing Date, a public company listed on
NASDAQ National Market.
"ACQUIRED NON-CORE ASSET DISPOSITION" means an Asset
Disposition (other than an Excluded Asset Disposition) of Property
acquired after the Closing Date in a Permitted Acquisition, provided
that (i) such Asset Disposition is consummated within 540 days
following the date of the related Permitted Acquisition and (ii) the
aggregate fair market value of the Property subject to such Asset
Disposition (or series of related Asset Dispositions) is less than
$5,000,000; PROVIDED, HOWEVER, that the term "Acquired Non-Core Asset
Disposition" shall not include any Asset Disposition which is an "Asset
Sale" (or any comparable term) under, and as defined in, any Junior
Financing Documentation.
"ACQUISITION", by any Person, means the acquisition by such
Person of at least a majority of the Capital Stock or all or
substantially all of the Property or a line of business or
division of another Person, whether or not such acquisition involves a
merger or consolidation by the acquiring Person with or into the
acquired Person.
"ADJUSTED BASE RATE" means, with respect to Revolving Loans,
Swingline Loans which are Base Rate Loans and Tranche A Term Loans, the
Base Rate PLUS the Applicable Percentage.
"ADJUSTED EURODOLLAR RATE" means, with respect to Revolving
Loans and Tranche A Term Loans which are Eurodollar Loans, the
Eurodollar Rate PLUS the Applicable Percentage.
"AFFILIATE" means, with respect to any Person, any other
Person (i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly or
indirectly owning or holding ten percent (10%) or more of the Capital
Stock in such Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.
"AGENCY MANAGEMENT ADDRESS" means Bank of America, N.A.,
Agency Management, Mail Code: CA5-701-12-09, 1455 Market Street, San
Francisco, CA 94103, Attn: Christine Cordi, or such other address as
may be identified by written notice from the Agent to the Borrower.
"AGENT" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"AGENT'S FEE LETTER" means that certain fee letter agreement,
dated as of February 15, 2001, between Bank of America, Banc of America
Securities LLC, Banc of America Bridge LLC and the Sponsor, as amended,
modified, restated or supplemented from time to time.
"APPLICABLE LENDING OFFICE" means, for each Lender, the office
of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Borrower by written
notice as the office by which its Eurodollar Loans are made and
maintained.
"APPLICABLE PERCENTAGE" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, Swingline
Loan or Tranche A Term Loan, the applicable rate of the Unused Fee for
any day for purposes of Section 3.5(a), the applicable rate of the
Standby Letter of Credit Fee for any day for purposes of Section
3.5(b)(i) or the applicable rate of the Trade Letter of Credit Fee for
any day for purposes of Section 3.5(b)(ii), the appropriate applicable
percentage corresponding to the Leverage Ratio in effect as of the most
recent Calculation Date:
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===========================================================================================================
APPLICABLE PERCENTAGES
-------------------------------------------------------------------------
FOR REVOLVING LOANS,
SWINGLINE LOANS AND TRANCHE
A TERM LOANS
----------------------------
FOR STANDBY FOR TRADE FOR UNUSED
PRICING LEVERAGE EURODOLLAR BASE RATE LETTER OF LETTER OF FEE
LEVEL RATIO LOANS LOANS CREDIT FEE CREDIT FEE
---------------------------------------------------------------------------------------------------------
I > 4.25 to 1.00 3.00% 2.00% 3.00% 1.50% 0.50%
---------------------------------------------------------------------------------------------------------
< 4.25 to 1.00
-
II but 2.75% 1.75% 2.75% 1.375% 0.50%
> 3.75 to 1.00
---------------------------------------------------------------------------------------------------------
< 3.75 to1.00
-
III but 2.50% 1.50% 2.50% 1.25% 0.50%
> 3.25 to 1.00
---------------------------------------------------------------------------------------------------------
< 3.25 to 1.00 but
-
IV > 2.75 to 1.00 2.25% 1.25% 2.25% 1.125% 0.375%
---------------------------------------------------------------------------------------------------------
V < 2.75 to 1.0 2.00% 1.00% 2.00% 1.00% 0.375%
===========================================================================================================
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "CALCULATION DATE") five Business Days after the
date by which the Credit Parties are required to provide the officer's
certificate in accordance with the provisions of Section 7.1(d) for the
most recently ended fiscal quarter of the Consolidated Parties or, in
the case of the fourth fiscal quarter of any fiscal year, five Business
Days after such earlier date as the Credit Parties shall have delivered
to the Agent financial statements for such fiscal quarter meeting the
requirements of Section 7.1(b) together with a related officer's
certificate meeting the requirements of Section 7.1(d), PROVIDED,
HOWEVER, that (i) the initial Applicable Percentages shall be based on
Pricing Level I and shall remain at Pricing Level I until the
Calculation Date for the fiscal quarter of the Consolidated Parties
ending on September 30, 2001, on and after which time the Pricing Level
shall be determined by the Leverage Ratio as of the last day of the
most recently ended fiscal quarter of the Consolidated Parties
preceding the applicable Calculation Date and (ii) if the Credit
Parties fail to provide the officer's certificate to the Agency
Management Address as required by Section 7.1(d) for the last day of
the most recently ended fiscal quarter of the Consolidated Parties
preceding the applicable Calculation Date, the Applicable Percentage
from such Calculation Date shall be based on Pricing Level I until such
time as an appropriate officer's certificate is provided, whereupon the
Pricing Level shall be determined by the Leverage Ratio as of the last
day of the most recently ended fiscal quarter of the Consolidated
Parties preceding such Calculation Date. Each Applicable Percentage
shall be effective from one Calculation Date until the next Calculation
Date. Any adjustment in the Applicable Percentages shall be applicable
to all existing Loans and Letters of Credit as well as any new Loans
and Letters of Credit made or issued.
"APPLICATION PERIOD" means (i) in respect of the Net Cash
Proceeds of any Asset Disposition (other than an Acquired Non-Core
Asset Disposition), the period of 365 days (or such earlier date as
provided for reinvestment of such proceeds under any Junior
3
Financing Documentation) following the consummation of such Asset
Disposition and (ii) in respect of the Net Cash Proceeds of any Equity
Issuance (other than an Excluded Equity Issuance or a Qualifying IPO),
the period of 365 days (or such earlier date as provided for
reinvestment of such proceeds under any Junior Financing Documentation)
following the consummation of such Equity Issuance.
"ASSET DISPOSITION" means any disposition (including pursuant
to a Sale and Leaseback Transaction) (a) by a Consolidated Party of any
or all of the Property (including without limitation the Capital Stock
of a Subsidiary) of any Consolidated Party whether by sale, lease,
licensing, transfer or otherwise, other than pursuant to any
Involuntary Disposition and (b) by Dairy Holdco of all of the Capital
Stock of Dairy LLC or Dairy TXCT LLC owned by Dairy Holdco; PROVIDED,
HOWEVER, that the term "Asset Disposition" (i) shall not be deemed to
include any Equity Issuance and (ii) shall be deemed to include any
"Asset Sale" (or any comparable term) under, and as defined in, any
Junior Financing Documentation.
"ASSET DISPOSITION PREPAYMENT EVENT" means, (i) with respect
to any Asset Disposition other than an Excluded Asset Disposition or an
Acquired Non-Core Asset Disposition, the failure of the Credit Parties
to apply (or cause to be applied) the Net Cash Proceeds of such Asset
Disposition to Eligible Reinvestments during the Application Period for
such Asset Disposition and (ii) the occurrence of an Acquired Non-Core
Asset Disposition.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning to such
term in Section 11.3(b).
"BANK OF AMERICA" means Bank of America, N. A. and its
successors.
"BANKRUPTCY CODE" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"BANKRUPTCY EVENT" means, with respect to any Person, the
occurrence of any of the following: (i) the entry of a decree or order
for relief by a court or governmental agency having jurisdiction over
such Person in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or the
appointment by a court or governmental agency of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
the ordering of the winding up or liquidation of its affairs by a court
or governmental agency; or (ii) the commencement against such Person of
an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or of any case,
proceeding or other action for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
for the winding up or liquidation of its affairs, and such involuntary
case or other case, proceeding or other action shall remain undismissed
for a period of sixty (60) consecutive days; or (iii) such Person shall
commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such law,
or consent to the appointment of or the taking possession by a
receiver, liquidator, assignee, secured creditor,
4
custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or make any general
assignment for the benefit of creditors; or (iv) such Person shall be
unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"BASE RATE" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of
one percent (0.5%) and (b) the Prime Rate for such day. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or Federal Funds Rate.
"BASE RATE LOAN" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"BORROWER" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"BUSINESS DAY" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close, EXCEPT THAT,
when used in connection with a Eurodollar Loan, such day shall also be
a day on which dealings between banks are carried on in Dollar deposits
in London, England.
"BUSINESSES" means, at any time, a collective reference to the
businesses operated by the Consolidated Parties at such time.
"CALCULATION DATE" shall have the meaning assigned to such
term in the definition of "Applicable Percentage" set forth in this
Section 1.1.
"CAPITAL LEASE" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is required to be accounted for as a
capital lease on the balance sheet of that Person.
"CAPITAL STOCK" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of
a partnership, partnership interests (whether general or limited) and
(iv) in the case of a limited liability company, membership interests.
"CASH EQUIVALENTS" means, as at any date, (1) with respect to
any Consolidated Party, (a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not
more than twelve months from the date of acquisition, (b) Dollar
denominated time deposits and certificates of deposit of (i) any
Lender, (ii) any domestic commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 or (iii) any bank 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 DOMESTIC BANK"), in each case
5
with maturities of not more than twelve (12) months from the date of
acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Domestic Bank (or by the parent company thereof)
or any variable rate notes issued by, or guaranteed by, any 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 and maturing
within twelve (12) months of the date of acquisition, (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,
in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
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 described in the foregoing subdivisions (a) through
(d) and (2) solely with respect to any Foreign Subsidiary, non-Dollar
denominated (a) 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 (b) equivalents of demand deposit accounts
which are maintained with an Approved Foreign Bank.
"CHANGE OF CONTROL" means any of the following events: (a)
prior to a Qualifying IPO, (1) the failure of the Parent to own
directly all of the Capital Stock of the Borrower, (2) the failure of
the Sponsor (A) to own beneficially, directly or indirectly, at least
51% of the outstanding Capital Stock of the Parent initially acquired
in the Transaction and (B) to have the right, directly or indirectly,
by beneficial ownership, contract or otherwise, to elect at least a
majority in number of the members of the Parent's Board of Directors or
(3) less than a majority in number of the sitting members of the
Parent's Board of Directors shall have been elected by the Sponsor, (b)
after a Qualifying IPO, (1) if the IPO Issuer is the Parent, the
failure of the Parent to own directly all of the Capital Stock of the
Borrower, (2) the failure of the Equity Investors to own beneficially,
directly or indirectly, at least 30% of the outstanding Voting Stock of
the IPO Issuer, (3) a person or any group, and any affiliate of any
such person other than the Equity Investors shall beneficially own,
directly or indirectly, an amount of the outstanding Voting Stock of
the IPO Issuer greater than the amount owned by the Equity Investors or
(4) during any period of up to 24 consecutive months, commencing after
the Closing Date, individuals who at the beginning of such 24 month
period were directors of the Parent (or, after a Qualifying IPO, the
IPO Issuer) (together with any new director whose election by the
Parent's (or the IPO Issuer's, as applicable) Board of Directors or
whose nomination for election by the Parent's (or the IPO Issuer's, as
applicable) shareholders was approved by the Equity Investors or a vote
of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of the
6
Parent (or the IPO Issuer, as applicable) then in office or (c) if any
Subordinated Debt or Qualified Preferred Stock shall have been issued,
the occurrence of a "Change of Control" (or any comparable term) under,
and as defined in, any Junior Financing Documentation. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange
Act.
"CLOSING DATE" means the date hereof.
"CODE" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"COLLATERAL" means a collective reference to all real and
personal Property (other than Excluded Property) with respect to which
Liens in favor of the Agent are purported to be granted pursuant to and
in accordance with the terms of the Collateral Documents.
"COLLATERAL DOCUMENTS" means a collective reference to the
Investor Pledge Agreement, the Pledge Agreement, the Security Agreement
and the Mortgage Instruments.
"COMMITMENT" means (i) with respect to each Lender, the
Revolving Commitment of such Lender, the Tranche A Term Loan Commitment
and the Tranche B Term Loan Commitment of such Lender, (ii) with
respect to the Issuing Lender, the LOC Commitment and (iii) with
respect to the Swingline Lender, the Swingline Commitment.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for the applicable
period, all capital expenditures of the Consolidated Parties on a
consolidated basis for such period, as determined in accordance with
GAAP; PROVIDED, HOWEVER, that Consolidated Capital Expenditures shall
not include any such expenditures which constitute (a) a Permitted
Acquisition, (b) capital expenditures relating to the construction or
acquisition of any Property which has been transferred to a Person that
is not a Consolidated Party pursuant to a Sale and Leaseback
Transaction permitted under Section 8.13 or (c) to the extent permitted
by this Credit Agreement, an Eligible Reinvestment of the Net Cash
Proceeds of any Asset Disposition (other than an Asset Dispositions of
the type described in clauses (i), (viii) and (ix) of the definition of
"Excluded Asset Disposition"), Involuntary Disposition or Equity
Issuance; PROVIDED, FURTHER, that Consolidated Capital Expenditures for
each of the fiscal quarters ending on September 30, 2000 and December
31, 2000 shall be equal to the amount indicated for Consolidated
Capital Expenditures for such quarter on SCHEDULE 1.1A.
"CONSOLIDATED CASH INTEREST EXPENSE" means, as of any date for
the applicable period ending on such date with respect to the
Consolidated Parties on a consolidated basis, interest expense
(including the amortization of debt discount and premium, the interest
component under Capital Leases and the implied interest component under
Synthetic Leases, but excluding, to the extent included in interest
expense, (i) fees and expenses associated with the consummation of the
Transaction, (ii) annual agency fees described in the Agent's Fee
Letter, (iii) costs associated with obtaining Hedging Agreements and
7
(iv) fees and expenses associated with any Permitted Investment, 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; PROVIDED, HOWEVER, that Consolidated Cash
Interest Expense for each of the fiscal quarters ending on September
30, 2000, December 31, 2000 and March 31, 2001 shall be equal to the
amount indicated for Consolidated Cash Interest Expense for such
quarter on SCHEDULE 1.1A.
"CONSOLIDATED CASH TAXES" means, as of any date for the
applicable period ending on such date with respect to the Consolidated
Parties on a consolidated basis, the aggregate of all income, franchise
and similar taxes, as determined in accordance with GAAP, to the extent
the same are payable in cash with respect to such period; PROVIDED,
HOWEVER, that Consolidated Cash Taxes for each of the fiscal quarters
ending on September 30, 2000, December 31, 2000 and March 31, 2001
shall be equal to the amount indicated for Consolidated Cash Taxes for
such quarter on SCHEDULE 1.1A.
"CONSOLIDATED EBITDA" 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 (i) Consolidated Net Income, PLUS (ii)
an amount which, in the determination of Consolidated Net Income for
such period, has been deducted for, without duplication, (A) total
interest expense, (B) income, franchise and similar taxes and any tax
distributions permitted to be made pursuant to Section 8.7(c), (C)
depreciation and amortization expense, (D) letter of credit fees, (E)
non-cash expenses resulting from any employee benefit or management
compensation plan or the grant of stock and stock options to employees
of the Parent, 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, (F) all extraordinary charges,
(G) non-cash amortization of financing costs of the Borrower and its
Subsidiaries, (H) one-time cash expenses incurred in connection with
the Transaction or, to the extent permitted hereunder, any Permitted
Investment, Equity Issuance or Debt Issuance (whether or not
consummated), (I) any losses (or minus any gains) realized upon the
disposition of Property outside of the ordinary course of business, (J)
to the extent actually reimbursed, expenses incurred to the extent
covered by indemnification provisions in any agreement in connection
with a Permitted Acquisition (or in any similar agreement related to
any other Acquisition consummated prior to the Closing Date), (K) to
the extent covered by insurance, expenses with respect to liability or
casualty events, business interruption or product recalls, (L)
management fees, (M) 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 Permitted Investment, (N) other
non-cash expenses (excluding any non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period), (O) non-cash losses from Joint Ventures and non-cash minority
interest reductions, (P) fees and expenses in connection with the
exchange of the Subordinated Notes for notes with identical terms as
permitted by Section 8.8, (Q) non-cash, non-recurring charges, (R)
other non-recurring charges in an aggregate amount not to exceed
$2,000,000 during any four consecutive fiscal quarter period, (S)
expenses representing the implied principal component under Synthetic
Leases, and (T) expenses in connection with payments made by any
Consolidated Party with respect to industrial revenue bond financings
and Guaranty Obligations in respect thereof MINUS (iii) an amount
which, in the determination of Consolidated Net Income, has been
included for (A) all extraordinary gains and non-cash
8
income during such period and (B) any gains realized upon the
disposition of Property outside of the ordinary course of business
PLUS/MINUS (iv) unrealized losses/gains in respect of Hedging
Agreements, all as determined in accordance with GAAP; PROVIDED,
HOWEVER, that, notwithstanding any other provision to the contrary
contained in this Credit Agreement, for purposes of any calculation
made under the financial covenants set forth in Section 7.10 (including
for purposes of the definition of "Pro Forma Basis" set forth in
Section 1.1, but excluding for purposes of the definition of
"Applicable Percentage" set forth in Section 1.1), no more than 15% of
total Consolidated EBITDA for the applicable period shall be
attributable to the Foreign Subsidiaries and/or Investments in Joint
Ventures.
"CONSOLIDATED NET INCOME" means, as of any date for the
applicable period ending on such date with respect to the Consolidated
Parties 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 the Consolidated Parties
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 Capital Stock of such Joint Venture held
by the Consolidated Parties), as determined in accordance with GAAP.
"CONSOLIDATED PARTIES" means a collective reference to the
Parent 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 Funded Indebtedness during such period
(including the implied principal component of payments due on Capital
Leases during such period and Synthetic Leases, less the reduction for
all voluntary prepayments or mandatory prepayments required pursuant to
Section 3.3, in each case as applied pursuant to Section 3.3), as
determined in accordance with GAAP; PROVIDED, HOWEVER, that
Consolidated Scheduled Funded Debt Payments for each of the fiscal
quarters ending on September 30, 2000, December 31, 2000 and March 31,
2001 shall be equal to the amount indicated for Consolidated Scheduled
Funded Debt Payments for such quarter on SCHEDULE 1.1A.
"CONSOLIDATED TOTAL ASSETS" means, as of any date with respect
to the Consolidated Parties on a consolidated basis, total assets, as
determined in accordance with GAAP.
"CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from
one Interest Period to the next Interest Period.
"CONVERT", "CONVERSION" and "CONVERTED" shall refer to a
conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
inclusive, of a Base Rate Loan into a Eurodollar Loan.
9
"CREDIT DOCUMENTS" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter and the Collateral Documents (in each case as the
same may be amended, modified, restated, supplemented, extended,
renewed or replaced from time to time), and "CREDIT DOCUMENT" means any
one of them.
"CREDIT FACILITIES" shall have the meaning assigned to such
term in the recitals hereto.
"CREDIT PARTIES" means a collective reference to the Borrower
and the Guarantors, and "CREDIT PARTY" means any one of them.
"CREDIT PARTY OBLIGATIONS" means, without duplication, (i) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement or any of the other Credit Documents (including, but not
limited to, any interest accruing after the occurrence of a Bankruptcy
Event with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (ii) all
liabilities and obligations, whenever arising, owing from any Credit
Party to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.
"DAIRY HOLDCO" means M-Foods Dairy Holdings, LLC, a Delaware
limited liability company.
"DAIRY LLC" means M-Foods Dairy, LLC, a Delaware limited
liability company.
"DAIRY RESTRUCTURING" means a collective reference to (i) the
transfer by certain of the Consolidated Parties to Dairy LLC and Dairy
TXCT LLC on or prior to the Closing Date of substantially all of the
assets constituting the dairy division of the Borrower and its
subsidiaries pursuant to the terms of the Dairy Restructuring
Documents, (ii) the issuance by Dairy LLC and Dairy TXCT LLC to Dairy
Holdco on the Closing Date of non-voting common Capital Stock
constituting 95% of all of the common Capital Stock of Dairy LLC and
Dairy TXCT LLC, as applicable, (iii) the issuance by Dairy LLC on or
prior to the Closing Date to certain of the Credit Parties of 100% of
all of the voting preferred Capital Stock of Dairy LLC and (iv) the
issuance by Dairy TXCT LLC on or prior to the Closing Date to certain
of the Credit Parties of 100% of all of the voting preferred Capital
Stock of Dairy TXCT LLC.
"DAIRY RESTRUCTURING DOCUMENTS" means a collective reference
to (a) that certain Dairy Contribution Agreement dated April 10, 2001
among Dairy Holdco, Dairy LLC, and Kohler Mix Specialties, Inc., (b)
that certain Bill of Sale dated April 10, 2001 between Dairy LLC and
Kohler Mix Specialties, Inc., (c) that certain Instrument of Assumption
dated April 10, 2001 between Dairy LLC and Kohler Mix Specialties,
Inc., (d) that certain Dairy Contribution Agreement dated April 10,
2001 among Dairy Holdco, Dairy TXCT LLC, Kohler Mix Specialties of
Connecticut, Inc., and Midwest Mix, Inc., (e) that certain Bill of Sale
dated April 10, 2001 among Dairy TXCT LLC, Kohler Mix Specialties of
Connecticut, Inc., and Midwest Mix, Inc., (f) that certain Instrument
of Assumption dated April 10, 2001 among Dairy TXCT LLC, Kohler Mix
Specialties of
10
Connecticut, Inc., and Midwest Mix, Inc., and (g) that certain Letter
of Direction dated April 10, 2001 among by Dairy Holdco, Dairy LLC and
Dairy TXCT LLC.
"DAIRY TXCT LLC" means M-Foods Dairy TXCT, LLC, a Delaware
limited liability company.
"DEBT ISSUANCE" means the issuance by any Consolidated Party
of any Indebtedness for borrowed money.
"DEBT ISSUANCE PREPAYMENT EVENT" means the receipt by any
Consolidated Party of proceeds from any Debt Issuance other than an
Excluded Debt Issuance.
"DEFAULT" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" means, at any time, any Lender that (a)
has failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement within one Business Day
of when due, (b) other than as set forth in (a) above, has failed to
pay to the Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Credit Agreement within one Business Day of when
due, unless such amount is subject to a good faith dispute or (c) has
been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or with respect to which (or with respect to any
of the assets of which) a receiver, trustee or similar official has
been appointed.
"DOLLARS" and "$" means dollars in lawful currency of the
United States.
"DOMESTIC SUBSIDIARY" means any direct or indirect Subsidiary
of the Borrower that was formed under the laws of the United States or
any state thereof or the District of Columbia.
"EGG PRODUCTS INSPECTION ACT" means the Egg Products
Inspection Act, as amended, 21 U.S.C. Section 1031, ET SEQ., and its
implementing regulations.
"ELIGIBLE ASSIGNEE" means (i) a Lender; (ii) unless an
assignment to such Person would result in any increased cost to the
Borrower under Section 3.6, 3.9 or 3.11, an Affiliate of a Lender or,
with respect to any Lender that is a fund that invests in bank loans,
any other fund that invests in bank loans which is an "accredited
investor" and is managed or advised by the same investment advisor that
manages or advises such Lender or by an Affiliate of such investment
advisor; and (iii) any other Person approved by the Agent and, unless
an Event of Default under Section 9.1(a), (c)(i) or (f) exists at the
time any assignment is effected in accordance with Section 11.3, the
Borrower (such approval by the Agent or the Borrower not to be
unreasonably withheld or delayed and such approval to be deemed given
by the Borrower if no objection is received by the assigning Lender and
the Agent from the Borrower within two (2) Business Days after
confirmation (such confirmation not to be unreasonably withheld or
delayed) by an Executive Officer of the Borrower of receipt of notice
of such proposed assignment by the assigning Lender); PROVIDED,
HOWEVER, that neither the Borrower nor an Affiliate of the Borrower
shall qualify as an Eligible Assignee and in no event shall a
competitor,
11
customer or supplier of any Consolidated Party or Affiliate thereof be
an Eligible Assignee.
"ELIGIBLE REINVESTMENT" means (i) any acquisition (whether or
not constituting a capital expenditure, but not constituting an
Acquisition) by a Consolidated Party of assets or any business (or any
substantial part thereof) used or useful in the same or a substantially
similar line of business as the Consolidated Parties were engaged in on
the Closing Date (or any reasonable extensions or expansions thereof)
and (ii) any Permitted Acquisition. If any Subordinated Debt or
Qualified Preferred Stock shall have been issued, the term "Eligible
Reinvestment" shall not include any item which is not a permitted
application of proceeds of an "Asset Sale" (or any comparable term)
under, and as defined in, any Junior Financing Documentation.
"ENVIRONMENTAL LAWS" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws (including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), the Resource Conservation and
Recovery Act of 1976, the Toxic Substances Control Act, the Water
Pollution Control Act, the Clean Air Act and the Hazardous Materials
Transportation Act), regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements
or other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.
"EQUITY INVESTORS" means a collective reference to (i) the
Sponsor, (ii) Marathon Fund Limited Partnership IV and (iii) certain
executives and beneficial and record shareholders of the Acquired
Company described in the Merger Agreement, and "EQUITY INVESTOR" means
any one of them.
"EQUITY ISSUANCE" means any issuance for cash by any
Consolidated Party to any Person of (a) shares of its Capital Stock,
(b) any shares of its Capital Stock pursuant to the exercise of options
or warrants, (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity or (d) any options or
warrants relating to its Capital Stock. An "Asset Disposition" shall
not be deemed to be an Equity Issuance.
"EQUITY ISSUANCE PREPAYMENT EVENT" means, (i) with respect to
any Equity Issuance other than an Excluded Equity Issuance or an Equity
Issuance constituting a Qualifying IPO, the failure of the Credit
Parties to apply (or cause to be applied) the Net Cash Proceeds of such
Equity Issuance to Eligible Reinvestments during the Application Period
for such Equity Issuance and (ii) with respect to any Equity Issuance
constituting a Qualifying IPO, the receipt by any Consolidated Party of
Net Cash Proceeds from such Equity Issuance.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations
12
thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA AFFILIATE" means an entity which is under common
control with any Consolidated Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes any
Consolidated Party and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA EVENT" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by any Consolidated Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year in which it was a substantial
employer (as such term is defined in Section 4001(a)(2) of ERISA), or
the termination of a Multiple Employer Plan; (iii) the distribution of
a notice of intent to terminate or the actual termination of a Plan
pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution
of proceedings to terminate or the actual termination of a Plan by the
PBGC under Section 4042 of ERISA; (v) any event or condition which
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; (vi) the complete or partial withdrawal of any Consolidated Party
or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions
for imposition of a lien under Section 302(f) of ERISA exist with
respect to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section
307 of ERISA.
"EURODOLLAR LOAN" means any Loan that bears interest at a rate
based upon the Eurodollar Rate.
"EURODOLLAR RATE" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to be
equal to the quotient obtained by dividing (a) the Interbank Offered
Rate for such Eurodollar Loan for such Interest Period by (b) 1 minus
the Eurodollar Reserve Requirement for such Eurodollar Loan for such
Interest Period.
"EURODOLLAR RESERVE REQUIREMENT" means, at any time, the
maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental, or emergency reserves) are required to
be maintained under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Eurodollar Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by
reference to which the Eurodollar Rate is to be determined, or (ii) any
category of extensions of credit or other assets which include
Eurodollar Loans. The Eurodollar Rate shall be adjusted automatically
on and as of the effective date of any change in the Eurodollar Reserve
Requirement.
"EVENT OF DEFAULT" shall have the meaning assigned to such
term in Section 9.1.
13
"EXCESS CASH FLOW" means, with respect to any fiscal year
period of the Consolidated Parties on a consolidated basis, an amount
equal to (i) Consolidated EBITDA MINUS (ii) without duplication, (A)
Consolidated Capital Expenditures, (B) Consolidated Cash Interest
Expense, (C) Consolidated Cash Taxes, including cash payments for
Federal, state and other income tax liabilities incurred prior to the
Closing Date, (D) Consolidated Scheduled Funded Debt Payments, (E)
without duplication of any item included under clause (B) above,
Restricted Payments made by the Consolidated Parties other than with
the proceeds of any Equity Issuance, to the extent that such Restricted
Payments are permitted to be made under Section 8.7, (F) voluntary
prepayments of any Indebtedness (other than the Credit Party
Obligations), PROVIDED that (1) such prepayments are otherwise
permitted hereunder and (2) if such Indebtedness consists of a
revolving line of credit, the commitments under such line of credit are
permanently reduced by the amount of such prepayment, (G) letter of
credit fees, (H) proceeds received by the Consolidated Parties from
insurance claims with respect to casualty events, business interruption
or product recalls which reimburse prior business expenses, (I) all
extraordinary cash charges, (J) cash payments made in satisfaction of
non-current liabilities, (K) one-time cash expenses incurred in
connection with the Transaction or, to the extent permitted hereunder,
any Permitted Investment, Equity Issuance or Debt Issuance (whether or
not consummated), (L) fees and expenses in connection with the exchange
of the Subordinated Notes for notes with identical terms as permitted
by Section 8.8, (M) cash indemnity payments received pursuant to
indemnification provisions in any agreement in connection with a
Permitted Acquisition (or in any similar agreement related to any other
Acquisition consummated prior to the Closing Date), (N) non-cash,
non-recurring charges, (O) other non-recurring charges in an aggregate
amount not to exceed $2,000,000 during any four consecutive fiscal
quarter period, (P) expenses in connection with payments made by any
Consolidated Party with respect to industrial revenue bond financings
and Guaranty Obligations in respect thereof, (Q) expenses incurred in
connection with deferred compensation arrangements in connection with
the Transaction, (R) management fees permitted to be made under Section
8.9 and (S) expenses representing the implied principal component under
Synthetic Leases PLUS/MINUS (iii) changes in working capital; PROVIDED,
HOWEVER, solely with respect to the calculation of Excess Cash Flow for
fiscal year 2001, the applicable period for measuring the components
thereof shall commence on the Closing Date and end on December 31,
2001).
"EXCESS PROCEEDS" shall have the meaning assigned to such term
in Section 7.6(b).
"EXCLUDED ASSET DISPOSITION" means, with respect to any
Consolidated Party, any Asset Disposition consisting of (i) the sale,
lease, license, transfer or other disposition of inventory or other
assets in the ordinary course of such Consolidated Party's business,
(ii) the sale, lease, license, transfer or other disposition of
Property no longer used or useful in the conduct of such Consolidated
Party's business, (iii) any Involuntary Disposition by such
Consolidated Party, (iv) any sale, lease, license, transfer or other
disposition of Property by such Consolidated Party to any Credit Party,
PROVIDED that the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may
reasonably request so as to cause the Credit Parties to be in
compliance with the terms of Section 7.12 after giving effect to such
transaction, (v) any portion of an Asset Disposition by such
Consolidated Party constituting a Permitted Investment, (vi) if such
Consolidated Party is not a Credit Party, any sale, lease, license,
14
transfer or other disposition of Property by such Consolidated Party to
any Consolidated Party that is not a Credit Party, (vii) the sale or
disposition of Cash Equivalents for fair market value, (viii) any sale
of accounts receivable in connection with the compromise thereof, (ix)
the assignment of past due accounts for collection or (x) the licensing
of Intellectual Property to third Persons on customary terms as
determined by the licensor's board of directors in good faith;
PROVIDED, HOWEVER, that the term "Excluded Asset Disposition" shall not
include any Asset Disposition to the extent of the portion of the
proceeds of such Asset Disposition that would be required under any
Junior Financing Documentation to be applied to permanently retire
Indebtedness of the Consolidated Parties.
