EXHIBIT 99.1
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$100,000,000
CREDIT AGREEMENT
DATED AS OF FEBRUARY 9, 2001
AMONG
LUIGINO'S, INC.,
THE LENDERS,
BANK ONE, NA,
AS ADMINISTRATIVE AGENT AND LC ISSUER
AND
U.S. BANK NATIONAL ASSOCIATION,
AS SYNDICATION AGENT
AND SWING LINE LENDER
_____________________
BANC ONE CAPITAL MARKETS, INC.,
LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................................. 1
ARTICLE II THE CREDITS................................................................. 22
2.1. Term Loan Facility................................................................ 22
2.1.1 Description of Facility....................................................... 22
2.1.2 Repayment of Facility......................................................... 22
2.2. Revolving Credit Facility......................................................... 22
2.2.1 Description of Facility....................................................... 22
2.2.2 Repayment of Facility upon Reduction in Commitments........................... 23
2.2.3 Termination................................................................... 23
2.3. Advances.......................................................................... 23
2.4. Types of Advances................................................................. 23
2.5. Swing Line Loans.................................................................. 23
2.5.1 Amount of Swing Line Loans.................................................... 23
2.5.2 Borrowing Notice.............................................................. 24
2.5.3 Making of Swing Line Loans.................................................... 24
2.5.4 Repayment of Swing Line Loans................................................. 24
2.6. Commitment Fee; Reductions and Increases in Aggregate Commitment.................. 25
2.7. Minimum Amount of Each Advance.................................................... 26
2.8. Optional Principal Payments....................................................... 26
2.9. Mandatory Prepayments and Commitment Reductions................................... 26
2.10. Method of Selecting Types and Interest Periods for New Advances.................. 27
2.11. Conversion and Continuation of Outstanding Advances.............................. 28
2.12. Changes in Interest Rate, etc.................................................... 29
2.13. Rates Applicable After Default................................................... 29
2.14. Method of Payment................................................................ 29
2.15. Noteless Agreement; Evidence of Indebtedness..................................... 30
2.16. Telephonic Notices............................................................... 31
2.17. Interest Payment Dates; Interest and Fee Basis................................... 31
2.18. Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.. 31
2.19. Lending Installations............................................................ 32
2.20. Non-Receipt of Funds by the Agent................................................ 32
2.21. Facility LCs..................................................................... 32
2.21.1 Issuance..................................................................... 32
2.21.2 Participations............................................................... 33
2.21.3 Notice....................................................................... 33
2.21.4 LC Fees...................................................................... 33
2.21.5 Administration; Reimbursement by Lenders..................................... 34
2.21.6 Reimbursement by Borrower.................................................... 34
2.21.7 Obligations Absolute......................................................... 35
2.21.8 Actions of LC Issuer......................................................... 35
2.21.9 Indemnification.............................................................. 36
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2.21.10 Lenders' Indemnification.................................................... 36
2.21.11 Facility LC Collateral Account.............................................. 37
2.21.12 Rights as a Lender.......................................................... 37
2.22. Replacement of Lender............................................................ 37
ARTICLE III YIELD PROTECTION; TAXES.................................................... 38
3.1. Yield Protection.................................................................. 38
3.2. Changes in Capital Adequacy Regulations........................................... 39
3.3. Availability of Types of Advances................................................. 39
3.4. Funding Indemnification........................................................... 40
3.5. Taxes............................................................................. 40
3.6. Lender Statements; Survival of Indemnity.......................................... 42
ARTICLE IV CONDITIONS PRECEDENT........................................................ 42
4.1. Initial Credit Extension.......................................................... 43
4.2. Each Credit Extension............................................................. 46
ARTICLE V REPRESENTATIONS AND WARRANTIES............................................... 46
5.1. Existence and Standing............................................................ 47
5.2. Authorization and Validity........................................................ 47
5.3. No Conflict; Government Consent................................................... 47
5.4. Financial Statements.............................................................. 47
5.5. Material Adverse Change........................................................... 47
5.6. Taxes............................................................................. 48
5.7. Litigation and Contingent Obligations............................................. 48
5.8. Subsidiaries...................................................................... 48
5.9. ERISA............................................................................. 48
5.10. Accuracy of Information.......................................................... 49
5.11. Regulation U..................................................................... 49
5.12. Material Agreements.............................................................. 49
5.13. Compliance With Laws............................................................. 49
5.14. Ownership of Properties.......................................................... 49
5.15. Plan Assets; Prohibited Transactions............................................. 49
5.16. Environmental Matters............................................................ 50
5.17. Investment Company Act........................................................... 50
5.18. Public Utility Holding Company Act............................................... 50
5.19. Subordinated Indebtedness........................................................ 51
5.20. Insurance........................................................................ 51
5.21. Solvency......................................................................... 51
5.22. Acquisition Documents............................................................ 51
5.23. Security......................................................................... 52
ARTICLE VI COVENANTS................................................................... 52
6.1. Financial Reporting............................................................... 52
6.2. Use of Proceeds................................................................... 54
6.3. Notice of Default................................................................. 54
6.4. Conduct of Business............................................................... 54
6.5. Taxes............................................................................. 54
6.6. Insurance......................................................................... 54
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6.7. Compliance with Laws.............................................................. 55
6.8. Maintenance of Properties......................................................... 55
6.9. Inspection........................................................................ 55
6.10. Capital Stock and Dividends...................................................... 55
6.11. Indebtedness..................................................................... 56
6.12. Merger........................................................................... 57
6.13. Sale of Assets................................................................... 57
6.14. Investments and Acquisitions..................................................... 57
6.15. Liens............................................................................ 58
6.16. Capital Expenditures............................................................. 59
6.17. Rental Obligations............................................................... 60
6.18. Affiliates....................................................................... 60
6.19. Subordinated Indebtedness........................................................ 60
6.20. Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities.......... 60
6.21. Environmental Matters............................................................ 60
6.22. Change in Corporate Structure; Fiscal Year....................................... 61
6.23. Inconsistent Agreements.......................................................... 61
6.24. Contingent Obligations........................................................... 61
6.25. Financial Covenants.............................................................. 62
6.26. ERISA Compliance................................................................. 63
6.27. Subsidiary Guaranties and Personal Property Pledges.............................. 64
6.28. Subsidiary Stock Pledge.......................................................... 64
6.29. Leasehold Mortgage............................................................... 64
ARTICLE VII DEFAULTS................................................................... 64
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............................ 68
8.1. Acceleration; Facility LC Collateral Account...................................... 68
8.2. Amendments........................................................................ 69
8.3. Preservation of Rights............................................................ 70
ARTICLE IX GENERAL PROVISIONS.......................................................... 70
9.1. Survival of Representations....................................................... 70
9.2. Governmental Regulation........................................................... 70
9.3. Headings.......................................................................... 70
9.4. Entire Agreement.................................................................. 70
9.5. Several Obligations; Benefits of this Agreement................................... 70
9.6. Expenses; Indemnification......................................................... 71
9.7. Numbers of Documents.............................................................. 72
9.8. Accounting........................................................................ 72
9.9. Severability of Provisions........................................................ 72
9.10. Nonliability of Lenders.......................................................... 72
9.11. Confidentiality.................................................................. 73
9.12. Nonreliance...................................................................... 73
ARTICLE X THE AGENT.................................................................... 73
10.1. Appointment; Nature of Relationship.............................................. 73
10.2. Powers........................................................................... 74
10.3. General Immunity................................................................. 74
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10.4. No Responsibility for Loans, Recitals, etc....................................... 74
10.5. Action on Instructions of Lenders................................................ 74
10.6. Employment of Agents and Counsel................................................. 75
10.7. Reliance on Documents; Counsel................................................... 75
10.8. Agent's Reimbursement and Indemnification........................................ 75
10.9. Notice of Default................................................................ 75
10.10. Rights as a Lender.............................................................. 76
10.11. Lender Credit Decision.......................................................... 76
10.12. Successor Agent................................................................. 76
10.13. Agent and Arranger Fees......................................................... 77
10.14. Delegation to Affiliates........................................................ 77
10.15. Execution of Collateral Documents............................................... 77
10.16. Collateral Releases............................................................. 77
ARTICLE XI SETOFF; RATABLE PAYMENTS.................................................... 77
11.1. Setoff........................................................................... 77
11.2. Ratable Payments................................................................. 78
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.......................... 78
12.1. Successors and Assigns........................................................... 78
12.2. Participations................................................................... 79
12.2.1 Permitted Participants; Effect............................................... 79
12.2.2 Voting Rights................................................................ 79
12.2.3 Benefit of Setoff............................................................ 79
12.3. Assignments...................................................................... 79
12.3.1 Permitted Assignments........................................................ 79
12.3.2 Effect; Effective Date....................................................... 80
12.4. Dissemination of Information..................................................... 80
12.5. Tax Treatment.................................................................... 80
ARTICLE XIII NOTICES................................................................... 81
13.1. Notices.......................................................................... 81
13.2. Change of Address................................................................ 81
ARTICLE XIV COUNTERPARTS............................................................... 81
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL................ 81
15.1. Choice Of Law.................................................................... 81
15.2. Consent To Jurisdiction.......................................................... 82
15.3. Waiver Of Jury Trial............................................................. 82
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SCHEDULES AND EXHIBITS
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COMMITMENT SCHEDULE
PRICING SCHEDULE
EXHIBIT A COMPLIANCE CERTIFICATE
EXHIBIT B ASSIGNMENT AGREEMENT
EXHIBIT C LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
EXHIBIT D-1 REVOLVING CREDIT NOTE
EXHIBIT D-2 TERM NOTE
EXHIBIT E BORROWING BASE CERTIFICATE
SCHEDULE 1. SUBSIDIARIES AND OTHER INVESTMENTS
SCHEDULE 2. INDEBTEDNESS AND LIENS
811300.7
SCHEDULE 3. ENVIRONMENTAL MATTERS
SCHEDULE 4. ADJUSTED CONSOLIDATED EBITDA COMPUTATION
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CREDIT AGREEMENT
This Agreement, dated as of February 9, 2001, is among Luigino's, Inc., a
Minnesota corporation, the Lenders and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as LC Issuer and
as Agent, and U.S. Bank National Association, as Swing Line Lender.
R E C I T A L S:
A. The Borrower has requested the Lenders to make financial
accommodations to it in the aggregate principal amount of $100,000,000, the
proceeds of which the Borrower will use (a) for its working capital and general
corporate needs (including the refinancing of the Existing Credit Agreement) and
(b) to finance the Gourmet Acquisition.
B. The Lenders are willing to extend such financial accommodations on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the
Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
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As used in this Agreement:
"Accounts" means all present and future rights of the Borrower (or any
Wholly-Owned Subsidiary of the Borrower which has executed Collateral Documents
as required by Section 6.27) to payment for goods sold or leased or for services
rendered, whether or not they have been earned by performance.
"Accounting Period" means the thirteen (13) periods, each having a duration
of either four or five weeks, into which the Borrower's fiscal year is divided.
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by
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percentage or voting power) of the outstanding ownership interests of a
partnership or limited liability company.
"Acquisition Documents" means the Purchase Agreement and the other
documents, certificates and agreements delivered in connection with the Gourmet
Acquisition.
"Adjusted Consolidated EBITDA" means, for any four fiscal quarter period,
Consolidated EBITDA for such period plus (i) the actual new item placement
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expenses ("NIP Costs") incurred during such period and minus (ii) the aggregate
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NIP Costs allocated to such period (the "Allocated NIP Costs") as described in
the following three sentences. For fiscal year 2000, total NIP Costs shall be
allocated on a level basis over the four fiscal quarters in such fiscal year.
For subsequent periods the NIP Costs actually incurred in any fiscal quarter
shall be allocated equally over such fiscal quarter and the three succeeding
fiscal quarters. The Allocated NIP Costs for any four fiscal quarter period
shall be calculated by summing the NIP Costs allocated to each of the relevant
fiscal quarters as described above. An example of the computation of Adjusted
Consolidated EBITDA is set forth on Schedule 4 hereto.
"Advance" means a borrowing hereunder, (i) made by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Loans of the same Type and, in the
case of Eurodollar Loans, for the same Interest Period and may be a Revolving
Credit Advance or Term Loan Advance. The term "Advance" shall include Swing
Line Loans unless expressly otherwise provided.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of the
Lenders pursuant to Article X, and not in its individual capacity as a Lender,
and any successor Agent appointed pursuant to Article X.
"Aggregate Available Revolving Credit Commitment" means, at any time, (a)
the lesser of (i) the Aggregate Revolving Credit Commitment at such time and
(ii) the Borrowing Base, less (b) the outstanding Facility LC Obligations at
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such time.
"Aggregate Outstanding Revolving Credit Exposure" means, at any time, the
aggregate of the Outstanding Revolving Credit Exposure of all the Lenders.
"Aggregate Revolving Credit Commitment" means the aggregate of the
Revolving Loan Commitments of all the Lenders, as reduced from time to time
pursuant to the terms hereof. The initial Aggregate Revolving Commitment is
$40,000,000.
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"Aggregate Term Loan Commitment" means the aggregate of the Term Loan
Commitments of all the Lenders, as reduced from time to time pursuant to the
terms hereof. The initial Aggregate Term Loan Commitment is $60,000,000.
"Aggregate Total Commitment" means the aggregate of the Total Commitments
of all the Lenders hereunder.
"Agreement" means this credit agreement, as it may be amended, restated or
otherwise modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
those used in preparing the financial statements referred to in Section 5.4;
provided, however, that for purposes of all computations required to be made
with respect to compliance by the Borrower with Section 6.25, such term shall
mean generally accepted accounting principles as in effect on the Closing Date,
applied in a manner consistent with those used in preparing the financial
statements referred to in Section 5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Dividend Percentage" means, with respect to any fiscal year of
the Borrower, (i) 50% if the Total Leverage Ratio as of the end of such fiscal
year is less than 2.50:1.00 and (ii) 0% otherwise.
"Applicable Fee Rate" means, at any time, the percentage rate per annum at
which Commitment Fees are accruing on the unused portion of the Aggregate
Revolving Credit Commitment at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arranger" means Banc One Capital Markets, Inc., a Delaware corporation,
and its successors, in its capacity as Lead Arranger and Sole Book Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Asset Disposition" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) other than sales of inventory in the ordinary course of
business consistent with past practices and (ii) the issue or sale by the
Borrower or any of its Subsidiaries of Equity Interests of any of the Borrower's
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions. Notwithstanding the foregoing,
neither (x) a transfer of assets by the
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Borrower to a Wholly-Owned Subsidiary or by a Wholly-Owned Subsidiary to the
Borrower or to another Wholly-Owned Subsidiary nor (y) an issuance of Equity
Interests by a Wholly-Owned Subsidiary to the Borrower or to another Wholly-
Owned Subsidiary will be deemed to be Asset Dispositions.
"Authorized Officer" means any of the chief executive officer, president or
chief financial officer of the Borrower, acting singly.
"Available Aggregate Revolving Commitment" means, at any time, the
Aggregate Available Revolving Commitment then in effect minus the Aggregate
Outstanding Revolving Credit Exposure at such time.
"Bank One" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Borrower" means Luigino's, Inc., a Minnesota corporation, and its
successors and assigns.
"Borrower Security Agreement" means that certain Pledge and Security
Agreement, dated as of the date hereof, duly executed and delivered by the
Borrower in favor of the Agent, on behalf of the Lenders, as the same may be
amended, supplemented or otherwise modified from time to time.
"Borrowing Base" means, as of any date of determination, an amount equal to
the sum of (a) 80% of the book value of all Eligible Accounts plus (b) 50% of
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the book value of all Eligible Inventory at such time; provided, however that
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until the Borrower's delivery of the Borrowing Base Certificate showing the
Borrowing Base as of the last Business Day of March, 2001, the Borrowing Base
shall be not less than $25,000,000.
"Borrowing Base Certificate" means a borrowing base certificate in
substantially the form of Exhibit E hereto.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.10.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
4
"Capital Expenditures" means any amount debited to the fixed asset account
on the Borrower's balance sheet in respect of: (i) the acquisition (including,
without limitation, acquisition by entry into a Capitalized Lease),
construction, improvement, replacement or betterment of land, buildings,
machinery, equipment or of any other fixed assets or leaseholds; and (ii) to the
extent related to and not included in (i) above, materials, contract labor and
direct labor (excluding expenditures properly chargeable to repairs or
maintenance in accordance with Agreement Accounting Principles).
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts and
money market funds which invest solely in other assets comprising Cash
Equivalents hereunder maintained in the ordinary course of business, and (iv)
certificates of deposit issued by and time deposits with commercial banks
(whether domestic or foreign) having capital and surplus in excess of
$100,000,000; provided in each case that the same provides for payment of both
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principal and interest (and not principal alone or interest alone) and is not
subject to any contingency regarding the payment of principal or interest.
"Change in Control" means (i) the acquisition by any Person, or two or more
Persons acting in concert, including, without limitation, any acquisition
effected by means of any transaction contemplated by Section 6.12, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or more of the
outstanding shares of voting stock of the Borrower (ii) JFP, his estate and his
immediate family shall cease to own at least 51% of the shares of all voting
stock of the Borrower or shall cease to control the power to elect a majority of
the Borrower's board of directors or shall cease to control the power to direct
the Borrower's management and policies whether through the ownership of voting
securities, by contract or otherwise, or (iii) the occurrence of a "Change of
Control" under the Senior Subordinated Indenture.
"Closing Date" means the date of the initial Credit Extension hereunder.
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"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral Documents" means, collectively, (i) the Borrower Security
Agreement, (ii) the Subsidiary Security Agreement, (iii) the Intellectual
Property Assignments and (iv) all other security agreements, patent and
trademark assignments, guarantees and other similar agreements between the
Borrower or any Subsidiary and the Lenders or the Agent for the benefit of the
Lenders now or hereafter delivered to the Lenders or the Agent pursuant to or in
connection with the transactions contemplated hereby, and any amendments,
supplements, modifications, renewals, replacements, consolidations,
substitutions and extensions of any of the foregoing.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans to, and participate in Facility LCs issued upon the application of, the
Borrower in an aggregate amount not exceeding the amount set forth on the
Commitment Schedule attached hereto, as it may be modified as a result of any
assignment that has become effective pursuant to Section 12.3.2 or as otherwise
modified from time to time pursuant to the terms hereof.
"Consolidated EBITDA" means, for any period, the sum for such period,
without duplication, of (i) Consolidated Net Income, plus (ii) Consolidated
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Interest Expense, plus (iii) expense for taxes paid or accrued, plus (iv)
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depreciation, plus (v) amortization, plus (vi) any other non-recurring non-cash
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charges to the extent deducted in computing Consolidated Net Income, minus (vii)
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any non-recurring non-cash credits to the extent added in computing Consolidated
Net Income, plus (viii) extraordinary losses, plus (ix) after-tax losses
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arising out of non-recurring events provided, that for any date of determination
from and after January 1, 2001, the aggregate adjustment pursuant to clauses
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(vi) through (ix) of this definition shall not exceed $2,000,000 for the four
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fiscal quarter period ending on such date (exclusive of any such adjustments for
periods ending prior to January 1, 2001), minus (x) after-tax gains arising out
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of non-recurring events, all calculated in accordance with Agreement Accounting
Principles except that such calculations shall be made on a pro forma basis
(giving effect to any Acquisition) using historical audited financial (or, in
the case of the Gourmet Acquisition or as otherwise consented to by the Required
Lenders, unaudited financial statements) obtained from the seller, broken down
by fiscal quarter, as if the Acquisition had occurred on the first day of the
twelve-month period ending on the last day of the Borrower's most recently
completed fiscal quarter; provided that the foregoing items (ii) through (x)
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shall be added or deducted, as applicable, solely to the extent included in the
computation of Consolidated Net Income.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Borrower and its consolidated Subsidiaries, whether paid or
accrued (including, without duplication, the interest component of Capitalized
Leases and Off-Balance Sheet Liabilities), all as determined in conformity with
Agreement Accounting Principles and excluding Consolidated Non-Cash Interest
Expense.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
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"Consolidated Non-Cash Interest" means, with reference to any period, the
underwriting or closing costs and fees associated with incurrence of
Indebtedness of the Borrower and its Subsidiaries calculated on a consolidated
basis for such period.
"Consulting Agreement" means that certain Consulting Agreement dated as of
January 1, 1999 between the Borrower and ▇▇▇▇▇▇▇▇ International Ltd., Inc., a
Florida corporation, as in effect on the date hereof, giving effect to the First
Amendment to Consulting Agreement dated as of December 12, 1999, the Second
Amendment to Consulting Agreement dated May 31, 2000, and the Third Amendment to
Consulting Agreement dated December 6, 2000.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"Conversion/Continuation Notice" is defined in Section 2.11.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Default" means an event described in Article VII.
"Dividend Availability Amount" means, at any time of computation, an amount
equal to (i) the product of (A) the Applicable Dividend Percentage for the
Borrower's most recently completed fiscal year times (B) the Borrower's
Consolidated Net Income for such fiscal year, minus (ii) Tax Distributions
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actually paid (or to be paid assuming all Tax Distributions relative to such
fiscal year are made to the full extent permitted by Section 6.10) by the
Borrower to its shareholders with respect to such fiscal year, minus (iii) the
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aggregate amount of all dividends, distributions, stock repurchases or stock
redemptions previously declared, paid or made by the Borrower pursuant to
Section 6.10(b)(iii) during the fiscal year in which such computation is made.
"Eligible Accounts" means, at any date of determination, the United States
dollar value of only such of the Accounts arising from the sale of finished
goods Inventory in which only the
7
Agent holds a Lien and as to which the Agent, in its reasonable business
judgment, shall from time to time determine to be collectable in a timely manner
in the ordinary course of business without dispute or set off. Notwithstanding
any earlier classification of eligibility, the Agent may consider any Account
not to be an Eligible Account if: (i) any warranty is breached as to the
Account; (ii) the Account is not paid by the account debtor within 60 days from
the due date of such Account; (iii) the account debtor disputes liability or
makes any claim with respect to the Account, provided that the amount of such
Account which is excluded from eligibility under this clause (iv) shall not
exceed the amount which is disputed; (v) a petition in bankruptcy or other
application for relief under any insolvency law is filed with respect to the
account debtor owing the Account; (vi) the account debtor on the Account makes
an assignment for the benefit of creditors, becomes insolvent, fails, suspends
or goes out of business; (vii) the Account arises from a sale to an account
debtor outside the United States and Canada, unless the sale is supported by a
letter of credit, acceptance or other terms acceptable to the Agent or is to an
account debtor whose creditworthiness is satisfactory to the Agent; (viii) such
Account is owed by an account debtor which has not paid 15% or more of its
Accounts within the time period specified in subsection (ii) of this definition;
(ix) the account debtor is a Related Party or an employee of the Borrower; (x)
the account debtor is the United States of America or any state or local
governmental unit or any agency or department of any thereof, unless the
Borrower or applicable Subsidiary has taken all action, if any, required under
the laws of the relevant governmental entity to validly assign the relevant
Account to the Agent; or (xi) the Agent shall become dissatisfied, in its
reasonable business judgment, with the enforceability or collectibility of such
Account or with the creditworthiness of an account debtor owing such Account and
shall have given the Borrower five Business Days' notice of such
dissatisfaction. The amount of Eligible Accounts shall be computed no less
frequently than monthly from the Borrowing Base Certificate delivered to the
Agent pursuant to Section 6.1(x). The Borrower may assume that any Accounts not
disqualified under any of clauses (i) through (xi) above are Eligible Accounts
unless and until otherwise notified in writing by the Agent.
"Eligible Inventory" means at any date of determination, the United States
dollar value of only such raw material or finished goods Inventory of the
Borrower or applicable Subsidiary in which only the Agent holds a Lien. The
Agent, notwithstanding any earlier classification of eligibility, may consider
any raw material or finished goods Inventory not to be Eligible Inventory if:
(i) such Inventory does not constitute either finished goods Inventory saleable
in the Borrower's or applicable Subsidiary's ordinary course of business or raw
materials that are to be used or consumed in the normal course in the processing
of such raw materials into finished goods which, upon completion, will
constitute finished goods Inventory saleable in the Borrower's or applicable
Subsidiary's ordinary course of business; (ii) such Inventory does not meet all
standards imposed by any governmental agency having regulatory authority over
such goods and/or their use, manufacture or sale; (iii) such Inventory has not
been physically received in the continental United States by the Borrower or
applicable Subsidiary; (iv) such Inventory is not currently usable in the normal
course of the Borrower's or applicable Subsidiary's operations; (v) such
Inventory is on consignment to or from any other Person or is subject to any
bailment; (vi) such Inventory is not located at a collateral location identified
on Exhibit A to the applicable Security Agreement (or, if such Inventory is
located at a leased location so identified, the Agent has not received such
related landlord waivers or consents as it may reasonably request;
8
provided that any such waivers or consents may be provided within thirty days
after the date hereof), or (vii) such Inventory has been sold to any other
Person. The value of Eligible Inventory shall be the lower of cost or market
computed on a first-in, first-out basis in accordance with Agreement Accounting
Principles minus a reserve for obsolescence satisfactory in amount to the
Borrower's independent certified public accountants, determined in accordance
with Agreement Accounting Principles, and shall be computed no less frequently
than monthly from the Borrowing Base Certificate delivered to the Agent pursuant
to Section 6.1(x). The Borrower may assume that any Inventory not disqualified
under any of clauses (i) through (vii) above is Eligible Inventory unless and
until otherwise notified in writing by the Agent.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"Environmental Permit" is defined in Section 5.16.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as
of 11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, and having a maturity equal to such Interest Period, provided
--------
that, (i) if Reuters Screen FRBD is not available to the Agent for any reason,
----
the applicable Eurodollar Base Rate for the relevant Interest Period shall
instead be the applicable British Bankers' Association Interest Settlement Rate
for deposits in U.S. dollars as reported by any other generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, and (ii) if no such British Bankers' Association Interest
Settlement Rate is available to the Agent, the applicable Eurodollar Base Rate
for the relevant Interest Period shall instead be the rate determined by the
Agent to be the rate at which Bank One or one of its Affiliate banks offers to
place deposits in U.S. dollars with first-class banks in the London interbank
market at approximately 11:00 a.m. (London time) two Business Days
9
prior to the first day of such Interest Period, in the approximate amount of
Bank One's relevant Eurodollar Loan and having a maturity equal to such Interest
Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.
"Excess Cash Flow" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, (a) Consolidated EBITDA, minus (b) the sum
of (i) Tax Distributions paid by the Borrower to the Borrower's shareholders,
plus (ii) Consolidated Interest Expense, (iii) plus Capital Expenditures, plus
---- ----
(iv) scheduled principal payments made on all term Indebtedness (exclusive of
mandatory prepayments made hereunder in respect of Excess Cash Flow from the
preceding fiscal year or in respect of any Asset Disposition), and minus (c) the
-----
increase (or plus the decrease, as the case may be), as of the last day of a
----
fiscal year from the last day of the previous fiscal year in the excess of
Current Assets over Current Liabilities. For purposes of this definition,
"Current Assets" means all accounts receivable and Inventory of the Company and
its Subsidiaries, calculated in accordance with Agreement Accounting Principles,
excluding cash and cash equivalents and excluding Accounts due from Affiliates
and "Current Liabilities" means all liabilities of the Company and its
Subsidiaries which should, in accordance with Agreement Accounting Principles,
be classified as current liabilities, and in any event shall include all
Indebtedness payable on demand or within one year from the date of determination
without any option on the part of the obligor to extend or renew beyond such
year, all accruals for federal or other taxes based on or measured by income and
payable within such year, and the current portion of long-term Indebtedness
required to be paid within one year (excluding the Revolving Loans).
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.
"Existing Credit Agreement" means that certain Amended and Restated Credit
Agreement dated as of February 4, 1999 among the Borrower, the Agent and certain
financial institutions, as amended through the date hereof.
"Facility LC" is defined in Section 2.21.1.
"Facility LC Application" is defined in Section 2.21.3.
10
"Facility LC Collateral Account" is defined in Section 2.21.11.
"Facility LC Obligations" means as at the time of determination thereof,
the sum of (a) the Reimbursement Obligations then outstanding and (b) the
aggregate then undrawn face amount of the then outstanding Facility LCs.
"Facility Termination Date" means December 31, 2005.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of: (a) the
sum of (i) Adjusted Consolidated EBITDA for such period, plus (ii) Rentals,
----
minus (iii) Tax Distributions (without duplication for any amount subtracted
-----
under clause (iv) below) paid by the Borrower to its shareholders during such
period, minus (iv) the amount (without duplication for any amount subtracted
-----
under clause (iii) above) of any increase in the outstanding principal balance
of the Shareholder Note on the last day of such period from the first day of
such period, minus (v) dividends or distributions (excluding Tax Distributions)
-----
to (b) the sum of (i) Consolidated Interest Expense of the Borrower for such
period, plus (ii) Rentals, plus (iii) scheduled principal payments of
---- ----
Indebtedness made, or required to have been made, by the Borrower during such
period.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the Floating Rate.
"Gourmet" means The All-American Gourmet Company, a Delaware corporation.
"Gourmet Acquisition" means the acquisition by the Borrower of all of the
outstanding capital stock of Gourmet from the Seller pursuant to the Purchase
Agreement.
"Gourmet Guaranty" means that certain Supplemental Indenture dated as of
the date hereof among Gourmet, the Borrower and US Bank National Association, as
trustee under the Senior Subordinated Indenture, as in effect on the date
hereof.
11
"Guarantor" means each Subsidiary of the Borrower, and its successors and
assigns.
"Guaranty" means that certain Guaranty dated as of the date hereof executed
by each Guarantor in favor of the Agent, for the ratable benefit of the Lenders,
as it may be amended or modified and in effect from time to time.
"Hazardous Materials" is defined in Section 5.16.
"Indebtedness" of a Person means such Person's (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person in an
amount equal to the lesser of (i) such obligations and (ii) the fair market
value of such Property if such obligations have not been assumed, (iv)
obligations which are evidenced by notes, acceptances, or similar instruments,
(v) Capitalized Lease Obligations, (vi) Rate Management Obligations, (vii)
Contingent Obligations, (viii) obligations for which such Person is obligated
pursuant to or in respect of a Facility Letter of Credit and the face amount of
any other Letter of Credit (ix) repurchase obligations or liabilities of such
Person with respect to accounts or notes receivable sold by such Person and (x)
Off-Balance Sheet Liabilities. For the purpose hereof, the amount of any
Contingent Obligation shall not, in any event, exceed the amount which, in light
of the facts and circumstances, represents the amount that can reasonably be
expected to become an actual or matured liability in accordance with Agreement
Accounting Principles.
"Intellectual Property Assignments" mean (i) that certain Intellectual
Property Assignment, dated as of the date hereof, duly executed and delivered by
the Borrower in favor of the Agent, on behalf of the Lenders, and (ii) that
certain Intellectual Property Assignment, dated as of the date hereof, duly
executed and delivered by Gourmet in favor of the Agent, on behalf of the
Lenders, in each case of the foregoing, as the same may be amended, supplemented
or otherwise modified from time to time.
"Interest Period" means, with respect to a Eurodollar Advance, subject to
the proviso in Section 2.10, a period of one, two, three or six months (or such
other periods acceptable to all of the Lenders making such Eurodollar Advances)
commencing on a Business Day selected by the Borrower pursuant to this
Agreement. Such Interest Period shall end on the day which corresponds
numerically to such date one, two, three or six months thereafter, provided,
---------
however, that if there is no such numerically corresponding day in such next,
--------
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
---------
however, that if said next succeeding Business Day falls in a new calendar
-------
month, such Interest Period shall end on the immediately preceding Business Day.