"EXCLUDED DEBT ISSUANCE" means any Debt Issuance permitted by
Section 8.1.
"EXCLUDED EQUITY ISSUANCE" means (i) any Equity Issuance by
any Consolidated Party to any other Consolidated Party, the Sponsor or
its Affiliates or designated co-investors or any of the officers,
directors or employees of a Consolidated Party, (ii) any Equity
Issuance by the Parent to the seller of a business acquired in a
Permitted Acquisition, (iii) any Equity Issuance by the Parent the
proceeds of which are used to finance a Permitted Acquisition or an
Investment in Joint Ventures and Foreign Subsidiaries permitted under
Section 8.6, (iv) any issuance of directors' qualifying shares or any
similar issuance, (v) any Equity Issuance to a lender in connection
with a related financing permitted hereunder, (vi) any Equity Issuance
pursuant to the exercise of options or warrants or conversion of any
debt securities to equity, (vii) any Equity Issuance in connection with
a contemporaneous repurchase of Capital Stock or (viii) any Equity
Issuance by the Parent, Dairy LLC or Dairy TXCT LLC to Dairy Holdco;
PROVIDED, HOWEVER, that the term "Excluded Equity Issuance" shall not
include any Equity Issuance to the extent of the portion of the
proceeds of such Equity Issuance that would be required under any
Junior Financing Documentation to be applied to permanently retire
Indebtedness of the Consolidated Parties.
"EXCLUDED PROPERTY" means, with respect to any Credit Party,
including any Person that becomes a Credit Party after the Closing Date
as contemplated by Section 7.11, (i) any owned or leased real or
personal Property of such Credit Party which is located outside of the
United States (other than that portion of the Capital Stock of Material
Foreign Subsidiaries required to be pledged to the Agent pursuant to
Section 7.12), (ii) any owned real Property of such Credit Party which
has a net book value of less than $1,000,000, PROVIDED that the
aggregate net book value of all real Property of all of the Credit
Parties excluded pursuant to this clause (ii) shall not exceed
$10,000,000, (iii) any leased real Property of such Credit Party which
(a) is designated as an "Excluded Property" on SCHEDULE 6.20(a) or (b)
at the written request of the Borrower, the Agent has agreed in writing
in its reasonable discretion is not material, (iv) any leased personal
Property of such Credit Party, (v) any Property of such Credit Party
which, subject to the terms of Section 8.11 and Section 8.14, is
subject to a Lien of the type described in Section 8.2(g), Section
8.2(q) or, to the extent constituting a Lien of the type described in
Section 8.2(g) or Section 8.2(q), Section 8.2(x) pursuant to documents
which prohibit such Credit Party from granting any other Liens in such
Property, (vi) owned motor vehicles of such Credit Party, PROVIDED that
the aggregate net book value of all owned motor vehicles of all of the
Credit Parties excluded pursuant to this clause (vi) shall not exceed
$7,500,000, (vii) contract rights (and related assets) under contracts
15
pertaining to the provision of goods or services to a Consolidated
Party and in respect of which the granting of a Lien is prohibited
under customary non-assignment provisions (to the extent that such
provisions have not been waived) and (viii) Capital Stock of Joint
Ventures and Foreign Subsidiaries which are not Material Foreign
Subsidiaries.
"EXECUTIVE OFFICER" of any Person means any of the chief
executive officer, chief operating officer, president, vice presidents,
chief financial officer, treasurer or assistant treasurer of such
Person.
"EXISTING LETTERS OF CREDIT" means the letters of credit
described by date of issuance, letter of credit number, undrawn amount,
name of beneficiary and date of expiry on SCHEDULE 1.1B.
"EXISTING NOTES" means the 7.58% Senior Promissory Notes due
2009 of the Acquired Company.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) 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 of New York 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
charged to the Agent (in its individual capacity) on such day on such
transactions as determined by the Agent.
"FEES" means all fees payable pursuant to Section 3.5.
"FIXED CHARGE COVERAGE RATIO" means, as of the end of any
fiscal quarter of the Consolidated Parties for the four fiscal quarter
period ending on such date with respect to the Consolidated Parties on
a consolidated basis, the ratio of (a) the sum of (i) Consolidated
EBITDA MINUS (ii) Consolidated Capital Expenditures MINUS (iii)
Consolidated Cash Taxes to (b) the sum of (i) Consolidated Cash
Interest Expense PLUS (ii) Consolidated Scheduled Funded Debt Payments.
"FOOD, DRUG, AND COSMETIC ACT" means the Food, Drug, and
Cosmetic Act, as amended, 21 U.S.C. Section 301, et seq., and its
implementing regulations.
"FOOD SECURITY ACT" means the Food Security Act of 1985, as
amended, and any successor statute thereto, including all rules and
regulations thereunder, all as the same may be in effect from time to
time.
"FOREIGN BORROWING BASE " means, as of any date, an amount
equal to (i) 80% of the aggregate face amount of accounts receivable of
Foreign Subsidiaries not more than 90 days past due as of the end of
the most recent fiscal quarter preceding such date PLUS (ii) 50% of the
aggregate book value of the inventory of Foreign Subsidiaries as of the
16
end of the most recent fiscal quarter preceding such date, all
calculated on a consolidated basis and in accordance with GAAP.
"FOREIGN SUBSIDIARY" means any direct or indirect Subsidiary
of the Borrower which is not a Domestic Subsidiary.
"FULLY SATISFIED" means, with respect to the Credit Party
Obligations as of any date, that, as of such date, (a) all principal of
and interest accrued to such date which constitute Credit Party
Obligations shall have been paid in full in cash, (b) all fees,
expenses and other amounts then due and payable which constitute Credit
Party Obligations shall have been paid in cash, (c) all outstanding
Letters of Credit shall have been (i) terminated, (ii) fully cash
collateralized or (iii) secured by one or more letters of credit on
terms and conditions, and with one or more financial institutions,
reasonably satisfactory to the Issuing Lender and (d) the Commitments
shall have been expired or terminated in full.
"FUNDED INDEBTEDNESS" means, with respect to any Person,
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 and
due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person and to the extent
constituting contingent obligations, (e) all Funded Indebtedness of
others secured by (or for which the holder of such 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 Guaranty Obligations of such
Person with respect to Funded Indebtedness of another Person, (g) the
implied principal component of all obligations of such Person under
Capital 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 Credit
Party or, if the issuer thereof is a Consolidated Party which is not a
Credit Party, any other Consolidated Party, all preferred Capital Stock
issued by such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory
sinking fund payments, redemption or other acceleration (other than as
a result of a Change of Control or an Asset Disposition that does not
in fact result in a redemption of such preferred Capital Stock) at any
time prior to the Maturity Date, (j) the principal portion of all
obligations of such Person under Synthetic Leases and (k) the 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 Funded Indebtedness is recourse to such Person.
Notwithstanding any other provision of this Credit Agreement to the
contrary, (i) the term "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
17
consulting obligations incurred in connection with Permitted
Acquisitions and (ii) the amount of 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).
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3 (except, in respect of (i) Joint Ventures of the type
described in clause (ii) of the definition thereof set forth in this
Section 1.1, (ii) the designation of Dairy LLC, Dairy TXCT LLC and
their respective Subsidiaries as Subsidiaries of the Borrower and (iii)
Synthetic Leases, as otherwise treated herein).
"GOVERNMENTAL AUTHORITY" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"GUARANTORS" means a collective reference to the Parent and
each of the Subsidiary Guarantors, together with their successors and
permitted assigns, and "GUARANTOR " means any one of them.
"GUARANTY OBLIGATIONS" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made (or,
if less, the maximum amount of such principal amount for which such
Person may be liable under the terms of the instrument(s) evidencing
such Guaranty Obligation).
"HEDGING AGREEMENTS" means any interest rate protection
agreement, commodities purchase agreement or foreign currency exchange
agreement.
"INDEBTEDNESS" means, with respect to any Person, 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
18
Person (other than accrued expenses and trade debt incurred in the
ordinary course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such
Person, (e) all Indebtedness of others secured by (or for which the
holder of such 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 Guaranty Obligations of such Person with respect to Indebtedness of
another Person, (g) the implied principal component of all obligations
of such Person under Capital Leases, (h) all net obligations of such
Person (or, if less, the exposure of such Person) under Hedging
Agreements, (i) 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), (j) unless the holder thereof is a Credit
Party or, if the issuer thereof is a Consolidated Party which is not a
Credit Party, any other Consolidated Party, all preferred Capital Stock
issued by such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory
sinking fund payments, redemption or other acceleration (other than as
a result of a Change of Control or an Asset Disposition that does not
in fact result in a redemption of such preferred Capital Stock) at any
time prior to the Maturity Date, (k) the principal portion of all
obligations of such Person under Synthetic Leases and (l) the
Indebtedness of any partnership or unincorporated joint venture in
which such Person is a general partner or a joint venturer to the
extent such Indebtedness is recourse to such Person. Notwithstanding
any other provision of this Credit Agreement to the contrary, (i) the
term "Indebtedness" shall not be deemed to include any earn-out
obligation until such obligation becomes a liability on the balance
sheet of the applicable Person and (ii) the amount of 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).
"INDEMNIFIED PARTY" shall have the meaning assigned to such
term in Section 11.5(b).
"INTELLECTUAL PROPERTY" shall have the meaning assigned to
such term in Section 6.17.
"INTERBANK OFFERED RATE" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Page 3750 (or any
successor page) of the Dow Jones Market Service as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason
such rate is not available, the term "Interbank Offered Rate" shall
mean, for any Eurodollar Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; PROVIDED,
HOWEVER, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such
rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). If
the rates referenced in the preceding two sentences are not available,
the term "Interbank Offered Rate" shall mean, for any Eurodollar Loan
for any Interest Period
19
therefor, the rate per annum determined by the Agent as the rate of
interest (rounded upwards, if necessary, to the nearest 1/100 of 1%) 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 Loan being made, continued or converted by Bank of America
and with a term equivalent to such Interest Period would be offered by
Bank of America's London Branch to major banks in the offshore Dollar
market at their request at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period.
"INTEREST COVERAGE RATIO" means, as of the end of any fiscal
quarter of the Consolidated Parties for the four fiscal quarter period
ending on such date with respect to the Consolidated Parties on a
consolidated basis, the ratio of (a) Consolidated EBITDA to (b)
Consolidated Cash Interest Expense.
"INTEREST PAYMENT DATE" means (a) as to Base Rate Loans and
Swingline Loans, the last Business Day of each March, June, September
and December and the Maturity Date, and (b) as to Eurodollar Loans, the
last day of each applicable Interest Period and the Maturity Date, and
in addition where the applicable Interest Period for a Eurodollar Loan
is greater than three months, then also the date three months from the
beginning of the Interest Period and each three months thereafter.
"INTEREST PERIOD" means (i) as to Eurodollar Loans, a period
of one, two, three or six (or to the extent available, nine or twelve)
months' duration, as the Borrower may elect, commencing, in each case,
on the date of the borrowing (including continuations and conversions
thereof) and (ii) as to Quoted Rate Swingline Loans, a period
commencing on the date of the borrowing and ending on the date agreed
to by the Borrower and the Swingline Lender in accordance with Section
2.3(b)(i); PROVIDED, HOWEVER, (a) if any Interest Period would end on a
day which is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day (except that where the next
succeeding Business Day falls in the next succeeding calendar month,
then on the next preceding Business Day), (b) no Interest Period shall
extend beyond the Maturity Date and (c) where an Interest Period begins
on a day for which there is no numerically corresponding day in the
calendar month in which the Interest Period is to end, such Interest
Period shall end on the last Business Day of such calendar month.
"INVESTMENT" in any Person means (a) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise) of Property (other than in the ordinary course of business
and other than in a transaction constituting a Consolidated Capital
Expenditure), Capital Stock, bonds, notes, debentures, partnership,
joint ventures or other ownership interests or other securities of such
other Person, (b) any deposit with, or advance, loan or other extension
of credit to, such Person (other than deposits made in connection with
leases or the purchase of equipment, inventory and other assets in the
ordinary course of business) or (c) any other capital contribution to
or investment in such Person, including, without limitation, any
Guaranty Obligations (including any support for a letter of credit
issued on behalf of such Person) incurred for the benefit of such
Person and any portion of an Asset Disposition (other than an Excluded
Asset Disposition) to such Person for consideration less than the fair
market value of the Property disposed in such transaction, but
excluding any Restricted Payment to such Person. Investments which are
20
capital contributions or purchases of Capital Stock which have a right
to participate in the profits of the issuer thereof shall be valued at
the amount actually contributed or paid to purchase such Capital Stock
as of the date of such contribution or payment less all cash
distributions and returns of capital from the date such Investment is
made through and including the date of calculation. Investments which
are loans, advances, extensions of credit or Guaranty Obligations shall
be valued at the principal amount of such loan, advance or extension of
credit outstanding as of the date of determination or, as applicable,
the principal amount of the loan or advance outstanding as of the date
of determination actually guaranteed by such Guaranty Obligation.
"INVESTOR PLEDGE AGREEMENT" means the pledge agreement dated
as of the Closing Date in the form of EXHIBIT 1.1A to be executed in
favor of the Agent by Dairy Holdco, as amended, modified, restated or
supplemented from time to time.
"INVOLUNTARY DISPOSITION" means any loss or casualty of,
damage to or destruction of, or any condemnation or other taking for
public use of, any Property of any Consolidated Party.
"INVOLUNTARY DISPOSITION PREPAYMENT EVENT" means, with respect
to any Involuntary Disposition, the failure of the Credit Parties to
apply (or cause to be applied) an amount equal to the Excess Proceeds
of such Involuntary Disposition, if any, to either (i) prepay the Loans
(and cash collateralize the LOC Obligations) in accordance with the
terms of Section 3.3(b)(iii)(B) or (ii) make Eligible Reinvestments
(including but not limited to the repair or replacement of the Property
affected by such Involuntary Disposition) within the period of 540 days
following the date of receipt of such Excess Proceeds (or such shorter
period as specified in any Junior Financing Documentation), subject to
the terms and conditions of Section 7.6(b).
"IPO ISSUER" means, in respect of a Qualifying IPO, the Person
(as among the Parent or the Borrower and subject to the definition of
the term "Change of Control" set forth in this Section 1.1) that is the
issuer of the common Capital Stock offered in such Qualifying IPO.
"ISSUING LENDER" means Bank of America.
"JOINDER AGREEMENT" means a Joinder Agreement substantially in
the form of EXHIBIT 7.11 hereto, executed and delivered by a new
Guarantor in accordance with the provisions of Section 7.11.
"JOINT VENTURE" means (i) any Person which would constitute an
"equity method investee" of a Consolidated Party and (ii) any other
Person designated by the Credit Parties in writing to the Agent (which
designation shall be irrevocable) as a "Joint Venture" for purposes of
this Credit Agreement and more than 50% but less than 100% of whose
Capital Stock is directly owned by any Consolidated Party; PROVIDED,
HOWEVER, that no Person which is a Subsidiary of the Parent as of the
Closing Date may be designated by the Consolidated Parties as a Joint
Venture. As of the Closing Date, R&P Liquid Egg Technology Limited
Partnership shall be deemed to be a Joint Venture pursuant to the terms
of clause (i) above.
21
"JUNIOR FINANCING DOCUMENTATION" means (i) the Subordinated
Debt Indenture, (ii) the Subordinated Notes, (iii) any other
documentation governing any Subordinated Debt permitted to be incurred
under Section 8.1(f) and (iv) any documentation governing any Qualified
Preferred Stock.
"LENDER" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender by
way of assignment in accordance with the terms hereof, together with
their successors and permitted assigns.
"LENDING PARTY" shall have the meaning assigned to such term
in Section 11.14.
"LETTER OF CREDIT" means (i) any letter of credit issued by
the Issuing Lender for the account of the Borrower in accordance with
the terms of Section 2.2 and (ii) any Existing Letter of Credit, in
each case including any amendments thereto.
"LEVERAGE RATIO" means, as of the end of any fiscal quarter of
the Consolidated Parties for the four fiscal quarter period ending on
such date with respect to the Consolidated Parties on a consolidated
basis, the ratio of (a) Funded Indebtedness (net of cash and Cash
Equivalents on hand) of the Consolidated Parties on a consolidated
basis on the last day of such period to (b) Consolidated EBITDA.
"LIEN" means any mortgage, pledge, hypothecation, collateral
assignment, deposit arrangement, security interest, encumbrance, lien
(statutory or otherwise), preference, priority or charge of any kind
(including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any financing or similar
statement or notice filed under the Uniform Commercial Code as adopted
and in effect in the relevant jurisdiction or other similar recording
or notice statute, and any lease in the nature thereof).
"LOAN" or "LOANS" means the Revolving Loans, the Tranche A
Term Loans, the Tranche B Term Loans (or a portion of any Revolving
Loan, any Tranche A Term Loan or Tranche B Term Loan bearing interest
at the Adjusted Base Rate or the Adjusted Eurodollar Rate and referred
to as a Base Rate Loan or a Eurodollar Loan) and/or the Swingline Loans
(or any Swingline Loan bearing interest at the Adjusted Base Rate or
the Quoted Rate and referred to as a Base Rate Loan or a Quoted Rate
Swingline Loan), individually or collectively, as appropriate.
"LOC COMMITMENT" means the commitment of the Issuing Lender to
issue Letters of Credit in an aggregate face amount at any time
outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC COMMITTED AMOUNT" shall have the meaning assigned to such
term in Section 2.2.
"LOC DOCUMENTS" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any application
therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such
22
Letter of Credit) governing or providing for the rights and obligations
of the parties concerned or at risk.
"LOC OBLIGATIONS" means, at any time, the sum, without
duplication, of (i) the maximum amount which is, or at any time
thereafter may become, available to be drawn under Letters of Credit
then outstanding, assuming compliance with all requirements for
drawings referred to in such Letters of Credit PLUS (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed by the Borrower.
"M-FOODS INVESTORS" means M-Foods Investors, LLC, a Delaware
limited liability company.
"MANAGEMENT AGREEMENT" means that certain management agreement
dated as of the Closing Date among Michael Foods, Inc., M-Foods
Holdings, Inc., M-Foods Investors, LLC, the Sponsor and Goldner Hawn
Johnson & Morrison Inc., as the same may be amended, modified, restated
or supplemented from time to time to the extent not adverse to the
Lenders.
"MASTER ASSIGNMENT AGREEMENT" means that certain Master
Assignment Agreement to be dated on or about April 13, 2001 among Bank
of America, as the Assigning Lender, the Persons identified therein as
"New Lenders" and the Agent.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the financial condition, operations, business, assets or
liabilities of the Consolidated Parties taken as a whole, (ii) the
ability of the Credit Parties (taken as a whole) to perform any
material obligation under the Credit Documents or (iii) the material
rights and remedies of the Agent and the Lenders under the Credit
Documents.
"MATERIAL FOREIGN SUBSIDIARY" means, at any time, any Foreign
Subsidiary (i) which is directly owned by the Borrower or any Domestic
Subsidiary and (ii) with respect to which either (a) the portion of
Consolidated EBITDA attributable to such Person and its Subsidiaries on
a consolidated basis for the most recently ended twelve-month period is
5% or more of total Consolidated EBITDA for such period or (b) the
portion of Consolidated Total Assets owned by such Person and its
Subsidiaries on a consolidated basis at such time is 5% or more of
total Consolidated Total Assets at such time.
"MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"MATURITY DATE" means (i) as to the Revolving Loans, Letters
of Credit (and the related LOC Obligations), Swingline Loans and the
Tranche A Term Loan, April 10, 2007 and (ii) as to the Tranche B Term
Loan, April 10, 2008.
23
"MERGER AGREEMENT" means the Agreement and Plan of Merger by
and among M-Foods Holdings, Inc., a Delaware corporation, Mergersub,
and Michael Foods, Inc., a Minnesota corporation, dated as of December
21, 2000, as it may be amended on or prior to the Closing Date.
"MERGERSUB" means Michael Foods Acquisition Corp. (formerly
known as Protein Acquisition Corp.), a Minnesota corporation and a
wholly-owned Subsidiary of the Parent.
"MOODY'S" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"MORTGAGE INSTRUMENTS" shall have the meaning assigned such
term in Section 5.1(e).
"MORTGAGED PROPERTIES" shall have the meaning assigned such
term in Section 5.1(e).
"MULTIEMPLOYER PLAN" means a Plan which is a "multiemployer
plan" as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" means a Plan (other than a
Multiemployer Plan) which any Consolidated Party or any ERISA Affiliate
and at least one employer other than the Consolidated Parties or any
ERISA Affiliate are contributing sponsors.
"MWPDA" means the Minnesota Wholesale Produce Dealers Act as
amended, (Minnesota Statutes, Ch. 27).
"NET CASH PROCEEDS" means the aggregate cash or Cash
Equivalents proceeds received by any Consolidated Party or Dairy Holdco
in respect of any Asset Disposition, Equity Issuance, Debt Issuance or
Involuntary Disposition, net of (a) direct costs (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) (b) taxes paid or payable as a result thereof (including
the amount of taxes payable by any Person resulting from an Asset
Disposition of all of the Capital Stock in or all or substantially all
of the assets of Dairy LLC and/or Dairy TXCT LLC, which amount of taxes
shall be deemed to be for each such Person the amount of tax calculated
by applying the highest federal, New York State and City individual
income tax rates applicable to the type of income realized from such
Asset Disposition) and (c) in the case of any Asset Disposition, (i)
the amount necessary to retire any Indebtedness secured by a Permitted
Lien (ranking senior to any Lien of the Agent) on the related Property,
(ii) any reserve for adjustment in respect of (A) the sale price of
such asset or assets established in accordance with GAAP and (B) any
liabilities associated with such asset or assets and retained by the
Consolidated Parties after such sale or other disposition thereof,
including, without limitation, pension and other post-employment
benefit liabilities and liabilities related to environmental matters or
against any indemnification obligations associated with such
transaction and (iii) reorganization, shut-down and severance costs
incurred during the Application Period for such Asset Disposition; it
being understood that "Net Cash Proceeds" shall include, without
limitation, any cash or Cash Equivalents received upon (i) the sale or
other disposition of any non-cash consideration received by any
24
such Consolidated Party in any Asset Disposition, Equity Issuance, Debt
Issuance or Involuntary Disposition or (ii) the reversal (without the
satisfaction of expenses in cash in a corresponding amount) of any
reserve described in clause (ii) of the preceding sentence. In
addition, the "Net Cash Proceeds" of any Asset Disposition shall
include any other amounts which constitute "Net Proceeds" (or any
comparable term) of such transaction under, and as defined in, any
Junior Financing Documentation.
"NOTE" or "NOTES" means the Revolving Notes, the Tranche A
Term Notes, the Tranche B Term Notes and/or the Swingline Note,
individually or collectively, as appropriate.
"NOTICE OF BORROWING" means a written notice of borrowing
signed by an Executive Officer of the Borrower in substantially the
form of EXHIBIT 2.1(b)(i), as required by Section 2.1(b)(i), Section
2.4(b) or Section 2.5(b).
"NOTICE OF EXTENSION/CONVERSION" means the written notice of
extension or conversion in substantially the form of EXHIBIT 3.2, as
required by Section 3.2.
"OTHER TAXES" shall have the meaning assigned to such term in
Section 3.11(b).
"PACA" means the Perishable Agricultural Commodities Act as
amended, 7 U.S.C. Section 499a, et seq. and its implementing
regulations.
"PARENT" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"PARTICIPATION INTEREST" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2, in Swingline Loans as provided in Section 2.3 or in any
Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"PERISHABLE AGRICULTURAL COMMODITIES" shall have the meaning
assigned to such term by PACA.
"PERMITTED ACQUISITION" means, at any time, an Acquisition by
the Borrower or any Subsidiary of the Borrower permitted at such time
pursuant to the terms of Section 8.6(h).
"PERMITTED ASSET DISPOSITION" means, at any time, (i) any
Asset Disposition permitted at such time by Section 8.5 and (ii) any
Excluded Asset Disposition.
"PERMITTED INVESTMENTS" means, at any time, Investments by the
Consolidated Parties permitted to exist at such time pursuant to the
terms of Section 8.6.
"PERMITTED LIENS" means, at any time, Liens in respect of
Property of the Consolidated Parties permitted to exist at such time
pursuant to the terms of Section 8.2.
25
"PERSON" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"PLAN" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is subject to Title IV of ERISA and with respect
to which any Consolidated Party or any ERISA Affiliate is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" within the meaning of Section 3(5) of
ERISA.
"PLEDGE AGREEMENT" means the pledge agreement dated as of the
Closing Date in the form of EXHIBIT 1.1B to be executed in favor of the
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"PRIME RATE" means the per annum rate of interest established
from time to time by Bank of America as its prime rate, which rate may
not be the lowest rate of interest charged by Bank of America to its
customers.
"PRINCIPAL AMORTIZATION PAYMENT" means a principal payment on
the Tranche A Term Loans as set forth in Section 2.4(d) or on the
Tranche B Term Loans as set forth in Section 2.5(d).
"PRINCIPAL AMORTIZATION PAYMENT DATE" means the date a
Principal Amortization Payment is due.
"PRINCIPAL OFFICE" means the principal office of Bank of
America, presently located at Charlotte, North Carolina.
"PRO FORMA BASIS" means, for purposes of calculating
(utilizing the principles set forth in the second paragraph of Section
1.3) compliance with each of the financial covenants set forth in
Section 7.10(a) and (b) in respect of a proposed transaction, that such
transaction shall be deemed to have occurred as of the first day of the
four fiscal-quarter period ending as of the most recent fiscal quarter
end preceding the date of such transaction with respect to which the
Agent has received the Required Financial Information. As used herein,
"TRANSACTION" shall mean (i) any Asset Disposition as referred to in
Section 8.5, (ii) any Acquisition as referred to in Section 8.6(h) or
(iii) any Investment (or series of related Investments) made pursuant
to Section 8.6(p) to the extent consisting of the contribution(s) or
other transfer(s) of Property (other than cash) to a Joint Venture for
consideration less than the fair market value of such Property. In
connection with any calculation of the financial covenants set forth in
Section 7.10(a) and (b) upon giving effect to a transaction on a Pro
Forma Basis:
(A) for purposes of any such calculation in respect of any Asset
Disposition as referred to in Section 8.5 or any Investment
(or series of related Investments) as referred to in Section
8.6(p), (1) income statement items (whether positive or
negative) attributable to the Property disposed of or
contributed or otherwise transferred, as applicable, shall be
excluded and (2) any Indebtedness which is
26
retired in connection with such transaction shall be excluded
and deemed to have been retired as of the first day of the
applicable period; and
(B) for purposes of any such calculation in respect of any
Acquisition as referred to in Section 8.6(h), (1) any
Indebtedness incurred by any Consolidated Party in connection
with such transaction (x) shall be deemed to have been
incurred as of the first day of the applicable period and (y)
if such Indebtedness has a floating or formula rate, shall
have an implied rate of interest for the applicable period for
purposes of this definition determined by utilizing the rate
which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination, (2)
income statement items (whether positive or negative)
attributable to the Person or Property acquired shall be
included beginning as of the first day of the applicable
period and (3) pro forma adjustments may be included to the
extent that such adjustments are consistent with the
definition of "Consolidated EBITDA" set forth in this Section
1.1 and give effect to events that are (x) directly
attributable to such transaction, (y) expected to have a
continuing impact on the Consolidated Parties and (z)
factually supportable.
"PRO FORMA COMPLIANCE CERTIFICATE" means a certificate of an
Executive Officer of the Borrower delivered to the Agent in connection
with (i) any Asset Disposition as referred to in Section 8.5, (ii) any
Acquisition as referred to in Section 8.6(h) or (iii) any Investment
(or series of related Investments) made pursuant to Section 8.6(p) to
the extent consisting of the contribution(s) or other transfer(s) of
Property (other than cash) to a Joint Venture for consideration less
than the fair market value of such Property, as applicable, and
containing reasonably detailed calculations, upon giving effect to the
applicable transaction on a Pro Forma Basis, of the financial covenants
set forth in Section 7.10(a) and (b) as of the most recent fiscal
quarter end preceding the date of the applicable transaction with
respect to which the Agent shall have received the Required Financial
Information.
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"QUALIFIED PREFERRED STOCK" means any preferred Capital Stock
issued by any Consolidated Party as a portion of consideration paid for
a Permitted Acquisition which preferred Capital Stock is subordinated
to the Credit Party Obligations on terms no less favorable to the
Lenders than the Subordinated Debt Indenture.
"QUALIFYING IPO" means an Equity Issuance by the Parent (or,
subject to the definition of the term "Change of Control" set forth in
Section 1.1, of the common Capital Stock of the Borrower) consisting of
an underwritten primary public offering (other than a public offering
pursuant to a registration statement on Form S-8) of its common Capital
Stock (i) pursuant to an effective registration statement filed with
the Securities and Exchange Commission in accordance with the
Securities Act (whether alone or in connection with a secondary public
offering) and (ii) resulting in gross proceeds to the Parent (or the
Borrower, as applicable) of at least $50,000,000.
27
"QUOTED RATE" means, with respect to any Quoted Rate Swingline
Loan, the fixed percentage rate per annum offered by the Swingline
Lender and accepted by the Borrower with respect to such Swingline Loan
as provided in accordance with the provisions of Section 2.3.
"QUOTED RATE SWINGLINE LOAN" means a Swingline Loan bearing
interest at a Quoted Rate.
"REAL PROPERTIES" means, at any time, a collective reference
to each of the real properties owned, leased or operated by the
Consolidated Parties at such time.
"REGISTER" shall have the meaning assigned to such term in
Section 11.3(c).
"REGULATION D, T, U, OR X" means Regulation D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"REPORTABLE EVENT" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"REQUIRED FINANCIAL INFORMATION" means, with respect to the
applicable Calculation Date, (i) the financial statements of the
Consolidated Parties required to be delivered pursuant to Section
7.1(a) or (b) for the fiscal period or quarter ending as of such
Calculation Date, and (ii) the certificate of an Executive Officer of
the Borrower required by Section 7.1(d) to be delivered with the
financial statements described in clause (i) above.
"REQUIRED LENDERS" means, at any time, Lenders (other than
Defaulting Lenders) holding in the aggregate at least a majority of (i)
the unfunded Commitments (and Participation Interests therein) and the
outstanding Loans (and Participation Interests therein) or (ii) if all
of the Commitments have been terminated, the outstanding Loans, LOC
Obligations and Participation Interests (including the Participation
Interests of the Issuing Lender in any Letters of Credit and the
Participation Interests of the Swingline Lender in any Swingline
Loans).
"REQUIREMENT OF LAW" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or to
which any of its material property is subject.
"RESTRICTED PAYMENT" means (i) any dividend or other payment
or distribution, direct or indirect, on account of any shares of any
class of Capital Stock of any Consolidated Party, now or hereafter
outstanding (including without limitation any payment in connection
with any dissolution, merger, consolidation or disposition involving
any Consolidated Party), or to the holders, in their capacity as such,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding (other than dividends or distributions
(including distributions in connection with any restructure, merger,
consolidation or
28
disposition) payable (A) in Capital Stock of the applicable Person, (B)
to any Credit Party (other than the Parent) or (C) except in the case
of the Borrower or the Parent, ratably to minority shareholders of the
applicable Person), (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding,
(iv) any payment or prepayment of principal of, premium, if any, or
interest on, including any redemption, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any
Subordinated Debt or Qualified Preferred Stock and (v) any dividend or
other payment or distribution, direct or indirect, by Dairy LLC or
Dairy TXCT LLC to any Person that is not a Credit Party. The
cancellation of Indebtedness shall not be deemed to constitute a
"Restricted Payment".
"REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage (if
any) of the Revolving Committed Amount, (i) to make Revolving Loans in
accordance with the provisions of Section 2.1(a), (ii) to purchase
Participation Interests in Letters of Credit in accordance with the
provisions of Section 2.2(c) and (iii) to purchase Participation
Interests in Swingline Loans in accordance with the provisions of
Section 2.3(b)(iii).
"REVOLVING COMMITMENT PERCENTAGE" means, for any Lender, the
percentage identified as its Revolving Commitment Percentage on
SCHEDULE 2.1(a), as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 11.3.
"REVOLVING COMMITTED AMOUNT" shall have the meaning assigned
to such term in Section 2.1(a).
"REVOLVING LOANS" shall have the meaning assigned to such term
in Section 2.1(a).
"REVOLVING NOTE" shall have the meaning assigned to such term
in Section 2.1(e).
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any Property,
whether owned by such Consolidated Party as of the Closing Date or
later acquired, which has been or is to be sold or transferred by such
Consolidated Party to such Person or to any other Person from whom
funds have been, or are to be, advanced by such Person on the security
of such Property.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and all regulations issued pursuant thereto.
29
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, and all regulations issued pursuant thereto.
"SECURITY AGREEMENT" means the security agreement dated as of
the Closing Date in the form of EXHIBIT 1.1C to be executed in favor of
the Agent by each of the Credit Parties, as amended, modified, restated
or supplemented from time to time.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"SOLVENT" or "SOLVENCY" means, with respect to any Person as
of a particular date, that on such date (i) such Person is able to pay
its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability generally to pay its
debts and liabilities as they mature in their ordinary course, (iii)
such Person is not engaged in a business or a transaction, and is not
about to engage in a business or a transaction, for which such Person's
Property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such
Person is engaged or is to engage, (iv) the fair value of the Property
of such Person on a going concern basis is greater than the total
amount of liabilities, including, without limitation, contingent
liabilities, of such Person and (v) 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. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in 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.
"SPONSOR" means Vestar Capital Partners IV, L.P. and its
Affiliates.
"STANDBY LETTER OF CREDIT FEE" shall have the meaning assigned
to such term in Section 3.5(b)(i).
"SUBORDINATED DEBT" means (i) any Indebtedness evidenced and
governed by the Subordinated Debt Indenture and the Subordinated Notes,
including any guarantees thereof by any Credit Party and (ii) any other
Indebtedness which is subordinated to the Credit Party Obligations on
terms no less favorable to the Lenders than the Subordinated Debt
Indenture.
"SUBORDINATED DEBT INDENTURE" means that certain Indenture,
dated as of March 27, 2001, by and among Borrower and BNY Midwest Trust
Company, as such Indenture may be amended, modified, restated or
supplemented and in effect from time to time in accordance with the
terms hereof.
"SUBORDINATED NOTE" means any of the 11 3/4% subordinated
promissory notes issued by the Borrower pursuant to the Subordinated
Debt Indenture, as such subordinated promissory note may be amended,
modified, exchanged, restated or supplemented and in effect from time
to time in accordance with the terms hereof.
30
"SUBSIDIARY" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or
classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether
or not at such time, any class or classes of such corporation shall
have or might have voting power by reason of the happening of any
contingency) is at such time owned or controlled by such Person
directly or indirectly through Subsidiaries, and (b) any partnership,
association, joint venture or other entity of which such Person
directly or indirectly through Subsidiaries owns or controls at such
time more than 50% of the Capital Stock; PROVIDED, HOWEVER, that,
notwithstanding any other provision to the contrary contained in this
Credit Agreement, (i) prior to any Asset Disposition of all of the
Capital Stock or all or substantially all of the Property of Dairy LLC,
Dairy LLC and its Subsidiaries shall be deemed to be a Subsidiaries of
the Borrower, (ii) prior to any Asset Disposition of all of the Capital
Stock or all or substantially all of the Property of Dairy TXCT LLC,
Dairy TXCT LLC and its Subsidiaries shall be deemed to be Subsidiaries
of the Borrower and (iii) a Joint Venture shall not constitute a
Subsidiary.
"SUBSIDIARY GUARANTOR" means each of the Persons identified as
a "Subsidiary Guarantor" on the signature pages hereto and each Person
which may hereafter execute a Joinder Agreement pursuant to Section
7.11, together with their successors and permitted assigns, and
"SUBSIDIARY GUARANTOR" means any one of them. Notwithstanding any other
provision to the contrary contained in this Credit Agreement, (i) prior
to any Asset Disposition of all of the Capital Stock or all or
substantially all of the Property of Dairy LLC, Dairy LLC shall be
deemed to be a Subsidiary Guarantor and (ii) prior to any Asset
Disposition of all of the Capital Stock or all or substantially all of
the Property of Dairy TXCT LLC, Dairy TXCT LLC shall be deemed to be a
Subsidiary Guarantor.
"SWINGLINE COMMITTED AMOUNT" shall have the meaning assigned
to such term in Section 2.3(a).
"SWINGLINE LENDER" means Bank of America.
"SWINGLINE LOAN" shall have the meaning assigned to such term
in Section 2.3(a).
"SWINGLINE NOTE" shall have the meaning assigned to such term
in Section 2.3(d).
"SYNDICATION AGENT" shall have the meaning assigned to such
term in the heading hereof, together with any successors or assigns.
"SYNTHETIC LEASE" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
under GAAP.
"TAXES" shall have the meaning assigned to such term in
Section 3.11(a).
"TRADE LETTER OF CREDIT FEE" shall have the meaning assigned
to such term in Section 3.5(b)(ii).
31
"TRANCHE A TERM LOAN" shall have the meaning assigned to such
term in Section 2.4(a).
"TRANCHE A TERM LOAN COMMITMENT" means, with respect to each
Lender, the commitment of such Lender to make its portion of the
Tranche A Term Loan in a principal amount equal to such Lender's
Tranche A Term Loan Percentage (if any) of the Tranche A Term Loan
Committed Amount.
"TRANCHE A TERM LOAN COMMITTED AMOUNT" shall have the meaning
assigned to such term in Section 2.4(a).
"TRANCHE A TERM LOAN PERCENTAGE" means, for any Lender, the
percentage identified as its Tranche A Term Loan Percentage on SCHEDULE
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"TRANCHE A TERM NOTE" shall have the meaning assigned to such
term in Section 2.4(f).
"TRANCHE B TERM LOAN" shall have the meaning assigned to such
term in Section 2.5(a).
"TRANCHE B TERM LOAN COMMITMENT" means, with respect to each
Lender, the commitment of such Lender to make its portion of the
Tranche B Term Loan in a principal amount equal to such Lender's
Tranche B Term Loan Percentage (if any) of the Tranche B Term Loan
Committed Amount.
"TRANCHE B TERM LOAN COMMITTED AMOUNT" shall have the meaning
assigned to such term in Section 2.5(a).
"TRANCHE B TERM LOAN PERCENTAGE" means, for any Lender, the
percentage identified as its Tranche B Term Loan Percentage on SCHEDULE
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"TRANCHE B TERM NOTE" shall have the meaning assigned to such
term in Section 2.5(f).
"TRANSACTION" means a collective reference to (i) the
acquisition by Mergersub of all of the outstanding capital stock of the
Acquired Company and the merger of Mergersub into the Acquired Company,
all pursuant to, and in accordance with the terms of, the Merger
Agreement; (ii) the refinancing of substantially all of the funded
indebtedness of the Acquired Company and its Subsidiaries existing at
the time of the events described in the foregoing clause (i); (iii) the
Dairy Restructuring; and (iv) the related financings, equity
contributions and other transactions referred to in Section 5.1(h).
32
"UNUSED FEE" shall have the meaning assigned to such term in
Section 3.5(a).
"UNUSED FEE CALCULATION PERIOD" shall have the meaning
assigned to such term in Section 3.5(a).
"UNUSED REVOLVING COMMITTED AMOUNT" means, for any period, the
amount by which (a) the then applicable Revolving Committed Amount
(other than any portion of the Revolving Committed Amount attributable
to a Lender that was a Defaulting Lender during such period) exceeds
(b) the daily average sum for such period of (i) the outstanding
aggregate principal amount of all Revolving Loans (but not including
any Swingline Loans) PLUS (ii) the outstanding aggregate principal
amount of all LOC Obligations.
"VOTING STOCK" means, with respect to any Person, Capital
Stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary
100% of whose Voting Stock (other than director's qualifying shares or
other shares required by law to be held by a third party) is at the
time owned by such Person directly or indirectly through other
Wholly-Owned Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis; PROVIDED, HOWEVER, that calculations of the implied principal component
of all obligations under any Synthetic Lease or the implied interest component
of any rent paid under any Synthetic Lease shall be made by the Borrower in
accordance with accepted financial practice and consistent with the terms of
such Synthetic Lease. All calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 (or, prior to the delivery of the first financial statements
pursuant to Section 7.1, consistent with the financial statements as at December
31, 2000), but, in any event, unless otherwise expressly provided herein, after
elimination for minority interests; PROVIDED, HOWEVER, if (a) the Credit Parties
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Agent or the Required Lenders shall
so object in writing within 30 days after delivery of such financial statements,
then such calculations shall be made on a basis consistent with the most recent
financial statements delivered by the Credit Parties to the Lenders as to which
no such objection shall have been made; PROVIDED FURTHER, HOWEVER, that nothing
contained in this Section 1.3 shall be deemed to restrict the ability of the
33
Credit Parties to (i) make purchase accounting adjustments with respect to the
Transaction during the four-quarter period immediately succeeding the
consummation of the Transaction or (ii) make purchase accounting adjustments
with respect to any Permitted Acquisition during the four-quarter period
immediately succeeding the consummation of such transaction.
Notwithstanding the above or the terms of any definition in Section
1.1, the parties hereto acknowledge and agree that, for purposes of all
calculations made under the financial covenants set forth in Section 7.10
(including without limitation for purposes of the definitions of "Applicable
Percentage" and "Pro Forma Basis" set forth in Section 1.1), (i) after
consummation of any Asset Disposition or any Investment (or series of related
Investments) made pursuant to Section 8.6(p) to the extent consisting of the
contribution(s) or other transfer(s) of Property (other than cash) to a Joint
Venture for consideration less than the fair market value of such Property, (A)
income statement items (whether positive or negative) and capital expenditures
attributable to the Property disposed of or contributed or otherwise
transferred, as applicable, shall be excluded to the extent relating to any
period occurring prior to the date of such transaction and (B) Indebtedness
which is retired shall be excluded and deemed to have been retired as of the
first day of the applicable period, (ii) after consummation of any Acquisition,
(A) income statement items (whether positive or negative) attributable to the
Person or Property acquired shall, to the extent not otherwise included in such
income statement items for the Consolidated Parties in accordance with GAAP or
in accordance with any defined terms set forth in Section 1.1, be included to
the extent relating to any period applicable in such calculations, (B) to the
extent not retired in connection with such Acquisition, Indebtedness of the
Person or Property acquired shall be deemed to have been incurred as of the
first day of the applicable period and (C) pro forma adjustments may be included
to the extent that such adjustments are consistent with the definition of
"Consolidated EBITDA" set forth in Section 1.1 and give effect to events that
are (x) directly attributable to such transaction, (y) expected to have a
continuing impact on the Consolidated Parties and (z) factually supportable and
(iii) the portion of Funded Indebtedness of the Consolidated Parties as of any
date consisting of Revolving Loans shall be deemed to be the monthly average
amount of Revolving Loans outstanding for the twelve-month period ended as of
such date.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) REVOLVING COMMITMENT. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Lender severally agrees to make
available to the Borrower such Lender's Revolving Commitment Percentage
of revolving credit loans requested by the Borrower in Dollars
("REVOLVING LOANS") from time to time from the Closing Date until the
Maturity Date, or such earlier date as the Revolving Commitments shall
have been terminated as provided herein; PROVIDED, HOWEVER, that the
sum of the aggregate outstanding principal amount of Revolving Loans
shall not exceed ONE HUNDRED MILLION DOLLARS ($100,000,000) (as such
aggregate maximum amount may be reduced from time to time as provided
in Section 3.4, the "REVOLVING COMMITTED AMOUNT"); PROVIDED, FURTHER,
(A) with regard to each Lender
34
individually, such Lender's outstanding Revolving Loans shall not
exceed such Lender's Revolving Commitment Percentage of the Revolving
Committed Amount, and (B) the sum of the aggregate outstanding
principal amount of Revolving Loans PLUS LOC Obligations PLUS Swingline
Loans shall not exceed the Revolving Committed Amount. The initial
advance of the Revolving Loans on the Closing Date shall consist solely
of Base Rate Loans. Thereafter, Revolving Loans may consist of Base
Rate Loans or Eurodollar Loans, or a combination thereof, as the
Borrower may request; PROVIDED, HOWEVER, that no more than 15
Eurodollar Loans shall be outstanding hereunder at any time (it being
understood that, for purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar Loans, even
if they begin on the same date, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined
at the end of existing Interest Periods to constitute a new Eurodollar
Loan with a single Interest Period). Revolving Loans hereunder may be
repaid and reborrowed in accordance with the provisions hereof.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall
request a Revolving Loan borrowing by written notice (or
telephonic notice promptly confirmed in writing) to the Agent
not later than 12:30 P.M. (Charlotte, North Carolina time) on
the Business Day prior to the date of the requested borrowing
in the case of Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of
Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount
to be borrowed, and (D) whether the borrowing shall be
comprised of Base Rate Loans, Eurodollar Loans or a
combination thereof, and if Eurodollar Loans are requested,
the Interest Period(s) therefor. If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period
of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base
Rate Loan hereunder. The Agent shall give notice to each
affected Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.1(b)(i), the contents
thereof and each such Lender's share of any borrowing to be
made pursuant thereto.
(ii) MINIMUM AMOUNTS. Except for Revolving Loans
made for the purpose of reimbursing the Issuing Lender in
respect of a drawing under a Letter of Credit pursuant to
Section 2.2(e), each Eurodollar Loan or Base Rate Loan that is
a Revolving Loan shall be in a minimum aggregate principal
amount of $2,000,000 and integral multiples of $100,000 in
excess thereof (or the remaining amount of the Revolving
Committed Amount, if less).
(iii) ADVANCES. Each Lender will make its
Revolving Commitment Percentage of each Revolving Loan
borrowing available to the Agent for the account of the
Borrower as specified in Section 3.15(a), or in such other
manner as the Agent may specify in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds
immediately
35
available to the Agent. Such borrowing will then be made
available to the Borrower by the Agent either by disbursing
such funds pursuant to written instructions from the Borrower
or by crediting the account of the Borrower on the books of
such office with the aggregate of the amounts made available
to the Agent by the Lenders and in like funds as received by
the Agent.
(c) REPAYMENT. The Borrower hereby promises to pay the
principal amount of all outstanding Revolving Loans in full on the
Maturity Date, unless accelerated sooner pursuant to Section 9.2.
(d) INTEREST. Subject to the provisions of Section 3.1,
(i) BASE RATE LOANS. During such periods as
Revolving Loans shall be comprised in whole or in part of Base
Rate Loans, such Base Rate Loans shall bear interest at a per
annum rate equal to the Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as
Revolving Loans shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the Adjusted Eurodollar Rate.
The Borrower hereby promises to pay interest on Revolving Loans in
arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein).
(e) REVOLVING NOTES. The Borrower hereby agrees that,
upon the request to the Agent by any Lender, the Borrower will execute
and deliver to such Lender a promissory note evidencing the Revolving
Loans of such Lender, substantially in the form of EXHIBIT 2.1(e), with
appropriate insertions as to date and principal amount (a "REVOLVING
NOTE").
2.2 LETTER OF CREDIT SUBFACILITY.
(a) ISSUANCE. Subject to the terms and conditions hereof
and in reliance upon the representations and warranties set forth
herein, the Issuing Lender agrees to issue, and each Lender severally
agrees to participate in the issuance by the Issuing Lender of, standby
and trade Letters of Credit in Dollars from time to time from the
Closing Date until the date five (5) days prior to the Maturity Date as
the Borrower may request, in a form acceptable to the Issuing Lender;
PROVIDED, HOWEVER, that (i) the LOC Obligations outstanding shall not
at any time exceed FIFTEEN MILLION DOLLARS ($15,000,000) (the "LOC
COMMITTED AMOUNT") and (ii) the sum of the aggregate outstanding
principal amount of Revolving Loans PLUS LOC Obligations PLUS Swingline
Loans shall not at any time exceed the Revolving Committed Amount. No
Letter of Credit shall (x) have an original expiry date more than one
year from the date of issuance (provided that any such Letter of Credit
may contain customary "evergreen" provisions pursuant to which the
expiry date is automatically extended by a specific time period unless
the Issuing Lender gives notice to the beneficiary of such Letter of
Credit at least a specified time period prior to the expiry date then
in effect) or (y) as originally issued or as extended, have an expiry
date extending beyond the date five (5) days prior to the Maturity
Date. The Issuing Lender shall not be required to issue any Letter of
Credit which would violate any Requirement of Law applicable to the
Issuing
36
Lender. Each Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry dates of each Letter of Credit shall
be a Business Day. For purposes of this Credit Agreement, the Existing
Letters of Credit shall be deemed to have been issued on the Closing
Date.
(b) NOTICE AND REPORTS. The request for the issuance of a
Letter of Credit shall be submitted by an Executive Officer of the
Borrower to the Issuing Lender and the Agent at least three (3)
Business Days prior to the requested date of issuance. The Issuing
Lender will provide to the Agent, at least quarterly and more
frequently upon request, who will in turn disseminate to each of the
Lenders a detailed report specifying the Letters of Credit which are
then issued and outstanding and any activity with respect thereto which
may have occurred since the date of the prior report, and including
therein, among other things, the beneficiary, the face amount and the
expiry date, as well as any payment or expirations which may have
occurred.
(c) PARTICIPATION. Each Lender, upon issuance of a Letter
of Credit (or, in the case of each Existing Letter of Credit, on the
Closing Date), shall be deemed to have purchased without recourse a
Participation Interest from the Issuing Lender in such Letter of Credit
and the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its pro rata share of the
obligations under such Letter of Credit (based on the respective
Revolving Commitment Percentages of the Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the
Issuing Lender and discharge when due, its pro rata share of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Lender's Participation Interest in any Letter
of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit,
each such Lender shall pay to the Agent for the account of the Issuing
Lender its pro rata share of such unreimbursed drawing in same day
funds on the day of notification by the Agent of an unreimbursed
drawing pursuant to the provisions of subsection (d) below. The
obligation of each Lender to so reimburse the Issuing Lender shall be
absolute and unconditional and shall not be affected by the occurrence
of a Default, an Event of Default or any other occurrence or event. Any
such reimbursement shall not relieve or otherwise impair the obligation
of the Borrower to reimburse the Issuing Lender under any Letter of
Credit, together with interest as hereinafter provided.
(d) REIMBURSEMENT. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower
and the Agent. Unless the Borrower shall immediately notify the Agent
and the Issuing Lender that the Borrower intends to otherwise reimburse
the Issuing Lender for such drawing, the Borrower shall be deemed to
have requested that the Lenders make a Revolving Loan in the amount of
the drawing as provided in subsection (e) below on the related Letter
of Credit, the proceeds of which will be used to satisfy the related
reimbursement obligations. The Borrower promises to reimburse the
Issuing Lender on the day on which the Issuing Lender notifies the
Borrower of a drawing under any Letter of Credit (either with the
proceeds of a Revolving Loan obtained hereunder or deemed to have been
requested hereunder or otherwise) in same day funds provided such
notice is received by the Borrower from the Issuing Lender on or before
2:00 P.M. (Charlotte, North Carolina time) (otherwise such payment
shall be made on or before 12:00 Noon (Charlotte, North Carolina time)
on the Business Day next succeeding the day such notice is received).
The Borrower hereby promises to pay to the Issuing Lender interest on
37
the unreimbursed amount of any drawing under a Letter of Credit at a
per annum rate equal to (i) for the first two (2) Business Days
following the date of the related drawing, the Adjusted Base Rate and
(ii) thereafter, the Adjusted Base Rate PLUS 2%. The Borrower's
reimbursement obligations hereunder shall be absolute and unconditional
under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have
against the Issuing Lender (other than that the payment of such drawing
by the Issuing Lender constituted gross negligence or willful
misconduct on the part of the Issuing Lender), the Agent, the Lenders,
the beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the Agent, who shall in
turn, promptly notify the other Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the Agent
for the account of the Issuing Lender in Dollars and in immediately
available funds, the amount of such Lender's pro rata share of such
unreimbursed drawing. Such payment shall be made on the day such notice
is received by such Lender from the Agent if such notice is received at
or before 2:00 P.M. (Charlotte, North Carolina time), and otherwise
such payment shall be made at or before 12:00 Noon (Charlotte, North
Carolina time) on the Business Day next succeeding the day such notice
is received. If such Lender does not pay such amount to the Agent for
the account of the Issuing Lender in full upon such request, such
Lender shall, on demand, pay to the Agent for the account of the
Issuing Lender interest on the unpaid amount during the period from the
date of such drawing until such Lender pays such amount to the Agent
for the account of the Issuing Lender in full at a rate per annum equal
to, if paid within two (2) Business Days of the date that such Lender
is required to make payments of such amount pursuant to the preceding
sentence, the Federal Funds Rate and thereafter at a rate equal to the
Base Rate. Each Lender's obligation to make such payment to the Issuing
Lender, and the right of the Issuing Lender to receive the same, shall
be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the obligations of
the Borrower hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever. Simultaneously with the making of
each such payment by a Lender to the Agent for the account of the
Issuing Lender, such Lender shall, automatically and without any
further action on the part of the Issuing Lender or such Lender,
acquire a Participation Interest in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to
the Issuing Lender) in the related unreimbursed drawing portion of the
LOC Obligation and in the interest thereon and in the related LOC
Documents, and shall have a claim against the Borrower with respect
thereto.
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which
the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance to reimburse a drawing under a Letter of Credit,
the Agent shall give notice to the Lenders that a Revolving Loan has
been requested or deemed requested by the Borrower to be made in
connection with a drawing under a Letter of Credit, in which case a
Revolving Loan advance comprised of Base Rate Loans (or Eurodollar
Loans to the extent the Borrower has complied with the procedures of
Section 2.1(b)(i) with respect thereto) shall be immediately made to
the Borrower by all Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) PRO RATA based on the respective
Revolving Commitment
38
Percentages of the Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2) and the
proceeds thereof shall be paid directly to the Agent for the account of
the Issuing Lender for application to the respective LOC Obligations.
Each such Lender hereby irrevocably agrees to make its pro rata share
of each such Revolving Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the
preceding sentence NOTWITHSTANDING (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or an Event of
Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required
hereunder, (v) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (vi)
any termination of the Commitments relating thereto immediately prior
to or contemporaneously with such borrowing. In the event that any
Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to
the Borrower or any other Credit Party), then each such Lender hereby
agrees that it shall forthwith purchase (as of the date such borrowing
would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase)
from the Issuing Lender such Participation Interests in the outstanding
LOC Obligations as shall be necessary to cause each such Lender to
share in such LOC Obligations ratably (based upon the respective
Revolving Commitment Percentages of the Lenders (determined before
giving effect to any termination of the Commitments pursuant to Section
9.2)), PROVIDED that at the time any purchase of Participation
Interests pursuant to this sentence is actually made, the purchasing
Lender shall be required to pay to the Agent for the account of the
Issuing Lender, to the extent not paid to the Issuing Lender by the
Borrower in accordance with the terms of subsection (d) above, interest
on the principal amount of Participation Interests purchased for each
day from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment for such
Participation Interests, at the rate equal to, if paid within two (2)
Business Days of the date of the Revolving Loan advance, the Federal
Funds Rate, and thereafter at a rate equal to the Base Rate.
(f) DESIGNATION OF CONSOLIDATED PARTIES AS ACCOUNT
PARTIES. Notwithstanding anything to the contrary set forth in this
Credit Agreement, including without limitation Section 2.2(a), a Letter
of Credit issued hereunder may contain a statement to the effect that
such Letter of Credit is issued for the account of any Subsidiary of
the Borrower, provided that notwithstanding such statement, the
Borrower shall be the actual account party for all purposes of this
Credit Agreement for such Letter of Credit and such statement shall not
affect the Borrower's reimbursement obligations hereunder with respect
to such Letter of Credit.
(g) RENEWAL, EXTENSION. The renewal or extension of any
Letter of Credit shall, for purposes hereof, be treated in all respects
the same as the issuance of a new Letter of Credit hereunder.
(h) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender may
have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits (the
39
"UCP") or the International Standby Practices 1998 (the "ISP98"), in
either case as published as of the date of issue by the International
Chamber of Commerce, in which case the UCP or the ISP98, as applicable,
may be incorporated therein and deemed in all respects to be a part
thereof.
(i) INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(i) In addition to its other obligations under
this Section 2.2, the Borrower hereby agrees to pay, and
protect, indemnify and save each Lender harmless from and
against, any and all claims, demands, liabilities, damages,
actual losses, costs, charges and reasonable expenses
(including reasonable attorneys' fees) that such Lender may
incur or be subject to as a consequence, direct or indirect,
of (A) the issuance of any Letter of Credit or (B) the failure
of such Lender to honor a drawing under a Letter of Credit as
a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein
called "GOVERNMENT ACTS").
(ii) As between the Borrower and the Lenders
(including the Issuing Lender), the Borrower shall assume all
risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. No Lender (including the Issuing
Lender) shall be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (D) for any loss or delay in
the transmission or otherwise of any document required in
order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from
causes beyond the control of such Lender, including, without
limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by any Lender (including the
Issuing Lender), under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in
good faith and without gross negligence, shall not put such
Lender under any resulting liability to the Borrower or any
other Credit Party. It is the intention of the parties that
this Credit Agreement shall be construed and applied to
protect and indemnify each Lender (including the Issuing
Lender) against any and all risks involved in the issuance of
the Letters of Credit, all of which risks are hereby assumed
by the Borrower (on behalf of itself and each of the other
Credit Parties), including, without limitation, any and all
Government Acts. No Lender (including the Issuing Lender)
shall, in any way, be
40
liable for any failure by such Lender or anyone else to pay
any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of such
Lender.
(iv) Nothing in this subsection (i) is intended
to limit the reimbursement obligations of the Borrower
contained in subsection (d) above. The obligations of the
Borrower under this subsection (i) shall survive the
termination of this Credit Agreement. No act or omission of
any current or prior beneficiary of a Letter of Credit shall
in any way affect or impair the rights of the Lenders
(including the Issuing Lender) to enforce any right, power or
benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this Section 2.2(i), no Credit Party shall have
any obligation to indemnify or reimburse any Lender (including
the Issuing Lender) in respect of any liability incurred by
such Lender (A) arising out of the gross negligence, bad faith
or willful misconduct of such Lender, or (B) caused by such
Lender's failure to pay under any Letter of Credit after
presentation to it of a request strictly complying with the
terms and conditions of such Letter of Credit unless such
payment is prohibited by any law, regulation, court order or
decree.
(j) RESPONSIBILITY OF ISSUING LENDER. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; PROVIDED, HOWEVER, that
nothing set forth in this Section 2.2 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section
2.2 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence, bad faith or willful misconduct on the
part of the Issuing Lender.
(k) CONFLICT WITH LOC DOCUMENTS. In the event of any
conflict between this Credit Agreement and any LOC Document (including
any letter of credit application), this Credit Agreement shall control.
2.3 SWINGLINE LOAN SUBFACILITY.
(a) SWINGLINE COMMITMENT. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans requested by
the Borrower in Dollars to the Borrower (each a "SWINGLINE LOAN" and,
collectively, the "SWINGLINE LOANS") from time to time from the Closing
Date until the Maturity Date for the purposes hereinafter set forth;
PROVIDED, HOWEVER, (i) the aggregate principal amount of Swingline
Loans outstanding at any time shall not exceed TEN MILLION DOLLARS
($10,000,000) (the "SWINGLINE COMMITTED AMOUNT"), and (ii) the sum of
the aggregate outstanding principal amount of Revolving Loans PLUS LOC
Obligations PLUS Swingline Loans shall not exceed the Revolving
Committed Amount. Swingline Loans hereunder shall be made as
41
Base Rate Loans or Quoted Rate Swingline Loans as the Borrower may
request in accordance with the provisions of this Section 2.3 and may
be repaid and reborrowed in accordance with the provisions hereof.
(b) SWINGLINE LOAN ADVANCES.
(i) NOTICES; DISBURSEMENT. Whenever the Borrower
desires a Swingline Loan advance hereunder it shall give
written notice from an Executive Officer of the Borrower (or
telephonic notice promptly confirmed in writing) to the
Swingline Lender not later than 1:00 P.M. (Charlotte, North
Carolina time) on the Business Day of the requested Swingline
Loan advance. Each such notice shall be irrevocable and shall
specify (A) that a Swingline Loan advance is requested, (B)
the date of the requested Swingline Loan advance (which shall
be a Business Day) and (C) the principal amount of the
Swingline Loan advance requested. Each Swingline Loan shall be
made as a Base Rate Loan or a Quoted Rate Swingline Loan and
shall have such maturity date as the Swingline Lender and the
Borrower shall agree upon receipt by the Swingline Lender of
any such notice from the Borrower. The Swingline Lender shall
initiate the transfer of funds representing the Swingline Loan
advance to the Borrower by 3:00 P.M. (Charlotte, North
Carolina time) on the Business Day of the requested borrowing.
(ii) MINIMUM AMOUNTS. Each Swingline Loan advance
shall be in an integral multiples of $100,000 (or the
remaining amount of the Swingline Committed Amount, if less).
(iii) REPAYMENT OF SWINGLINE LOANS. The Borrower
hereby promises to pay the outstanding principal amount of
each Swingline Loan on the earlier of (A) the maturity date
agreed to by the Swingline Lender and the Borrower with
respect to such Loan or (B) the Maturity Date. The Swingline
Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Lenders, demand repayment of
its Swingline Loans by way of a Revolving Loan advance, in
which case the Borrower shall be deemed to have requested a
Revolving Loan advance comprised solely of Base Rate Loans in
the amount of such Swingline Loans; PROVIDED, HOWEVER, that
any such demand shall be deemed to have been given one
Business Day prior to the Maturity Date and on the date of the
occurrence of any Event of Default described in Section 9.1
and upon acceleration of the indebtedness hereunder and the
exercise of remedies in accordance with the provisions of
Section 9.2. Each Lender hereby irrevocably agrees to make its
pro rata share of each such Revolving Loan in the amount, in
the manner and on the date specified in the preceding sentence
NOTWITHSTANDING (I) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (II) whether any conditions
specified in Section 5.2 are then satisfied, (III) whether a
Default or an Event of Default then exists, (IV) failure of
any such request or deemed request for a Revolving Loan to be
made by the time otherwise required hereunder, (V) whether the
date of such borrowing is a date on which Revolving Loans are
otherwise permitted to be made hereunder or (VI) any
termination of the Commitments relating thereto immediately
prior to or contemporaneously with such borrowing. In the
event that any Revolving Loan
42
cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each
Lender hereby agrees that it shall forthwith purchase (as of
the date such borrowing would otherwise have occurred, but
adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Swingline
Lender such Participation Interests in the outstanding
Swingline Loans as shall be necessary to cause each such
Lender to share in such Swingline Loans ratably based upon its
Revolving Commitment Percentage of the Revolving Committed
Amount (determined before giving effect to any termination of
the Commitments pursuant to Section 3.4), PROVIDED that (A)
all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the
respective Participation Interest is purchased and (B) at the
time any purchase of Participation Interests pursuant to this
sentence is actually made, the purchasing Lender shall be
required to pay to the Swingline Lender, to the extent not
paid to the Swingline Lender by the Borrower in accordance
with the terms of subsection (c)(ii) below, interest on the
principal amount of Participation Interests purchased for each
day from and including the day upon which such borrowing would
otherwise have occurred to but excluding the date of payment
for such Participation Interests, at the rate equal to the
Federal Funds Rate.
(c) INTEREST ON SWINGLINE LOANS.
(i) RATE OF INTEREST . Subject to the provisions
of Section 3.1, each Swingline Loan shall bear interest as
follows:
(A) BASE RATE LOANS. If such Swingline
Loan is a Base Rate Loan, at a per annum rate equal
to the Adjusted Base Rate.
(B) QUOTED RATE SWINGLINE LOANS. If
such Swingline Loan is a Quoted Rate Swingline Loan,
at a per annum rate equal to the Quoted Rate
applicable thereto.
(ii) PAYMENT OF INTEREST. The Borrower hereby
promises to pay interest on Swingline Loans in arrears on each
applicable Interest Payment Date (or at such other times as
may be specified herein).
Notwithstanding any other provision to the contrary set forth
in this Credit Agreement, in the event that the principal
amount of any Quoted Rate Swingline Loan is not repaid on the
last day of the Interest Period for such Loan, then such Loan
shall be automatically converted into a Base Rate Loan at the
end of such Interest Period.
(d) SWINGLINE NOTE. The Borrower hereby agrees that, upon
the request to the Agent by the Swingline Lender, the Borrower will
execute and deliver to the Swingline Lender a promissory note
evidencing the Swingline Loans of the Swingline Lender, substantially
in the form of EXHIBIT 2.3(d), with appropriate insertions as to date
and principal amount (a "SWINGLINE NOTE").
43
2.4 TRANCHE A TERM LOAN.
(a) TRANCHE A TERM COMMITMENT. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Lender severally agrees to make
available to the Borrower on the Closing Date such Lender's Tranche A
Term Loan Percentage of a term loan in Dollars (the "TRANCHE A TERM
LOAN") in the aggregate principal amount of ONE HUNDRED MILLION DOLLARS
($100,000,000) (the "TRANCHE A TERM LOAN COMMITTED AMOUNT"). The full
principal amount of the Tranche A Term Loan shall be disbursed on the
Closing Date as a Base Rate Loan. Thereafter, the Tranche A Term Loan
may consist of Base Rate Loans or Eurodollar Loans, or a combination
thereof, as the Borrower may request; PROVIDED, HOWEVER, that no more
than 15 Eurodollar Loans shall be outstanding hereunder at any time (it
being understood that, for purposes hereof, Eurodollar Loans with
different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings,
extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period).
Amounts repaid on the Tranche A Term Loan may not be reborrowed.
(b) BORROWING PROCEDURES. The Borrower shall submit an
appropriate Notice of Borrowing for the Tranche A Term Loan to the
Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the
Closing Date. Such Notice of Borrowing shall be irrevocable and shall
specify (i) that the funding of the Tranche A Term Loan is requested
and (ii) that the funding of the Tranche A Term Loan shall be comprised
of Base Rate Loans. Each Lender shall make its Tranche A Term Loan
Percentage of the Tranche A Term Loan available to the Agent for the
account of the Borrower at the office of the Agent specified in
SCHEDULE 2.1(a), or at such other office as the Agent may designate in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the Closing
Date in Dollars and in funds immediately available to the Agent.
(c) MINIMUM AMOUNTS. Each Eurodollar Loan or Base Rate
Loan that is part of the Tranche A Term Loan shall be in an aggregate
principal amount that is not less than $2,000,000 and integral
multiples of $100,000 (or the then remaining principal balance of the
Tranche A Term Loan).
(d) REPAYMENT OF TRANCHE A TERM LOAN. The Borrower hereby
promises to pay the outstanding principal amount of the Tranche A Term
Loan in twenty-four (24) consecutive quarterly installments as follows
(as such installments may hereafter be adjusted as a result of
prepayments made pursuant to Section 3.3), unless accelerated sooner
pursuant to Section 9.2:
================================ ==============================
TRANCHE A TERM LOAN
PRINCIPAL AMORTIZATION PRINCIPAL AMORTIZATION
PAYMENT DATES PAYMENT
44
-------------------------------- ------------------------------
June 30, 2001, September 30,
2001, December 31, 2001,
March 31, 2002, June 30, 2002,
September 30, 2002, December
31, 2002 and March 31, 2003
$3,000,000
-------------------------------- ------------------------------
June 30, 2003, September 30,
2003, December 31, 2003, March
31, 2004, June 30, 2004,
September 30, 2004, December
31, 2004 and March 31, 2005
$4,000,000
-------------------------------- ------------------------------
June 30, 2005, September 30,
2005, December 31, 2005 and
March 31, 2006 $5,000,000
-------------------------------- ------------------------------
June 30, 2006, September 30,
2006, December 31, 2006 and
March 31, 2007 $6,000,000
================================ ==============================
(e) INTEREST. Subject to the provisions of Section 3.1,
the outstanding Tranche A Term Loan shall bear interest at a per annum
rate equal to:
(i) BASE RATE LOANS. During such periods as the
Tranche A Term Loan shall be comprised in whole or in part of
Base Rate Loans, such Base Rate Loans shall bear interest at a
per annum rate equal to the Adjusted Base Rate.
(ii) EURODOLLAR LOANS. During such periods as the
Tranche A Term Loan shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the Adjusted Eurodollar Rate.
The Borrower hereby promises to pay interest on the Tranche A Term Loan
in arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein).
(f) TRANCHE A TERM NOTES. The Borrower hereby agrees
that, upon the request to the Agent by any Lender, the Borrower will
execute and deliver to such Lender a promissory note evidencing the
Tranche A Term Loans of such Lender, substantially in the form of
EXHIBIT 2.4(f), with appropriate insertions as to date and principal
amount (a "TRANCHE A TERM NOTE").
45
2.5 TRANCHE B TERM LOAN.
(a) TRANCHE B TERM COMMITMENT. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Lender severally agrees to make
available to the Borrower on the Closing Date such Lender's Tranche B
Term Loan Percentage of a term loan in Dollars (the "TRANCHE B TERM
LOAN") in the aggregate principal amount of TWO HUNDRED SEVENTY MILLION
DOLLARS ($270,000,000) (the "TRANCHE B TERM LOAN COMMITTED AMOUNT").
The full principal amount of the Tranche B Term Loan shall be disbursed
on the Closing Date as a Base Rate Loan, and no portion of the Tranche
B Term Loan shall consist of a Eurodollar Loan until the date which is
10 Business Days after the Closing Date (or, if earlier, the date which
is three (3) Business Days following the date that the primary
syndication of the Tranche B Term Loan has been completed (as
determined by the Agent)). Thereafter, the Tranche B Term Loan may
consist of Base Rate Loans or Eurodollar Loans, or a combination
thereof, as the Borrower may request; PROVIDED, HOWEVER, that no more
than 15 Eurodollar Loans shall be outstanding hereunder at any time (it
being understood that, for purposes hereof, Eurodollar Loans with
different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings,
extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period).
Amounts repaid on the Tranche B Term Loan may not be reborrowed.
(b) BORROWING PROCEDURES. The Borrower shall submit an
appropriate Notice of Borrowing for the Tranche B Term Loan to the
Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the
Closing Date. Such Notice of Borrowing shall be irrevocable and shall
specify (i) that the funding of the Tranche B Term Loan is requested
and (ii) that the funding of the Tranche B Term Loan shall be comprised
of Base Rate Loans. Each Lender shall make its Tranche B Term Loan
Percentage of the Tranche B Term Loan available to the Agent for the
account of the Borrower at the office of the Agent specified in
SCHEDULE 2.1(a), or at such other office as the Agent may designate in
writing, by 1:00 P.M. (Charlotte, North Carolina time) on the Closing
Date in Dollars and in funds immediately available to the Agent.
(c) MINIMUM AMOUNTS. Each Eurodollar Loan or Base Rate
Loan that is part of the Tranche B Term Loan shall be in an aggregate
principal amount that is not less than $2,000,000 and integral
multiples of $100,000 (or the then remaining principal balance of the
Tranche B Term Loan).
(d) REPAYMENT OF TRANCHE B TERM LOAN. The Borrower hereby
promises to pay the outstanding principal amount of the Tranche B Term
Loan in twenty-eight (28) consecutive quarterly installments as follows
(as such installments may hereafter be adjusted as a result of
prepayments made pursuant to Section 3.3), unless accelerated sooner
pursuant to Section 9.2:
46
================================ ==============================
TRANCHE B TERM LOAN
PRINCIPAL AMORTIZATION PAYMENT PRINCIPAL AMORTIZATION
DATES PAYMENT
-------------------------------- ------------------------------
June 30, 2001,
September 30, 2001,
December 31, 2001,
March 31, 2002,
June 30, 2002,
September 30, 2002,
December 31, 2002,
March 31, 2003,
June 30, 2003, $675,000
September 30, 2003,
December 31, 2003,
March 31, 2004,
June 30, 2004,
September 30, 2004,
December 31, 2004,
March 31, 2005,
June 30, 2005,
September 30, 2005,
December 31, 2005,
March 31, 2006,
June 30, 2006,
September 30, 2006,
December 31, 2006 and
March 31, 2007
-------------------------------- ------------------------------
June 30, 2007,
September 30, 2007,
December 31, 2007 and $63,450,000
March 31, 2008
================================ ==============================
(e) INTEREST. Subject to the provisions of Section 3.1,
the outstanding Tranche B Term Loan shall bear interest at a per annum
rate equal to:
(i) BASE RATE LOANS. During such periods as the
Tranche B Term Loan shall be comprised in whole or in part of
Base Rate Loans, such Base Rate Loans shall bear interest at a
per annum rate equal to the Base Rate PLUS 2.00%.
(ii) EURODOLLAR LOANS. During such periods as the
Tranche B Term Loan shall be comprised in whole or in part of
Eurodollar Loans, such Eurodollar Loans shall bear interest at
a per annum rate equal to the Eurodollar Rate PLUS 3.00%.
47
The Borrower hereby promises to pay interest on the Tranche B Term Loan
in arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein).
(f) TRANCHE B TERM NOTES. The Borrower hereby agrees
that, upon the request to the Agent by any Lender, the Borrower will
execute and deliver to such Lender a promissory note evidencing the
Tranche B Term Loans of such Lender, substantially in the form of
EXHIBIT 2.5(f), with appropriate insertions as to date and principal
amount (a "TRANCHE B TERM NOTE").
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of a default in the
payment of any amount hereunder or under any of the other Credit Documents, such
overdue amount shall bear interest, payable on demand, at a per annum rate 2%
greater than the rate which would otherwise be applicable (or if no rate is
applicable, whether in respect of interest, fees or other amounts, then the
Adjusted Base Rate PLUS 2%).
3.2 EXTENSION AND CONVERSION.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; PROVIDED, HOWEVER, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto unless the Borrower makes payment of any
amounts then due and owing pursuant to Section 3.12, (ii) Loans extended as, or
converted into, Eurodollar Loans shall be subject to the terms of the definition
of "INTEREST PERIOD" set forth in Section 1.1 and shall be in such minimum
amounts as provided in, with respect to Revolving Loans, Section 2.1(b)(ii),
with respect to the Tranche A Term Loan, Section 2.4(c), or, with respect to the
Tranche B Term Loan, Section 2.5(c), (iii) no more than 15 Eurodollar Loans
shall be outstanding hereunder at any time (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same date,
although borrowings, extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period), (iv) any
request for extension or conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month and (v) Swingline Loans may not be extended or converted
pursuant to this Section 3.2. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the Agent
specified in SCHEDULE 2.1(a), or at such other office as the Agent may designate
in writing, prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business
Day of, in the case of the conversion of a Eurodollar Loan into a Base Rate
Loan, and on the third Business Day prior to, in the case of the extension of a
Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan,
the date of the proposed extension or conversion, specifying the date of the
48
proposed extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if appropriate,
the applicable Interest Periods with respect thereto. In the event the Borrower
fails to request extension or conversion of any Eurodollar Loan in accordance
with this Section 3.2, or any such conversion or extension is not permitted or
required by this Section 3.2, then such Eurodollar Loan shall be automatically
converted into a Base Rate Loan at the end of the Interest Period applicable
thereto. The Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. The Borrower shall have the
right to prepay Loans in whole or in part from time to time upon
providing at least three (3) Business Days' notice to the Agent (which
notice may be waived by the Agent) other than in connection with
Revolving Loans; PROVIDED, HOWEVER, that (i) each partial prepayment of
Loans (other than Swingline Loans) shall be in a minimum principal
amount of $2,000,000 (or $500,000 in the case of Revolving Loans) and
integral multiples of $100,000 in excess thereof (or the then remaining
principal balance of the Revolving Loans, the Tranche A Term Loan or
the Tranche B Term Loan, as applicable, if less) and (ii) any
prepayment of the Tranche A Term Loan or the Tranche B Term Loan shall
be applied ratably to the Tranche A Term Loan and the Tranche B Term
Loan, with, in each case, 25% of such prepayment being applied to the
remaining Principal Amortization Payments in direct order of maturities
thereof and 75% of such prepayment being applied ratably to the
remaining Principal Amortization Payments thereof. Subject to the
foregoing terms, amounts prepaid under this Section 3.3(a) shall be
applied as the Borrower may elect; PROVIDED that if the Borrower shall
fail to specify with respect to any voluntary prepayment, such
voluntary prepayment shall be applied first to Revolving Loans and then
ratably to the Tranche A Term Loan and the Tranche B Term Loan, in each
case first to Base Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities. All prepayments under this Section
3.3(a) shall be subject to Section 3.12, but otherwise without premium
or penalty, and, in the case of Eurodollar Loans, shall be accompanied
by interest on the principal amount prepaid through the date of
prepayment.
(b) MANDATORY PREPAYMENTS.
(i) (A) REVOLVING COMMITTED AMOUNT. If at any
time, the sum of the aggregate outstanding principal amount
of Revolving Loans PLUS LOC Obligations PLUS Swingline Loans
shall exceed the Revolving Committed Amount, the Borrower
immediately shall prepay the Revolving Loans and (after all
Revolving Loans have been repaid) cash collateralize the LOC
Obligations, in an amount sufficient to eliminate such excess.
(B) LOC COMMITTED AMOUNT. If at any
time, the sum of the aggregate principal amount of LOC
Obligations shall exceed the LOC Committed Amount, the
Borrower immediately shall cash collateralize the LOC
Obligations in an amount sufficient to eliminate such excess.
(ii) EXCESS CASH FLOW. Within 105 days after the
end of each fiscal year (commencing with the fiscal year
ending December 31, 2001), the Borrower shall
49
prepay the Loans in an amount equal to (A) 75% (if the
Leverage Ratio as of the end of such fiscal year is equal to
or greater than 3.50 to 1.00) or 50% (if the Leverage Ratio as
of the end of such fiscal year is less than 3.50 to 1.00) of
Excess Cash Flow for such prior fiscal year MINUS (B) the
amount of any voluntary prepayments made during such fiscal
year of the Tranche A Term Loan, the Tranche B Term Loan or
(to the extent accompanied by a permanent reduction in the
Revolving Committed Amount) the Revolving Loans (such
prepayment to be applied as set forth in clause (vi) below).
(iii) (A) ASSET DISPOSITIONS. Immediately upon the
occurrence of any Asset Disposition Prepayment Event, the
Borrower shall prepay the Loans in an aggregate amount equal
to (1) if the related Asset Disposition is not an Acquired
Non-Core Asset Disposition, 100% of the Net Cash Proceeds of
such Asset Disposition not applied (or caused to be applied)
by the Credit Parties during the related Application Period to
make Eligible Reinvestments or (2) if the related Asset
Disposition is an Acquired Non-Core Asset Disposition, 100% of
the Net Cash Proceeds of such Asset Disposition (in each case,
such prepayment to be applied as set forth in clause (vi)
below).
(B) INVOLUNTARY DISPOSITIONS.
Immediately upon the occurrence of an Involuntary Disposition
Prepayment Event, the Borrower shall prepay the Loans in an
aggregate amount equal to 100% of the Excess Proceeds (such
prepayment to be applied as set forth in clause (vi) below).
(iv) DEBT ISSUANCES. Immediately upon the
occurrence of a Debt Issuance Prepayment Event, the Borrower
shall prepay the Loans in an aggregate amount equal to 100% of
the Net Cash Proceeds of the related Debt Issuance (such
prepayment to be applied as set forth in clause (vi) below).
(v) EQUITY ISSUANCES. Immediately upon the
occurrence of an Equity Issuance Prepayment Event, the
Borrower shall prepay the Loans in an aggregate amount equal
to the lesser of (A) 50% of the Net Cash Proceeds of the
related Equity Issuance or (B) except in the case of a
Qualifying IPO, the Net Cash Proceeds not applied to make
Eligible Reinvestments during the Application Period (such
prepayment to be applied as set forth in clause (vi) below).
(vi) APPLICATION OF MANDATORY PREPAYMENTS. All
amounts required to be paid pursuant to this Section 3.3(b)
shall be applied as follows: (A) with respect to all amounts
prepaid pursuant to Section 3.3(b)(i)(A), to Revolving Loans
and (after all Revolving Loans have been repaid) to a cash
collateral account in respect of LOC Obligations, (B) with
respect to all amounts prepaid pursuant to Section
3.3(b)(i)(B), to a cash collateral account in respect of LOC
Obligations, (C) with respect to all amounts prepaid pursuant
to Section 3.3(b)(ii), FIRST, pro rata to the Tranche A Term
Loan and the Tranche B Term Loan (with, in each case, 25% of
such prepayment being applied to the remaining Principal
Amortization Payments in direct order of maturities thereof
and 75% of such prepayment being applied ratably to the
remaining Principal Amortization Payments thereof) and SECOND,
to the Revolving
50
Loans and (after all Revolving Loans have been repaid) to a
cash collateral account in respect of LOC Obligations (without
any reduction in the Revolving Committed Amount), (D) with
respect to all amounts prepaid pursuant to Section
3.3(b)(iii)(A)(1) and 3.3(b)(iii)(B), FIRST, pro rata to the
Tranche A Term Loan and the Tranche B Term Loan (in each case
ratably to remaining Principal Amortization Payments) and
SECOND, to the Revolving Loans and (after all Revolving Loans
have been repaid) to a cash collateral account in respect of
LOC Obligations (with a corresponding reduction in the
Revolving Committed Amount in an amount equal to all amounts
applied pursuant to this clause (D)), (E) with respect to all
amounts prepaid pursuant to Section 3.3(b)(iii)(A)(2), FIRST,
to the Revolving Loans and (after all Revolving Loans have
been repaid) to a cash collateral account in respect of LOC
Obligations (without any reduction in the Revolving Committed
Amount) and SECOND, pro rata to the Tranche A Term Loan and
the Tranche B Term Loan (in each case ratably to remaining
Principal Amortization Payments), (F) with respect to all
amounts prepaid pursuant to Section 3.3(b)(iv), FIRST, pro
rata to the Tranche A Term Loan and the Tranche B Term Loan
(in each case to remaining Principal Amortization Payments in
inverse order of maturities thereof) and SECOND, to the
Revolving Loans (without any reduction in the Revolving
Committed Amount) and (G) with respect to all amounts prepaid
pursuant to Section 3.3(b)(v), FIRST, pro rata to the Tranche
A Term Loan and the Tranche B Term Loan (in each case ratably
to remaining Principal Amortization Payments thereof) and
SECOND, to the Revolving Loans (without any reduction in the
Revolving Committed Amount). Solely for purposes of
determining the pro rata share of the Lenders in connection
with any prepayment referred to in this subclause (D) of this
clause (vi), the outstanding principal amount of all Revolving
Loans and LOC Obligations of any Lender which then holds
outstanding Tranche A Term Loans shall be deemed to be
additional Tranche A Term Loan principal owing to such Lender.
Within the parameters of the applications set forth above,
prepayments shall be applied first to Base Rate Loans and then
to Eurodollar Loans in direct order of Interest Period
maturities. All prepayments under this Section 3.3(b) shall be
subject to Section 3.12, but otherwise without premium or
penalty, and shall, in the case of Eurodollar Loans, be
accompanied by interest on the principal amount prepaid
through the date of prepayment.
(vii) PREPAYMENT ACCOUNT. If the Borrower is
required to make a mandatory prepayment of Eurodollar Loans
under this Section 3.3(b), the Borrower shall have the right,
in lieu of making such prepayment in full, to deposit an
amount equal to such mandatory prepayment with the Agent in a
cash collateral account maintained (pursuant to documentation
reasonably satisfactory to the Agent) by and in the sole
dominion and control of the Agent. Any amounts so deposited
shall be held by the Agent as collateral for the prepayment of
such Eurodollar Loans and shall be applied to the prepayment
of the applicable Eurodollar Loans at the end of the current
Interest Periods applicable thereto or, subject to the terms
of Section 3.12, as earlier requested in writing by the
Borrower. At the request of the Borrower, amounts so deposited
shall be invested by the Agent in Cash Equivalents maturing
prior to the date or dates on which it is anticipated that
such amounts will be applied to prepay such Eurodollar Loans;
any interest earned on such Cash Equivalents will be for the
account of the
51
Borrower and the Borrower will deposit with the Agent the
amount of any loss on any such Cash Equivalents to the extent
necessary in order that the amount of the prepayment to be
made with the deposited amounts may not be reduced.
(viii) NOTICE OF MANDATORY PREPAYMENTS. The
Borrower agrees to use reasonable efforts to notify the Agent
of any mandatory prepayments of the Loans required to be made
pursuant to this Section 3.3(b).
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED
AMOUNT.
(a) VOLUNTARY REDUCTIONS. The Borrower may from time to
time permanently reduce or terminate the Revolving Committed Amount in
whole or in part (in minimum aggregate amounts of $2,500,000 or in
integral multiples of $100,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Revolving Committed Amount))
upon five Business Days' prior written notice to the Agent; PROVIDED,
HOWEVER, no such termination or reduction shall be made which would
cause the sum of the aggregate outstanding principal amount of
Revolving Loans PLUS LOC Obligations PLUS Swingline Loans to exceed the
Revolving Committed Amount, unless, concurrently with such termination
or reduction, the Revolving Loans are repaid to the extent necessary to
eliminate such excess. The Agent shall promptly notify each affected
Lender of receipt by the Agent of any notice from the Borrower pursuant
to this Section 3.4(a).
(b) TERM LOAN COMMITMENTS. The Tranche A Term Loan
Commitment of each Lender, if any, shall automatically terminate at
such time as such Lender shall have made available to the Borrower such
Lender's share of the Tranche A Term Loan, and the Tranche B Term Loan
Commitment of each Lender, if any, shall automatically terminate at
such time as such Lender shall have made available to the Borrower such
Lender's share of the Tranche B Term Loan.
(c) MANDATORY REDUCTIONS. The Revolving Committed Amount
and the Swingline Committed Amount automatically shall be permanently
reduced from time to time in accordance with the terms of Section
3.3(b)(vi).
(d) MATURITY DATE. Unless terminated sooner pursuant to
Section 3.4(a) or Section 9.2, the Revolving Commitments of the Lenders
and the LOC Commitment of the Issuing Lender shall automatically
terminate on the Maturity Date.
(e) GENERAL. The Borrower shall pay to the Agent for the
account of the Lenders (except to the extent that any Lender was a
Defaulting Lender during the applicable period in which such fee
accrued) in accordance with the terms of Section 3.5(a), on the date of
each termination or reduction of the Revolving Committed Amount, the
Unused Fee accrued through the date of such termination or reduction on
the amount of the Revolving Committed Amount so terminated or reduced.
3.5 FEES.
(a) UNUSED FEE. In consideration of the Revolving
Commitments of the Lenders hereunder, the Borrower hereby promises to
pay to the Agent for the account of each Lender
52
(except to the extent that any Lender was a Defaulting Lender during
the applicable period in which such fee accrued) a fee (the "UNUSED
FEE") on the Unused Revolving Committed Amount computed at a per annum
rate for each day during the applicable Unused Fee Calculation Period
(hereinafter defined) at a rate equal to the Applicable Percentage in
effect from time to time. The Unused Fee shall commence to accrue on
the Closing Date and shall be due and payable in arrears on the last
Business Day of each March, June, September and December (and on any
date that the Revolving Committed Amount is reduced pursuant to Section
3.4(a) and on the Maturity Date) for the immediately preceding quarter
(or portion thereof) (each such quarter or portion thereof for which
the Unused Fee is payable hereunder being herein referred to as an
"UNUSED FEE CALCULATION PERIOD"), beginning with the first of such
dates to occur after the Closing Date.
(b) LETTER OF CREDIT FEES.
(i) STANDBY LETTER OF CREDIT ISSUANCE FEE. In
consideration of the issuance of standby Letters of Credit
hereunder, the Borrower hereby promises to pay to the Agent
for the account of each Lender (except to the extent that any
Lender was a Defaulting Lender during the applicable period in
which such fee accrued) a fee (the "STANDBY LETTER OF CREDIT
FEE") on such Lender's Revolving Commitment Percentage of the
average daily maximum amount available to be drawn under each
such standby Letter of Credit computed at a per annum rate for
each day from the date of issuance to the date of expiration
equal to the Applicable Percentage. The Standby Letter of
Credit Fee will be payable quarterly in arrears on the last
Business Day of each March, June, September and December for
the immediately preceding quarter (or a portion thereof).
(ii) TRADE LETTER OF CREDIT DRAWING FEE. In
consideration of the issuance of trade Letters of Credit
hereunder, the Borrower hereby promises to pay to the Agent
for the account of each Lender (except to the extent that any
Lender was a Defaulting Lender during the applicable period in
which such fee accrued) a fee (the "TRADE LETTER OF CREDIT
FEE") on such Lender's Revolving Commitment Percentage of the
average daily maximum amount available to be drawn under each
such trade Letter of Credit computed at a per annum rate for
each day from the date of issuance to the date of expiration
equal to the Applicable Percentage. The Trade Letter of Credit
Fee will be payable quarterly in arrears on the last Business
Day of each March, June, September and December for the
immediately preceding quarter (or a portion thereof).
(iii) ISSUING LENDER FEES. In addition to the
Standby Letter of Credit Fee payable pursuant to clause (i)
above and the Trade Letter of Credit Fee payable pursuant to
clause (ii) above, the Borrower hereby promises to pay to the
Agent for the account of the Issuing Lender without sharing by
the other Lenders (i) a letter of credit fronting fee of
0.125% on the average daily maximum amount available to be
drawn under each Letter of Credit computed at a per annum rate
for each day from the date of issuance to the date of
expiration (which fronting fee shall be payable quarterly in
arrears on the last Business Day of each March, June,
September and December for the immediately preceding quarter
(or a portion thereof)) and (ii) the customary charges from
time to time of the Issuing Lender with respect to the
53
issuance, amendment, transfer, administration, cancellation
and conversion of, and drawings under, such Letters of Credit.
(c) AGENT'S FEES. The Borrower hereby (i) absolutely
accepts and assumes all of the duties, obligations and liabilities of
the Sponsor in, to and under the Agent's Fee Letter to the same extent
as if the Borrower had executed the Agent's Fee Letter and (ii)
promises to pay to the Agent, for its own account and for the account
of Banc of America Securities LLC, as applicable, the fees referred to
in the Agent's Fee Letter.
3.6 CAPITAL ADEQUACY.
(a) If any Lender has determined, after the date hereof,
that the adoption or the becoming effective of, or any change in, or
any change by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof in the
interpretation or administration of, any applicable law, rule or
regulation regarding capital adequacy, or compliance by such Lender
with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, effectiveness, change
or compliance (taking into consideration such Lender's policies with
respect to capital adequacy) by an amount deemed by such Lender to be
material, then, upon notice from such Lender through the Agent to the
Borrower setting forth in reasonable detail the charge and the
calculation of such reduced rate of return to the Borrower, the
Borrower shall be obligated to pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction to
the extent that such Lender reasonably determines that such additional
amount is allocable to the existence of such Lender's commitments or
obligations hereunder. Each determination by any such Lender of amounts
owing under this Section shall, absent demonstrable error, be
conclusive and binding on the parties hereto.
(b) The Borrower shall not be required to compensate a
Lender pursuant to this Section 3.6 for any additional amounts incurred
more than 180 days prior to the date that such Lender notifies the
Borrower of the change of law giving rise to such additional amounts
and of such Lender's intention to claim compensation therefor; PROVIDED
that, if the change of law giving rise to such additional amounts is
retroactive, then such 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
54
(b) the Required Lenders determine (which determination
shall be conclusive) and notify the Agent that the Eurodollar Rate will
not adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement. The Agent or the
Required Lenders, as the case may be, will withdraw such determination pursuant
to this Section promptly as circumstances allow.
3.8 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable). Each Lender will designate a different Applicable Lending Office if
such designation will permit such Lender to continue to make, maintain, or fund
Eurodollar Loans hereunder and will not, in the judgment of such Lender, be
otherwise materially disadvantageous to it.
3.9 REQUIREMENTS OF LAW.
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any applicable
law, rule, or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank, or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office)
with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans or its obligation to make Eurodollar Loans, or change
the basis of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Credit Agreement in respect of
any Eurodollar Loans (other than Taxes defined in Section 3.11(a) and
taxes imposed on the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office or such
Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Eurodollar Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities
55
or commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or the London interbank market any other condition
affecting this Credit Agreement or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase, by an amount
deemed by such Lender (or its Applicable Lending Office) to be
material, the cost to such Lender (or its Applicable Lending Office) of
making, Converting into, Continuing, or maintaining any Eurodollar
Loans or to reduce any sum received or receivable by such Lender (or
its Applicable Lending Office) under this Credit Agreement with respect
to any Eurodollar Loans, then the Borrower shall pay to such Lender on
demand such amount or amounts as will compensate such Lender for such
increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such
Lender (with a copy to the Agent), suspend the obligation of such
Lender to make or Continue Eurodollar Loans, or to Convert Base Rate
Loans into Eurodollar Loans, until the event or condition giving rise
to such request ceases to be in effect (in which case the provisions of
Section 3.10 shall be applicable); PROVIDED that such suspension shall
not affect the right of such Lender to receive the compensation so
requested. Each Lender shall promptly notify the Borrower and the Agent
of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender to compensation pursuant to this
Section 3.9 and will designate a different Applicable Lending Office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Lender, be otherwise
materially disadvantageous to it. Any Lender claiming compensation
under this Section 3.9 shall furnish to the Borrower and the Agent a
statement setting forth in reasonable detail the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the
absence of demonstrable error. In determining such amount, such Lender
may use any reasonable averaging and attribution methods.
(c) The Borrower shall not be required to compensate a
Lender pursuant to this Section 3.9 for any increased costs or
reductions incurred more than 180 days prior to the date that such
Lender notifies the Borrower of the change of law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; PROVIDED that, if the change of law giving rise
to such increased costs or reductions is retroactive, then such 180-day
period referred to above shall be extended to include the period of
retroactive effect thereof.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.7, 3.8 or 3.9 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for such Eurodollar Loans (or, in the
case of a Conversion required by Section 3.8, on such earlier date as required
by law as such Lender may specify to the Borrower with a copy to the Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in Section 3.7, 3.8 or 3.9 hereof that gave rise to such
Conversion no longer exist:
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(a) to the extent that such Lender's Eurodollar Loans
have been so Converted, all payments and prepayments of principal that
would otherwise be applied to such Lender's Eurodollar Loans shall be
applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued
by such Lender as Eurodollar 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 Loans shall remain as Base Rate
Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.7, 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar 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 Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar 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.