"Inventory" means all goods now or at any time hereafter owned by the
Borrower (or a Wholly-Owned Subsidiary of the Borrower which has executed
Collateral Documents as
12
required by Section 6.27) and held for sale or lease, or furnished or to be
furnished by the Borrower or such Subsidiary under contracts of service, or
consumed in the Borrower's or such Subsidiary's business, including, without
limitation, all merchandise, raw materials, parts, supplies, work-in-process and
finished goods intended for sale.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificate of deposit owned by such Person; and structured
notes, derivative financial instruments and other similar instruments or
contracts owned by such Person.
"JFP" means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
"LC Fee" is defined in Section 2.21.4.
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.
"LC Payment Date" is defined in Section 2.21.5.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns. Unless otherwise
specified, the term "Lenders" includes US Bank National Association in its
capacity as Swing Line Lender.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or on a Schedule or otherwise selected by such Lender
or the Agent pursuant to Section 2.19.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's Loan made pursuant to
Article II (or any conversion or continuation thereof) in the form of a
Revolving Loan or a Term Loan.
13
"Loan Documents" means this Agreement, the Facility LC Applications and any
Notes issued pursuant to Section 2.15, the Collateral Documents, and the
Guaranty.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), performance, results of
operations, or prospects of the Borrower, (ii) the ability of the Borrower to
perform its obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Agent, the LC Issuer or the Lenders thereunder.
"Modify" and "Modification" are defined in Section 2.21.1.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Available Proceeds" means the aggregate cash proceeds received by the
Borrower or any of its Subsidiaries in respect of any Asset Disposition
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Disposition),
net of the direct costs relating to such Asset Disposition (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), amounts required to be
applied to the repayment of the Indebtedness (other than the Obligations)
secured by a Lien on the asset or assets that were the subject of such Asset
Disposition and any reserve for adjustment in respect of the sale price of such
asset or assets established in accordance with Agreement Accounting Principles.
"Net ▇▇▇▇-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" means a Revolving Credit Note or a Term Note.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all Reimbursement Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Borrower to
the Lenders or to any Lender, the Agent, the LC Issuer or any indemnified party
arising under the Loan Documents.
14
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any so-
called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Revolving Credit Exposure" means, as to any Lender at any
time, the sum of (i) the aggregate principal amount of its Loans outstanding at
such time, plus (ii) an amount equal to its Pro Rata Share of the LC Obligations
at such time, plus (iii) an amount equal to its Pro Rate Share of the aggregate
principal amount of Swing Line Loans outstanding at such time.
"Parkersburg Facility" means the proposed manufacturing facility to be
owned by the Borrower located in Parkersburg, West Virginia.
"Participants" is defined in Section 12.2.1.
"Payment Date" means (i) with respect to any Eurodollar Loan, in the case
of an Interest Period with a duration of one, two or three months, the last day
of such Interest Period and, in the case of an Interest Period with a duration
of six months or more, the last day of each March, June, September and December;
(ii) with respect to any Floating Rate Loan, the last day of each calendar
month; and (iii) with respect to the commitment fee payable pursuant to Section
2.6 and the LC Fee payable pursuant to Section 2.21.4, the last day of each
March, June, September and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pricing Schedule" means the Schedule attached hereto identified as such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
15
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Total Commitment.
"Pro Rata Revolving Share" means, with respect to each Lender at any time,
the percentage of the Aggregate Revolving Credit Commitment set forth opposite
the name of the Lender on the signature pages hereto (as the same may be reduced
or terminated from time to time).
"Pro Rata Term Share" means, with respect to each Lender at any time, the
percentage of the Aggregate Term Loan Commitment set forth opposite the name of
the Lender on signature pages hereto (as the same may be reduced or terminated
from time to time).
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Purchase Agreement" means that certain Purchase Agreement dated as of the
date hereof between the Borrower and the Seller, as the same may be amended or
modified after the date hereof with the consent of the Required Lenders and the
Agent.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Transaction" means any transaction (including an agreement
with respect thereto) now existing or hereafter entered into between the
Borrower and any Lender or Affiliate thereof which is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures.
"Rate Management Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official
16
interpretation of said Board of Governors relating to the extension of credit by
banks for the purpose of purchasing or carrying margin stocks applicable to
member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.21 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Release" is defined in the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. 39601 et seq.
-- ---
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any lease of Property having an original term (including any
required renewals or any renewals at the option of the lessor or lessee) of one
year or more but does not include any amounts payable under Capitalized Leases
of such Person..
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
-----------------
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having at least 51% of
the sum of (i) the aggregate unpaid principal amount of the outstanding Term
Loan, plus (ii) the Aggregate Revolving Credit Commitment or, if the Aggregate
Revolving Credit Commitment has been terminated, the Aggregate Outstanding
Revolving Credit Exposure; provided, however, that at any time there are fewer
-----------------
than three Lenders, "Required Lenders" shall mean all such Lenders; further
provided that at any time there are three Lenders, "Required Lenders" shall mean
the greater of (i) two Lenders and (ii) that number of Lenders which would
constitute Required Lenders were the three provisos to this definition to be
disregarded; and further provided that at any time there are at least four but
not more than six Lenders, "Required Lenders" shall mean the greater of (i)
three Lenders and (ii) that number of Lenders which would constitute Required
Lenders were the three provisos to this definition to be disregarded.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Revolving Credit Advance" means an Advance of Revolving Loans by the
Lenders pursuant to Section 2.3.
17
"Revolving Credit Commitment" means, for each Lender, the obligation of
such Lender to make the Revolving Loans to the Borrower pursuant to Section 2.2
in an aggregate amount not exceeding the amount set forth opposite its name on
the signature pages hereof, as such amount may be modified or reduced from time
to time pursuant to the terms of this Agreement.
"Revolving Credit Note" is defined in Section 2.15 (iv).
"Revolving Loan" means, with respect to a Lender, such Lender's Pro Rata
Revolving Share of all Revolving Credit Advances.
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations and (ii) all
Rate Management Obligations owing to one or more Lenders.
"Seller" means Heinz Frozen Food Company, a Delaware corporation.
"Senior Leverage Ratio" means, as of any date of determination, the ratio
of (a) Total Indebtedness (excluding any Subordinated Indebtedness) on such date
of determination to (b) Adjusted Consolidated EBITDA for the most recently ended
four fiscal quarter period.
"Senior Subordinated Debt Documents" means the Senior Subordinated
Indenture, the Senior Subordinated Notes and the other documents and instruments
executed and delivered in connection therewith.
"Senior Subordinated Indenture" means that certain Senior Subordinated Note
Indenture, dated as of February 4, 1999, between the Borrower and U.S. Bank
Trust National Association, as trustee.
"Senior Subordinated Notes" means those certain $100,000,000 Luigino's,
Inc. 10% Senior Subordinated Notes of the Borrower due 2006.
"Shareholder Loan" means each loan or advance made by the Borrower to JFP
prior to the date hereof; provided, however, that accrued interest on any
-------- -------
Shareholder Loan which is added to the outstanding principal balance thereof
shall not constitute a loan or advance for purposes of this definition.
18
"Shareholder Note" means each note heretofore or hereafter executed and
delivered by JFP payable to the order of the Borrower to evidence a Shareholder
Loan.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Secured
Obligations to the written satisfaction of the Required Lenders and shall
include, in the case of the Borrower, the Indebtedness of the Borrower under the
Senior Subordinated Notes.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Subsidiary Security Agreement" means that certain Pledge and Security
Agreement, dated as of the date hereof, duly executed and delivered by Gourmet
in favor of the Agent, on behalf of the Lenders, as the same may be amended,
supplemented or otherwise modified from time to time.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
"Swing Line Borrowing Notice" is defined in Section 2.5.2.
"Swing Line Commitment" means the obligation of the Swing Line Lender to
make Swing Line Loans up to a maximum principal amount of $10,000,000 at any one
time outstanding.
"Swing Line Lender" means U.S. Bank National Association or such other
Lender which may succeed to its rights and obligations as Swing Line Lender
pursuant to the terms of this Agreement.
"Swing Line Loan" means a Loan made available to the Borrower by the Swing
Line Lender pursuant to Section 2.5.
19
"Tax Distributions" means, for any period, an amount equal to the federal
and state income tax liability of the Borrower's shareholders arising from their
respective allocable share of the Borrower's taxable income for such period so
long as the Borrower has made an effective election to be treated as an "S"
Corporation under Code Section 1361(a)(i) and shall be computed on the basis of
the highest marginal combined tax rate possible under the Code and applicable
state law for the applicable year; provided, however, that if, for any of the
-------- -------
Borrower's fiscal years, the amount of the Tax Distributions calculated in
accordance with this definition exceeds 45% of the Borrower's taxable income,
then the Borrower shall provide the Agent and the Lenders with information
showing the actual tax liability relating to the Borrower's taxable income
(assuming that such shareholder's allocable share of the Borrower's taxable
income is taxed at such shareholder's actual marginal tax rate) of the largest
shareholder of the Borrower which owns at least 10% (or if no single shareholder
owns at least 10%, then the next highest percentage ownership) of the Borrower's
issued and outstanding Capital Stock and which has the highest marginal tax rate
and the amount of the Tax Distributions shall be limited to such marginal rate.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.
"Term Loan" means, with respect to each Lender, such Lender's Pro Rata Term
Share of the Term Loan made by the Lenders.
"Term Loan Commitment" means, for each Lender, the obligation of such
Lender to make the Term Loan to the Borrower pursuant to Section 2.1 in an
aggregate amount not exceeding the amount set forth opposite its name on the
signature pages hereof, as such amount may be modified or reduced from time to
time pursuant to the terms of this Agreement.
"Term Note" is defined in Section 2.15(iv).
"Termination Event" means, with respect to a Plan which is subject to Title
IV of ERISA, (i) a Reportable Event, (ii) the withdrawal of the Borrower or any
other member of the Controlled Group from such Plan during a plan year in which
the Borrower or any other member of the Controlled Group was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such under
Section 4068(f) of ERISA, (iii) the termination of such Plan, the filing of a
notice of intent to terminate such Plan or the treatment of an amendment of such
Plan as a termination under Section 4041 of ERISA, (iv) the institution by the
PBGC of proceedings to terminate such Plan or (v) any event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
appointment of a trustee to administer, such Plan.
"Total Commitments" means, for each Lender, the aggregate of such Lender's
Revolving Credit Commitment and Term Loan Commitment.
"Total Indebtedness" means, without duplication, (i) all Indebtedness for
borrowed money of the Borrower and its Subsidiaries, on a consolidated basis,
plus, (ii) the face amount of
----
20
all outstanding letters of credit (including Facility LCs) in respect of which
the Borrower or any Subsidiary has any actual or contingent reimbursement
obligation, plus (iii) the principal amount of all Contingent Obligations of the
----
Borrower or any Subsidiary in respect of Indebtedness of any Person representing
the amount which, in light of the facts and circumstances, can reasonably be
expected to become an actual or matured liability in accordance with Agreement
Accounting Principles, plus (iv) Indebtedness of the Borrower and its
----
Subsidiaries evidenced by notes, acceptances or similar instruments, plus (v)
----
Capitalized Lease Obligations of the Company and its Subsidiaries, plus (vi)
----
Rate Management Obligations of the Borrower and its Subsidiaries, plus (vii) any
----
Subordinated Indebtedness, plus (viii) any Off-Balance Sheet Liabilities of the
----
Borrower or its Subsidiaries.
"Total Leverage Ratio" means, as of any date of determination, the ratio of
(i) Total Indebtedness (including any Subordinated Indebtedness) on such date of
determination to (ii) Adjusted Consolidated EBITDA for the most recently ended
four fiscal quarter period.
"Transaction Documents" means the Loan Documents, the Acquisition Documents
and the Subordinated Debt Documents.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms. All references herein to "fiscal year"
or "fiscal quarter" shall be deemed references to the applicable fiscal year or
fiscal quarter of the Borrower, it being understood that first, second, third
and fourth fiscal quarters, of any fiscal year of the Borrower, end on the last
day of the Borrower's fourth, seventh, tenth and thirteenth Accounting Periods
of such fiscal year, respectively.
21
ARTICLE II
THE CREDITS
2.1. Term Loan Facility.
------------------
2.1.1 Description of Facility. Each Lender severally (and not jointly)
-----------------------
agrees, on the terms and conditions set forth in this Agreement, to make a term
loan to the Borrower on the date hereof in the amount of its respective Term
Loan Commitment. No amount of the Term Loan which is repaid or prepaid by the
Borrower may be reborrowed hereunder. The obligation of the Borrower to repay
the Term Loan of each Lender shall be evidenced by the Term Note of such Lender.
Not later than noon Chicago time on the date hereof, each Lender shall make
available funds equal to its Term Loan Commitment in immediately available funds
in Chicago, to the Agent at its address specified on its signature page hereto
or pursuant to Article XIII.
------------
2.1.2 Repayment of Facility. The Term Loan shall be payable in 19
---------------------
quarterly installments in the amounts and on the dates, commencing June 30,
2001, as follows:
Payment Date Amount
------------ ------
June 30, 2001 2,500,000
September 30, 2001 2,500,000
December 31, 2001 2,500,000
March 31, 2002 2,500,000
June 30, 2002 2,500,000
September 30, 2002 2,500,000
December 31, 2002 2,500,000
March 31, 2003 3,312,500
June 30, 2003 3,312,500
September 30, 2003 3,312,500
December 31, 2003 3,312,500
March 31, 2004 3,312,500
June 30, 2004 3,312,500
September 30, 2004 3,312,500
December 31, 2004 3,312,500
March 31, 2005 4,000,000
June 30, 2005 4,000,000
September 30, 2005 4,000,000
December 31, 2005 4,000,000
2.2. Revolving Credit Facility.
-------------------------
2.2.1 Description of Facility. From and including the date of this
-----------------------
Agreement and prior to the Facility Termination Date, each Lender severally
agrees, on the terms and conditions set forth in this Agreement, to (i) make
Revolving Loans to the Borrower and (ii) participate in Facility LCs issued by
the LC Lender upon the request of the Borrower,
22
provided that, after giving effect to the making of each such Loan and the
--------
issuance of each such Facility LC, (a) such Lender's Outstanding Revolving
Credit Exposure shall not exceed its Revolving Credit Commitment and (b)
the Aggregate Outstanding Revolving Credit Exposure shall not exceed the
Aggregate Available Revolving Credit Commitment. Subject to the terms of
this Agreement, the Borrower may borrow, repay and reborrow at any time
prior to the Facility Termination Date. The Revolving Credit Commitments to
extend credit hereunder shall expire on the Facility Termination Date. The
LC Issuer will issue Facility LCs hereunder on the terms and conditions set
forth in Section 2.21.
2.2.2 Repayment of Facility upon Reduction in Commitments. The
---------------------------------------------------
Borrower hereby agrees that if at any time as a result of reductions in the
Aggregate Revolving Credit Commitment pursuant to Sections 2.8 and 2.9 or
otherwise, the Aggregate Outstanding Revolving Credit Exposure exceeds the
lesser of either (i) the Borrowing Base or (ii) the Aggregate Revolving
Credit Commitment, the Borrower shall repay immediately its then
outstanding Revolving Loans in such amount as may be necessary to eliminate
such excess; provided, that if an excess remains after repayment of all
--------
outstanding Revolving Loans, then the Borrower shall cash collateralize the
Facility LC Obligations by depositing into the Facility LC Collateral
Account such amount as may be necessary to eliminate such excess.
2.2.3 Termination. The Aggregate Outstanding Revolving Credit
-----------
Exposure and all other unpaid Obligations shall be paid in full by the
Borrower on the Facility Termination Date. Upon the effectiveness of this
Agreement pursuant to Section 4.1, each Revolving Credit Advance which is
-----------
then outstanding under the Existing Credit Agreement shall be deemed an
Advance outstanding under this Agreement.
2.3. Advances. Each Advance hereunder (other than any Swing Line Loan)
--------
shall consist of Loans made from the several Lenders ratably in proportion to
the ratio that (a) in the case of Term Loan Advances, their respective Term Loan
Commitments bear to the Aggregate Term Loan Commitment and (b) in the case of
Revolving Credit Advances, their respective Revolving Credit Commitments bear to
the Aggregate Revolving Credit Commitment.