3.11 TAXES.
(a) Except as otherwise provided herein, any and all
payments by any Credit Party to or for the account of any Lender or the
Agent hereunder or under any other Credit Document shall be made free
and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, EXCLUDING, in the case of
each Lender and the Agent, taxes imposed on it as a result of a present
or former connection between the Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from the Agent or such Lender
having executed, delivered or performed its obligations or received a
payment under, or enforced this Credit Agreement or any other Credit
Document) (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter
referred to as "TAXES"). If any Credit Party shall be required by law
to deduct any Taxes from or in respect of any sum payable under this
Credit Agreement or any other Credit Document to any Lender or the
Agent, (i) the sum payable shall be increased as necessary so that
after making all required deductions of Taxes (including deductions
applicable to additional sums payable under this Section 3.11) such
Lender or the Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Credit Party shall
make such deductions, (iii) such Credit Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law, and (iv) such Credit Party shall
furnish to the Agent, at its address referred to in Section 11.1, the
original or a certified copy of a receipt evidencing payment thereof.
Notwithstanding the foregoing, no additional sums shall be payable
pursuant to this Section 3.11(a) with respect to Taxes (A) that are
attributable to such Lender's failure to comply with Section 3.11(d),
(B) that are United States withholding taxes imposed on amounts payable
to such Lender at the time the Lender
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becomes a party to this Credit Agreement or (C) unless imposed as a
result of a change in treaty, law or regulation.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Credit Agreement or any other Credit Document
or from the execution or delivery of, or otherwise with respect to,
this Credit Agreement or any other Credit Document (hereinafter
referred to as "OTHER TAXES").
(c) The Borrower agrees to indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 3.11) paid by such
Lender or the Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect
thereto.
(d) Each Lender that is not a United States person under
Section 7701(a)(30) of the Code, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each
Lender listed on the signature pages hereof and on or prior to the date
on which it becomes a Lender in the case of each other Lender, and from
time to time thereafter if requested in writing by the Borrower or the
Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue
Service Form W-8 BEN or W-8 ECI, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender
is entitled to benefits under an income tax treaty to which the United
States is a party which reduces to zero the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant
to this Credit Agreement is effectively connected with the conduct of a
trade or business in the United States, (ii) Internal Revenue Service
Form W-8 or W-9, as appropriate, or any successor form prescribed by
the Internal Revenue Service, and/or (iii) any other form or
certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Code), certifying that
such Lender is entitled to an exemption from tax on payments pursuant
to this Credit Agreement or any of the other Credit Documents. In
addition, each Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such
Lender. Each Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered form to the Borrower (or any other form adopted by the United
States taxing authorities for such purposes).
(e) For any period with respect to which a Lender has
failed to provide the Borrower and the Agent with the appropriate form
pursuant to Section 3.11(d) (unless such failure is due to a change in
treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 3.11(a) or 3.11(b) with
respect to Taxes imposed by the United States; PROVIDED, HOWEVER, that
should a Lender, which is otherwise exempt from withholding tax, become
subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as such Lender shall
reasonably request to assist such Lender to recover such Taxes.
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(f) If any Credit Party is required to pay additional
amounts to or for the account of any Lender pursuant to this Section
3.11, then such Lender will agree to use reasonable efforts to change
the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such
change, in the judgment of such Lender, is not otherwise materially
disadvantageous to such Lender.
(g) Without prejudice to the survival of any other
agreement of the Credit Parties hereunder, the agreements and
obligations of the Credit Parties contained in this Section 3.11 shall
survive the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the
Commitments hereunder.
(h) If the Agent or any Lender receives a refund with
respect to Taxes paid by the Borrower, which in the good faith judgment
of such Lender is allocable to such payment, the Agent or Lender,
respectively shall promptly pay such refund, together with any other
amounts paid by the Borrower in connection with such refunded Taxes, to
the Borrower, net of all out-of-pocket expenses of such Lender incurred
in obtaining such refund, PROVIDED, HOWEVER, that the Borrower agrees
to promptly return such refund to the Agent or the applicable Lender,
as the case may be, if it receives notice from the Agent or applicable
Lender that such Agent or Lender is required to repay such refund. Each
of the Agent and each Lender agrees that it will contest such Taxes or
liabilities if the Agent or such Lender determines, in its reasonable
judgment, that it would not be materially disadvantaged or prejudiced
as a result of such contest.
3.12 COMPENSATION.
Upon the request of any Lender, the Borrower shall pay to such Lender
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (excluding loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a
Eurodollar Loan or Quoted Rate Swingline Loan for any reason (other
than in connection with any assignment by any Lender pursuant to
Section 11.3(b), but including acceleration of the Loans pursuant to
Section 9.2) on a date other than the last day of the Interest Period
for such Loan; or
(b) any failure by the Borrower for any reason
(including, without limitation, the failure of any condition precedent
specified in Section 5 to be satisfied) to borrow, Convert, Continue,
or prepay a Eurodollar Loan or Quoted Rate Swingline Loan on the date
for such borrowing, Conversion, Continuation, or prepayment specified
in the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest (other than the
Applicable Percentage) which would have accrued on the amount so prepaid, or not
so borrowed, Converted or Continued, for the period from the date of such
prepayment or of such failure to borrow, Convert or Continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, Convert
or Continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, the Applicable
59
Percentage included therein, if any) over (b) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. Any Lender claiming
compensation under this Section 3.12 shall furnish to the Borrower and the Agent
a statement setting forth in reasonable detail the calculation of the amounts to
be paid to it hereunder. The covenants of the Borrower set forth in this Section
3.12 shall survive the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder; PROVIDED, HOWEVER, the Borrower shall not be required to compensate a
Lender pursuant to this Section 3.12 for any such loss, cost or expense incurred
more than 180 days prior to the date that such Lender notifies the Borrower of
the incurrence of such loss, cost or expense.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) LOANS. Each Loan, each payment or (subject to the
terms of Section 3.3) prepayment of principal of any Loan or
reimbursement obligations arising from drawings under Letters of
Credit, each payment of interest on the Loans or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of Unused Fees, each payment of the Standby Letter of Credit Fee, each
payment of the Trade Letter of Credit Fee, each reduction of the
Revolving Committed Amount and each conversion or extension of any
Loan, shall be allocated pro rata among the Lenders in accordance with
the respective principal amounts of their outstanding Loans of the
applicable type and Participation Interests in Loans of the applicable
type and Letters of Credit.
(b) ADVANCES. No Lender shall be responsible for the
failure or delay by any other Lender in its obligation to make its
ratable share of a borrowing hereunder; PROVIDED, HOWEVER, that the
failure of any Lender to fulfill its obligations hereunder shall not
relieve any other Lender of its obligations hereunder. Unless the Agent
shall have been notified by any Lender prior to the date of any
requested borrowing that such Lender does not intend to make available
to the Agent its ratable share of such borrowing to be made on such
date, the Agent may assume that such Lender has made such amount
available to the Agent on the date of such borrowing, and the Agent in
reliance upon such assumption, may (in its sole discretion but without
any obligation to do so) make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to
the Agent, the Agent shall be able to recover such corresponding amount
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent will promptly
notify the Borrower, and the Borrower shall promptly pay such
corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Lender or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered by the Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for
the applicable borrowing pursuant to the Notice of Borrowing and (ii)
from a Lender at the Federal Funds Rate.
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3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law and in a manner not inconsistent
with this Credit Agreement, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such Participation Interest as
fully as if such Lender were a holder of such Loan, LOC Obligations or other
obligation in the amount of such Participation Interest. Except as otherwise
expressly provided in this Credit Agreement, if any Lender shall fail to remit
to the Agent or any other Lender an amount payable by such Lender to the Agent
or such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Agent or such other Lender at a rate per annum equal to the Federal Funds
Rate. If under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a setoff to which this Section 3.14
applies, such Lender shall, to the extent practicable, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.14 to share in the benefits of any recovery on such
secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) GENERALLY. Except as otherwise specifically provided
herein, all payments hereunder shall be made to the Agent in Dollars in
immediately available funds, without setoff, deduction, counterclaim or
withholding of any kind, at the Agent's office specified in SCHEDULE
2.1(a) not later than 2:00 P.M. (Charlotte, North Carolina time) on the
date when due. Payments received after such time shall be deemed to
have been received on the next succeeding Business Day. The Borrower
shall, at the time it makes any payment under this Credit Agreement,
specify to the Agent the Loans, LOC Obligations, Fees, interest or
other amounts payable by the Borrower hereunder to which such payment
is to be applied (and in the event that it fails so to specify, or if
such application would be inconsistent with the terms hereof, the Agent
shall distribute such payment to the Lenders in such manner as the
Agent may determine to be appropriate in respect of obligations owing
by the Borrower hereunder, subject to the terms of Sections 3.3 and
3.13(a)). The Agent will distribute such
61
payments to such Lenders, if any such payment is received prior to 2:00
P.M. (Charlotte, North Carolina time) on a Business Day in like funds
as received prior to the end of such Business Day and otherwise the
Agent will distribute such payment to such Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated
to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (subject to
accrual of interest and Fees for the period of such extension), except
that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such
payment shall instead be made on the next preceding Business Day.
Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days
elapsed over a year of 360 days, except with respect to computation of
interest on Base Rate Loans which shall be calculated based on a year
of 365 or 366 days, as appropriate. Interest shall accrue from and
include the date of borrowing, but exclude the date of payment.
(b) ALLOCATION OF PAYMENTS AFTER ACCELERATION.
Notwithstanding any other provision of this Credit Agreement to the
contrary, after acceleration of the Credit Party Obligations pursuant
to Section 9.2(d), all amounts collected or received by the Agent or
any Lender on account of the Credit Party Obligations or in respect of
the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation reasonable
attorneys' fees) of the Agent in connection with enforcing the
rights of the Lenders under the Credit Documents and any
protective advances made by the Agent with respect to the
Collateral under or pursuant to the terms of the Collateral
Documents;
SECOND, to payment of any fees payable to the Agent
then due and owing;
THIRD, to the payment of all of the Credit Party
Obligations consisting of accrued fees and interest;
FOURTH, to the payment of the outstanding principal
amount of the Credit Party Obligations (including the payment
or cash collateralization of the outstanding LOC Obligations);
FIFTH, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation, reasonable
attorneys' fees) of each of the Lenders in connection with
enforcing its rights under the Credit Documents or otherwise
with respect to the Credit Party Obligations owing to such
Lender;
SIXTH, to all other Credit Party Obligations and
other obligations which shall have become due and payable
under the Credit Documents or otherwise and not repaid
pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to
whomever may be lawfully entitled to receive such surplus.
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In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Agent in a cash collateral account and
applied (A) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (B) then, following
the expiration of all Letters of Credit, to all other obligations of
the types described in clauses "FIFTH" and "SIXTH" above in the manner
provided in this Section 3.15(b).
3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts
evidencing each Loan made by such Lender to the Borrower from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Credit Agreement. Each
Lender will make reasonable efforts to maintain the accuracy of its
account or accounts and to promptly update its account or accounts from
time to time, as necessary.
(b) The Agent shall maintain the Register pursuant to
Section 11.3(c), and a subaccount for each Lender, in which Register
and subaccounts (taken together) shall be recorded (i) the amount, type
and Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to
each Lender hereunder and (iii) the amount of any sum received by the
Agent hereunder from or for the account of any Credit Party and each
Lender's share thereof. The Agent will make reasonable efforts to
maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register and
subaccounts maintained pursuant to clause (b) of this Section 3.16
(and, if consistent with the entries of the Agent, clause (a)) shall be
prima facie evidence of the existence and amounts of the obligations of
the Credit Parties therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Agent to maintain any such account, such
Register or such subaccount, as applicable, or any error therein, shall
not in any manner affect the obligation of the Credit Parties to repay
the Credit Party Obligations owing to such Lender.
3.17 REPLACEMENT OF AFFECTED LENDERS.
If (i) any Lender having a Revolving Commitment becomes a Defaulting
Lender or otherwise defaults in its Revolving Commitment, (ii) any Credit Party
is required to make any payments to any Lender under Section 3.6, Section 3.8,
Section 3.9 or Section 3.11 in excess of the proportionate amount (based on the
respective Commitments and/or Loans of the Lenders) of corresponding payments
required to be made to the other Lenders or (iii) in the event of a refusal by a
Lender to consent to a proposed change, waiver, discharge or termination which
requires only the consent of the Required Lenders, the Borrower shall have the
right to replace such
63
Lender (the "REPLACED LENDER") with one or more other Eligible Assignee or
Eligible Assignees, none of whom shall constitute a Defaulting Lender at the
time of such replacement (collectively, the "REPLACEMENT LENDER"), PROVIDED that
(a) except in the case of clause (iii) above, no Event of Default then exists,
(b) at the time of any replacement pursuant to this Section 3.17, the Replaced
Lender and Replacement Lender shall enter into an Assignment and Acceptance
pursuant to which the Replacement Lender shall acquire all or a portion, as the
case may be, of the Commitments and outstanding Loans of, and participation in
Letters of Credit by, the Replaced Lender and (c) all obligations of the
Borrower owing to the Replaced Lender relating to the Loans so replaced
(including, without limitation, such increased costs and excluding those
specifically described in clause (b) above in respect of which the assignment
purchase price has been, or is concurrently being paid) shall be paid in full to
such Replaced Lender concurrently with such replacement. Upon the execution of
the appropriate Assignment and Acceptance, the payment of amounts referred to in
clauses (b) and (c) above and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes executed by
the Borrower, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder with respect to
such replaced Loans, except with respect to indemnification provisions under
this Agreement, which shall survive as to such Replaced Lender. Notwithstanding
anything to the contrary contained above, (1) the Lender that acts as the
Issuing Lender may not be replaced hereunder at any time that it has Letters of
Credit outstanding hereunder unless arrangements satisfactory to the Issuing
Lender (including the furnishing of a back-up standby letter of credit in form
and substance, and issued by an issuer satisfactory to such Issuing Lender or
the depositing of cash collateral into a cash collateral account maintained with
the Agent in amounts and pursuant to arrangements satisfactory to such Issuing
Lender) have been made with respect to such outstanding Letters of Credit and
(2) the Lender that acts as the Agent may not be replaced hereunder except in
accordance with the terms of Section 10.7. The Replaced Lender shall be required
to deliver for cancellation its applicable Notes, if any, to be canceled on the
date of replacement, or if any such Note is lost or unavailable, such other
assurances or indemnification therefor as the Borrower may reasonably request.
SECTION 4
GUARANTY
4.1 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and the
Agent as hereinafter provided, as primary obligor and not as surety, the prompt
payment of the Credit Party Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Credit Party Obligations
are not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Credit Party Obligations, the same
will be promptly paid in full when due
64
(whether at extended maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise) in accordance with the terms of
such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor under this Credit Agreement and the other Credit Documents shall be
limited to an aggregate amount equal to the largest amount that would not render
such obligations subject to avoidance under Section 548 of the Bankruptcy Code
or any comparable provisions of any applicable state law.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the Credit Party Obligations have been Fully Satisfied. Without
limiting the generality of the foregoing, it is agreed that, to the fullest
extent permitted by law, the occurrence of any one or more of the following
shall not alter or impair the liability of any Guarantor hereunder which shall
remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to
any Guarantor, the time for any performance of or compliance with any
of the Credit Party Obligations shall be extended, or such performance
or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of
any of the Credit Documents, any Hedging Agreement between any
Consolidated Party and any Lender, or any Affiliate of a Lender, or any
other agreement or instrument referred to in the Credit Documents or
such Hedging Agreements shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations
shall be accelerated, or any of the Credit Party Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Credit Documents, any Hedging Agreement between any
Consolidated Party and any Lender, or any Affiliate of a Lender, or any
other agreement or instrument referred to in the Credit Documents or
such Hedging Agreements shall be waived or any other guarantee of any
of the Credit Party Obligations or any security therefor shall be
released, impaired or exchanged in whole or in part or otherwise dealt
with;
(d) any Lien granted to, or in favor of, the Agent or any
Lender or Lenders as security for any of the Credit Party Obligations
shall fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be
determined to be void or voidable (including, without limitation, for
the benefit of any creditor of any Guarantor) or
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shall be subordinated to the claims of any Person (including, without
limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement between any Consolidated Party and any Lender, or any
Affiliate of a Lender, or any other agreement or instrument referred to in the
Credit Documents or such Hedging Agreements, or against any other Person under
any other guarantee of, or security for, any of the Credit Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Section 4,
each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat.
Sections 26-7 through 26-9, inclusive, to the extent applicable. Each
Guarantor further agrees that such Guarantor shall have no right of recourse
to security for the Credit Party Obligations, except through the exercise of
rights of subrogation pursuant to Section 4.2 and through the exercise of
rights of contribution pursuant to Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Collateral Documents and that the
Lenders may exercise their remedies thereunder in accordance with the terms
thereof.
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4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment. The
payment obligations of any Guarantor under this Section 4.6 shall be subordinate
and subject in right of payment to the Credit Party Obligations until such time
as the Credit Party Obligations have been Fully Satisfied, and none of the
Guarantors shall exercise any right or remedy under this Section 4.6 against any
other Guarantor until such Credit Party Obligations have been Fully Satisfied.
For purposes of this Section 4.6, (a) "EXCESS PAYMENT" shall mean the amount
paid by any Guarantor in excess of its Pro Rata Share of any Guaranteed
Obligations; (b) "PRO RATA SHARE" shall mean, for any Guarantor in respect of
any payment of Credit Party Obligations, the ratio (expressed as a percentage)
as of the date of such payment of Guaranteed Obligations of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of all of the Credit Parties exceeds the amount of all of the debts
and liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Credit Parties hereunder) of
the Credit Parties; PROVIDED, HOWEVER, that, for purposes of calculating the Pro
Rata Shares of the Guarantors in respect of any payment of Credit Party
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such
payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such payment; and (C) "CONTRIBUTION SHARE" shall mean, for any Guarantor in
respect of any Excess Payment made by any other Guarantor, the ratio (expressed
as a percentage) as of the date of such Excess Payment of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Credit Parties other than the maker of such Excess Payment
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Credit Parties) of the Credit Parties other than the maker of
such Excess Payment; PROVIDED, HOWEVER, that, for purposes of calculating the
Contribution Shares of the Guarantors in respect of any Excess Payment, any
Guarantor that became a Guarantor subsequent to the date of any such Excess
Payment shall be deemed to have been a Guarantor on the date of such Excess
Payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such Excess Payment. This Section 4.6 shall not be deemed to affect any
right of subrogation, indemnity, reimbursement or contribution that any
Guarantor may have under applicable law against the Borrower in respect of any
payment of Guaranteed Obligations. Notwithstanding the foregoing, all rights of
contribution against any Guarantor shall terminate from and after such time, if
ever, that such Guarantor shall be relieved of its obligations pursuant to
Section 8.5.
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4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions:
(a) EXECUTED CREDIT DOCUMENTS. Receipt by the Agent of
duly executed copies of: (i) this Credit Agreement, (ii) the Collateral
Documents and (iii) all other Credit Documents.
(b) CORPORATE DOCUMENTS. Receipt by the Agent of the
following:
(i) CHARTER DOCUMENTS. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Closing Date.
(ii) BYLAWS. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(iii) RESOLUTIONS. Copies of resolutions of the
Board of Directors of each Credit Party approving and adopting
the Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iv) GOOD STANDING. Copies of (A) certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could
have a Material Adverse Effect and (B) to the extent
available, a certificate indicating payment of all corporate
or comparable franchise taxes certified as of a recent date by
the appropriate governmental taxing authorities.
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(v) INCUMBENCY. An incumbency certificate of
each Credit Party certified by a secretary or assistant
secretary to be true and correct as of the Closing Date.
(c) OPINIONS OF COUNSEL. The Agent shall have received,
in each case dated as of the Closing Date and in form and substance
reasonably satisfactory to the Agent:
(i) a legal opinion of Kirkland & Ellis, counsel
for the Credit Parties;
(ii) a legal opinion of special Minnesota counsel
for the Credit Parties; and
(iii) a legal opinion of special local counsel for
the Credit Parties.
(d) PERSONAL PROPERTY COLLATERAL. The Agent shall have
received:
(i) searches of Uniform Commercial Code filings
in the jurisdiction of the chief executive office of each
Credit Party and each jurisdiction where a filing would need
to be made in order to perfect the Agent's security interest
in the Collateral, copies of the financing statements on file
in such jurisdictions and evidence that no Liens on the
Collateral exist other than Permitted Liens;
(ii) duly executed UCC financing statements for
each appropriate jurisdiction as is necessary, in the Agent's
reasonable discretion, to perfect the Agent's security
interest in the Collateral;
(iii) searches of ownership of, and Liens on,
federally registered intellectual property of each Credit
Party in the appropriate governmental offices;
(iv) all certificates evidencing any certificated
Capital Stock pledged to the Agent pursuant to the Pledge
Agreement, together with duly executed in blank, undated stock
powers attached thereto (unless, with respect to the pledged
Capital Stock of any Foreign Subsidiary, such stock powers are
deemed unnecessary by the Agent in its reasonable discretion
under the law of the jurisdiction of incorporation of such
Person);
(v) duly executed notices of grant of security
interest in the form required by the Security Agreement as are
necessary, in the Agent's sole discretion, to perfect the
Agent's security interest in the Collateral;
(vi) all instruments and chattel paper having a
value in excess of $100,000 in the possession of any of the
Credit Parties, together with allonges or assignments as may
be necessary or appropriate to perfect the Agent's security
interest in the Collateral; and
(vii) in the case of any personal property
Collateral located at a premises leased by a Credit Party,
such estoppel letters, consents and waivers from the landlords
on such real property as may be (A) reasonably required by the
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Agent and (B) obtainable upon the exercise of commercially
reasonable efforts by the Credit Parties.
(e) REAL PROPERTY COLLATERAL. Except with respect to the
owned Real Properties identified as items 3, 4, 5, 6, 7 and 24 in
subpart (1) of SCHEDULE 6.20(a), the Agent shall have received the
following, in form and substance reasonably satisfactory to the Agent:
(i) fully executed and notarized mortgages,
deeds of trust or deeds to secure debt (each, as the same may
be amended, modified, restated or supplemented from time to
time, a "MORTGAGE INSTRUMENT" and collectively the "MORTGAGE
INSTRUMENTS") encumbering the fee interest and/or, to the
extent available using commercially reasonable efforts,
leasehold interest of any Credit Party in each of the Real
Properties designated in SCHEDULE 6.20(a) which are not
identified on such Schedule as "Excluded Properties" (each a
"MORTGAGED PROPERTY" and collectively the "MORTGAGED
PROPERTIES");
(ii) in the case of each real property leasehold
interest of any Credit Party constituting Mortgaged Property,
(a) such estoppel letters, consents and waivers from the
landlords on such real property as may be required by the
Agent, which estoppel letters shall be in the form and
substance reasonably satisfactory to the Agent and (b)
evidence that the applicable lease, a memorandum of lease with
respect thereto, or other evidence of such lease in form and
substance reasonably satisfactory to the Agent, has been or
will be recorded in all places to the extent necessary or
desirable, in the reasonable judgment of the Agent, so as to
enable the Mortgage Instrument encumbering such leasehold
interest to effectively create a valid and enforceable first
priority lien (subject to Permitted Liens) on such leasehold
interest in favor of the Agent (or such other Person as may be
required or desired under local law) for the benefit of
Lenders;
(iii) with respect to each of the Real Properties
identified as items 2, 16, 17, 19, 21, 22, 23, 24, 26 and 27
on subpart (1) of SCHEDULE 6.20(a), maps or plats of an
as-built survey of the sites of the real property covered by
the Mortgage Instruments certified to the Agent and the Title
Insurance Company (hereinafter defined) in a manner reasonably
satisfactory to each of the Agent and the Title Insurance
Company, dated a date reasonably satisfactory to each of the
Agent and the Title Insurance Company by an independent
professional licensed land surveyor, which maps or plats and
the surveys on which they are based shall be sufficient to
delete any standard printed survey exception contained in the
applicable title policy and be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping
in 1999 with all items from Table A thereof completed, except
for Nos. 5, 12 and 17;
(iv) ALTA mortgagee title insurance policies
issued by Chicago Title Insurance Company (the "TITLE
INSURANCE COMPANY") in amounts not less than the respective
amounts designated in SCHEDULE 6.20(a) with respect to any
particular Mortgaged Property, assuring the Agent that each of
the Mortgage Instruments
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creates a valid and enforceable first priority mortgage lien
on the applicable Mortgaged Property, free and clear of all
defects and encumbrances except Permitted Liens, which
policies shall otherwise be in form and substance reasonably
satisfactory to the Agent and shall include such endorsements
as are reasonably requested by the Agent to the extent such
endorsements are reasonably available in the jurisdictions in
which the Mortgaged Properties are located;
(v) evidence as to (A) whether any Mortgaged
Property is in an area designated by the Federal Emergency
Management Agency as having special flood or mud slide hazards
(a "FLOOD HAZARD PROPERTY") and (B) if any Mortgaged Property
is a Flood Hazard Property, (1) whether the community in which
such Mortgaged Property is located is participating in the
National Flood Insurance Program, (2) the applicable Credit
Party's written acknowledgment of receipt of written
notification from the Agent (a) as to the fact that such
Mortgaged Property is a Flood Hazard Property and (b) as to
whether the community in which each such Flood Hazard Property
is located is participating in the National Flood Insurance
Program and (3) copies of insurance policies or certificates
of insurance of the Consolidated Parties evidencing flood
insurance satisfactory to the Agent and naming the Agent as
sole loss payee on behalf of the Lenders; and
(vi) evidence reasonably satisfactory to the
Agent (which evidence the Agent agrees may be in the form of a
3.1 zoning endorsement to the mortgagee title insurance
policies referred to in clause (iv) above) that each of the
Mortgaged Properties, and the uses of the Mortgaged
Properties, are in compliance in all material respects with
all applicable zoning laws (the evidence submitted as to
zoning should include the zoning designation made for each of
the Mortgaged Properties, the permitted uses of each such
Mortgaged Properties under such zoning designation and, if
available, zoning requirements as to parking, lot size,
ingress, egress and building setbacks).
(f) EVIDENCE OF INSURANCE. Receipt by the Agent of copies
of insurance policies or certificates of insurance of the Consolidated
Parties evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Agreement, including, but not
limited to, naming the Agent as additional insured (in the case of
liability insurance) or loss payee (in the case of hazard insurance) on
behalf of the Lenders.
(g) GOVERNMENT CONSENT. Receipt by the Agent of evidence
that all material governmental, shareholder and third party consents
(including Hart-Scott-Rodino clearance) and approvals necessary in
connection with the Transaction and expiration of all applicable
waiting periods without any action being taken by any authority that
could restrain, prevent or impose any material adverse conditions on
the Transaction or that could seek or threaten any of the foregoing.
(h) CONSUMMATION OF TRANSACTION. The Transaction shall
have been consummated in accordance in all material respects with the
terms of the Merger Agreement and in compliance in all material
respects with applicable law and regulatory approvals; all material
conditions precedent to the obligations of the buyer under the Merger
Agreement shall have been satisfied; and (i) the Equity Investors shall
have
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contributed (directly or indirectly) at least $150 million to the
Parent (of which, at least $125 million shall have been contributed by
the Sponsor) and that immediately thereafter the Parent shall have
contributed such amount, net of reasonable expenses payable to third
parties, in the Borrower in exchange for common Capital Stock of the
Borrower, (ii) existing shareholders of the Acquired Company shall have
rolled over not less than $48 million of common Capital Stock and
option value of the Acquired Company into common Capital Stock of the
Parent and deferred compensation arrangements of the Parent on terms
and conditions reasonably acceptable to the Agent, (iii) the Borrower
shall have received gross proceeds of at least $200 million from the
issuance by the Borrower of the Subordinated Notes on terms that are
reasonably satisfactory to the Agent and (iv) after giving effect to
the Transaction, including the application on the Closing Date of the
proceeds of the related financings and equity contributions, the
Consolidated Parties shall have no Indebtedness except for Indebtedness
permitted under Section 8.1. The Merger Agreement shall not have been
altered, amended or otherwise changed or supplemented in any material
respect or any material condition therein waived, without the prior
written consent of the Agent. The Agent shall have received (i) a copy,
certified by an Executive Officer of the Borrower as true and complete,
of the Merger Agreement as originally executed and delivered, together
with all exhibits and schedules and (ii) a copy, certified by an
Executive Officer of the Parent as true and complete, of the
Subordinated Debt Indenture as originally executed and delivered,
together with all exhibits and schedules thereto.
(i) SOLVENCY. Receipt by the Agent of (i) an opinion from
an independent auditor or appraiser reasonably acceptable to the Agent
as to the Solvency of the Credit Parties on a consolidated basis after
giving effect to the Transaction and (ii) a certificate executed by the
chief financial officer of the Parent as of the Closing Date, in form
and substance satisfactory to the Agent, regarding the Solvency of the
Credit Parties on a consolidated basis.
(j) OFFICER'S CERTIFICATES. The Agent shall have received
a certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date, in form and substance reasonably
satisfactory to the Agent, stating that (A) each Credit Party is in
compliance with all existing material financial obligations which are
to remain outstanding, (B) all material governmental, shareholder and
third party consents and approvals, if any, with respect to the Credit
Documents and the transactions contemplated thereby have been obtained,
(C) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any Credit Party or any
transaction contemplated by the Credit Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a
Material Adverse Effect, (D) the transactions contemplated by the
Merger Agreement have been consummated in accordance in all material
respects with the terms thereof and (E) immediately after giving effect
to the Transaction, (1) no Default or Event of Default exists and (2)
all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects.
(k) FEES AND EXPENSES. Payment by the Credit Parties to
the Lenders and the Agent of all fees and expenses relating to the
Credit Facilities which are due and payable on
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the Closing Date, including, without limitation, payment to the Agent
of the fees set forth in the Agent's Fee Letter.
(l) EXISTING NOTES. The Agent shall be satisfied with the
arrangement for the repayment on or before May 10, 2001 of any Existing
Notes which shall remain outstanding after consummation of the
Transaction on the Closing Date.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make any Loan and of the Issuing
Lender to issue or extend any Letter of Credit (including the initial Loans and
the initial Letter of Credit) are subject to satisfaction of the following
conditions in addition to satisfaction on the Closing Date of the conditions set
forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of
any Revolving Loan, any portion of the Tranche A Term Loan or any
portion of the Tranche B Term Loan, an appropriate Notice of Borrowing
or (ii) in the case of any Letter of Credit, the Issuing Lender shall
have received an appropriate request for issuance in accordance with
the provisions of Section 2.2(b);
(b) (i) the representations and warranties set forth in
Section 6 shall, subject to the limitations set forth therein, be true
and correct in all material respects as of such date (except for those
which expressly relate to an earlier date) and (ii) no Default or Event
of Default shall exist and be continuing either prior to or after
giving effect thereto; and
(c) In the case of a request for a Revolving Loan or a
Letter of Credit, immediately after giving effect to the making of such
Loan (and the application of the proceeds thereof) or to the issuance
of such Letter of Credit, as the case may be, (i) the sum of the
aggregate outstanding principal amount of Revolving Loans PLUS LOC
Obligations PLUS Swingline Loans shall not exceed the Revolving
Committed Amount, and (ii) the LOC Obligations shall not exceed the LOC
Committed Amount.
The delivery of each Notice of Borrowing and each request for a Letter of Credit
pursuant to Section 2.2(b) shall constitute a representation and warranty by the
Credit Parties of the correctness of the matters specified in subsections (b)
and (c) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated balance sheets and income
statements of the Consolidated Parties for the fiscal years ended
December 31, 1998, December 31, 1999 and December 31, 2000 (including
the notes thereto) (i) have been audited by Grant Thornton,
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(ii) have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby and (iii) present fairly (on the
basis disclosed in the footnotes to such financial statements) in all
material respects the consolidated financial condition, results of
operations and cash flows of the Consolidated Parties as of such date
and for such periods. The unaudited interim balance sheets of the
Consolidated Parties as at the end of, and the related unaudited
interim income statements for, each fiscal month ended in January and
February 2001 (copies of which previously have been delivered to the
Agent) (i) have been prepared in accordance with GAAP consistently
applied throughout the periods covered thereby (except for the absence
of footnotes and subject to year-end audit adjustments) and (ii)
present fairly (on the basis disclosed in the footnotes to such
financial statements) in all material respects the consolidated
financial condition, results of operations and cash flows of the
Consolidated Parties as of such date and for such periods. During the
period from December 31, 2000 to and including the Closing Date, there
has been no sale, transfer or other disposition by any Consolidated
Party of any material part of the business or property of the
Consolidated Parties, taken as a whole, and no purchase or other
acquisition by any of them of any business or property (including any
Capital Stock of any other Person) material in relation to the
consolidated financial condition of the Consolidated Parties, taken as
a whole, in each case, which is not reflected in the foregoing
financial statements or in the notes thereto and has not otherwise been
disclosed in writing to the Lenders on or prior to the Closing Date. As
of the Closing Date, the Borrower and its Subsidiaries have no material
liabilities (contingent or otherwise) that are not reflected (but
required to be reflected) in the foregoing financial statements or in
the notes thereto which could reasonably be expected to have a Material
Adverse Effect except as described on SCHEDULE 6.1.
(b) The pro forma consolidated balance sheet as of
February 28, 2001 and the pro forma income statement of the
Consolidated Parties for the twelve month period ending February 28,
2001 giving effect to the Transaction (i) have been reviewed by Grant
Thornton, (ii) meet the requirements of Regulation S-X of the
Securities Act applicable to a Form S-1 registration statement under
the Securities Act, (iii) are based upon reasonable assumptions made
known to the Lenders and upon information not known to be incorrect or
misleading in any material respect and (iv) evidence Consolidated
EBITDA of not less than $134 million.
(c) To the extent delivered, the financial statements
delivered pursuant to Section 7.1(a) and (b) have been prepared in
accordance with GAAP (except as may otherwise be permitted under
Section 7.1(a) and (b)) and present fairly (on the basis disclosed in
the footnotes to such financial statements) in all material respects
the consolidated financial condition, results of operations and cash
flows of the Consolidated Parties as of such date and for such periods
(except for, in the case of the financial statements described in
Section 7.10(b), the absence of footnotes and subject to year-end audit
adjustments).
6.2 NO MATERIAL CHANGE.
Since December 31, 2000, there has been no development or event
relating to or affecting a Consolidated Party which has had or could reasonably
be expected to have a Material Adverse Effect.
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6.3 ORGANIZATION AND GOOD STANDING.
Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate or other
necessary action to authorize the borrowings and other extensions of credit on
the terms and conditions of this Credit Agreement and to authorize the
execution, delivery and performance of the Credit Documents to which it is a
party. No consent or authorization of, filing with, notice to or other similar
act by or in respect of, any Governmental Authority or any other Person is
required to be obtained or made by or on behalf of any Credit Party in
connection with the borrowings or other extensions of credit hereunder, with the
execution, delivery, performance, validity or enforceability of the Credit
Documents to which such Credit Party is a party or with the consummation of the
Transaction, except for (i) consents, authorizations, notices and filings
described in SCHEDULE 6.4, all of which have been obtained or made or have the
status described in such SCHEDULE 6.4, (ii) filings to release Liens to the
extent that the holders of such Liens have agreed in writing with the Agent to
release such Liens, (iii) filings to perfect the Liens created by the Collateral
Documents and (iv) consents, authorizations, filings, notices or other acts
which have been obtained as and when required or the failure to make or obtain
could not reasonably be expected to have a Material Adverse Effect. This Credit
Agreement has been, and each other Credit Document to which any Credit Party is
a party will be, duly executed and delivered on behalf of the Credit Parties.
This Credit Agreement constitutes, and each other Credit Document to which any
Credit Party is a party when executed and delivered will constitute, a legal,
valid and binding obligation of such Credit Party enforceable against such party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) and by an implied covenant of good faith and
fair dealing.
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any material
Requirement of Law or any other material law, regulation (including, without
limitation, Regulation U or Regulation X), order,
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writ, judgment, injunction, decree or permit applicable to it, (c) violate,
contravene or conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, deed of trust, contract
or other agreement or instrument to which it is a party or by which it may be
bound, the violation of which could reasonably be expected to have a Material
Adverse Effect, or (d) result in or require the creation of any Lien (other than
those contemplated in or created in connection with the Credit Documents) upon
or with respect to its properties.
6.6 NO DEFAULT.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect.
6.7 OWNERSHIP.
Each Consolidated Party is the owner of, and has good and marketable
title to, all of its respective assets owned by it necessary for the conduct of
its business, 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 none of such assets is subject to any Lien other than
Permitted Liens.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, the Consolidated
Parties have no Indebtedness.
6.9 LITIGATION.
Except as disclosed in SCHEDULE 6.9, there does not exist (i) any
order, decree, judgment, ruling or injunction which restrains the consummation
of the acquisition of the Acquired Company in the manner contemplated by the
Merger Agreement or (ii) any pending or, to the knowledge of any Consolidated
Party, threatened action, suit or legal, equitable, arbitration or
administrative proceeding against any Consolidated Party which could reasonably
be expected to have a Material Adverse Effect.
6.10 TAXES.
Each Consolidated Party has filed, or caused to be filed, all material
tax returns (Federal, state, local and foreign) required to be filed and paid
(a) all amounts of taxes shown thereon to be due (including interest and
penalties) and (b) all other material taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent, (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP or (iii) the failure of which to pay could reasonably be
expected to result in a Material Adverse Effect. No Credit Party is aware as of
the Closing Date of any proposed tax assessments against it or any other
Consolidated Party that could reasonably be expected to have a Material Adverse
Effect.
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6.11 COMPLIANCE WITH LAW.
Each Consolidated Party is in compliance with all Requirements
of Law applicable to it, or to its properties, unless such failure to comply
could not reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the preceding sentence, (i) the Consolidated Parties
have produced and distributed and are producing and distributing food products
that are in compliance with the Food Security Act, the Food, Drug, and Cosmetic
Act (21 U.S.C. 321 et seq.), the Egg Products Inspection Act, the Minnesota Food
Law (Minnesota Statutes, Ch. 31), MWPDA and all other applicable federal and
state laws governing the production of food, and all applicable regulations and
administrative interpretations promulgated under any such laws except for any
violations or failures which could not reasonably be expected to have a Material
Adverse Effect and (ii) none of the Consolidated Parties has violated or failed
to comply with PACA or MWPDA, except for any violation or failure which could
not reasonably be expected to have a Material Adverse Effect.
6.12 ERISA.
Except as disclosed and described in SCHEDULE 6.12 attached hereto or
except as could not reasonably be expected to result in a Material Adverse
Effect:
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no ERISA Event
has occurred, and, to the knowledge of the Executive Officers of the
Credit Parties, no event or condition has occurred or exists as a
result of which any ERISA Event could reasonably be expected to occur,
with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the
Code, whether or not waived, has occurred with respect to any Plan;
(iii) each Plan has been maintained, operated, and funded in compliance
with its own terms and in material compliance with the provisions of
ERISA, the Code, and any other applicable Federal or state laws; and
(iv) no Lien in favor of the PBGC or a Plan has arisen or is reasonably
likely to arise on account of any Plan (other than a Permitted Lien).
(b) The actuarial present value of all "benefit
liabilities" (as defined in Section 4001(a)(16) of ERISA), whether or
not vested, under each Single Employer Plan, as of the last annual
valuation date prior to the date on which this representation is made
or deemed made (determined, in each case, in accordance with Financial
Accounting Standards Board Statement 87, utilizing the actuarial
assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value
of the assets of such Plan by such amount as could reasonably be
expected to have a Material Adverse Effect.
(c) Neither any Consolidated Party nor any ERISA
Affiliate has received any notification that any Multiemployer Plan is
in reorganization (within the meaning of Section 4241 of ERISA), is
insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the knowledge of the Executive Officers of
the Credit Parties, reasonably expected to be in reorganization,
insolvent, or terminated.
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(d) No prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which has
subjected or may subject any Consolidated Party or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any Person against any such
liability.
(e) Neither any Consolidated Party nor any ERISA
Affiliate has any material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the
Financial Accounting Standards Board Statement 106. Each Plan which is
a welfare plan (as defined in Section 3(1) of ERISA) to which Sections
601-609 of ERISA and Section 4980B of the Code apply has been
administered in compliance in all material respects of such sections.
(f) Neither the execution and delivery of this Credit
Agreement nor the consummation of the financing transactions
contemplated thereunder will involve any transaction which is subject
to the prohibitions of Sections 404, 406 or 407 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975
of the Code. The representation by the Credit Parties in the preceding
sentence is made in reliance upon and subject to the accuracy of the
Lenders' representation in Section 11.15 with respect to their source
of funds.
6.13 CORPORATE STRUCTURE; CAPITAL STOCK, ETC.
The corporate capital and ownership structure of the Consolidated
Parties as of the Closing Date after giving effect to the Transaction is as
described in SCHEDULE 6.13A. Set forth on SCHEDULE 6.13B is a complete and
accurate list as of the Closing Date with respect to the Borrower and each of
its direct and indirect Subsidiaries of (i) jurisdiction of incorporation, (ii)
number of shares of each class of Capital Stock outstanding, (iii) number and
percentage of outstanding shares of each class owned (directly or indirectly) by
the Consolidated Parties and (iv) number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all other
similar rights with respect thereto as of the Closing Date. As of the Closing
Date, the outstanding Capital Stock of all such Persons is validly issued, fully
paid and (to the extent such concept is applicable) non-assessable and is owned
by the Consolidated Parties, directly or indirectly, in the manner set forth on
SCHEDULE 6.13B, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). Other than as set forth
in SCHEDULE 6.13B, as of the Closing Date neither the Borrower nor any of its
Subsidiaries has outstanding any securities convertible into or exchangeable for
its Capital Stock nor does any such Person have outstanding any rights to
subscribe for or to purchase or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to its Capital Stock.
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use of
the proceeds of the Loans) will violate or result in a violation of the
Securities Act, the Securities Exchange Act or any of
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Regulations U and X. If requested by any Lender or the Agent, the
Borrower will furnish to the Agent and each Lender a statement, in
conformity with the requirements of FR Form U-1 referred to in
Regulation U, that no part of the Letters of Credit or proceeds of the
Loans will be used, directly or indirectly, for the purpose of "buying"
or "carrying" any "margin stock" within the meaning of Regulations U
and X, or for the purpose of purchasing or carrying or trading in any
securities.
(b) None of the Consolidated Parties is (i) an
"investment company", or a company "controlled" by "investment
company", within the meaning of the Investment Company Act of 1940, as
amended, (ii) a "holding company" as defined in, or otherwise subject
to regulation under, the Public Utility Holding Company Act of 1935, as
amended or (iii) subject to regulation under any other Federal or state
statute or regulation which limits its ability to incur Indebtedness.
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the
Borrower to effect the Transaction, to pay fees and expenses related to the
Transaction and to provide for working capital and general corporate purposes of
the Borrower and its Subsidiaries (including, without limitation, Permitted
Acquisitions). The Letters of Credit shall be used only for or in connection
with appeal bonds, reimbursement obligations arising in connection with surety
and reclamation bonds, reinsurance, domestic or international trade transactions
and obligations not otherwise aforementioned relating to transactions entered
into by the applicable account party in the ordinary course of business.
6.16 ENVIRONMENTAL MATTERS.
Except as disclosed and described in SCHEDULE 6.16 attached hereto or
except as could not reasonably be expected to result in a Material Adverse
Effect:
(a) Each of the Real Properties and all operations at the
Real Properties are in compliance with all applicable Environmental
Laws, there is no violation of any Environmental Law with respect to
the Real Properties or the Businesses, and there are no conditions
relating to the Real Properties or the Businesses that could give rise
to liability under any applicable Environmental Laws.
(b) None of the Real Properties contains, or has
previously contained, any Materials of Environmental Concern at, on or
under the Real Properties in amounts or concentrations that constitute
or constituted a violation of, or could give rise to liability under,
Environmental Laws.
(c) No Consolidated Party has received any written or
verbal notice of, or inquiry from any Governmental Authority regarding,
any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Real Properties or the
Businesses, nor does any Executive Officer of any Credit Party have
knowledge or reason to believe that any such notice will be received or
is being threatened.
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(d) Materials of Environmental Concern have not been
transported or disposed of from the Real Properties, or generated,
treated, stored or disposed of at, on or under any of the Real
Properties or any other location, in each case by or on behalf of any
Consolidated Party in violation of, or in a manner that could give rise
to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the best knowledge of the
Executive Officers of the Credit Parties, threatened, under any
Environmental Law to which any Consolidated Party is or will be named
as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Consolidated Parties, the Real Properties or the
Businesses.
(f) There has been no release, or threat of release, of
Materials of Environmental Concern at or from the Real Properties, or
arising from or related to the operations (including, without
limitation, disposal) of any Consolidated Party in connection with the
Real Properties or otherwise in connection with the Businesses, in
violation of or in amounts or in a manner that could reasonably be
expected to give rise to liability under Environmental Laws.
6.17 INTELLECTUAL PROPERTY.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, service marks, trade names, trade dress, patents, copyrights,
technology, know-how and processes (the "INTELLECTUAL PROPERTY") necessary for
each of them to conduct its business as currently conducted except for those the
failure to own or have such legal right to use could not reasonably be expected
to have a Material Adverse Effect. Set forth on SCHEDULE 6.17 as of the Closing
Date is a list of all Intellectual Property registered or pending registration
with the United States Copyright Office or the United States Patent and
Trademark Office and owned by each Consolidated Party. Except as provided on
SCHEDULE 6.17, no claim has been asserted and is pending by any Person
challenging or questioning the use of the Intellectual Property or the validity
or effectiveness of the Intellectual Property, nor does any Credit Party know of
any such claim, and, to the knowledge of the Executive Officers of the Credit
Parties, the use of the Intellectual Property by any Consolidated Party or the
granting of a right or a license in respect of the Intellectual Property from
any Consolidated Party does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
6.18 SOLVENCY.
The Credit Parties are Solvent on a consolidated basis.
6.19 INVESTMENTS.
All Investments of each Consolidated Party are Permitted Investments.
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6.20 BUSINESS LOCATIONS.
Set forth on SCHEDULE 6.20(a) is a list of all Real Properties located
in the United States as of the Closing Date. Set forth on SCHEDULE 6.20(b) is a
list of all owned or leased locations where any tangible personal property of a
Consolidated Party is located as of the Closing Date (other than vehicles and
assets temporarily in transit or sent for repair). Set forth on SCHEDULE 6.20(c)
is the chief executive office, jurisdiction of incorporation or formation and
principal place of business of each Consolidated Party as of the Closing Date.
6.21 DISCLOSURE.
Neither this Credit Agreement nor any financial statements (other than
projections, budgets and other estimates) delivered to the Lenders nor any other
document, certificate or statement furnished to the Lenders by or on behalf of
any Consolidated Party in connection with the transactions contemplated hereby,
when taken as a whole, contains as of the applicable delivery date any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein or herein not materially
misleading in light of the circumstances under which such statements were made.
6.22 BROKERS' FEES.
Except as set forth on SCHEDULE 6.22, no Consolidated Party has any
obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Credit Documents other than the Agent's Fee Letter.
6.23 LABOR MATTERS.
Except as set forth on SCHEDULE 6.23, there are no collective
bargaining agreements or Multiemployer Plans covering the employees of a
Consolidated Party as of the Closing Date. None of the Consolidated Parties has
suffered any strikes, walkouts, work stoppages or other material labor
difficulty during the five years prior to the Closing Date except, with respect
to any of the foregoing, which could reasonably be expected to have a Material
Adverse Effect.
6.24 NATURE OF BUSINESS.
As of the Closing Date, the Consolidated Parties are principally
engaged in the business of the production, distribution and sales of food
products in the areas of egg products, refrigerated distribution, dairy products
and potato products.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that until such time as
the Credit Agreement has been terminated in accordance with the terms of Section
11.13:
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7.1 INFORMATION COVENANTS.
The Credit Parties will furnish, or cause to be furnished, to the
Agent:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available,
and in any event within 90 days after the close of each fiscal year of
the Consolidated Parties, a consolidated balance sheet of the
Consolidated Parties as of the end of such fiscal year, together with
related consolidated statements of income and cash flows for such
fiscal year, in each case setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
audited by Grant Thornton (or by any "Big Five" accounting firm or any
other independent certified public accountants of recognized national
standing reasonably acceptable to the Agent) and whose opinion shall be
to the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants
concur) and shall not be limited as to the scope of the audit or
qualified as to the status of the Consolidated Parties as a going
concern or any other material qualifications or exceptions.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available,
and in any event within 45 days (90 days in the case of the last fiscal
quarter) after the close of each fiscal quarter of each fiscal year of
the Consolidated Parties, a consolidated balance sheet of the
Consolidated Parties as of the end of such fiscal quarter, together
with related consolidated statements of income and cash flows for such
fiscal quarter, in each case setting forth in comparative form
consolidated figures for the corresponding period of the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail and reasonably acceptable to the Agent, and
accompanied by a certificate of an Executive Officer of the Borrower to
the effect that such quarterly financial statements fairly present in
all material respects the financial condition of the Consolidated
Parties and have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments and
the absence of certain footnotes.
(c) OTHER QUARTERLY FINANCIAL REPORTS. At the time of
delivery of the financial statements provided for in Section 7.1(b)
above, quarterly divisional income statements for the egg products
division, the potato products division, the dairy division and the
refrigerated distribution division prepared in accordance with past
practices.
(d) OFFICER'S CERTIFICATE. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of an Executive Officer of the Borrower substantially in
the form of EXHIBIT 7.1(d), (i) providing a detailed calculation of
Consolidated EBITDA (with a break-out of each of the components of the
definition thereof set forth in Section 1.1) for the applicable fiscal
period, (ii) demonstrating compliance with the financial covenants
contained in Section 7.10 by calculation thereof as of the end of the
applicable fiscal period and (iii) stating that no Default or Event of
Default exists as of the end of the applicable fiscal period, or if any
Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Credit Parties propose to take with
respect thereto.
(e) ANNUAL BUSINESS PLAN AND BUDGETS. Within 45 days
after the end of each fiscal year of the Borrower, beginning with the
fiscal year ending December 31, 2001, an
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annual business plan and budget of the Consolidated Parties containing,
among other things, projected financial statements for the next fiscal
year.
(f) COMPLIANCE WITH CERTAIN PROVISIONS OF THE CREDIT
AGREEMENT. Within 105 days after the end of each fiscal year of the
Credit Parties, a certificate (i) providing a detailed calculation of
Excess Cash Flow (with a break-out of each of the components of the
definition thereof set forth in Section 1.1) and (ii) containing
information regarding the amount of all Asset Dispositions, Debt
Issuances and Equity Issuances that were made during the prior fiscal
year.
(g) ACCOUNTANT'S CERTIFICATE. Within the period for
delivery of the annual financial statements provided in Section 7.1(a),
a certificate of the accountants conducting the annual audit stating
that they have reviewed this Credit Agreement as it relates to
accounting matters and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default with
respect to such accounting matters and, if any such Default or Event of
Default exists, specifying the nature and extent thereof, PROVIDED that
such accountants shall not incur any liability to the Lenders by reason
of any failure to obtain knowledge of any such Default or Event of
Default that would not be disclosed in the course of their audit
examination.
(h) REPORTS. Promptly upon transmission or receipt
thereof, (i) copies of any filings and registrations with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as any Consolidated Party shall send to its
shareholders generally or to a holder of any Indebtedness owed by any
Consolidated Party in its capacity as such a holder and (ii) upon the
reasonable request of the Agent, all written reports and written
information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(i) NOTICES. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written
notice to the Agent immediately of (i) the occurrence of an event or
condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Credit Parties propose
to take with respect thereto, and (ii) the occurrence of any of the
following with respect to any Consolidated Party (A) the pendency or
commencement of any litigation, arbitral or governmental proceeding
against such Person which is reasonably likely to have a Material
Adverse Effect, (B) the institution of any proceedings against such
Person with respect to, or the receipt of notice by such Person of
potential liability or responsibility for violation, or alleged
violation of any Federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, where such liability
or the violation of which could reasonably be expected to have a
Material Adverse Effect or (C) the receipt by any Consolidated Party of
notice from any regulatory agency or authority having jurisdiction in
the matter regarding a material investigation of any of such Person
under PACA or MWPDA.
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(j) ERISA. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Credit Parties will give written
notice to the Agent promptly (and in any event within thirty Business
Days) of any of the following which could reasonably be expected to
have a Material Adverse Effect: (i) any event or condition, including,
but not limited to, any Reportable Event, that constitutes, or might
reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Credit
Parties or any ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any Consolidated Party or any ERISA Affiliate is required to
contribute to each Plan pursuant to its terms and as required to meet
the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan
as of the end of the applicable Plan year that could have a Material
Adverse Effect, together with a description of any such event or
condition or a copy of any such notice and a statement by an Executive
Officer of the Borrower briefly setting forth the details regarding
such event, condition, or notice, and the action, if any, which has
been or is being taken or is proposed to be taken by the Credit Parties
with respect thereto. Promptly upon request, the Credit Parties shall
furnish the Agent and the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as
well as all schedules and attachments thereto required to be filed with
the Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(k) ENVIRONMENTAL. Upon the reasonable written request of
the Agent following the occurrence of any event or the discovery of any
condition which the Agent or the Required Lenders reasonably believe(s)
has caused (or could cause) the representations and warranties set
forth in Section 6.16 to be untrue, the Credit Parties will furnish or
cause to be furnished to the Agent, at the Credit Parties' expense, a
report of an environmental assessment of reasonable scope, form and
depth, (including, where appropriate, invasive soil or groundwater
sampling) by a consultant reasonably acceptable to the Agent as to the
subject matter of such possible breach. If the Credit Parties fail to
deliver such an environmental report within seventy-five (75) days
after receipt of such written request then the Agent may arrange for
same, and the Consolidated Parties hereby grant to the Agent and their
representatives reasonable access to the Real Properties to reasonably
undertake such an assessment (including, where appropriate, invasive
soil or groundwater sampling). The reasonable cost of any assessment
requested by the Agent pursuant to this provision will be payable by
the Credit Parties on demand and added to the obligations secured by
the Collateral Documents.
(l) ADDITIONAL PATENTS AND TRADEMARKS. At the time of
delivery of the financial statements and reports provided for in
Section 7.1(a), a report signed by an Executive Officer of the Borrower
setting forth (i) a list of registration numbers for all federally
registered patents, trademarks, service marks, trade names and
copyrights awarded to any Credit Party since the last day of the
immediately preceding fiscal year and (ii) a list of all patent
applications, trademark applications, service mark applications, trade
name applications and copyright applications submitted by any Credit
Party to the U.S. Patent and
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Trademark Office or the U.S. Copyright Office since the last day of the
immediately preceding fiscal year and the status of each such
application, all in such form as shall be reasonably satisfactory to
the Agent.
(m) OTHER INFORMATION. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of any Consolidated Party as the
Agent or the Required Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary not prohibited by Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
7.3 BOOKS AND RECORDS.
Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions (including PACA, MWPDA, the Food Security Act, the Food, Drug, and
Cosmetic Act, the Egg Products Inspection Act, the Minnesota Food Law, all other
applicable federal and state laws governing the production of food, and all
applicable regulations and administrative interpretations promulgated under any
such laws) imposed by all Governmental Authorities, applicable to it and its
Property to the extent that noncompliance with any such law, rule, regulation,
order or restriction could reasonably be expected to have a Material Adverse
Effect.
7.5 PAYMENT OF TAXES AND OTHER CLAIMS.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and discharge (a) all material taxes, assessments and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent and (b) all material lawful
claims (including claims for labor, materials and supplies) which, if unpaid,
might give rise to a Lien upon any of its properties (other than a Permitted
Lien); PROVIDED, HOWEVER, that no Consolidated Party shall be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith by appropriate proceedings and as to which adequate reserves therefor have
been established in accordance with GAAP, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could reasonably be expected to have a Material
Adverse Effect.
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7.6 INSURANCE.
(a) Each Credit Party will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect
insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in
such amounts, covering such risks and liabilities and with such
deductibles or self-insurance retentions as are in accordance with
customary industry practice. The Agent shall be named as loss payee or
mortgagee, as its interest may appear, and/or additional insured with
respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Agent, that it will give the Agent thirty
(30) days prior written notice before any such policy or policies shall
be altered in a manner adverse to the Lenders or canceled. The
insurance coverage of the Consolidated Parties as of the Closing Date
is outlined as to carrier, policy number, expiration date, type and
amount on SCHEDULE 7.6.
(b) In the event that the Consolidated Parties receive
Net Cash Proceeds from property damage or casualty insurance in excess
of $1,000,000 in aggregate amount during any fiscal year of the
Consolidated Parties ("EXCESS PROCEEDS") on account of Involuntary
Dispositions, the Credit Parties shall, within the period of 540 days
following the date of receipt of such Excess Proceeds, either (i)
prepay the Loans (and cash collateralize the LOC Obligations) in
accordance with the terms of Section 3.3(b)(iii)(B) or (ii) apply (or
cause to be applied) an amount equal to such Excess Proceeds to make
Eligible Reinvestments (including but not limited to the repair or
replacement of the related Property); PROVIDED, HOWEVER, that such
Consolidated Party need not repair or replace the Property of such
Consolidated Party so lost, damaged or destroyed to the extent the
failure to make such repair or replacement (i) is desirable to the
proper conduct of the business of such Consolidated Party and otherwise
in the best interest of such Consolidated Party; and (ii) would not
materially impair the rights and benefits of the Agent or the Lenders
under the Collateral Documents or any other Credit Document.
Notwithstanding the foregoing, no Consolidated Party shall undertake
replacement or restoration of any such Property having a net book value
in excess of $5,000,000 unless, after giving pro forma effect to any
Funded Indebtedness to be incurred in connection with such replacement
or restoration, the Credit Parties would be in compliance with the
financial covenants set forth in Section 7.10(a) and Section 7.10(b) as
of the most recent fiscal quarter end preceding the date of
determination with respect to which the Agent has received the Required
Financial Information (assuming, for purposes hereof, that such Funded
Indebtedness was incurred as of the first day of the four
fiscal-quarter period ending as of such fiscal quarter end). All
property damage or casualty insurance proceeds shall be subject to the
security interest of the Agent (for the ratable benefit of the Lenders)
under the Collateral Documents. Pending final application of any Excess
Proceeds, the Credit Parties may apply such Excess Proceeds to
temporarily reduce the Revolving Loans or to make Permitted
Investments.
7.7 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and Involuntary Disposition excepted, and will make, or cause to be
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made, in such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
reasonably be needed or proper, to the extent and in the manner customary for
companies in similar businesses and to the extent necessary in the reasonable
business judgment of such Person.
7.8 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.
7.9 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records to the extent allowed by applicable law and regulation,
its accounts receivable and inventory, its facilities and its other business
assets, and to make photocopies or photographs thereof and to write down and
record any information such representative obtains and shall permit the Agent or
its representatives to investigate and verify the accuracy of information
provided to the Lenders and to discuss all such matters with the officers,
employees and representatives of such Person; PROVIDED, HOWEVER, that, unless an
Event of Default shall exist, the Agent shall not exercise its rights under this
sentence more often than two times during any calendar year and only one such
time shall be at the Credit Parties' expense. Notwithstanding the foregoing, no
material protected by an attorney-client privilege shall be required to be
disclosed pursuant to this Section 7.9; PROVIDED, HOWEVER, that, in the event
that any Credit Party claims that any materials requested for review,
investigation or discussion by the Agent or any of its representatives pursuant
to this Section 7.9 is protected by an attorney-client privilege, then such
Credit Party shall (i) provide the Agent with a reasonably acceptable basis for
the assertion of the privilege, (ii) remove or redact only those portions of the
related materials deemed to be privileged and (iii) in good faith cooperate with
the Agent to determine a method by which the information which the Agent deems
necessary to review, investigate or discuss may be obtained by the Agent in an
alternative manner which will not jeopardize any attorney-client privilege.
7.10 FINANCIAL COVENANTS.
(a) LEVERAGE RATIO. The Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties set forth below,
shall be less than or equal to:
------------------------------------------------------------------------------------------------------------
FISCAL YEAR MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------------------------------------------------------------------------------------------------------
2001 NA 5.00 to 1.00 5.00 to 1.00 4.75 to 1.00
------------------------------------------------------------------------------------------------------------
2002 4.75 to 1.00 4.75 to 1.00 4.75 to 1.00 4.50 to 1.00
------------------------------------------------------------------------------------------------------------
2003 4.50 to 1.00 4.50 to 1.00 4.50 to 1.00 4.00 to 1.00
------------------------------------------------------------------------------------------------------------
2004 4.00 to 1.00 4.00 to 1.00 4.00 to 1.00 3.50 to 1.00
------------------------------------------------------------------------------------------------------------
2005 3.50 to 1.00 3.50 to 1.00 3.50 to 1.00 3.25 to 1.00
------------------------------------------------------------------------------------------------------------
THEREAFTER 3.25 to 1.00 3.25 to 1.00 3.25 to 1.00 3.25 to 1.00
------------------------------------------------------------------------------------------------------------
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(b) INTEREST COVERAGE RATIO. The Interest Coverage Ratio,
as of the last day of each fiscal quarter of the Consolidated Parties
set forth below, shall be greater than or equal to:
------------------------------------------------------------------------------------------------------------
FISCAL YEAR MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------------------------------------------------------------------------------------------------------
2001 NA 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
------------------------------------------------------------------------------------------------------------
2002 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
------------------------------------------------------------------------------------------------------------
2003 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00 2.25 to 1.00
------------------------------------------------------------------------------------------------------------
2004 2.25 to 1.00 2.25 to 1.00 2.25 to 1.00 2.50 to 1.00
------------------------------------------------------------------------------------------------------------
2005 2.50 to 1.00 2.50 to 1.00 2.50 to 1.00 2.75 to 1.00
------------------------------------------------------------------------------------------------------------
THEREAFTER 2.75 to 1.00 2.75 to 1.00 2.75 to 1.00 2.75 to 1.00
------------------------------------------------------------------------------------------------------------
(c) FIXED CHARGE COVERAGE RATIO. The Fixed Charge
Coverage Ratio, as of the last day of each fiscal
quarter of the Consolidated Parties set forth below, shall be greater
than or equal to:
------------------------------------------------------------------------------------------------------------
FISCAL YEAR MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------------------------------------------------------------------------------------------------------
2001 NA 1.00 to 1.00 1.00 to 1.00 1.00 to 1.00
------------------------------------------------------------------------------------------------------------
2002 1.00 to 1.00 1.00 to 1.00 1.00 to 1.00 1.00 to 1.00
------------------------------------------------------------------------------------------------------------
2003 1.00 to 1.00 1.00 to 1.00 1.00 to 1.00 1.05 to 1.00
------------------------------------------------------------------------------------------------------------
2004 1.05 to 1.00 1.05 to 1.00 1.05 to 1.00 1.10 to 1.00
------------------------------------------------------------------------------------------------------------
THEREAFTER 1.10 to 1.00 1.10 to 1.00 1.10 to 1.00 1.10 to 1.00
------------------------------------------------------------------------------------------------------------
7.11 ADDITIONAL GUARANTORS.
As soon as practicable and in any event within 30 days after (a) any
Person becomes a direct or indirect Domestic Subsidiary of the Parent or (b) any
direct or indirect Subsidiary of the Parent guarantees the Borrower's
obligations under any Junior Financing Documentation, the Credit Parties shall
(i) provide the Agent with written notice thereof and shall cause such Person to
execute a Joinder Agreement in substantially the same form as EXHIBIT 7.11, (ii)
deliver such other documentation as the Agent may reasonably request in
connection with the foregoing, including, without limitation, customary
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the Joinder
Agreement) and other items of the types required to be delivered pursuant to
Section 5.1(b), all in form, content and scope reasonably satisfactory to the
Agent and (iii) otherwise comply with Section 7.12 in respect of such Person.