2.4. Types of Advances. The Advances may be Floating Rate Advances or
-----------------
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.9 and 2.10 or Swing Line Loans selected by the
Borrower in accordance with Section 2.5.
2.5. Swing Line Loans.
----------------
2.5.1 Amount of Swing Line Loans. Upon the satisfaction of the
--------------------------
conditions precedent set forth in Section 4.2 and, if such Swing Line Loan
is to be made on the date of the initial Revolving Loan hereunder, the
satisfaction of the conditions precedent set forth in Section 4.1 as well,
from and including the date of this Agreement and prior to the Facility
Termination Date, the Swing Line Lender agrees, on the terms and conditions
set forth in this Agreement, to make Swing Line Loans to the Borrower from
time to time in an aggregate outstanding principal amount not to exceed the
Swing Line Commitment.
23
Subject to the terms of this Agreement, the Borrower may borrow, repay and
reborrow Swing Line Loans at any time prior to the Facility Termination
Date.
2.5.2 Borrowing Notice. The Borrower shall deliver to the Agent and
----------------
the Swing Line Lender irrevocable notice (a "Swing Line Borrowing Notice")
not later than 2:00 p.m. (Chicago time) on the Borrowing Date of each Swing
Line Loan, specifying (i) the applicable Borrowing Date (which date shall
be a Business Day), and (ii) the aggregate amount of the requested Swing
Line Loan, which shall be an amount not less than $100,000. The Swing Line
Loans shall bear interest at the Floating Rate.
2.5.3 Making of Swing Line Loans. Promptly after receipt of a Swing
--------------------------
Line Borrowing Notice, the Agent shall notify each Lender having a
Revolving Credit Commitment by fax, or other similar form of transmission,
of the requested Swing Line Loan. Not later than 3:00 p.m. (Chicago time)
on the applicable Borrowing Date, the Swing Line Lender shall make the
Swing Line Loan available to the Borrower at such account as the Borrower
may direct.
2.5.4 Repayment of Swing Line Loans. Each Swing Line Loan shall be
-----------------------------
paid in full by the Borrower on or before the fifth (5th) Business Day
after the Borrowing Date for such Swing Line Loan to such account of the
Swing Line Lender as the Swing Line Lender may direct (and the Swing Line
Lender shall give the Agent prompt notice of any such repayment). In
addition, by notice delivered to the Agent not later than 9:30 a.m. on the
applicable Business Day (which notice the Agent shall promptly remit to the
Lenders), the Swing Line Lender (i) may at any time in its sole discretion
with respect to any outstanding Swing Line Loan, or (ii) shall on the fifth
(5th) Business Day after the Borrowing Date of any Swing Line Loan, require
each Lender (including the Swing Line Lender) to make a Revolving Loan in
the amount of such Lender's Pro Rata Revolving Share of such Swing Line
Loan (including, without limitation, any interest accrued and unpaid
thereon), for the purpose of repaying such Swing Line Loan. Not later than
noon (Chicago time) on the date of any notice received pursuant to this
Section 2.5.4, each Lender shall make available its required Revolving
Loan, in funds immediately available in Chicago to the Agent at its address
specified pursuant to Article XIII. Revolving Loans made pursuant to this
Section 2.5.4 shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into Eurodollar Loans in the
manner provided in Section 2.11 and subject to the other conditions and
limitations set forth in this Article II. Unless a Lender shall have
notified the Swing Line Lender, prior to its making any Swing Line Loan,
that any applicable condition precedent set forth in Sections 4.1 or 4.2
had not then been satisfied, such Lender's obligation to make Revolving
Loans pursuant to this Section 2.5.4 to repay Swing Line Loans shall be
unconditional, continuing, irrevocable and absolute and shall not be
affected by any circumstances, including, without limitation, (a) any set-
off, counterclaim, recoupment, defense or other right which such Lender may
have against the Agent, the Swing Line Lender or any other Person, (b) the
occurrence or continuance of a Default or an unmatured Event of Default,
(c) any adverse change in the condition (financial or otherwise) of the
Borrower, or (d) any other circumstances, happening or event
24
whatsoever. In the event that any Lender fails to make payment to the Agent
of any amount due under this Section 2.5.4, the Agent shall be entitled to
receive, retain and apply against such obligation the principal and
interest otherwise payable to such Lender hereunder until the Agent
receives such payment from such Lender or such obligation is otherwise
fully satisfied. In addition to the foregoing, if for any reason any Lender
fails to make payment to the Agent of any amount due under this Section
2.5.4, such Lender shall be deemed, at the option of the Agent, to have
unconditionally and irrevocably purchased from the Swing Line Lender,
without recourse or warranty, an undivided interest and participation in
the applicable Swing Line Loan in the amount of such Revolving Loan, and
such interest and participation may be recovered from such Lender together
with interest thereon at the Federal Funds Effective Rate for each day
during the period commencing on the date of demand and ending on the date
such amount is received. On the Facility Termination Date, the Borrower
shall repay in full the outstanding principal balance of the Swing Line
Loans.
2.6. Commitment Fee; Reductions and Increases in Aggregate Commitment. (a)
----------------------------------------------------------------
The Borrower agrees to pay to the Agent for the account of each Lender according
to its Pro Rata Revolving Share a commitment fee at a per annum rate equal to
the Applicable Fee Rate on the average daily unutilized portion of the Aggregate
Revolving Commitment (with Facility LCs being deemed usage) from the date hereof
to and including the Facility Termination Date, payable on each Payment Date
hereafter and on the Facility Termination Date. Swing Line Loans shall not
count as usage of any Lender's commitment for the purpose of calculating the
commitment fee due hereunder. The Borrower may permanently reduce the Aggregate
Revolving Commitment in whole, or in part ratably among the Lenders in integral
multiples of $1,000,000, upon at least five Business Days' prior written notice
to the Agent, which notice shall specify the amount of any such reduction,
provided, however, that the amount of the Aggregate Revolving Commitment may not
-----------------
be reduced below the Aggregate Outstanding Revolving Credit Exposure. All
accrued commitment fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Loans hereunder.
(b) The Borrower may, at its option, on a single occasion, seek to
increase the Aggregate Revolving Credit Commitment by up to an aggregate amount
of $20,000,000 (resulting in a maximum Aggregate Revolving Credit Commitment of
$60,000,000) upon at least three (3) Business Days' prior written notice to the
Agent, which notice shall specify the amount of any such increase and shall be
delivered at a time when no Default or Unmatured Default has occurred and is
continuing. The Borrower may, after giving such notice, offer the increase
(which may be declined by any Lender in its sole discretion) in the Aggregate
Revolving Credit Commitment on either a ratable basis to the Lenders or on a non
pro-rata basis to one or more Lenders and/or to other lenders or entities
reasonably acceptable to the Agent. No increase in the Aggregate Revolving
Credit Commitment shall become effective until the existing or new Lenders
extending such incremental Revolving Credit Commitment amount and the Borrower
shall have delivered to the Agent a document in form reasonably satisfactory to
the Agent pursuant to which any such existing Lender states the amount of its
Revolving Credit Commitment increase, any such new Lender states its Revolving
Credit Commitment amount and agrees to assume and accept the obligations and
rights of a Lender hereunder and the
25
Borrower accepts such incremental Revolving Credit Commitments. The Lenders (new
or existing) shall accept an assignment from the existing Lenders, and the
existing Lenders shall make an assignment to the new or existing Lender
accepting a new or increased Revolving Credit Commitment, of an interest in each
then outstanding Revolving Credit Advances and LC Obligations such that, after
giving effect thereto, all outstanding Revolving Credit Advances and LC
Obligations are held ratably by the Lenders in proportion to their respective
Revolving Credit Commitments. Assignments pursuant to the preceding sentence
shall be made in exchange for the principal amount assigned plus accrued and
unpaid interest and commitment fees. The Borrower shall make any payments under
Section 3.4 resulting from such assignments.
-----------
2.7. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in
------------------------------
the minimum amount of $3,000,000 (and in multiples of $500,000 if in excess
thereof), and each Floating Rate Advance (other than a Revolving Credit Advance
to repay Swing Line Loans) shall be in the minimum amount of $1,000,000 (and in
multiples of $500,000 if in excess thereof), provided, however, that any
-----------------
Floating Rate Advance may be in the amount of the Available Aggregate Revolving
Commitment.
2.8. Optional Principal Payments. The Borrower may from time to time pay,
---------------------------
without penalty or premium, all outstanding Floating Rate Advances (other than
Swing Line Loans, except as provided below), or, in a minimum aggregate amount
of $1,000,000 or any integral multiple of $500,000 in excess thereof, any
portion of the outstanding Floating Rate Advances (other than Swing Line Loans,
except as provided below) upon same-day notice to the Agent. The Borrower may
from time to time pay, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $3,000,000 or any
integral multiple of $500,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon five Business Days' prior written notice to the Agent.
The Borrower may at any time pay, without penalty or premium, all outstanding
Swing Line Loans, or, in a minimum amount of $100,000 and increments of $50,000
in excess thereof, any portion of the outstanding Swing Line Loans, with notice
to the Agent and the Swing Line Lender by 11:00 a.m. (Chicago time) on the date
of repayment.
2.9. Mandatory Prepayments and Commitment Reductions. (a) The Borrower
-----------------------------------------------
shall make mandatory prepayment of the Term Loan and permanent reductions in the
Aggregate Total Commitment and the Aggregate Revolving Credit Commitment in
amounts equal to the following:
(i) commencing with the Borrower's fiscal year ending December 31,
2001, seventy five percent (75%) of the Excess Cash Flow for each
fiscal year of the Borrower to be paid on or before the earlier
of (A) the date on which the Agent receives the annual audit
report required by Section 6.1(a) with respect to such fiscal
year and (B) the date the Borrower is required to deliver such
financial statements for such fiscal year; provided, however,
-----------------
that no mandatory prepayment or Commitment reduction shall be
made
26
under this Section 2.9(a)(i) with respect to any fiscal
year of the Borrower for which the year-end Total Leverage
Ratio is less than 2.5 to 1.0;
(ii) concurrently with the receipt thereof by the Borrower or
any of its Subsidiaries, 100% of the aggregate Net
Available Proceeds realized upon any Asset Disposition, to
the extent the Net Available Proceeds realized for such
Asset Disposition, when added to the Net Available Proceeds
realized upon other Asset Dispositions in the same fiscal
year of the Borrower exceed $500,000; provided, however,
-------- -------
that no mandatory prepayment or Commitment reduction shall
be made under this Section 2.9 to the extent that, the
facts and amount of such Asset Dispositions are disclosed
as required by Section 6.1(iv) and, within 360 days after
the receipt of the Net Available Proceeds, the Borrower
applies such Net Available Proceeds towards the acquisition
of a controlling interest in another business, the making
of a capital expenditure or the acquisition of other long-
term assets, in each case, in the same or a similar line of
business as the Borrower was engaged in on the date hereof;
and
(iii) concurrently with the receipt thereof by the Borrower or
any Subsidiary of the Borrower, 100% of the net proceeds
realized upon the sale or series of sales or issuance of
(A) any common stock, preferred stock, partnership
interest, limited liability company membership interest,
warrant or other equity (whether through a public offering
or a private sale) by the Borrower or such Subsidiary or
(B) any Indebtedness not permitted by Section 6.11 (other
than net proceeds resulting from the refinancing of the
Senior Subordinated Notes on terms and conditions
satisfactory to the Lenders).
(b) Mandatory prepayments payable under this Section 2.9 shall be
applied to the extent thereof in the following order:
(i) first, to installments of the Term Loan due in the inverse
order of maturity; and
(ii) second, after payment in full of the Term Loan, then to
reduction of the Aggregate Revolving Credit Commitment.
(c) Any prepayment of the Term Loan or any reduction in the Aggregate
Revolving Credit Commitment pursuant to this Section 2.9 or
otherwise shall ratably reduce, as applicable, the amounts
outstanding under the Term Loan Commitment and the Revolving
Credit Commitment of each Lender.
2.10. Method of Selecting Types and Interest Periods for New Advances.
---------------------------------------------------------------
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time;
provided, however, that until the earlier to
-----------------
27
occur of (i) ninety (90) days after the date hereof or (ii) the completion of
the syndication of the Commitments (or for such shorter period as the Agent may
agree), the Borrower will keep all of the Loans in a Eurodollar Advance with an
Interest Period of seven or fourteen days. The Borrower shall give the Agent
irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m. (Chicago
time) at least one Business Day before the Borrowing Date of each Floating Rate
Advance (other than a Swing Line Loan) and three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will
make the funds so received from the Lenders available to the Borrower at the
Agent's aforesaid address.
2.11. Conversion and Continuation of Outstanding Advances. Floating Rate
---------------------------------------------------
Advances shall continue as Floating Rate Advances (other than Swing Line Loans)
unless and until such Floating Rate Advances are converted into Eurodollar
Advances pursuant to this Section 2.11 or are repaid in accordance with Section
2.8. Each Eurodollar Advance shall continue as a Eurodollar Advance until the
end of the then applicable Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a Floating Rate Advance
unless (x) such Eurodollar Advance is or was repaid in accordance with Section
2.8 or (y) the Borrower shall have given the Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest Period,
such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.8, the Borrower may elect
from time to time to convert all or any part of a Floating Rate Advance (other
than a Swing Line Loan) into a Eurodollar Advance. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of a Floating Rate Advance into a Eurodollar Advance or continuation of a
Eurodollar Advance not later than 10:00 a.m. (Chicago time) at least three
Business Days prior to the date of the requested conversion or continuation,
specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and
28
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.12. Changes in Interest Rate, etc. Each Floating Rate Advance (other
------------------------------
than a Swing Line Loan) shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to Section 2.11, to but excluding the date it is paid or is converted
into a Eurodollar Advance pursuant to Section 2.11 hereof, at a rate per annum
equal to the Floating Rate for such day. Each Swing Line Loan shall bear
interest on the outstanding principal amount thereof, for each day from and
including the day such Swing Line Loan is made to but excluding the date it is
paid, at a rate per annum equal to the Floating Rate for such day. Changes in
the rate of interest on that portion of any Advance maintained as a Floating
Rate Advance will take effect simultaneously with each change in the Alternate
Base Rate. Each Eurodollar Advance shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined by the Agent as applicable to such Eurodollar
Advance based upon the Borrower's selections under Sections 2.10 and 2.11 and
otherwise in accordance with the terms hereof. No Interest Period may end after
the Facility Termination Date.
2.13. Rates Applicable After Default. Notwithstanding anything to the
------------------------------
contrary contained in Section 2.10 or 2.11, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by written
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by written notice to the Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum
and (iii) the LC Fee shall be increased by 2% per annum, provided that, during
--------
the continuance of a Default under Section 7.6 or 7.7, the interest rates set
forth in clauses (i) and (ii) above and the increase in the LC Fee set forth in
clause (iii) above shall be applicable to all Credit Extensions without any
election or action on the part of the Agent or any Lender.
2.14. Method of Payment. Except as provided in Section 2.5.4 with respect
-----------------
to Swing Line Loans, all payments of the Obligations hereunder shall be made,
without setoff, deduction, or counterclaim, in immediately available funds to
the Agent at the Agent's address specified pursuant to Article XIII, or at any
other Lending Installation of the Agent specified in writing by the Agent to the
Borrower, by noon (local time) on the date when due and shall (except in the
case of Reimbursement Obligations for which the LC Issuer has not been fully
indemnified by
29
the Lenders or with respect to repayments of Swing Line Loans, or as otherwise
specifically required hereunder) be applied ratably by the Agent among the
Lenders. Each payment delivered to the Agent for the account of any Lender shall
be delivered promptly by the Agent to such Lender in the same type of funds that
the Agent received at its address specified pursuant to Article XIII or at any
Lending Installation specified in a notice received by the Agent from such
Lender. The Agent is hereby authorized to charge the account of the Borrower
maintained with Bank One for each payment of principal, interest, Reimbursement
Obligations and fees as it becomes due hereunder. Each reference to the Agent in
this Section 2.14 shall also be deemed to refer, and shall apply equally, to the
LC Issuer, in the case of payments required to be made by the Borrower to the LC
Issuer pursuant to Section 2.21.6.
2.15. Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
--------------------------------------------
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record
(a) the amount of each Loan made hereunder, the Type thereof
and the Interest Period with respect thereto, (b) the amount of
any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder, (c) the
original stated amount of each Facility LC and the amount of LC
Obligations outstanding at any time, and (d) the amount of any
sum received by the Agent hereunder from the Borrower and each
Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of
the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Agent or any Lender
-----------------
to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrower to repay the
Obligations in accordance with their terms.
(iv) Any Lender may request that its Revolving Loans be evidenced by
a promissory note in substantially the form of Exhibit D-1 (a
"Revolving Credit Note") and that its Term Loans be evidenced
by a promissory note substantially in the form of Exhibit D-2
(a "Term Note") or, in the case of the Swing Line Lender,
promissory notes representing its Revolving Loans and Swing
Line Loans, respectively, substantially in the form of Exhibit
D-1, with appropriate changes for notes evidencing Swing Line
Loans. In such event, the Borrower shall prepare, execute and
deliver to such Lender a Note payable to the order of such
Lender in a form supplied by the Agent. Thereafter, the Loans
evidenced by such Note and interest thereon shall at all times
(including after any assignment pursuant to Section 12.3) be
represented by one or more Notes payable to the order of
30
the payee named therein or any assignee pursuant to Section
12.3, except to the extent that any such Lender or assignee
subsequently returns any such Note for cancellation and
requests that such Loans once again be evidenced as described
in paragraphs (i) and (ii) above.
2.16. Telephonic Notices. The Borrower hereby authorizes the Lenders and
------------------
the Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
the Borrower, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.17. Interest Payment Dates; Interest and Fee Basis. Interest accrued on
----------------------------------------------
each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the Closing Date, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. Interest
accrued on each Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest with respect to Eurodollar Loans, commitment fees and
LC Fees shall be calculated for actual days elapsed on the basis of a 360-day
year. Interest with respect to Floating Rate Loans shall be calculated for
actual days elapsed on the basis of a 365 or 366 day year, as applicable.
Interest shall be payable for the day an Advance is made but not for the day of
any payment on the amount paid if payment is received prior to noon (Chicago
time) at the place of payment. If any payment of principal of or interest on an
Advance shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.18. Notification of Advances, Interest Rates, Prepayments and Commitment
--------------------------------------------------------------------
Reductions. Promptly after receipt thereof, the Agent will notify each Lender
----------
of the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Swing Line Borrowing Notice, Conversion/Continuation Notice, and repayment
notice received by it hereunder. Promptly after notice from the LC Issuer, the
Agent will notify each Lender of the contents of each request for issuance of a
Facility LC hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
31
2.19. Lending Installations. Each Lender may book its Loans and its
---------------------
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and the LC
Issuer may, by written notice to the Agent and the Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.
2.20. Non-Receipt of Funds by the Agent. Unless the Borrower or a Lender,
---------------------------------
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption.
If such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.21. Facility LCs.
------------
2.21.1 Issuance. The LC Issuer hereby agrees, on the terms and
--------
conditions set forth in this Agreement, to issue standby and commercial
letters of credit (each, a "Facility LC") and to renew, extend, increase,
decrease or otherwise modify each Facility LC ("Modify," and each such
action a "Modification"), from time to time from and including the date of
this Agreement and prior to the Facility Termination Date upon the request
of the Borrower; provided that immediately after each such Facility LC is
--------
issued or Modified, (i) the aggregate amount of the outstanding LC
Obligations shall not exceed $15,000,000 and (ii) the Aggregate Outstanding
Revolving Credit Exposure shall not exceed the Aggregate Revolving Credit
Commitment. No Facility LC shall have an expiry date later than the
earlier of (x) the fifth Business Day prior to the Facility Termination
Date (unless (z) below is applicable), (y) one year after its issuance and
(z) one year after the Facility Termination Date, provided, however, that
-------- -------
the LC Issuer, as a condition to issuing any Facility LC which has an
expiry date later than the Facility Termination Date, may require that the
Borrower (A) deposit cash in the amount of the resulting LC Obligations in
an interest-bearing account maintained with the LC Issuer for application
to the Borrower's reimbursement obligations under Section 2.21.6 as
32
payments are made on each such Facility LC, with the balance, if any,
returned to the Borrower upon the expiration of the Facility LC with the
latest expiry date, or (B) provide one or more irrevocable letters of
credit in form and substance, and issued by a bank and satisfactory to the
LC Issuer, pursuant to which the LC Issuer is entitled to recover the
maximum amount at any time payable under each such Facility LC, plus all
costs and fees then or thereafter payable with respect to such Facility LC
under the terms of this Agreement.
2.21.2 Participations. Upon the issuance or Modification by the LC
--------------
Issuer of a Facility LC in accordance with this Section 2.21, the LC Issuer
shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender, and each Lender shall
be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the LC Issuer, a
participation in such Facility LC (and each Modification thereof) and the
related LC Obligations in proportion to its Pro Rata Share.
2.21.3 Notice. Subject to Section 2.21.1, the Borrower shall give
------
the LC Issuer notice prior to 10:00 a.m. (Chicago time) at least five (5)
Business Days prior to the proposed date of issuance or Modification of
each Facility LC, specifying the beneficiary, the proposed date of issuance
(or Modification) and the expiry date of such Facility LC, and describing
the proposed terms of such Facility LC and the nature of the transactions
proposed to be supported thereby. Upon receipt of such notice, the LC
Issuer shall promptly notify the Agent, and the Agent shall promptly notify
each Lender, of the contents thereof and of the amount of such Lender's
participation in such proposed Facility LC. The issuance or Modification by
the LC Issuer of any Facility LC shall, in addition to the conditions
precedent set forth in Article IV (the satisfaction of which the LC Issuer
shall have no duty to ascertain), be subject to the conditions precedent
that such Facility LC shall be satisfactory to the LC Issuer and that the
Borrower shall have executed and delivered such application agreement
and/or such other instruments and agreements relating to such Facility LC
as the LC Issuer shall have reasonably requested (each, a "Facility LC
Application"). In the event of any conflict between the terms of this
Agreement and the terms of any Facility LC Application, the terms of this
Agreement shall control.
2.21.4 LC Fees. The Borrower shall pay to the Agent, for the account
-------
of the Lenders ratably in accordance with their respective Pro Rata
Revolving Shares, a letter of credit fee at a per annum rate equal to the
Applicable Margin for Eurodollar Loans in effect from time to time on the
stated amount under such Facility LC, such fee to be payable in arrears on
each Payment Date (the fee described in this sentence an "LC Fee"). The
Borrower shall also pay to the LC Issuer for its own account (x) at the
time of issuance of each Facility LC, a fronting fee equal to 0.25% of the
initial stated amount (or, with respect to a Modification of any such
commercial Facility LC which increases the stated amount thereof, such
increase in the stated amount) thereof, such fee to be payable on the date
of such issuance or increase, and (y) documentary and processing charges in
connection with the issuance or Modification of and draws under Facility
LCs
33
in accordance with the LC Issuer's standard schedule for such charges as
in effect from time to time.
2.21.5 Administration; Reimbursement by Lenders. Upon receipt from
----------------------------------------
the beneficiary of any Facility LC of any demand for payment under such
Facility LC, the LC Issuer shall notify the Agent and the Agent shall
promptly notify the Borrower and each other Lender as to the amount to
be paid by the LC Issuer as a result of such demand and the proposed
payment date (the "LC Payment Date"). The responsibility of the LC
Issuer to the Borrower and each Lender shall be only to determine that
the documents (including each demand for payment) delivered under each
Facility LC in connection with such presentment shall be in conformity
in all material respects with such Facility LC. The LC Issuer shall
endeavor to exercise the same care in the issuance and administration of
the Facility LCs as it does with respect to letters of credit in which
no participations are granted, it being understood that in the absence
of any gross negligence or willful misconduct by the LC Issuer, each
Lender shall be unconditionally and irrevocably liable without regard to
the occurrence of any Default or any condition precedent whatsoever, to
reimburse the LC Issuer on demand for (i) such Lender's Pro Rata Share
of the amount of each payment made by the LC Issuer under each Facility
LC to the extent such amount is not reimbursed by the Borrower pursuant
to Section 2.21.6 below, plus (ii) interest on the foregoing amount to
be reimbursed by such Lender, for each day from the date of the LC
Issuer's demand for such reimbursement (or, if such demand is made after
11:00 a.m. (Chicago time) on such date, from the next succeeding
Business Day) to the date on which such Lender pays the amount to be
reimbursed by it, at a rate of interest per annum equal to the Federal
Funds Effective Rate for the first three days and, thereafter, at a rate
of interest equal to the rate applicable to Floating Rate Advances.
2.21.6 Reimbursement by Borrower. The Borrower shall be irrevocably and
-------------------------
unconditionally obligated to reimburse the LC Issuer on or before the applicable
LC Payment Date for any amounts to be paid by the LC Issuer upon any drawing
under any Facility LC, without presentment, demand, protest or other formalities
of any kind; provided that neither the Borrower nor any Lender shall hereby be
--------
precluded from asserting any claim for direct (but not consequential) damages
suffered by the Borrower or such Lender to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the LC Issuer in
determining whether a request presented under any Facility LC issued by it
complied with the terms of such Facility LC or (ii) the LC Issuer's failure to
pay under any Facility LC issued by it after the presentation to it of a request
strictly complying with the terms and conditions of such Facility LC. All such
amounts paid by the LC Issuer and remaining unpaid by the Borrower shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to (x) the rate applicable to Floating Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the sum of 2% plus the
rate applicable to Floating Rate Advances for such day if such day falls after
such LC Payment Date. The LC Issuer will pay to each Lender ratably in
accordance with its Pro Rata Share all amounts received by it from the Borrower
for application in payment, in whole or in part, of the Reimbursement Obligation
in respect of any Facility LC issued by the LC Issuer, but only to the extent
such Lender has made payment to the
34
LC Issuer in respect of such Facility LC pursuant to Section 2.21.5. If the
Borrower does not pay any Reimbursement Obligation when due, the Borrower shall
be deemed to have immediately requested that the Lenders make a Revolving Loan
in a principal amount equal to such unreimbursed Reimbursement Obligation. The
Agent shall promptly notify the Lenders of such deemed request, and without the
necessity of compliance with the requirements of Section 4.2, each Lender shall
make available to the Agent its Loan in the manner prescribed for Floating Rate
Advances. The proceeds of such Loans shall be paid over by the Agent to the LC
Issuer for the account of the Borrower in satisfaction of such unreimbursed
Reimbursement Obligation, which shall thereupon be deemed satisfied by the
proceeds of, and replaced by, such Floating Rate Advance.
2.21.7 Obligations Absolute. The Borrower's obligations under this
--------------------
Section 2.21 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the LC Issuer, any
Lender or any beneficiary of a Facility LC, provided that, this Agreement
--------
by the Borrower shall in no way limit or waive the Borrower's rights under
Section 2.21.6. The Borrower further agrees with the LC Issuer and the
Lenders that the LC Issuer and the Lenders shall not be responsible for,
and the Borrower's Reimbursement Obligation in respect of any Facility LC
shall not be affected by, among other things, the validity or genuineness
of documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or forged,
or any dispute between or among the Borrower, any of its Affiliates, the
beneficiary of any Facility LC or any financing institution or other party
to whom any Facility LC may be transferred or any claims or defenses
whatsoever of the Borrower or of any of its Affiliates against the
beneficiary of any Facility LC or any such transferee. The LC Issuer shall
not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Facility LC. The Borrower agrees that
any action taken or omitted by the LC Issuer or any Lender under or in
connection with each Facility LC and the related drafts and documents, if
done without gross negligence or willful misconduct, shall be binding upon
the Borrower and shall not put the LC Issuer or any Lender under any
liability to the Borrower. Nothing in this Section 2.21.7 is intended to
limit the right of the Borrower to make a claim against the LC Issuer for
damages as contemplated by the proviso to the first sentence of Section
2.21.6.
2.21.8 Actions of LC Issuer. The LC Issuer shall be entitled to
--------------------
rely, and shall be fully protected in relying, upon any Facility LC, draft,
writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order
or other document believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts
selected by the LC Issuer. The LC Issuer shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first have received such advice or concurrence of the
35
Required Lenders as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. Notwithstanding any other provision
of this Section 2.21, the LC Issuer shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement in accordance
with a request of the Required Lenders, and such request and any action
taken or failure to act pursuant thereto shall be binding upon the Lenders
and any future holders of a participation in any Facility LC.
2.21.9 Indemnification. The Borrower hereby agrees to indemnify and
---------------
hold harmless each Lender, the LC Issuer and the Agent, and their
respective directors, officers, agents and employees from and against any
and all claims and damages, losses, liabilities, costs or expenses which
such Lender, the LC Issuer or the Agent may incur (or which may be claimed
against such Lender, the LC Issuer or the Agent by any Person whatsoever)
by reason of or in connection with the issuance, execution and delivery or
transfer of or payment or failure to pay under any Facility LC or any
actual or proposed use of any Facility LC, including, without limitation,
any claims, damages, losses, liabilities, costs or expenses which the LC
Issuer may incur by reason of or in connection with (i) the failure of any
other Lender to fulfill or comply with its obligations to the LC Issuer
hereunder (but nothing herein contained shall affect any rights the
Borrower may have against any Lender, any beneficiary named in a Facility
LC, any transferee of any Facility LC (or any Person for whom any such
transferee may be acting), or any other Person, whether in connection with
this Agreement, any Facility LC, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
the Borrower and the beneficiary named in any Facility LC)) or (ii) by
reason of or on account of the LC Issuer issuing any Facility LC which
specifies that the term "Beneficiary" included therein includes any
successor by operation of law of the named Beneficiary, but which Facility
LC does not require that any drawing by any such successor Beneficiary be
accompanied by a copy of a legal document, satisfactory to the LC Issuer,
evidencing the appointment of such successor Beneficiary; provided that the
--------
Borrower shall not be required to indemnify any Lender, the LC Issuer or
the Agent for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (x) the willful misconduct
or gross negligence of the LC Issuer in determining whether a request
presented under any Facility LC complied with the terms of such Facility LC
or (y) the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. Nothing in this Section 2.21.9 is intended
to limit the obligations of the Borrower under any other provision of this
Agreement.
2.21.10 Lenders' Indemnification. Each Lender shall, ratably in
------------------------
accordance with its Pro Rata Share, indemnify the LC Issuer, its affiliates
and their respective directors, officers, agents and employees (to the
extent not reimbursed by the Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from such indemnitees' gross negligence or
willful misconduct or the LC Issuer's failure to pay
36
under any Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of the Facility LC) that such
indemnitees may suffer or incur in connection with this Section 2.21 or any
action taken or omitted by such indemnitees hereunder.
2.21.11 Facility LC Collateral Account. The Borrower agrees that
------------------------------
it will, upon the request of the Agent or the Required Lenders and until
the final expiration date of any Facility LC and thereafter as long as any
amount is payable to the LC Issuer or the Lenders in respect of any
Facility LC, maintain a special collateral account pursuant to arrangements
satisfactory to the Agent (the "Facility LC Collateral Account") at the
Agent's office at the address specified pursuant to Article XIII, in the
name of such Borrower but under the sole dominion and control of the Agent,
for the benefit of the Lenders and in which such Borrower shall have no
interest other than as set forth in Section 8.1. The Borrower hereby
pledges, assigns and grants to the Agent, on behalf of and for the ratable
benefit of the Lenders and the LC Issuer, a security interest in all of the
Borrower's right, title and interest in and to all funds which may from
time to time be on deposit in the Facility LC Collateral Account to secure
the prompt and complete payment and performance of the Obligations;
provided that the Borrower shall not be required to make any deposit to the
Facility LC Collateral Account except as specified in Section 8.1. The
Agent will invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of Bank One having a maturity
not exceeding 30 days. Nothing in this Section 2.21.11 shall either
obligate the Agent to require the Borrower to deposit any funds in the
Facility LC Collateral Account or limit the right of the Agent to release
any funds held in the Facility LC Collateral Account in each case other
than as required by Section 8.1.