7.12 PLEDGED ASSETS.
Each Credit Party will (i) cause all of its owned real and personal
Property and shall use commercially reasonable efforts to cause all of its
leased real and personal Property, in each
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case, other than Excluded Property to be subject at all times to first priority,
perfected and, in the case of real Property (whether leased or owned), title
insured Liens in favor of the Agent to secure the Credit Party Obligations
pursuant to the terms and conditions of the Collateral Documents or, with
respect to any such Property acquired subsequent to the Closing Date, such other
additional security documents as the Agent shall reasonably request, subject in
any case to Permitted Liens and (ii) deliver such other documentation as the
Agent may reasonably request in connection with the foregoing, including,
without limitation, appropriate UCC-1 financing statements, real estate title
insurance policies, surveys, environmental reports, landlord's waivers,
certified resolutions and other organizational and authorizing documents of such
Person, customary favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above and the perfection of the
Agent's liens thereunder) and other items of the types required to be delivered
pursuant to Section 5.1(d) and (e), all in form, content and scope reasonably
satisfactory to the Agent. Without limiting the generality of the above, the
Credit Parties will cause
(A) 100% of the issued and outstanding Capital Stock of the
Borrower;
(B) 100% of the issued and outstanding Capital Stock of each
Domestic Subsidiary owned by the Credit Parties (other than
Dairy LLC, Dairy TXCT LLC and their respective Subsidiaries);
(C) 65% (or such greater percentage that, due to a change in an
applicable Requirement of Law after the date hereof, (1) could
not reasonably be expected to cause the undistributed earnings
of such Material Foreign Subsidiary as determined for United
States federal income tax purposes to be treated as a deemed
dividend to such Material Foreign Subsidiary's United States
parent and (2) could not reasonably be expected to cause any
material adverse tax consequences) of the issued and
outstanding Capital Stock entitled to vote (within the meaning
of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
and outstanding Capital Stock not entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) owned by the
Credit Parties in each Material Foreign Subsidiary;
(D) prior to any Asset Disposition of all of the Capital Stock or
all or substantially all of the Property of Dairy LLC and its
Subsidiaries in one or more transactions permitted under
Section 8.5, 100% of the issued and outstanding Capital Stock
of Dairy LLC and its Subsidiaries; and
(E) prior to any Asset Disposition of all of the Capital Stock or
all or substantially all of the Property of Dairy TXCT LLC and
its Subsidiaries in one or more transactions permitted under
Section 8.5, 100% of the issued and outstanding Capital Stock
of Dairy TXCT LLC and its Subsidiaries,
to be delivered to the Agent (together with undated stock powers signed in blank
(unless, with respect to a Material Foreign Subsidiary, such stock powers are
deemed unnecessary by the Agent in its reasonable discretion under the law of
the jurisdiction of incorporation of such Person)) and pledged to the Agent
pursuant to an appropriate pledge agreement(s) in
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substantially the form of the Pledge Agreement and otherwise in form reasonably
acceptable to the Agent.
7.13 INTEREST RATE PROTECTION.
Within 60 days following the Closing Date, the Credit Parties shall
cause the Borrower to maintain protection against fluctuations in interest rates
until the third anniversary date of the Closing Date pursuant to one or more
interest rate protection agreements reasonably satisfactory to the Agent and
providing coverage in a notional amount, together with the amount of Funded
Indebtedness of the Consolidated Parties on a consolidated basis that is bearing
interest at a fixed rate, at least equal to 50% of the aggregate amount of all
Funded Indebtedness of the Consolidated Parties on a consolidated basis.
7.14 FURTHERANCE ASSURANCES.
(a) If any Credit Party owns any of the Real Properties
identified as items 3, 4, 5, 6 and 7 on subpart (1) of SCHEDULE 6.20(a)
after the date 180 days following the Closing Date, then the Credit
Parties shall deliver to the Agent with respect to such Real Properties
such documents, instruments and other items of the types required to be
delivered pursuant to Section 5.1(e).
(b) To the extent not delivered on the Closing Date, the
Borrower shall deliver to the Agent within 90 days after the Closing
Date such documents, instruments and other items of the types required
to be delivered pursuant to Section 5.1(e) with respect to the Real
Property identified as item 24 on subpart (1) of SCHEDULE 6.20(a).
(c) To the extent not delivered on the Closing Date and
otherwise available using commercially reasonable efforts, the Borrower
shall deliver to the Agent within 90 days after the Closing Date such
documents, instruments and other items of the types required to be
delivered pursuant to Section 5.1(e)(iii) with respect to each of the
Real Properties identified as items 2, 16, 17, 19, 21, 22, 23, 24, 26
and 27 on subpart (1) of SCHEDULE 6.20(a).
(d) To the extent not delivered on the Closing Date and
otherwise available using commercially reasonable efforts, the Borrower
shall deliver to the Agent within 90 days after the Closing Date such
documents, instruments and other items of the types required to be
delivered pursuant to Section 5.1(e) with respect to each real property
leasehold interest of the Credit Parties constituting a Mortgaged
Property.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that until such time as
the Credit Agreement has been terminated in accordance with the terms of Section
11.13:
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8.1 INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries (i)
set forth in SCHEDULE 8.1 (and renewals, refinancings and extensions
thereof on terms and conditions no less favorable to such Person than
such existing Indebtedness) and (ii) until May 10, 2001, the Existing
Notes;
(c) purchase money Indebtedness (including obligations in
respect of Capital Leases, Synthetic Leases and mortgage, industrial
revenue bond, industrial development bond and similar financings)
hereafter incurred by the Borrower or any of its Subsidiaries to
finance the purchase, repair or improvement of capital assets and real
property or assumed or acquired by any of the Consolidated Parties in
connection with a Permitted Investment, PROVIDED that (i) the total of
all such Indebtedness for all such Persons taken together shall not
exceed an aggregate principal amount of $20,000,000 at any one time
outstanding; (ii) unless non-recourse to the Consolidated Parties, such
Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
(d) obligations of any Consolidated Party in respect of
Hedging Agreements entered into in order to manage existing or
anticipated interest rate, exchange rate or commodity pricing risks and
not for speculative purposes;
(e) Guaranty Obligations and intercompany Indebtedness
permitted under Section 8.6 and Section 8.7;
(f) the Subordinated Debt in an aggregate principal
amount (including any accumulated, pay-in-kind or capitalized interest
thereon) not to exceed (i) $275,000,000 LESS (ii) the outstanding
amount of all Qualified Preferred Stock issued under clause (o) below
(including any accretion or accumulated or pay-in-kind dividends
thereon);
(g) Indebtedness of Foreign Subsidiaries in an aggregate
principal amount at any time outstanding for all such Persons taken
together not exceeding the greater of (i) the Foreign Borrowing Base as
of the date of such incurrence or (ii) $20,000,000;
(h) Indebtedness representing deferred compensation to
employees of the Consolidated Parties;
(i) Indebtedness consisting of promissory notes issued by
any Consolidated Party to current or former officers, directors and
employees, their respective estates, spouses or former spouses to
finance the purchase or redemption of Capital Stock of the Parent
and/or M-Foods Investors;
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(j) Indebtedness incurred by any Consolidated Party in
connection with Permitted Acquisitions or Permitted Asset Dispositions
under agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guarantees or letters of credit,
surety bonds or performance bonds securing the performance of such
Credit Party pursuant to such agreements;
(k) Indebtedness consisting of obligations of any
Consolidated Party under incentive, non-compete, consulting, deferred
compensation or other similar arrangements incurred by such Person in
connection with the Transaction and Permitted Acquisitions;
(l) Indebtedness incurred in connection with the
financing of insurance premiums;
(m) Indebtedness in respect of netting services,
overdraft protections and similar arrangements in each case in
connection with deposit accounts;
(n) to the extent constituting Indebtedness, obligations
incurred in respect of Liens permitted under Section 8.2(e);
(o) Qualified Preferred Stock in an aggregate liquidation
preference (including any accretion or accumulated or pay-in-kind
dividends thereon) not to exceed (i) $275,000,000 LESS (ii) the
outstanding principal amount of all Subordinated Debt incurred under
clause (f) above (including any accumulated, pay-in-kind or capitalized
interest thereon); and
(p) other Indebtedness in the aggregate principal amount
for all Consolidated Parties not to exceed $20,000,000 at any time
outstanding.
8.2 LIENS.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or hereafter acquired, except for:
(a) Liens in favor of the Agent to secure the Credit
Party Obligations;
(b) Liens existing as of the Closing Date and set forth
on SCHEDULE 8.2; PROVIDED that no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Closing Date;
(c) Liens (other than Liens created or imposed under
ERISA) for taxes, assessments or governmental charges or levies not yet
delinquent or Liens for taxes being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof) or not otherwise required to be paid
under Section 7;
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(d) statutory and contractual Liens of landlords and
Liens of carriers, warehousemen, mechanics, materialmen and suppliers
and other Liens imposed by law or pursuant to customary reservations or
retentions of title arising in the ordinary course of business,
PROVIDED that such Liens (i) secure only amounts not overdue by more
than 30 days or (ii) if more than 30 days overdue, are unfiled and no
other action has been taken to enforce the same or are being contested
in good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to
which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof) or not otherwise required
to be paid under Section 7;
(e) Liens (other than Liens created or imposed under
ERISA) incurred or deposits made by any Consolidated Party in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, bids, leases,
government contracts, performance, surety, appeal and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(f) Liens in connection with attachments or judgments
(including judgment or appeal bonds) PROVIDED that either (i) the
judgments secured shall, within 30 days after the entry thereof, have
been discharged or execution thereof stayed pending appeal, or shall
have been discharged within 30 days after the expiration of any such
stay or (ii) the judgments secured thereby do not constitute an Event
of Default under Section 9.1(h);
(g) easements, rights-of-way, covenants, restrictions
(including zoning and building code restrictions), minor defects or
irregularities in title and other similar charges or encumbrances not,
in any material respect, impairing the use of the encumbered Property
for its intended purposes;
(h) Liens on Property of any Person securing purchase
money Indebtedness (including obligations in respect of Capital Leases,
Synthetic Leases and mortgage, industrial revenue bond, industrial
development bond and similar financings) of such Person permitted under
Section 8.1(c), PROVIDED that any such Lien attaches to such Property
concurrently with or within 90 days after the acquisition, repair,
replacement or improvement (as applicable) thereof;
(i) leases, licenses, subleases or sublicenses granted to
others not interfering in any material respect with the business of any
Consolidated Party;
(j) any interest of title of a lessor, licensor,
sublessor or sublicensor under, and Liens arising from UCC financing
statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) relating to, leases or licenses not prohibited
by this Credit Agreement;
(k) 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;
(l) Liens deemed to exist in connection with Investments
in repurchase agreements permitted under Section 8.6;
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(m) normal and customary rights of setoff upon deposits
of cash in favor of banks or other depository institutions;
(n) Liens of a collection bank arising under Section
4-210 of the Uniform Commercial Code on items in the course of
collection;
(o) Liens arising from operation of the statutory trust
under PACA or MWPDA, 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 applicable Consolidated
Party 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;
(p) 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 a Consolidated Party) which
sold such Property to the applicable Consolidated Party and (ii)
follows the Property by reason of the provisions of the Food Security
Act notwithstanding the transfer of title to such Property to such
Consolidated Party;
(q) Liens of sellers of goods to the Borrower and any of
its Subsidiaries arising under Article 2 of the Uniform Commercial Code
or similar provisions of applicable law in the ordinary course of
business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses;
(r) Liens on Property of any Foreign Subsidiary securing
Indebtedness of such Foreign Subsidiary to the extent permitted under
Section 8.1(g);
(s) Liens in favor of sellers of Property attaching
solely to cash earnest money deposits in connection with any letter of
intent or purchase agreement in connection with a Permitted
Acquisition;
(t) Liens arising from precautionary UCC financing
statements regarding consignments;
(u) Liens on insurance policies and the proceeds thereof
to the extent securing the financing of the premium payment with
respect thereto and to the extent such payment is not delinquent;
(v) Liens encumbering customary initial deposits and
margin deposits, and similar Liens and margin deposits, and similar
Liens attaching to commodity trading accounts or other brokerage
accounts incurred in the ordinary course of business;
(w) Liens in favor of financial institutions securing
reimbursement obligations in respect of documentary letters of credit
or bankers' acceptances; PROVIDED that such Liens attach only to the
goods covered thereby and the proceeds thereof;
94
(x) any interest of title of a purchaser under, and Liens
arising from UCC financing statements relating to, any sale of accounts
receivable in connection with the compromise thereof;
(y) Liens consisting of an agreement to sell, transfer or
dispose of Property pursuant to a Permitted Asset Disposition;
(z) Liens in favor of Dairy LLC or Dairy TXCT LLC
encumbering distributions made in accordance with the terms of their
respective operating agreements (or other similar agreements); and
(aa) other Liens not described above, PROVIDED that such
Liens do not secure obligations in excess of $20,000,000 at any one
time outstanding.
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit any Consolidated Party to
substantively alter the character or conduct of the business conducted by such
Person as of the Closing Date, except for reasonable extensions thereof and
businesses ancillary or complementary thereto.
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
Except in connection with a Permitted Asset Disposition, the Credit
Parties will not permit any Consolidated Party to enter into any transaction of
merger or consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); PROVIDED that, notwithstanding the foregoing
provisions of this Section 8.4 but subject to the terms of Sections 7.11 and
7.12, (a) the Borrower may merge or consolidate with any of its Subsidiaries
PROVIDED that the Borrower shall be the continuing or surviving corporation, (b)
subject to the preceding clause (a), any Credit Party (other than the Parent or
the Borrower) may merge or consolidate with any other Credit Party (other than
the Parent or the Borrower), (c) any Consolidated Party which is not a Credit
Party may be merged or consolidated with or into any Credit Party other than the
Parent PROVIDED that such Credit Party shall be the continuing or surviving
corporation, (d) any Consolidated Party which is not a Credit Party may be
merged or consolidated with or into any other Consolidated Party which is not a
Credit Party, (e) any Subsidiary of the Borrower may merge with any Person that
is not a Credit Party in connection with an Asset Disposition permitted under
Section 8.5, (f) the Borrower or any Subsidiary of the Borrower may merge with
any Person other than a Consolidated Party in connection with a Permitted
Acquisition PROVIDED that, if such transaction involves the Borrower, the
Borrower shall be the continuing or surviving corporation and (g) any Subsidiary
of the Borrower may dissolve, liquidate or wind up its affairs at any time
provided that such dissolution, liquidation or winding up, as applicable, could
not have a Material Adverse Effect.
8.5 ASSET DISPOSITIONS.
The Credit Parties will not permit any Consolidated Party or Dairy
Holdco to make any Asset Disposition other than an Excluded Asset Disposition
unless (a) at least 75% of the consideration paid in connection therewith
(excluding the assumption by the purchaser of liabilities associated with such
disposed Property) is cash or Cash Equivalents and shall be in an amount not
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less than the fair market value of the Property disposed of, (b) if such
transaction is a Sale and Leaseback Transaction, such transaction is not
prohibited by the terms of Section 8.13, (c) such transaction does not involve a
sale or other disposition of receivables other than receivables owned by or
attributable to other Property concurrently being disposed of in a transaction
otherwise permitted under this Section 8.5, (d) the aggregate net book value of
all of the assets sold or otherwise disposed of by the Consolidated Parties in
all such transactions after the Closing Date (other than (i) any Asset
Disposition of all of the Capital Stock or all or substantially all of the
Property of Dairy LLC, Dairy TXCT LLC and/or any of their respective
Subsidiaries and (ii) any other Asset Disposition to the extent that 100% of the
consideration paid in connection therewith (excluding the assumption by the
purchaser of liabilities associated with such disposed Property) is cash or Cash
Equivalents) shall not exceed $50,000,000, (e) if the net book value of the
Property subject to such Asset Disposition exceeds $5,000,000, the Borrower
shall have delivered to the Agent (i) a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such transaction,
the Credit Parties would be in compliance with the financial covenants set forth
in Section 7.10(a) and (b) and (ii) a certificate of an Executive Officer of the
Borrower specifying the anticipated date of such Asset Disposition, briefly
describing the assets to be sold or otherwise disposed of and setting forth the
net book value of such assets, the aggregate consideration and a reasonable
estimate of the Net Cash Proceeds to be received for such assets in connection
with such Asset Disposition, (f) the Credit Parties shall apply (or cause to be
applied) an amount equal to the Net Cash Proceeds of such Asset Disposition to
(i) make Eligible Reinvestments or (ii) prepay the Loans (and cash collateralize
LOC Obligations) in accordance with the terms of Section 3.3(b)(iii)(A) and (g)
such Asset Disposition is not prohibited by any Junior Financing Documentation.
Pending final application of the Net Cash Proceeds of any Asset Disposition, the
Consolidated Parties may apply such Net Cash Proceeds to temporarily reduce the
Revolving Loans or to make Investments in Cash Equivalents.
Upon a sale of assets or the sale of Capital Stock of a Consolidated
Party permitted by this Section 8.5, such Collateral automatically shall be
released from the Liens created by the Credit Documents and the Agent shall (to
the extent applicable) deliver to the Credit Parties, upon the Credit Parties'
request and at the Credit Parties' expense, such documentation as is reasonably
necessary to evidence the release of the Agent's security interest, if any, in
such assets or Capital Stock, including, without limitation, amendments or
terminations of UCC financing statements, if any, the return of stock
certificates, if any, and, provided that such Consolidated Party is released
from all of its obligations, if any, under any Junior Financing Documentation,
the release of such Consolidated Party from all of its obligations, if any,
under the Credit Documents.
8.6 INVESTMENTS.
The Credit Parties will not permit any Consolidated Party to make any
Investments, except for:
(a) Investments consisting of cash and Cash Equivalents;
(b) Investments consisting of accounts receivable
created, acquired or made by any Consolidated Party in the ordinary
course of business and payable or dischargeable in accordance with
customary trade terms;
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(c) Investments consisting of Capital Stock, obligations,
securities or other property received by any Consolidated Party (i) in
settlement of accounts receivable (created in the ordinary course of
business) from bankrupt or insolvent obligors or disputes with
customers and (ii) as partial consideration for a Permitted Asset
Disposition;
(d) Investments existing as of the Closing Date and set
forth in SCHEDULE 8.6;
(e) Investments consisting of advances or loans to
directors, officers, employees, agents, customers or suppliers that do
not exceed $3,500,000 in the aggregate at any one time outstanding;
(f) Investments in any Credit Party (other than the
Parent) and Investments by Consolidated Parties which are not Credit
Parties in other Consolidated Parties;
(g) to the extent not required at such time to prepay the
Loans pursuant to Section 3.3(b), any Eligible Reinvestment of the Net
Cash Proceeds of (i) any Involuntary Disposition as contemplated by
Section 7.6(b), (ii) any Asset Disposition as contemplated by Section
8.5(g) or (iii) any Equity Issuance;
(h) Investments consisting of an Acquisition by the
Borrower or any Subsidiary of the Borrower, PROVIDED that (i) the
Property acquired (or the Property of the Person acquired) in such
Acquisition is used or useful in the same or a similar line of business
as the Borrower and its Subsidiaries were engaged in on the Closing
Date (and any reasonable extensions or expansions thereof or businesses
ancillary or complementary thereto), (ii) the Agent shall have received
all items in respect of the Capital Stock or Property acquired in such
Acquisition required to be delivered by the terms of Section 7.11
and/or Section 7.12, (iii) in the case of an Acquisition of the Capital
Stock of another Person, the board of directors (or other comparable
governing body) of such other Person shall have duly approved such
Acquisition, (iv) the Borrower shall have delivered to the Agent (A) a
Pro Forma Compliance Certificate demonstrating that, upon giving effect
to such Acquisition on a Pro Forma Basis, the Credit Parties would be
in compliance with the financial covenants set forth in Section 7.10(a)
and (b) and (B) a certificate of an Executive Officer of the Borrower
(1) demonstrating that, upon giving effect to such Acquisition, at
least 90% of Consolidated EBITDA for the most recently ended fiscal
year period for each of the Consolidated Parties and the acquired
Person or Property preceding the date of such Acquisition with respect
to which the Agent shall have received the Required Financial
Information has been audited in accordance with GAAP, in the case of
the Consolidated Parties, as required by Section 7.1(a) and, in the
case of the acquired Person or Property, by independent certified
public accountants of recognized national standing reasonably
acceptable to the Agent (whose opinion shall not be limited as to the
scope or qualified as to going concern status or any other material
qualifications or exceptions) and (2) to the extent that audited
financial information for the acquired Person or Property is required
under the terms of the foregoing clause (1), certifying that the
quarterly financial statements with respect to the Person or Property
acquired for each fiscal quarter period ending after the date of the
last audit and immediately prior to the date of such Acquisition have
been prepared in accordance with GAAP (subject to audit adjustments and
the absence of footnotes) and reviewed by independent certified public
accountants of recognized national standing reasonably acceptable to
the Agent, (v) the representations and warranties made by the
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Credit Parties in Section 6 shall be true and correct in all material
respects at and as if made as of the date of such Acquisition (after
giving effect thereto) except to the extent such representations and
warranties expressly relate to an earlier date, (vi) if such
transaction involves the purchase of an interest in a partnership
between the Borrower as a general partner and entities unaffiliated
with the Borrower as the other partners, such transaction shall be
effected by having such equity interest acquired by a corporate holding
company directly or indirectly wholly-owned by the Borrower newly
formed for the sole purpose of effecting such transaction, (vii) after
giving effect to such Acquisition, there shall be at least $25,000,000
of availability existing under the Revolving Committed Amount and
(viii) the aggregate consideration (including cash and non-cash
consideration and any assumption of Indebtedness, but excluding
consideration consisting of (A) any Capital Stock of the Parent issued
to the seller of the Capital Stock or Property acquired in such
Acquisition, (B) consideration consisting of the Net Cash Proceeds of
the issuance of Subordinated Debt and (C) to the extent not required at
such time to prepay the Loans pursuant to Section 3.3(b), consideration
consisting of the Net Cash Proceeds of any Equity Issuance by the
Parent consummated subsequent to the Closing Date and the Net Cash
Proceeds of any Asset Disposition (other than an Asset Dispositions of
the type described in clauses (i), (viii) and (ix) of the definition of
"Excluded Asset Disposition") or Involuntary Disposition consummated
subsequent to the Closing Date) paid by the Consolidated Parties for
all such Acquisitions occurring after the Closing Date shall not exceed
$100,000,000;
(i) Investments consisting of endorsements for collection
or deposit in the ordinary course of business;
(j) to the extent constituting Investments, (i) Guaranty
Obligations permitted by Section 8.1(o), (ii) Permitted Liens and (iii)
transactions permitted by Section 8.4;
(k) Investments consisting of customary trade
arrangements with customers in the ordinary course of business and
consistent with past practices;
(l) Investments consisting of obligations of directors
and/or employee's of any Consolidated Party in connection with such
Person's purchase of Capital Stock in the Parent or M-Foods Investors;
(m) Investments made with the portion of Excess Cash Flow
not required to prepay the Loans in accordance with Section 3.3(b)(ii);
(n) to the extent constituting Investments, the licensing
or contribution of Intellectual Property pursuant to joint marketing
arrangements with Persons other than Consolidated Parties;
(o) Investments consisting of advances or loans to the
Parent in lieu of, and not exceeding the aggregate amount of,
Restricted Payments to the Parent permitted under Section 8.7; or
(p) other Investments not listed above (including,
without limitation, Investments in Foreign Subsidiaries and Joint
Ventures) in an aggregate net amount not to
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exceed $65,000,000 at any one time; PROVIDED, HOWEVER, that, to the
extent that any such Investment (or series of related Investments) made
pursuant to this clause (p) consists of the contribution(s) or other
transfer(s) of Property (other than cash) having an aggregate net book
value in excess of $5,000,000 to a Joint Venture for consideration less
than the fair market value of such Property, then the Borrower shall
have delivered to the Agent a Pro Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro Forma Basis to such
Investment(s), the Credit Parties would be in compliance with the
financial covenants set forth in Section 7.10(a) and (b).
8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) Restricted Payments by any Consolidated Party
which is not a Credit Party to any other Consolidated Party, (b) to the extent
constituting Restricted Payments, transactions permitted by Section 8.4, Section
8.8 or Section 8.9, (c) Restricted Payments by any Consolidated Parties to the
Parent for its proportionate share of the tax liability of the affiliated group
of corporations that file consolidated federal income tax returns (or that file
state or local income tax returns on a consolidated basis), (d) Restricted
Payments made on the Closing Date to consummate the Transaction pursuant to the
Merger Agreement, (e) scheduled payments of Subordinated Debt or Qualified
Preferred Stock not in violation of the subordination provisions contained in
the applicable Junior Financing Documentation, (f) Restricted Payments by any
Consolidated Party to the Parent not to exceed an amount necessary to permit the
Parent to pay its costs (including all professional fees and expenses) incurred
to comply with its reporting obligations under federal or state laws or in
connection with reporting or other obligations under this Credit Agreement and
the Credit Documents, (g) Restricted Payments by any Consolidated Party to the
Parent not to exceed an amount necessary to permit the Parent to pay its interim
expenses incurred in connection with any public offering of equity securities
the net proceeds of which are specifically intended to be received by or
contributed or loaned to the Borrower, which, unless such offering shall have
been terminated by the board of directors of the Parent, shall be repaid to the
Borrower promptly out of the proceeds of such offering, (h) Restricted Payments
by any Consolidated Party to the Parent and/or M-Foods Investors to pay for
corporate, administrative and operating expenses (including indemnity payments)
in the ordinary course of business, (i) Restricted Payments by each of Dairy LLC
and Dairy TXCT LLC to Dairy Holdco to permit the holders of the Capital Stock of
Dairy Holdco to pay for income taxes attributable to their respective
Investments in Dairy Holdco in accordance with the terms of the operating
agreements (or other similar agreements) of Dairy Holdco, Dairy LLC, and Dairy
TXCT LLC, (j) Restricted Payments by each of Dairy LLC and Dairy TXCT LLC to
Dairy Holdco not to exceed an amount necessary to permit Dairy Holdco to pay for
corporate and administrative expenses in the ordinary course of business, (k)
Restricted Payments by each of Dairy LLC and Dairy TXCT LLC for the account of
Dairy Holdco to the extent that the proceeds of such Restricted Payments are
made directly to Credit Parties for the account of Dairy Holdco, (l) repurchases
by the Parent of its Capital Stock (and Restricted Payments by the Borrower,
Dairy LLC, Dairy TXCT LLC and/or the Parent) to the extent necessary to enable
the Parent, Dairy Holdings and/or M-Foods Investors to repurchase Capital Stock
from a former or current employee (and/or such employee's estate, spouse and/or
former spouse) of the Parent or the Borrower or any of its Subsidiaries in
connection with the termination of such employee's employment; PROVIDED that
such Restricted Payments shall not exceed $2,000,000 in cash during any fiscal
year PLUS (1) the unused amount available pursuant to this clause (l) for such
Restricted Payments from any previous year and (2) the
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proceeds of any key-man life insurance maintained by the Parent, the Borrower or
any of its Subsidiaries, (m) repurchases of Capital Stock of the Parent deemed
to occur upon the non-cash exercise of stock options and warrants and (n) other
Restricted Payments made with the Net Cash Proceeds of Equity Issuances which
are not required to be applied to the prepayment of the Loans pursuant to
Section 3.3(b)(v).
8.8 OTHER INDEBTEDNESS.
The Credit Parties will not permit any Consolidated Party to (a) if any
Default or Event of Default has occurred and is continuing or would be directly
or indirectly caused as a result thereof, after the issuance thereof, amend or
modify any of the terms of any Indebtedness of such Consolidated Party if such
amendment or modification would add or change any terms in a manner adverse to
such Consolidated Party, or shorten the final maturity or average life to
maturity or require any payment to be made sooner than originally scheduled or
increase the interest rate applicable thereto, or, make (or give any notice with
respect thereto) any voluntary or optional payment or prepayment or redemption
or acquisition for value of (including without limitation, by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due), refund, refinance or exchange of any other
Indebtedness of such Consolidated Party, other than in connection with the
refinancing, repayment or retirement of any such Indebtedness with Capital Stock
or the Net Cash Proceeds from an Equity Issuance which are not required to
prepay the Loans pursuant to Section 3.3(b)(v), (b) after the issuance thereof,
amend or modify any of the terms of any Junior Financing Documentation if such
amendment or modification would add or change any terms in a manner adverse to
the Consolidated Parties, or shorten the final maturity or average life to
maturity thereof or require any payment to be made sooner than originally
scheduled or increase the interest rate applicable thereto or change any
subordination provision thereof, (c) make interest payments in respect of any
Subordinated Debt or Qualified Preferred Stock in violation of the subordination
provisions of the applicable Junior Financing Documentation or (d) make (or give
any notice with respect thereto) any voluntary or optional payment or
prepayment, redemption, acquisition for value or defeasance of (including
without limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any Subordinated Debt except, (i) subject to the terms
of clause (a) above, for the exchange of the Subordinated Notes for notes with
identical terms registered pursuant to the registration rights agreement set
forth in the Subordinated Debt Indenture and (ii) provided that no Default or
Event of Default exists, the refinancing, repayment or retirement of any
Subordinated Debt with Capital Stock or the Net Cash Proceeds from Equity
Issuances which are not required to prepay the Loans pursuant to Section
3.3(b)(v).
8.9 TRANSACTIONS WITH AFFILIATES.
The Credit Parties will not permit any Consolidated Party to enter into
or permit to exist any transaction or series of transactions with any officer,
director, Subsidiary or Affiliate of such Person other than (a) advances of
working capital to any Credit Party other than the Parent, (b) transfers of cash
and assets to any Credit Party other than the Parent, (c) transactions expressly
permitted by Section 8.1, Section 8.4, Section 8.5, Section 8.6 or Section 8.7,
(d) normal compensation, indemnification and reimbursement of expenses of
officers, employees and directors, (e) the payment of fees and expenses in
connection with the Transaction as contemplated by the Merger Agreement, the
Credit Documents and the Subordinated Debt Indenture, (f) the payment of fees
and
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reimbursement of expenses to the Equity Investors and any indemnities in
connection with the Transaction, (g) the transactions set forth on SCHEDULE 8.9,
(h) Equity Issuances to Affiliates, (i) the payment of fees and expenses of the
Equity Investors contemplated by the Management Agreement and (j) except as
otherwise specifically limited in this Credit Agreement, other transactions
which are entered into in the ordinary course of such Person's business on terms
and conditions substantially as favorable to such Person as would be obtainable
by it in a comparable arms-length transaction with a Person other than an
officer, director, shareholder, Subsidiary or Affiliate.