2.21.12 Rights as a Lender. In its capacity as a Lender, the LC
------------------
Issuer shall have the same rights and obligations as any other Lender.
2.22. Replacement of Lender. In addition to the Borrower's other rights
---------------------
and remedies that may be available to the Borrower under this Agreement or
applicable law, if the Borrower is required pursuant to Section 3.1, 3.2 or 3.5
to make any additional payment to any Lender or if any Lender's obligation to
make or continue, or to convert Floating Rate Advances into, Eurodollar Advances
shall be suspended pursuant to Section 3.3 (any Lender so affected an "Affected
Lender"), the Borrower may elect, if such amounts continue to be charged or such
suspension is still effective, to replace such Affected Lender as a Lender party
to this Agreement, provided that no Default or Unmatured Default shall have
--------
occurred and be continuing at the time of such replacement, and provided further
--------
that, concurrently with such replacement, (i) another bank or other entity which
is reasonably satisfactory to the Borrower and the Agent shall agree, as of such
date, to purchase for cash the Advances and other Obligations due to the
Affected Lender pursuant to an assignment substantially in the form of Exhibit B
and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrower shall pay to such Affected Lender in same day funds on the day of
such replacement (A) all interest, fees and other amounts then accrued but
unpaid to such
37
Affected Lender by the Borrower hereunder to and including the date of
termination, including without limitation payments due to such Affected Lender
under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the payment
which would have been due to such Lender on the day of such replacement under
Section 3.4 had the Loans of such Affected Lender been prepaid on such date
rather than sold to the replacement Lender.
ARTICLE III
YIELD PROTECTION; TAXES
-----------------------
3.1. Yield Protection. If, on or after the date of this Agreement, the
----------------
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects such Lender or such applicable Lending Installation or
the LC Issuer to any Taxes, or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to such
Lender or the LC Issuer in respect of its Eurodollar Loans,
Facility LCs or participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, such Lender or such applicable
Lending Installation or the LC Issuer (other than reserves and
assessments taken into account in determining the interest rate
applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to such Lender or such applicable Lending Installation
or the LC Issuer of making, funding or maintaining its
Eurodollar Loans, or of issuing or participating in Facility
LCs, or reduces any amount receivable by such Lender or such
applicable Lending Installation or the LC Issuer in connection
with its Eurodollar Loans, Facility LCs or participations
therein, or requires such Lender or such applicable Lending
Installation or the LC Issuer to make any payment calculated by
reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest or LC Fees received by
it, by an amount deemed material by such Lender or the LC
Issuer as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by
38
such Lender or applicable Lending Installation or the LC Issuer, as the case may
be, in connection with such Eurodollar Loans, Commitment, Facility LCs or
participations therein, then, within 15 days after written demand by such Lender
or the LC Issuer, as the case may be, showing in reasonable detail the
computations supporting such Lender's or the LC Issuer's, as the case may be,
claims of increased cost or reduction of return, the Borrower shall pay such
Lender or the LC Issuer, as the case may be, such additional amount or amounts
as will compensate such Lender or the LC Issuer, as the case may be, for such
increased cost or reduction in amount received, provided that the Borrower shall
not be obligated to pay any such amount or amounts which are attributable to any
period of time occurring more than one year prior to the date of receipt by the
Borrower of such written demand except to the extent such increased cost or
reduction in amount received is the result of any of the matters referred to
above having retroactive effect.
3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC Issuer
---------------------------------------
determines the amount of capital required or expected to be maintained by such
Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within 15 days of written demand by such Lender
or the LC Issuer, showing in reasonable detail the computations supporting such
Lender's or the LC Issuer's, as the case may be, claims of increased capital
requirements as applied to the credit accommodations provided under this
Agreement, the Borrower shall pay such Lender or the LC Issuer the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender or the LC Issuer determines is
attributable to this Agreement, its Outstanding Revolving Credit Exposure or its
Commitment to make Loans and issue or participate in Facility LCs, as the case
may be, hereunder (after taking into account such Lender's or the LC Issuer's
policies as to capital adequacy), provided that the Borrower shall not be
obligated to pay any such amount or amounts which are attributable to any period
of time occurring more than one year prior to the date of receipt by the
Borrower of such written demand except to the extent such increased cost or
reduction in amount received is the result of any of the matters referred to
above having retroactive effect. "Change" means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or the LC Issuer or any
Lending Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
---------------------------------
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule,
39
regulation, or directive, whether or not having the force of law, or if the
Required Lenders determine that (i) deposits of a type and maturity appropriate
to match fund Eurodollar Advances are not available or (ii) the interest rate
applicable to Eurodollar Advances does not accurately reflect the cost of making
or maintaining Eurodollar Advances, then the Agent shall, with notice to the
Borrower, suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
-----------------------
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance upon written demand from such Lender (or from
the Agent on behalf of each Lender) showing in reasonable detail the
computations supporting such Lender's claim for losses or costs incurred.
3.5. Taxes. (i) All payments by the Borrower to or for the account of
-----
any Lender, the LC Issuer or the Agent hereunder or under any Note or Facility
LC Application shall be made free and clear of and without deduction for any and
all Taxes. If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender, the LC Issuer or the
Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
Facility LC Application or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note or Facility LC Application ("Other
Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent, the LC Issuer and
each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, the LC Issuer or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days
of the date the Agent, the LC Issuer or such Lender makes demand therefor
pursuant to Section 3.6.
40
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not more than ten Business Days after the date of this Agreement, (i)
deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in
either case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, and (ii) deliver to each of the Borrower and the Agent a United States
Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is
entitled to an exemption from United States backup withholding tax. Each Non-
U.S. Lender further undertakes to deliver to each of the Borrower and the Agent
(x) renewals or additional copies of such form (or any successor form) on or
before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Agent. All forms or amendments described in
the preceding sentence shall certify that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form or amendment with respect to it and such Lender advises
the Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax. Each Lender
that is not incorporated under the laws of the United States of America or a
state thereof shall deliver to the Borrower and the Administrative Agent, with
respect to tax liabilities imposed by any governmental authority other than the
United States, similar forms, if available (or the information that would be
contained in similar forms if such forms were available), to the forms which are
required to be provided under this subsection with respect to tax liabilities to
the United States.
(v) For any period during which a Non-U.S. Lender has failed to provide
the Borrower with an appropriate form pursuant to clause (iv), above (unless
such failure is due to a change in treaty, law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
--------
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrower shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such Non-
U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
41
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1. Initial Credit Extension. The Lenders shall have no obligation to
------------------------
make the initial Credit Extension hereunder unless and until the Borrower has
furnished the following to the Agent and the other conditions set forth below
have been satisfied:
(i) Copies of the articles or certificate of incorporation of
the Borrower and each Subsidiary, together with all
amendments, and a certificate of good standing, each
certified by the appropriate governmental officer in its
jurisdiction of incorporation.
42
(ii) Copies, certified by the Secretary or Assistant Secretary of
the Borrower and each Subsidiary, of its by-laws and of its
Board of Directors' resolutions and of resolutions or
actions of any other body authorizing the execution of the
Loan Documents to which the Borrower or such Subsidiary is a
party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower and each Subsidiary,
which shall identify by name and title and bear the
signatures of the Authorized Officers and any other officers
of the Borrower and such Subsidiary authorized to sign the
Loan Documents to which the Borrower or such Subsidiary is a
party, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in
writing by the Borrower or such Subsidiary.
(iv) A certificate, dated the date of this Agreement, signed by
an Authorized Officer of the Borrower, in form and substance
satisfactory to the Agent, to the effect that: (i) on such
date (both before and after giving effect to the
consummation of the Gourmet Acquisition, the consummation of
the other transactions contemplated hereby, the making of
the Credit Extensions hereunder (collectively, the "Closing
Transactions")) no Default or Unmatured Default has occurred
and is continuing; (ii) no injunction or temporary
restraining order which would prohibit the making of the
Loans or the consummation of any of the Closing
Transactions, or other litigation which could reasonably be
expected to have a Material Adverse Effect is pending or, to
the best of the Borrower's knowledge, threatened; (iii) all
orders, consents, approvals, licenses, authorizations, or
validations of, or filings, recordings or registrations
with, or exemptions by, any governmental or public body or
authority, or any subdivision thereof, required to make or
consummate the Closing Transactions have been or, prior to
the time required, will have been, obtained, given, filed or
taken and are or will be in full force and effect (or the
Borrower has obtained effective judicial relief with respect
to the application thereof) and all applicable waiting
periods have expired; (iv) the Transaction Documents are in
full force and effect and no term or condition thereof has
been amended, modified or waived after the execution thereof
except with the written consent of the Agent; (v) the
Gourmet Acquisition has been consummated in accordance with
the Purchase Agreement and no conditions to closing set
forth therein have been waived; (vi) neither the Borrower
nor any Subsidiary has failed to perform any material
obligation or covenant required in connection with any
Closing Transaction to be performed or complied with by it
on or before the initial Borrowing Date; (vii) each of the
representations and warranties set forth in Article V of
this Agreement is true and correct on and as of such date;
and (viii) since October 8, 2000, (A) no event or change has
occurred that has caused or
43
evidences a Material Adverse Effect and (B) there has
occurred no material adverse change in the business,
property, condition (financial or otherwise), performance,
results of operations or prospects of Gourmet, except as set
forth in Section 4(u) of the Disclosure Schedule (as defined
in the Purchase Agreement) to the Purchase Agreement.
(v) If the initial Credit Extension will be the issuance of a
Facility LC, a properly completed Facility LC Application.
(vi) A written opinion of the Borrower's counsel, addressed to
the Agent and the Lenders, in form and substance
satisfactory to the Agent.
(vii) Any Notes requested by a Lender pursuant to Section 2.15
payable to the order of each such requesting Lender.
(viii) Executed originals of this Agreement and each of the Loan
Documents executed in connection herewith, which shall be in
full force and effect, together with all schedules,
exhibits, certificates, instruments, opinions, documents and
financial statements required to be delivered pursuant
hereto and thereto.
(ix) Written money transfer instructions, in substantially the
form of Exhibit C, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested.
(x) A copy of the Purchase Agreement and any amendments,
supplements and modifications thereto certified as true and
complete by an Authorized Officer of the Borrower.
(xi) The insurance certificate described in Section 5.20 and
evidence satisfactory to the Agent that it has been named
loss payee with respect to the property insurance of the
Borrower and its Subsidiaries and additional insured with
respect to the liability insurance of the Borrower and its
Subsidiaries.
(xii) The Agent shall have determined that (i) there has not been,
since November 29, 2000, any material adverse change in
primary or secondary loan syndication markets or in capital
markets generally that would impair syndication of the Loans
hereunder and (ii) the Borrower has fully cooperated with
the Agent's syndication efforts including, without
limitation, by providing the Agent with information
regarding the Borrower's operations and prospects and such
other information as the Agent deems necessary to
successfully syndicate the Loans hereunder.
44
(xiii) A duly completed Borrowing Base Certificate dated as of
January 28, 2001.
(xiv) A written solvency certificate from the chief financial
officer of the Borrower in form and content satisfactory to
the Agent, dated the date hereof, with respect to the value,
solvency and other factual information of, or relating to,
as the case may be, the Borrower on a consolidated basis
after giving effect to the Gourmet Acquisition.
(xv) Pro forma opening financial statements and updated
projections, each giving effect to the Gourmet Acquisition,
together with such information as the Administrative Agent
may reasonably request to confirm the tax, legal and
business assumptions made in such pro forma financial
statements and updated projections.
(xvi) All governmental, shareholder and third party consents and
approvals necessary in connection with this Agreement, the
Gourmet Acquisition and the other transactions contemplated
hereby shall have been obtained; all such consents and
approvals shall be in full force and effect; all applicable
waiting periods shall have expired without any action being
taken by any governmental authority that could restrain,
prevent or impose any material adverse conditions on the
Gourmet Acquisition or such other transactions or that could
seek or threaten any of the foregoing, and no law or
regulation shall be applicable which in the judgment of the
Agent could have such effect; and all legal, financial,
accounting and tax aspects of the Gourmet Acquisition must
be acceptable to the Agent.
(xvii) The absence of any injunction or restraining order which, in
the reasonable judgment of the Agent, would prohibit the
making of the initial Credit Extension or the consummation
of the Gourmet Acquisition; and the absence of any
litigation which could reasonably be expected to have a
Material Adverse Effect on the Borrower and its
Subsidiaries.
(xviii) All principal, interest and other amounts due under the
Existing Credit Agreement shall have been paid in full, the
Existing Credit Agreement shall have been terminated, and
the Borrower shall have executed and delivered to the Agent
such documents as the Agent shall require in connection
therewith.
(xix) (a) Such duly completed and executed UCC-1 financing
statements as the Agent shall have requested to perfect is
security interest in the Collateral; (b) copies of searches
of financing statements filed under the Uniform Commercial
Code, together with tax lien and judgment searches with
respect to the assets of the Borrower and its Subsidiaries,
in both cases in such jurisdictions as the Agent may
request; and (c) such duly executed UCC-3 termination
statements, mortgage releases and similar documents
45
as the Agent may request with respect to any mortgages or
security interests securing indebtedness being repaid in
full on the initial Credit Extension Date.
(xx) Delivery of any pledged stock certificates and related blank
stock powers.
(xxi) A certificate from the Borrower's chief financial officer to
the effect that the incurrence of Indebtedness by the
Borrower hereunder will not breach the terms of the Senior
Subordinated Notes, which certificate shall include a
computation reflecting compliance with the Senior
Subordinated Notes.
(xxii) A duly executed landlord's waiver from Foremost Mgmt. with
respect to the Borrower's ▇▇▇▇▇▇▇, Ohio location, in form
and substance satisfactory to the Agent.
(xxiii) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. Each Credit Extension. The Lenders shall not (except as otherwise
---------------------
set forth in Section 2.5.4 with respect to Revolving Credit Advances for the
purpose of repaying Swing Line Loans) be required to make any Credit Extension
unless on the applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V
are true and correct as of such Credit Extension Date except
to the extent any such representation or warranty is stated
to relate solely to an earlier date, in which case such
representation or warranty shall have been true and correct
on and as of such earlier date, and except for
representations and warranties for which exceptions thereto
have been disclosed in writing to the Lenders and have been
approved by the Required Lenders.
(iii) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Lenders and their
counsel.
Each Borrowing Notice or Swing Line Borrowing Notice, as the case may be,
or request for issuance of a Facility LC with respect to each such Credit
Extension shall constitute a representation and warranty by the Borrower that
the conditions contained in Sections 4.2(i) and (ii) have been satisfied. Any
Lender may require a duly completed compliance certificate in substantially the
form of Exhibit A as a condition to making a Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lenders that:
46
5.1. Existence and Standing. Each of the Borrower and its Subsidiaries is
----------------------
a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its material business in
each jurisdiction in which its material business is conducted.
5.2. Authorization and Validity. The Borrower and each of its Subsidiaries
--------------------------
has the requisite power and authority and legal right to execute and deliver the
Loan Documents to which it is a party and to perform its obligations thereunder.
The execution and delivery by the Borrower and each of its Subsidiaries of the
Loan Documents to which it is a party and the performance of its respective
obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which the Borrower or any Subsidiary is a
party constitute legal, valid and binding obligations of the Borrower or such
Subsidiary, as applicable, enforceable against the Borrower or such Subsidiary,
as applicable, in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and delivery
-------------------------------
by the Borrower or any Subsidiary of the Loan Documents to which it is a party,
nor the consummation of the transactions therein contemplated, nor compliance
with the provisions thereof will violate (i) any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on the Borrower or any of
its Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or
certificate of incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating or other
management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement (including without limitation the Senior
Subordinated Notes) to which the Borrower or any of its Subsidiaries is a party
or is subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary
pursuant to the terms of any such indenture, instrument or agreement. No order,
consent, adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower or any of its Subsidiaries,
is required to be obtained by the Borrower or any of its Subsidiaries in
connection with the execution and delivery of the Transaction Documents, the
borrowings under this Agreement, the consummation of the Gourmet Acquisition,
the payment and performance by the Borrower of the Obligations or the legality,
validity, binding effect or enforceability of any of the Loan Documents. All
applicable waiting periods with respect to the Gourmet Acquisition under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, have expired
or been terminated prior to the date hereof.
5.4. Financial Statements. The audited financial statements for fiscal
--------------------
years 1998 and 1999 and the unaudited quarterly financial statements for the
first three fiscal quarters of the
47
fiscal year 2000 of the Borrower and the unaudited statements of income for
fiscal years 1998 and 1999 and the unaudited statement of income for the eight
months ended December 27, 2000 of Gourmet heretofore delivered to the Lenders
were prepared in accordance with Agreement Accounting Principles in effect on
the date such statements were prepared and fairly present the consolidated
financial condition and operations of the Borrower and Gourmet, as the case may
be, at such date and the consolidated results of their operations for the period
then ended, subject to the absence of footnotes, comparative data in the interim
statements, and normal year-end adjustments.
5.5. Material Adverse Change. Since October 8, 2000, there has been no
-----------------------
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed or caused to be
-----
filed all United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Borrower or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in accordance with Agreement Accounting
Principles and as to which no Lien exists. No tax liens have been filed and no
claims are being asserted with respect to any such taxes which could reasonably
be expected to have a Material Adverse Effect. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges have been made in accordance with Agreement
Accounting Principles.
5.7. Litigation and Contingent Obligations. There is no litigation,
-------------------------------------
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8. Subsidiaries. Schedule 1 contains an accurate list of all
------------
Subsidiaries of the Borrower as of the date of this Agreement (giving effect to
the Gourmet Acquisition), setting forth their respective jurisdictions of
organization and the percentage of their respective Capital Stock or other
ownership interests owned by the Borrower or other Subsidiaries. All of the
issued and outstanding shares of Capital Stock or other ownership interests of
such Subsidiaries have been (to the extent such concepts are relevant with
respect to such ownership interests) duly authorized and issued and are fully
paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do not
-----
in the aggregate exceed $1,000,000. Neither the Borrower nor any other member
of the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to
48
Multiemployer Plans in excess of $1,000,000 in the aggregate. Each Plan complies
in all material respects with all applicable requirements of law and
regulations, no Reportable Event has occurred with respect to any Plan, neither
the Borrower nor any other member of the Controlled Group has withdrawn from any
Plan or initiated steps to do so, and no steps have been taken to reorganize or
terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or written report
-----------------------
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents, when taken as a whole, contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which the same
were made.
5.11. Regulation U. Margin stock (as defined in Regulation U) constitutes
------------
less than 25% of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary is a
-------------------
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, or (ii) any
agreement or instrument evidencing or governing Indebtedness, in the case of
each of the foregoing clauses (i) and (ii), which default could reasonably be
expected to have a Material Adverse Effect. The Borrower has delivered to the
Agent a true and correct copy of the Consulting Agreement.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
--------------------
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property where
the failure to do so could reasonably be expected to cause a Material Adverse
Effect.
5.14. Ownership of Properties. Except as set forth on Schedule 2, on the
-----------------------
date of this Agreement, the Borrower and its Subsidiaries will have good title,
free of all Liens other than those permitted by Section 6.15, to all of the
Property and assets reflected in the Borrower's most recent consolidated
financial statements provided to the Agent as owned by the Borrower and its
Subsidiaries.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an entity
------------------------------------
deemed to hold "plan assets" within the meaning of 29 C.F.R. (S) 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor the making of Credit
Extensions hereunder gives rise to a prohibited transaction within the meaning
of Section 406 of ERISA or Section 4975 of the Code.
49
5.16. Environmental Matters. Except as disclosed on Schedule 3, there are
---------------------
no claims, investigations, litigation, administrative proceedings, notices,
requests for information (each a "Proceeding") known to the Borrower, whether
----------
pending or threatened, or judgments or orders asserting violations of applicable
federal, state and local environmental, health and safety statutes, regulations,
ordinances, codes, rules, orders, decrees, directives and standards
("Environmental Laws") or relating to any toxic or hazardous waste, substance or
------------------
chemical or any pollutant, contaminant, chemical or other substance defined or
regulated pursuant to any Environmental Law, including, without limitation,
asbestos, petroleum, crude oil or any fraction thereof ("Hazardous Materials")
-------------------
asserted against the Borrower or any of its Subsidiaries which, in any case,
could reasonably be expected to have a Material Adverse Effect. As of the date
hereof, there are no Proceedings pending, or to the Borrower's knowledge
threatened, except as disclosed on Schedule 3. Neither the Borrower nor any
Subsidiary has caused or permitted any Hazardous Materials to be released,
either on or under real property, currently or formerly, legally or beneficially
owned or operated by the Borrower or any Subsidiary or on or under real property
to which the Borrower or any of its Subsidiaries transported, arranged for the
transport or disposal of, or disposed of Hazardous Materials, which release
could reasonably be expected to have a Material Adverse Effect. To the
knowledge of the Borrower, no real property currently or formerly owned or
operated by the Borrower or any Subsidiary has ever been used as a dump or
disposal site or as a treatment or storage site for Hazardous Materials. The
Borrower and each of its Subsidiaries have obtained and are in compliance in all
material respects with all material permits, certificates, licenses, approvals
and other authorizations ("Environmental Permits") required for the operation of
---------------------
their business and have filed all required notifications or reports relating to
chemical substances, air emissions, effluent discharges and the storage,
treatment, transport and disposal of Hazardous Materials. To the knowledge of
the Borrower, no asbestos containing materials, polychlorinated biphenyls or
underground storage tanks are or have been located in, on or under real property
owned or operated by the Borrower or any of its Subsidiaries. As of the date
hereof, the Borrower and its Subsidiaries do not have liabilities exceeding
$100,000 in the aggregate for all of them with respect to compliance with
applicable Environmental Laws and Environmental Permits or related to the
generation, treatment, storage, disposal, release, investigation or cleanup of
Hazardous Materials, and to the Borrower's knowledge, no facts or circumstances
exist which could give rise to such liabilities with respect to compliance with
applicable Environmental Laws and Environmental Permits and the generation,
treatment, storage, disposal, release, investigation or cleanup of Hazardous
Materials. The operation and production of the Borrower and its Subsidiaries to
the Borrower's knowledge will not be materially impacted or affected by the
compliance by any such Person with existing applicable Environmental Laws and
Environmental Permits or related to the generation, treatment, storage,
disposal, release, investigation or cleanup of Hazardous Materials.
5.17. Investment Company Act. Neither the Borrower nor any Subsidiary is
----------------------
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor any
----------------------------------
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a
50
"holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.19. Subordinated Indebtedness. The Obligations constitute senior
-------------------------
indebtedness which is entitled to the benefits of the subordination provisions
of all outstanding Subordinated Indebtedness including, without limitation, the
Senior Subordinated Notes.
5.20. Insurance. The certificate signed by an Authorized Officer of the
---------
Borrower, that attests to the existence and adequacy of, and summarizes, the
property and casualty insurance program carried by the Borrower with respect to
itself and its Subsidiaries and that has been furnished by the Borrower to the
Agent and the Lenders, is complete and accurate. This summary includes the
insurer's or insurers' name(s), policy number(s), expiration date(s), amount(s)
of coverage, type(s) of coverage, exclusion(s), and deductibles. This summary
also includes similar information, and describes any reserves, relating to any
self-insurance program that is in effect.
5.21. Solvency. (i) Immediately after the consummation of the
--------
transactions to occur on the date hereof, including, without limitation,
consummation of the Gourmet Acquisition, and immediately following the making of
each Loan, if any, made on the date hereof and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
the Borrower and its Subsidiaries on a consolidated basis as a going concern, at
a fair valuation, will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the Borrower and its Subsidiaries on a consolidated
basis; (b) the present fair saleable value of the Property of the Borrower and
its Subsidiaries on a consolidated basis as a going concern will be greater than
the amount that will be required to pay the probable liability of the Borrower
and its Subsidiaries on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Borrower and its Subsidiaries
on a consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) the Borrower and its Subsidiaries on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.
(ii) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
5.22. Acquisition Documents. The Borrower has delivered to each of the
---------------------
Lenders true, complete and correct copies of the Acquisition Documents
(including all schedules, exhibits, annexes, amendments, supplements,
modifications, and all other documents delivered pursuant thereto or in
connection therewith). The Acquisition Documents as originally executed and
delivered by the parties thereto have not been amended, waived, supplemented or
modified without the consent of the Agent. Each of the representations and
warranties given by the parties
51
thereto in the Purchase Agreement is true and correct in all material aspects as
of the date hereof. Neither the Borrower nor any other party thereto is in
default in the performance of or compliance with any provisions thereof. The
Gourmet Acquisition is contemporaneously with the initial Advance being
consummated in accordance with applicable laws and regulations.
5.23. Security. The provisions of the Collateral Documents are effective
--------
to create and give the Agent, for the benefit of the Lenders, as security for
the repayment of the obligations secured thereby, a legal, valid, perfected and
enforceable Lien (which priority is subject only to prior Liens permitted by
Section 6.15 and such agreements) upon all right, title and interest of the
Borrower or its Subsidiaries, as applicable, in any and all of the Collateral
described therein.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and each
-------------------
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Agent:
(i) Within 120 days after the close of each of its fiscal years, an
unqualified audit report certified by independent certified
public accountants acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a
consolidated and consolidating basis (consolidating statements
need not be certified by such accountants) for itself and its
Subsidiaries, including balance sheets as of the end of such
period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by (a)
any management letter prepared by said accountants, and (b) a
certificate of said accountants that, in the course of their
examination necessary for their certification of the foregoing,
they have obtained no knowledge of any Default or Unmatured
Default, or if, in the opinion of such accountants, any Default
or Unmatured Default shall exist, stating the nature and status
thereof.
(ii) Within 45 days after the close of each of the four quarterly
periods of each of its fiscal years, for itself and its
Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such period and consolidated and
consolidating profit and loss and reconciliation of surplus
statements and a statement of cash flows for the period from the
beginning of such fiscal year to the end of such quarter, all
certified by its chief financial officer.
52
(iii) By not later than January 31 of each year, projections for
the Borrower's then current fiscal year consisting of
monthly balance sheets and monthly and year-to-date income
statements together with the assumptions underlying such
projections certified by the Borrower's chief financial
officer or treasurer as being the most probable course of
the Borrower's business based on such assumptions.
(iv) Together with the financial statements required under
Sections 6.1(i) and (ii), a compliance certificate in
substantially the form of Exhibit A signed by its chief
financial officer showing the calculations necessary to
determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status
thereof and disclosing the date and amount of any Asset
Dispositions and related Net Available Proceeds occurring in
the applicable fiscal quarter and the Borrower's intent to
reinvest the same pursuant to Section 2.9(a)(ii).
(v) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single
Employer Plan, certified as correct by an actuary enrolled
under ERISA.
(vi) As soon as possible and in any event within 10 days after
the Borrower knows that any Reportable Event has occurred
with respect to any Plan which could reasonably be expected
to have a Material Adverse Effect, a statement, signed by
the chief financial officer of the Borrower, describing said
Reportable Event and the action which the Borrower proposes
to take with respect thereto.
(vii) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim
to the effect that the Borrower or any of its Subsidiaries
is or may be liable to any Person as a result of the release
by the Borrower, any of its Subsidiaries, or any other
Person of any toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any violation of
any federal, state or local environmental, health or safety
law or regulation by the Borrower or any of its
Subsidiaries, which, in either case, could reasonably be
expected to have a Material Adverse Effect.
(viii) Promptly upon the furnishing thereof to the shareholders of
the Borrower, copies of all financial statements, reports
and proxy statements so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission.
53
(x) Within 14 days of the end of each month, a Borrowing Base
Certificate showing the Borrowing Base as of the last Business
Day of the previous monthly period in the form of Exhibit E
attached hereto and certified as accurate by the Borrower's
chief financial officer.
(xi) Within 10 days after the filing thereof, a copy of the
Borrower's "U.S. Income Tax Return for an S Corporation" and
related Schedules K-1 for the immediately preceding calendar
year.
(xii) Such other information (including non-financial information) as
the Agent or any Lender may from time to time reasonably
request.
6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary
---------------
to, use the proceeds of the Credit Extensions for general corporate purposes.
The Borrower will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Advances to purchase or carry any "margin stock" (as defined in
Regulation U) or to make any other Acquisition of any Person which has not been
approved and recommended by the Board of Directors (or functional equivalent
thereof of such person.
6.3. Notice of Default. The Borrower will, and will cause each Subsidiary
-----------------
to, give prompt notice in writing to the Lenders of the occurrence of (a) any
Default or Unmatured Default and (b) of any other development, financial or
otherwise, relating specifically to the Borrower or any of its Subsidiaries (and
not of a general economic or political nature) which could reasonably be
expected to have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
-------------------
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted where the failure to do so could reasonably be
expected to have a Material Adverse Effect.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to, timely
-----
file complete and correct United States federal and applicable foreign, state
and local tax returns required by applicable law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
---------
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to the Agent and any
Lender upon request full information as to the insurance carried.
54
6.7. Compliance with Laws. The Borrower will, and will cause each
--------------------
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, including,
without limitation, all Environmental Laws, the failure to comply with which
could reasonably be expected to have a Material Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will cause each
-------------------------
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. Inspection. Upon reasonable notice, the Borrower will, and will
----------
cause each Subsidiary to, permit the Agent and the Lenders, by their respective
representatives and agents, to inspect any of the Inventory or other Property,
corporate books and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other financial records of
the Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised as to the
same by, their respective officers at such reasonable times and intervals as the
Agent or any Lender may designate. The Borrower will keep or cause to be kept,
and cause each Subsidiary to keep or cause to be kept, appropriate records and
books of account in which complete entries are to be made reflecting its and
their business and financial transactions, such entries to be made in accordance
with Agreement Accounting Principles consistently applied.
6.10. Capital Stock and Dividends. The Borrower will not, nor will it
---------------------------
permit any Subsidiary to, (a) issue any preferred stock, other Capital Stock
(other than common stock) or any equity securities of any Subsidiary of any
kind, or (b) declare or pay any dividends or make any distributions on its
Capital Stock (other than dividends payable in its own Capital Stock) or redeem,
repurchase or otherwise acquire or retire any of its Capital Stock or any
options or other rights in respect thereof at any time outstanding, except that
(i) any Subsidiary may declare and pay dividends or make distributions to the
Borrower or to a Wholly-Owned Subsidiary of the Borrower, (ii) so long as no
Default under Section 7.2 or Unmatured Default under Section 7.2 is pending
-----------
before or after giving effect to the declaration, payment or making of such
dividends or repurchase or redemption of such Capital Stock, the Borrower may
make Tax Distributions up to the maximum amount permitted by the definition of
Tax Distributions, and (iii) so long as (A) no Default or Unmatured Default is
pending before or after giving effect to the declaration, payment or making of
such dividends, repurchase or redemption of such Capital Stock, (B) such
dividend, repurchase or redemption, if effected on the last day of the preceding
fiscal quarter, would not have resulted in a breach of Section 6.25.1 as of such
date, and (C) both before and immediately after such dividend, distribution,
repurchase or redemption, the Total Leverage Ratio is less than 2.50 to 1.00,
then the Borrower may declare and pay dividends to its shareholders or redeem or
repurchase its Capital Stock in an amount not in excess of the Dividend
Availability Amount at the time of such declaration or payment. Tax
Distributions may be paid in estimated quarterly installments contemporaneously
with the Borrower's shareholders' obligations to pay estimated income taxes
based upon the Borrower's income through the end of its fiscal quarter
immediately preceding such tax installment's due date and also contemporaneously
with any
55
such shareholder's filing of his or her federal and state income tax returns if
the estimated Tax Distributions paid for any of the Borrower's fiscal years are
not sufficient to pay such shareholder's actual income tax liability arising
from such shareholder's share of the Borrower's income for such fiscal year as
disclosed by copies of the Borrower's tax returns and related Schedules K-1 for
such fiscal year delivered to the Lenders pursuant to this Agreement; provided,
--------
however, that if the Tax Distributions actually paid with respect to any of the
-------
Borrower's fiscal years exceed the Tax Distributions permitted by this Section
based upon the Borrower's actual taxable net income as disclosed by copies of
such tax returns and schedules described above, then the Borrower shall either
(x) reduce by such excess amount the amount of the immediately following Tax
Distributions in the order of their payment dates so long as (i) no Unmatured
Default under Section 7.2 has occurred prior to the Tax Distribution to be
-----------
reduced, and (ii) the Facility Termination Date will not occur prior to the Tax
Distribution to be reduced, or (y) immediately recover the excess amount from
the recipient and not pay any further Tax Distribution to any person until such
excess amount is recovered if any of the events described in clause (x)(i) or
-------------
(ii) is applicable.