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; DAIRY
RESTRUCTURING DOCUMENTS.
The Credit Parties will not permit any Consolidated Party to (a) amend,
modify or change its articles of incorporation (or other similar organizational
document) or bylaws (or other similar documents) in a manner adverse to the
rights of the Lenders or (b) change its fiscal year. The Credit Parties will not
permit any of Dairy Holdco, Dairy LLC or Dairy TXCT LLC to amend, modify or
change its articles of formation, operating agreement or any of the Dairy
Restructuring Documents in a manner adverse to the Lenders.
8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its Property (other than Capital Stock in Joint Ventures) to any
Credit Party, or (e) act as a Credit Party and pledge its Property (other than
Capital Stock in Joint Ventures) pursuant to and in accordance with the Credit
Documents or any renewals, refinancings, exchanges, refundings or extension
thereof, except (in respect of any of the matters referred to in clauses (a)-(d)
above) for such encumbrances or restrictions existing under or by reason of (i)
this Credit Agreement and the other Credit Documents, (ii) the Subordinated Debt
Indenture, as in effect as of the Closing Date, (iii) applicable law or
regulation, (iv) any document or instrument governing Indebtedness permitted
under Section 8.1, PROVIDED that the encumbrances and restrictions relating to
any Consolidated Party in such document or instrument are no more restrictive
than the corresponding encumbrances and restrictions contained in the Credit
Documents, (v) any Permitted Lien or any document or instrument governing any
Permitted Lien, PROVIDED that any such restriction contained therein relates
only to the asset or assets subject to such Permitted Lien, (vii) customary
restrictions and conditions contained in any agreement relating to the sale of
any Property permitted under Section 8.5 pending the consummation of such sale,
(viii) customary non-assignment provisions in contracts, (ix) the documentation
governing or evidencing the Existing Notes or (x) agreements entered into by
Foreign Subsidiaries.
8.12 OWNERSHIP OF SUBSIDIARIES.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not (i) except in the case of Dairy LLC or
Dairy TXCT LLC, permit the Credit Parties (other than the Parent) to own
directly less than 90% of the Voting Stock of any of the Domestic
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Subsidiaries except as a result of or in connection with a dissolution, merger,
consolidation or disposition of a Subsidiary not prohibited by Section 8.4 or
Section 8.5, (ii) permit the Credit Parties to own directly or indirectly less
than 90% of the Voting Stock of any of the Foreign Subsidiaries except (A) to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital Stock of
Foreign Subsidiaries or (B) as a result of or in connection with a dissolution,
merger, consolidation or disposition of a Subsidiary not prohibited by Section
8.4 or Section 8.5, (iii) prior to any Asset Disposition of all of the Capital
Stock or all or substantially all of the Property of Dairy LLC, permit any
Person other than the Credit Parties or Dairy Holdco to own any Capital Stock of
Dairy LLC, (iv) prior to any Asset Disposition of all of the Capital Stock or
all or substantially all of the Property of Dairy TXCT LLC, permit any Person
other than the Credit Parties or Dairy Holdco to own any Capital Stock of Dairy
TXCT LLC, (v) except as permitted by Section 8.6, permit any Subsidiary of the
Borrower to issue or have outstanding any shares of preferred Capital Stock
other than Qualified Preferred Stock or (vi) create, incur, assume or suffer to
exist any Lien on any Capital Stock of any Subsidiary of the Borrower required
to pledged to the Agent pursuant to the terms of Section 7.12, except for
Permitted Liens.
8.13 SALE LEASEBACKS.
The Credit Parties will not permit any Consolidated Party to enter into
any Sale and Leaseback Transaction; PROVIDED, HOWEVER, the Borrower and its
Subsidiaries may enter into Sale and Leaseback Transactions so long as the fair
market value of all Properties subject to such transactions occurring on or
after the Closing Date does not exceed $25,000,000.
8.14 NO FURTHER NEGATIVE PLEDGES.
The Credit Parties will not permit any Consolidated Party to enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the existence of any Lien upon any of its Property in favor of the
Agent (for the benefit of the Lenders) for the purpose of securing the Credit
Party Obligations, whether now owned or hereafter acquired, or requiring the
grant of any security for any obligation if such Property is given as security
for the Credit Party Obligations, except (a) in connection with any document or
instrument governing Indebtedness incurred pursuant to Section 8.1(c), PROVIDED
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (b) in connection with any
Permitted Lien or any document or instrument governing any Permitted Lien,
PROVIDED that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (c) pursuant to customary restrictions
and conditions contained in any agreement relating to any Permitted Asset
Disposition, pending the consummation of such sale, (d) customary non-assignment
provisions in contracts, (e) the documentation governing or evidencing the
Existing Notes, (f) agreements entered into by to Foreign Subsidiaries or (g)
Property consisting of Capital Stock in Joint Ventures.
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SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence and during the
continuance of any of the following specified events (each an "EVENT OF
DEFAULT"):
(a) PAYMENT. Any Credit Party shall
(i) default in the payment when due of any
principal of any of the Loans or of any reimbursement
obligations arising from drawings under Letters of Credit, or
(ii) default, and such default shall continue for
five (5) or more Business Days, in the payment when due of any
interest on the Loans or of any interest on reimbursement
obligations arising from drawings under Letters of Credit, or
of any Fees or other amounts owing hereunder, under any of the
other Credit Documents or in connection herewith or therewith;
or
(b) REPRESENTATIONS. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
deemed to have been made; or
(c) COVENANTS. Any Credit Party shall
(i) default in the due performance or observance
of any term, covenant or agreement contained in Sections 7.2
(with respect to corporate existence), 7.8, 7.10, 7.11 or 7.12
or Section 8; or
(ii) default in the due performance or observance
by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) of this Section
9.1) contained in this Credit Agreement or any other Credit
Document and such default shall continue unremedied for a
period of at least 30 days after notice thereof by the Agent;
or
(d) OTHER CREDIT DOCUMENTS. Except as a result of or in
connection with a dissolution, merger or disposition of a Subsidiary
not prohibited by Section 8.4 or Section 8.5, any Credit Document shall
fail to be in full force and effect (other than in accordance with its
terms) or to give the Agent and/or the Lenders the Liens, material
rights, powers and privileges purported to be created thereby, or any
Credit Party (or, in the case of the Investor Pledge Agreement, Dairy
Holdco) shall so state in writing; or
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(e) GUARANTIES. Except as the result of or in connection
with a dissolution, merger or disposition of a Subsidiary not
prohibited by Section 8.4 or Section 8.5, the guaranty given by any
Guarantor hereunder (including any Person after the Closing Date in
accordance with Section 7.11) or any provision thereof shall cease to
be in full force and effect, or any Guarantor (including any Person
after the Closing Date in accordance with Section 7.11) hereunder or
any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such guaranty, or any
Guarantor shall default (beyond any applicable grace period) in the due
performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to any guaranty; or
(f) BANKRUPTCY, ETC. Any Bankruptcy Event shall occur
with respect to any Consolidated Party; or
(g) DEFAULTS UNDER OTHER INDEBTEDNESS. With respect to
any Indebtedness (other than Indebtedness outstanding under this Credit
Agreement and the Existing Notes) in excess of $10,000,000 in the
aggregate principal amount for the Consolidated Parties taken as a
whole, (A) either (1) default in any payment shall occur and continue
(beyond the applicable grace period with respect thereto, if any) with
respect to any such Indebtedness (other than as a result of
subordination provisions invoked by the Lenders), or (2) a default in
the observance or performance relating to such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event or condition shall occur or exist,
the effect of which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee or agent
on behalf of such holders) to cause (determined without regard to
whether any notice or lapse of time is required), any such Indebtedness
to become due prior to its stated maturity; or (B) any such
Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior
to the stated maturity thereof; or
(h) JUDGMENTS. One or more judgments or decrees shall be
entered against one or more of the Consolidated Parties involving a
liability of $10,000,000 or more in the aggregate (to the extent not
paid or covered by insurance provided by a carrier who has not
disclaimed coverage and has the ability to perform) and any such
judgments or decrees shall not have been paid, vacated, discharged or
stayed or bonded pending appeal within 60 days from the entry thereof;
or
(i) ERISA. Any of the following events or conditions, if
such event or condition could reasonably be expected to result in
liability that would have a Material Adverse Effect: (i) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets
of any Consolidated Party or any ERISA Affiliate in favor of the PBGC
or a Plan; (ii) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the Agent, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the reasonable opinion of
the Agent, likely to result in (A) the termination of such Plan for
purposes of Title IV of ERISA, or (B) any Consolidated Party or any
ERISA Affiliate incurring any liability in connection with a withdrawal
from, reorganization of (within the
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meaning of Section 4241 of ERISA), or insolvency (within the meaning of
Section 4245 of ERISA) of such Plan; or (iv) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the
Code) or breach of fiduciary responsibility shall occur which may
subject any Consolidated Party or any ERISA Affiliate to any liability
under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which
any Consolidated Party or any ERISA Affiliate has agreed or is required
to indemnify any person against any such liability; or
(j) SUBORDINATED FINANCINGS. (i) There shall occur and be
continuing any "Event of Default" (or any comparable term) under, and
as defined in, any Junior Financing Documentation, (ii) any of the
Credit Party Obligations for any reason shall cease to be "Designated
Senior Debt" (or any comparable term) under, and as defined in, any
Junior Financing Documentation, (iii) any Indebtedness other the Credit
Party Obligations shall constitute "Designated Senior Debt" (or any
comparable term) under, and as defined in, any Junior Financing
Documentation or (iv) the subordination provisions set forth in Article
10 and Section 11.02 of the Subordinated Debt Indenture (or comparable
provisions in any other Junior Financing Documentation) shall, in whole
or in part, terminate, cease to be effective or cease to be legally
valid, binding and enforceable against any holder of the applicable
Subordinated Debt or Qualified Preferred Stock (other than in
accordance with their respective terms); or
(k) OWNERSHIP. (i) There shall occur a Change of Control
or (ii) prior to any Asset Disposition of all of the Capital Stock or
all or substantially all of the Property of Dairy LLC and Dairy TXCT
LLC in one or more transactions permitted under Section 8.5, the
Capital Stock of Dairy Holdco shall fail to be owned, directly or
indirectly, substantially by the same Persons that own, directly and
indirectly, the Capital Stock of the Parent.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence and during the continuance of an Event of Default,
the Agent, upon the request and direction of the Required Lenders, shall, by
written notice to the Credit Parties take any of the following actions:
(a) TERMINATION OF COMMITMENTS. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) ACCELERATION. Declare the Credit Party Obligations to
be due and payable, whereupon the same shall be immediately due and
payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Credit Parties.
(c) CASH COLLATERAL. Direct the Borrower to pay (and the
Borrower hereby promises to pay, upon receipt of such notice) to the
Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the
LOC Obligations in respect of subsequent drawings under all then
outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding.
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(d) ENFORCEMENT OF RIGHTS. Enforce any and all rights and
interests created and existing under the Credit Documents including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur with respect to the Borrower, then, without the
giving of any notice or other action by the Agent or the Lenders, (i) the
Commitments automatically shall terminate, (ii) all of the outstanding Credit
Party Obligations automatically shall immediately become due and payable and
(iii) the Borrower automatically shall be obligated (and hereby promises) to pay
to the Agent additional cash, to be held by the Agent, for the benefit of the
Lenders, in a cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then outstanding Letters
of Credit in an amount equal to the maximum aggregate amount which may be drawn
under all Letters of Credits then outstanding.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT, POWERS AND IMMUNITIES.
(a) Each Lender hereby irrevocably appoints and
authorizes the Agent to act as its agent under this Credit Agreement
and the other Credit Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Credit
Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as
used in this sentence and in Section 10.5 and the first sentence of
Section 10.6 hereof shall include its Affiliates and its own and its
Affiliates' officers, directors, employees, and agents): (i) shall not
have any duties or responsibilities except those expressly set forth in
this Credit Agreement and shall not be a trustee or fiduciary for any
Lender; (ii) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made
in or in connection with any Credit Document or any certificate or
other document referred to or provided for in, or received by any of
them under, any Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any
Credit Document, or any other document referred to or provided for
therein or for any failure by any Credit Party or any other Person to
perform any of its obligations thereunder; (iii) shall not be
responsible for or have any duty to ascertain, inquire into, or verify
the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the
Property (including the books and records) of any Credit Party or any
of its Subsidiaries or Affiliates; and (iv) shall not be responsible
for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross
negligence, bad faith or willful misconduct. The Agent may employ
agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.
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(b) The Issuing Lender shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents
associated therewith until such time (and except for so long) as the
Agent may agree at the request of the Required Lenders to act for the
Issuing Lender with respect thereto; PROVIDED, HOWEVER, that the
Issuing Lender shall have all of the benefits and immunities (i)
provided to the Agent in this Section 10 with respect to any acts taken
or omissions suffered by the Issuing Lender in connection with Letters
of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Agent" as used in this
Section 10 included the Issuing Lender with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the
Issuing Lender.
10.2 RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit Agreement, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding on all of the Lenders; PROVIDED, HOWEVER,
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless 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 any such action.
10.3 DEFAULTS.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or a Credit Party specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall (subject to Section 10.2 hereof) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders (or such other Lenders as required by Section 11.6), PROVIDED THAT,
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
10.4 RIGHTS AS A LENDER.
With respect to its Commitment and the Loans made by it, Bank of
America (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and
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powers hereunder as any other Lender and may exercise the same as though it were
not acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. Bank
of America (and any successor acting as Agent) and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with any Credit Party or any of its
Subsidiaries or Affiliates as if it were not acting as Agent, and Bank of
America (and any successor acting as Agent) and its Affiliates may accept fees
and other consideration from any Credit Party or any of its Subsidiaries or
Affiliates for services in connection with this Credit Agreement or otherwise
without having to account for the same to the Lenders.
10.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably (in accordance with their respective (i)
Revolving Commitments (or, if the Revolving Commitments have been terminated,
the outstanding Revolving Loans and Participation Interests in Letters of Credit
(including the Participation Interests of the Issuing Lender in Letters of
Credit)), (ii) outstanding Tranche A Term Loans (and Participation Interests
therein) and (iii) outstanding Tranche B Term Loans (and Participation Interests
therein)) for, and hold the Agent harmless from and against, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Agent (including by any Lender) in any way relating to or arising out of any
Credit Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Credit Document; PROVIDED that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence, bad faith or willful misconduct of the Person to be indemnified.
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs or expenses payable by
the Credit Parties under Section 11.5, to the extent that the Agent is not
promptly reimbursed for such costs and expenses by the Credit Parties. The
agreements in this Section 10.5 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Credit Parties and
their Subsidiaries and decision to enter into this Credit Agreement and that it
will, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under the Credit Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Credit Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Agent or any of its
Affiliates.
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10.7 SUCCESSOR AGENT.
The Agent may resign at any time by giving 30 days prior notice thereof
to the Lenders and the Credit Parties. Upon any such resignation, the Required
Lenders shall have the right with, if no Event of Default under Section 9.1(a),
(c)(i) or (f) exists, the consent of the Borrower (not to be unreasonably
withheld) to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of the
United States having combined capital and surplus of at least $100,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 10 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 Agent. If no
successor administrative agent has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above.
10.8 SYNDICATION AGENT.
The Syndication Agent, in its capacity as such, shall have no rights,
powers, duties, liabilities, fiduciary relationships or obligations under this
Credit Agreement or any of the other Credit Documents.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid (or pursuant to an invoice arrangement) to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case to the respective parties at the address, in the
case of the Credit Parties and the Agent, set forth below, and, in the case of
the Lenders, set forth on SCHEDULE 2.1(a), or at such other address as such
party may specify by written notice to the other parties hereto:
if to any Credit Party:
Michael Foods, Inc.
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416
109
Attn: Gregg Ostrander, President
Telephone: (952) 546-1500
Telecopy: (952) 546-3711
with copies to:
Vestar Capital Partners
1225 Seventeenth Street
Suite 1660
Denver, CO 80202
Attn: Chris Henderson, Managing Director
Telephone: (303) 294-1822
Telecopy: (303) 292-6639
and
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: Steve Ritchie
Telephone: (312) 861-2210
Telecopy: (312) 861-2200
if to the Agent in respect of Notices of Borrowing, payments and
prepayments:
Bank of America, N. A.
Independence Center, 15th Floor
NC1-001-15-04
101 North Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services
Telephone: (704) 386-9046
Telecopy: (704) 409-0026
if to the Agent in respect of all other communications:
Bank of America, N. A.
CA5-701-12-09
1455 Market Street
San Francisco, California 94103
Attn: Agency Management, Christine Cordi
Telephone: (415) 436-2790
Telecopy: (415) 436-5004
in each case with a copy to:
Bank of America, N. A.
100 North Tryon Street
110
NC1-007-13-06
Charlotte, NC 28255
Attn: John O'Neill
Telephone: (704) 388-5045
Telecopy: (704) 386-9607
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of Default
under Section 9.1(a), each Lender (and each of its 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, other than payroll or trust accounts) at any time
held and other indebtedness at any time owing by such Lender (or any of its
Affiliates) to or for the credit or the account of any Credit Party against any
and all of the obligations of such Person then due and owing under this Credit
Agreement or under any other Credit Document, irrespective of whether such
Lender shall have made any demand hereunder or thereunder. Each Lender agrees
promptly to notify in writing any affected Credit Party 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 set-off and application. The
rights of each Lender under this Section 11.2 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Lender may have.
11.3 BENEFIT OF AGREEMENT.
(a) This Credit Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; PROVIDED that none of the Credit Parties
may assign or transfer any of its interests and obligations without
prior written consent of each of the Lenders; PROVIDED FURTHER that the
rights of each Lender to transfer, assign or grant participations in
its rights and/or obligations hereunder shall be limited as set forth
in this Section 11.3.
(b) Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this
Credit Agreement (including, without limitation, all or a portion of
its Loans and its Commitment); PROVIDED, HOWEVER, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to
another Lender, an Affiliate of an existing Lender or, with
respect to any Lender that is a fund that invests in bank
loans, any other fund that invests in bank loans and is
managed or advised by the same investment advisor as such
Lender or by an Affiliate of such investment advisor or an
assignment of all of a Lender's rights and obligations under
this Credit Agreement, any such partial assignment shall be in
an amount at least equal to $2,500,000 (or, if less, the
remaining amount of the Commitment being assigned by such
Lender) or an integral multiple of $1,000,000 in excess
thereof;
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(iii) each such assignment by a Lender of any
portion of its Revolving Commitment and its Revolving Loans
shall be accompanied by an assignment of a constant, and not
varying, percentage of all of such Lender's Tranche A Term
Loans, and each such assignment by a Lender of any portion of
its Tranche A Term Loans shall be accompanied by an assignment
of a constant, and not varying, percentage of all of such
Lender's Revolving Commitment and its Revolving Loans; and
(iv) the parties to such assignment shall execute
and deliver to the Agent for its acceptance an Assignment and
Acceptance in the form of EXHIBIT 11.3(b) (an "ASSIGNMENT AND
ACCEPTANCE"), together with a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Credit Agreement. Upon the consummation of any
assignment pursuant to this Section 11.3(b), the assignor, the Agent
and the Credit Parties shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not a United States person under Section 7701(a)(30) of the
Code, it shall deliver to the Credit Parties and the Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to
in Section 11.1 a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount of
the Loans owing to, each Lender from time to time (the "REGISTER"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Credit Parties, the Agent and
the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Credit
Parties or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Any assignment of any Loan or other Credit
Party Obligations shall be effective only upon an entry with respect
thereto being made in the Register.
(d) Upon its receipt of an Assignment and Acceptance
executed by the parties thereto and payment of the processing fee, the
Agent shall, if such Assignment and Acceptance has been completed and
is in substantially the form of Exhibit 11.3(b) hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the
parties thereto.
(e) Each Lender may sell participations to one or more
Persons in all or a portion of its rights, obligations or rights and
obligations under this Credit Agreement (including all or a portion of
its Commitment or its Loans); PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the
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yield protection provisions contained in Sections 3.6 through 3.12,
inclusive (but only to the extent that the selling Lender is so
entitled), and the right of set-off contained in Section 11.2 (provided
that, in the case of Section 3.11, such participant shall have complied
with the provisions of said Section (except that any forms required to
be delivered pursuant to Section 3.11 will be delivered to the Lender
from whom the participation was purchased) and, provided, further, that
no participant shall be entitled to receive any greater amount pursuant
to Sections 3.9, 3.11 or 3.12 than the Lender from whom the
participation was purchased would have been entitled to receive in
respect of the amount of the participation transferred by such Lender
to such participant had no such transfer occurred), and (iv) the Credit
Parties shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Credit
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Credit Parties relating to the Credit Party
Obligations owing to such Lender and to approve any amendment,
modification, or waiver of any provision of this Credit Agreement
(other than amendments, modifications, or waivers directly affecting
such participant (A) decreasing the amount of principal of or the rate
at which interest is payable on such Loans, (B) extending the Maturity
Date or any scheduled Principal Amortization Payment Date or date fixed
for the payment of interest on such Loans or (C) extending its
Commitment.
(f) Notwithstanding any other provision set forth in this
Credit Agreement, any Lender may at any time collaterally assign and
pledge all or any portion of its Loans and its Notes, if any, (i) to
any Federal Reserve Bank as collateral security pursuant to Regulation
A and any Operating Circular issued by such Federal Reserve Bank, (ii)
in the case of any Lender which has made Tranche B Term Loans hereunder
and is an investment fund, to the trustee under the indenture to which
such fund is a party in support of its obligations to such trustee for
the benefit of the applicable trust beneficiaries or (iii) to
appropriate entities within the Farm Credit System as collateral
security. No such assignment shall release the assigning Lender from
its obligations hereunder.
(g) Any Lender may furnish any information concerning the
Consolidated Parties in the possession of such Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.14
hereof.
(h) Notwithstanding anything to the contrary contained in
any Credit Document, the Master Assignment Agreement shall be deemed to
be an Assignment and Acceptance executed in compliance with this
Section 11.3.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender and any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not
113
exclusive of any rights or remedies which the Agent or any Lender would
otherwise have. No notice to or demand on any Credit Party in any case shall
entitle the Credit Parties to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Agent or the
Lenders to any other or further action in any circumstances without notice or
demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Credit Parties jointly and severally agree to pay
on demand all reasonable costs and expenses of the Agent in connection
with the syndication, preparation, execution, delivery, administration,
modification, and amendment of this Credit Agreement, the other Credit
Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of
counsel for the Agent with respect thereto and with respect to advising
the Agent as to its rights and responsibilities under the Credit
Documents. The Credit Parties further jointly and severally agree to
pay on demand all reasonable costs and expenses of the Agent and one
counsel to all of the Lenders, if any, in connection with the
enforcement (whether through negotiations, legal proceedings, or
otherwise) of the Credit Documents and the other documents to be
delivered hereunder, except to the extent such claim, damage, loss,
liability, cost, or expense results from the gross negligence, bad
faith, willful misconduct of the Person seeking reimbursement or a
breach by such Person of its obligations hereunder.
(b) The Credit Parties jointly and severally agree to
indemnify and hold harmless the Agent and each Lender and each of their
Affiliates and their respective officers, directors, employees and
agents (each, an "INDEMNIFIED PARTY") from and against any and all
claims, damages, actual losses, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' fees of the Agent
and one counsel to all of the Lenders and excluding taxes) that may be
incurred by or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation,
or proceeding or preparation of defense in connection therewith) the
Credit Documents, any of the transactions contemplated herein or the
actual or proposed use of the proceeds of the Loans, except to the
extent such claim, damage, loss, liability, cost, or expense results
from the gross negligence, bad faith or willful misconduct of such
Indemnified Party (or any of its Affiliates or any their respective
officers, directors, employees or agents) or from a breach by such
Indemnified Party (or any of its Affiliates or any their respective
officers, directors, employees or agents) of its obligations hereunder.
In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 11.5 applies, such indemnity shall
be effective whether or not such investigation, litigation or
proceeding is brought by any of the Credit Parties, their respective
directors, shareholders or creditors or an Indemnified Party or any
other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. No
party hereto shall assert any claim against any other party hereto, any
of their Affiliates, or any of their respective directors, officers,
employees, attorneys, agents, and advisers, on any theory of liability,
for special, indirect, consequential, or punitive damages arising out
of or otherwise relating to the Credit Documents, any of the
transactions contemplated herein or the actual or proposed use of the
proceeds of the Loans.
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(c) Without prejudice to the survival of any other
agreement of the Credit Parties hereunder, the agreements and
obligations of the Credit Parties contained in this Section 11.5 shall
survive the repayment of the Loans, LOC Obligations and other Credit
Party Obligations and the termination of the Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, each of the Credit Parties
party thereto and the Required Lenders, PROVIDED, HOWEVER, that:
(a) without the consent of each Lender affected thereby,
neither this Credit Agreement nor any other Credit Document may be
amended, changed, waived, discharged or terminated so as to
(i) extend any Commitment or the final maturity
of any Loan or of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit, or
extend or waive any Principal Amortization Payment of any
Loan, or any portion thereof,
(ii) reduce the rate or extend the time of
payment of interest on any Loan or of any reimbursement
obligation, or any portion thereof, arising from drawings
under Letters of Credit (other than as a result of waiving the
applicability of any post-default increase in interest rates)
or of any Fees,
(iii) reduce or waive the principal amount of any
Loan or of any reimbursement obligation, or any portion
thereof, arising from drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the
amount thereof in effect (it being understood and agreed that
a waiver of any condition precedent set forth in Section 5.2
or of any Default or Event of Default or mandatory reduction
in the Commitments shall not constitute a change in the terms
of any Commitment of any Lender),
(v) except as the result of or in connection
with an Asset Disposition not prohibited by Section 8.5,
release all or substantially all of the Collateral,
(vi) except as the result of or in connection
with a dissolution, merger or disposition of a Consolidated
Party not prohibited by Section 8.4 or Section 8.5, release
the Borrower or substantially all of the other Credit Parties
from its or their obligations under the Credit Documents,
(vii) amend, modify or waive any provision of this
Section 11.6 or Section 3.13(a),
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(viii) reduce any percentage specified in the
definition of Required Lenders, or
(ix) consent to the assignment or transfer by the
Borrower or all or substantially all of the other Credit
Parties of any of its or their rights and obligations under
(or in respect of) the Credit Documents except as permitted
hereby or thereby;
(b) without the consent of Lenders (other than Defaulting
Lenders) holding in the aggregate at least a majority of the
outstanding Tranche A Term Loans (and Participation Interests therein)
and Lenders (other than Defaulting Lenders) holding in the aggregate at
least a majority of the outstanding Tranche B Term Loans (and
Participation Interests therein), Section 3.3(b)(vi) may not be
amended, changed, waived, discharged or terminated so as to extend the
time for or change the amount or the manner of application of proceeds
of any mandatory prepayment required by Section 3.3(b)(ii), (iii), (iv)
or (v) hereof;
(c) without the consent of the Agent, no provision of
Section 10 may be amended, changed, waived, discharged or terminated;
(d) without the consent of the Issuing Lender, no
provision of Section 2.2 may be amended, changed, waived, discharged or
terminated and
(e) without the consent of the Swingline Lender, no
provision of Section 2.3 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender
is entitled to vote as such Lender sees fit on any bankruptcy
reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and
(y) the Required Lenders shall determine whether or not to allow a
Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding and such determination shall be binding on all of
the Lenders.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed shall be an original, but all of which shall
constitute one and the same instrument. It shall not be necessary in making
proof of this Credit Agreement to produce or account for more than one such
counterpart for each of the parties hereto. Delivery by facsimile by any of the
parties hereto of an executed counterpart of this Credit Agreement shall be as
effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
11.8 HEADINGS.
The headings of the sections hereof are provided for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Credit Agreement.
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11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive until this Credit Agreement shall be terminated in
accordance with the terms of Section 11.13(b).
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
PROVIDED THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in the
courts of the State of New York in New York County, or of the United
States for the Southern District of New York, and, by execution and
delivery of this Credit Agreement, each of the Credit Parties hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 11.1, such service to become effective
three (3) days after such mailing. Nothing herein shall affect the
right of the Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise
proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives
any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT,
THE LENDERS, EACH OF THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in
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full force and effect and shall be construed without giving effect to the
illegal, invalid or unenforceable provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such
time on or after the Closing Date when it shall have been executed by
each Credit Party and the Agent, and the Agent shall have received
copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Lender, and thereafter this Credit Agreement
shall be binding upon and inure to the benefit of each Credit Party,
the Agent and each Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until the
Credit Party Obligations are Fully Satisfied.
11.14 CONFIDENTIALITY.
The Agent and each Lender (each, a "LENDING PARTY") agrees to keep
confidential any information furnished or made available to it by or on behalf
of the Credit Parties pursuant to this Credit Agreement; PROVIDED that nothing
herein shall prevent any Lending Party from disclosing such information (a) to
any other Lending Party or any Affiliate of any Lending Party, or any officer,
director, employee, agent, or advisor of any Lending Party or Affiliate of any
Lending Party, provided in each case that such Person is informed of the
confidential nature of such information, (b) to any other Person if reasonably
incidental to the administration of the Credit Facilities, provided in each case
that such Person is informed of the confidential nature of such information, (c)
as required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Lending Party, (f) that is or becomes
available to the public or that is or becomes available to any Lending Party
other than as a result of a disclosure by any Lending Party or other Person
bound by this Section 11.14 prohibited by this Credit Agreement, (g) in
connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, PROVIDED, such Lending Party will, to the extent
practical, use reasonable efforts to notify the Borrower prior to such
disclosure, (h) to the extent necessary in connection with the exercise of any
remedy under this Credit Agreement or any other Credit Document, (i) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender, (j) to any direct or indirect contractual counterparty
in swap agreements or such contractual counterparty's professional advisor (so
long as such contractual counterparty or professional advisor to such
contractual counterparty (i) has been approved in writing by the Borrower and
(ii) agrees in a writing enforceable by the Borrower to be bound by the
provisions of this Section 11.14) and
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(k) subject to provisions substantially similar to those contained in this
Section 11.14, to any actual or proposed participant or assignee.
11.15 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to
any separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender,
such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total
assets of such account as of the date of such purchase (and, for
purposes of this clause (b), all employee benefit plans maintained by
the same employer or employee organization are deemed to be a single
plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance
company has complied with all of the requirements of the regulations
issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 REGULATION D.
Each of the Lenders hereby represents and warrants to the Borrower that
it is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires or loans in
the ordinary course of business and that it will make or acquire Loans for its
own account in the ordinary course of business.
11.17 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: MICHAEL FOODS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
PARENT: M-FOODS HOLDINGS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SUBSIDIARY
GUARANTORS: CRYSTAL FARMS REFRIGERATED
DISTRIBUTION COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
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NORTHERN STAR CO.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
KOHLER MIX SPECIALTIES, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
KOHLER MIX SPECIALTIES OF
CONNECTICUT, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
[Signatures Continued]
M.G. WALDBAUM COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
PAPETTI'S HYGRADE EGG PRODUCTS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
CASA TRUCKING, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
WISCO FARM COOPERATIVE
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
WFC, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
FARM FRESH FOODS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
MICHAEL FOODS OF DELAWARE, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
[Signatures Continued]
MIDWEST MIX, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
MINNESOTA PRODUCTS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
PAPETTI ELECTROHEATING CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
M-FOODS DAIRY, LLC
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
M-FOODS DAIRY TXCT, LLC
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
[Signatures Continued]
AGENT: BANK OF AMERICA, N. A.,
in its capacity as Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SYNDICATION AGENT: BEAR, STEARNS & CO.,
in its capacity as Syndication Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
LENDERS: BANK OF AMERICA, N. A.,
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------