----
6.11. Indebtedness. The Borrower will not, nor will it permit any
------------
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans (including any increase in the amount thereof
pursuant to Section 2.6(b))and the Reimbursement Obligations.
(ii) Indebtedness existing on the date hereof and described in
Schedule 2, and any extension, refinancing or renewal thereof
which does not include an increase in the principal amount
thereof, or an increase in the fees or the rate of interest
payable with respect thereto.
(iii) Indebtedness arising pursuant to Rate Management Transactions
related to the Loans having a Net ▇▇▇▇-to-Market Exposure not
exceeding $5,000,000 in the aggregate.
(iv) Purchase money or other Indebtedness of up to $5,000,000 in
aggregate outstanding principal amount incurred by the
Borrower in connection with Capital Expenditures permitted
under this Agreement.
(iv) The Indebtedness evidenced by the Senior Subordinated Notes.
(v) Indebtedness not to exceed $38,000,000 on terms and
conditions reasonably satisfactory to the Agent and the
Required Lenders relating to the construction of the
Parkersburg Facility or a substitute comparably priced
facility.
(vi) Contingent Obligations permitted under Section 6.24.
(vi) Other Indebtedness at no time exceeding $1,000,000 in the
aggregate principal amount.
56
6.12. Merger. The Borrower will not, nor will it permit any Subsidiary
------
to, merge or consolidate with or into any other Person, except that (a) a
Wholly-Owned Subsidiary may merge into the Borrower or any Wholly-Owned
Subsidiary of the Borrower, (b) the Borrower or any Subsidiary may merge or
consolidate with any other Person so long as the Borrower or such Subsidiary is
the continuing or surviving corporation and, prior to and after giving effect to
such merger or consolidation, no Default or Unmatured Default shall exist and be
continuing, and (c) any Subsidiary may enter into a merger or consolidation as a
means of effecting a disposition permitted by Section 6.13.
6.13. Sale of Assets. The Borrower will not, nor will it permit any
--------------
Subsidiary to, lease, sell, transfer or otherwise dispose of its Property, to
any other Person except for (a) sales of inventory in the ordinary course of
business, (b) disposition of obsolete or unusable equipment, (c) disposition of
Collateral as permitted under the Security Documents, (d) transfers of assets in
connection with Investments permitted under Section 6.14, and (e) leases, sales,
transfers or other dispositions of its Property (other than Collateral) that,
together with all other Property of the Borrower and its Subsidiaries previously
leased, sold or disposed of (other than inventory sold in the ordinary course of
business) as permitted by this Section 6.13 since the date hereof, do not
constitute a Substantial Portion of the Property of the Borrower and its
Subsidiaries.
6.14. Investments and Acquisitions. The Borrower will not, nor will it
----------------------------
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, Loans and Advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Subsidiaries, including the
Investment in the Gourmet Acquisition, and other Investments
in existence on the date hereof and described in Schedule 1.
(iii) Shares of stock or other securities received in settlement of
claims arising in the ordinary course of business.
(iv) Promissory notes acquired in connection with the dispositions
of assets permitted under Section 6.13.
(v) Shareholder Loans existing on the date hereof.
(vi) Other Investments up to an aggregate amount not in excess of
$250,000.
(vii) Acquisitions up to an aggregate amount not to exceed
$1,500,000.
(viii) Acquisitions other than those referred to in clause (vii)
------------
above up to an aggregate amount not to exceed $3,500,000;
provided, however, that at least 5 Business Days before any
-------- -------
such Acquisition, the Borrower shall
57
submit to the Agent satisfactory evidence of pro forma
compliance (after giving effect to such Purchase) with
Section 6.25 hereof for the four most recently ended fiscal
quarters of the Borrower.
6.15. Liens. The Borrower will not, nor will it permit any Subsidiary to,
-----
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings and
for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its
books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or materially interfere with
the use thereof in the business of the Borrower or its
Subsidiaries.
(v) Liens existing on the date hereof and described in Schedule 2
and any subsequent extension or renewals of such Liens to the
extent the related extension or renewal of the Indebtedness
secured by such Lien is otherwise permitted under this
Agreement, the principal amount secured thereby is not
increased and the Property subject thereto is not increased.
(vi) Liens in favor of the Agent, for the benefit of the Lenders,
granted pursuant to any Collateral Document.
(vii) Liens incurred or deposits or pledges made or given in
connection with, or to secure payment of indemnity,
performance or other similar bonds in the ordinary course of
business.
(viii) Liens arising from judgments, decrees or attachments (or
securing of appeal bonds with respect thereto) in
circumstances not constituting a
58
Default under Section 7.9, so long as no cash or property
(other than proceeds of insurance payable by reason of such
judgments, decrees or attachments) is deposited or delivered
to secure any respective judgment or award, or any appeal
bond in respect thereof, the fair market value of which
exceeds $3,000,000.
(ix) Banker's Liens, rights of setoff and similar Liens incurred
on deposits made in the ordinary course of business.
(x) Liens arising from precautionary UCC financing statements
regarding Operating Leases permitted by this Agreement.
(xi) Any interest or title of a lessor under any lease.
(xii) So long as the Indebtedness secured by such Liens is
permitted under Section 6.11, Liens on the assets of a
Subsidiary if such Liens existed at the time such Subsidiary
was acquired by the Borrower or a Subsidiary, provided that
such Lien does not encumber additional property after such
Subsidiary is acquired or increase the principal amount
secured thereby after such Subsidiary is acquired.
(xiii) Purchase money Liens and Liens created in connection with
Capitalized Lease Obligations which are incurred in the
ordinary course of business secure Indebtedness incurred in
connection with permitted Capital Expenditures; provided,
--------
that (i) any such Lien attaches to such property concurrently
with or within 20 days after the acquisition thereof, (ii)
such Lien attaches solely to the property so acquired in such
transaction and (iii) the principal amount of the
Indebtedness secured by any and all such purchase money
security interests shall not at any time exceed $5,000,000.
(xiv) Licenses, leases or subleases granted to other Persons not
interfering in any material respect with the business of the
Borrower or any of its Subsidiaries and not diminishing the
value of, or impairing any rights of the Lenders in, any
Collateral (as such term is defined in the applicable
Security Agreement.)
(xv) Other Liens securing aggregate principal Indebtedness at no
time exceeding $250,000.
6.16. Capital Expenditures. Except with respect to up to $38,000,000 of
--------------------
Capital Expenditures in respect of the Parkersburg Facility, the Borrower will
not, nor will it permit any Subsidiary to, expend, or be committed to expend, in
excess of $12,000,000 for Capital Expenditures during any one fiscal year on a
non-cumulative basis in the aggregate for the Borrower and its Subsidiaries.
59
6.17. Rental Obligations. The Borrower will not, nor will it permit any
------------------
Subsidiary to, create, incur or suffer to exist obligations for fixed amounts
payable under any lease of Property (including obligations under Capitalized
Leases but exclusive of obligations in existence on the date hereof and
extensions and renewals thereof) in excess of $3,000,000 payable during any one
of the Borrower's fiscal years on a non-cumulative basis in the aggregate for
the Borrower and its Subsidiaries.
6.18. Affiliates. The Borrower will not, and will not permit any
----------
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction, provided that the foregoing restrictions
--------
shall not apply to (a) dividends or repurchases of stock permitted under Section
6.10, (b) transactions between the Borrower and its Wholly-Owned Subsidiaries to
the extent such Wholly-Owned Subsidiaries have executed Collateral Documents as
required by Section 6.27, or (c) subject to Section 7.22, payments required to
be made pursuant to the terms of the Consulting Agreement, as from time to time
amended in compliance with Section 6.19(b) (it being understood and agreed that
▇▇▇▇▇▇▇▇ International Ltd., Inc. is an Affiliate of the Borrower).
6.19. Subordinated Indebtedness; Consulting Agreement. (a) The Borrower
-----------------------------------------------
will not, and will not permit any Subsidiary to, make any amendment or
modification to the indenture, note or other agreement evidencing or governing
any Subordinated Indebtedness (including, without limitation, the Senior
Subordinated Debt Documents), or directly or indirectly voluntarily prepay,
defease or in substance defease, purchase, redeem, retire or otherwise acquire,
any Subordinated Indebtedness (including, without limitation, the Senior
Subordinated Notes).
(b) The Borrower will not terminate or otherwise make any amendment
or modification to the Consulting Agreement at any time a Default or an
Unmatured Default exists, nor will it at any time amend or modify the Consulting
Agreement to increase the amounts payable by the Borrower thereunder by more
than 10% per annum. The Borrower shall promptly provide the Agent written notice
of any amendment or modification to the Consulting Agreement, together with a
copy of such amendment or modification.
6.20. Sale and Leaseback Transactions and other Off-Balance Sheet
-----------------------------------------------------------
Liabilities. The Borrower will not, nor will it permit any Subsidiary to, enter
-----------
into or suffer to exist any (a) Sale and Leaseback Transaction or (b) any other
transaction pursuant to which it incurs or has incurred Off-Balance Sheet
Liabilities.
6.21. Environmental Matters. The Borrower shall and shall cause each of
---------------------
its Subsidiaries to (a) at all times comply in all material respects with all
applicable Environmental Laws and (b) promptly take any and all necessary
remedial actions in response to the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials on, under or about
60
any real property owned, leased or operated by the Borrower or any of its
Subsidiaries, where the failure to do so could reasonably be expected to have a
Material Adverse Effect. In the event that the Borrower or any Subsidiary
undertakes any remedial action with respect to any Hazardous Material on, under
or about any real property, the Borrower or such Subsidiary shall conduct and
complete such remedial action in compliance with all applicable Environmental
Laws and in accordance with the policies, orders and directives of all federal,
state and local governmental authorities, except when the Borrower's or such
Subsidiary's liability for such presence, storage, use, disposal, transportation
or Release of any Hazardous Material is being contested in good faith by the
Borrower or such Subsidiary and appropriate reserves therefor have been
established. If the Agent or any Lender at any time has a reasonable basis to
believe that there may be a material violation of any Environmental Law by the
Borrower or any of its Subsidiaries, or any material liability arising
thereunder or related to a Release of Hazardous Materials on any real property
owned, leased or operated by the Borrower or any of its Subsidiaries or a
Release on real property adjacent to such real property, then the Borrower
shall, upon the request of the Agent or such Lender, provide the Agent and each
Lender with all such reports, certificates, engineering studies and other
written material or data relating thereto as the Agent or any Lender may
reasonably require.
6.22. Change in Corporate Structure; Fiscal Year. The Borrower shall not,
------------------------------------------
nor shall it permit any Subsidiary to, (a) permit any amendment or modification
to be made to its certificate or articles of incorporation or by-laws which is
materially adverse to the interests of the Lenders (provided that the Borrower
shall notify the Agent of any other amendment or modification thereto as soon as
practicable thereafter) or (b) change its fiscal year.
6.23. Inconsistent Agreements. The Borrower shall not, nor shall it
-----------------------
permit any Subsidiary to, enter into any indenture, agreement, instrument or
other arrangement which (a) directly or indirectly prohibits or restrains, or
has the effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence of the Obligations, the granting of Liens to
secure the Obligations, the amending of the Loan Documents or the ability of any
Subsidiary to (i) pay dividends or make other distributions on its Capital
Stock, (ii) make loans or advances to the Borrower or (iii) repay loans or
advances from the Borrower or (b) contains any provision which would be violated
or breached by the making of Advances, by the issuance of Facility LCs or by the
performance by the Borrower or any Subsidiary of any of its obligations under
any Loan Document provided that the foregoing restrictions in this Section 6.23
shall not apply to (x) customary non-assignment provisions entered into in the
ordinary course of business, consistent with past practices and not adversely
affecting the rights of the Agent and the Lenders in the Collateral; or (y)
Liens permitted under Section 6.15 and any documents or instruments governing
the terms of any Indebtedness or other obligations secured by any such Liens,
provided that such prohibitions or restrictions apply only to the assets subject
--------
to such Liens.
6.24. Contingent Obligations. The Borrower will not, nor will it permit
----------------------
any Subsidiary to, make or suffer to exist any Contingent Obligation (including,
without limitation, any Contingent Obligation with respect to the obligations of
a Subsidiary), except (i) by endorsement of instruments for deposit or
collection in the ordinary course of business, (ii) the
61
Reimbursement Obligations, (iii) the Guaranty, (iv) as permitted under Section
6.11, and (v) the Gourmet Guaranty.
6.25. Financial Covenants.
-------------------
6.25.1 Fixed Charge Coverage Ratio. The Borrower will not permit the
---------------------------
Fixed Charge Coverage Ratio as of the end of any fiscal quarter,
determined for the then most recently ended four fiscal quarters, to
be less than 1.25 to 1.0.
6.25.2 Total Leverage Ratio. The Borrower will not at any time
--------------------
permit its Total Leverage Ratio, to be greater than the ratio
specified in the following table for the applicable period:
Period Ratio
------ -----
From and including the date hereof
to and including the last day of the
Borrower's third fiscal quarter of its
fiscal year 2001 4.50 to 1.00
Fourth fiscal quarter of 2001 and
first fiscal quarter of 2002 4.25 to 1.00
Second fiscal quarter of 2002 4.00 to 1.00
Third fiscal quarter of 2002 3.75 to 1.00
Fourth fiscal quarter of 2002 and
first fiscal quarter of 2003 3.50 to 1.00
Second fiscal quarter of 2003 3.25 to 1.00
Third fiscal quarter of 2003 3.00 to 1.00
Fourth fiscal quarter of 2003 and
first fiscal quarter of 2004 2.75 to 1.00
All times thereafter 2.50 to 1.00
6.25.3 Senior Leverage Ratio. The Borrower will not at any time
---------------------
permit its Senior Leverage Ratio to be greater than the ratio
specified in the following table for the applicable period:
62
Period Ratio
------ -----
From and including the date hereof
to and including the last day of the
Borrowers third fiscal quarter of 2001 2.50 to 1.00
Fourth fiscal quarter of 2001 and
first fiscal quarter of 2002 2.25 to 1.00
Second fiscal quarter of 2002 2.00 to 1.00
Third fiscal quarter of 2002 1.75 to 1.00
All times thereafter 1.50 to 1.00
6.25.4 Minimum Adjusted Consolidated EBITDA. The Borrower will not
------------------------------------
permit its aggregate Adjusted Consolidated EBITDA for the period of two
fiscal quarters ending July 15, 2001 to be less than $17,500,000.
6.26. ERISA Compliance.
----------------
With respect to any Plan, neither the Borrower nor any Subsidiary
shall:
(i) engage in any "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) for which a civil
penalty pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975 of
the Code in excess of $100,000 could be imposed;
(ii) incur any "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) in excess of $100,000, whether or not waived,
or permit any Unfunded Liability to exceed $100,000;
(iii) permit the occurrence of any Termination Event which could
result in a liability to the Borrower or any other member of the Controlled
Group in excess of $100,000;
(d) be an "employer" (as such term is defined in Section 3(5) of
ERISA) required to contribute to any Multiemployer Plan or a "substantial
employer" (as such term in defined in Section 4001(a)(2) of ERISA) required to
contribute to any Multiple Employer Plan; or
(e) permit the establishment or amendment of any Plan or fail to
comply with the applicable provisions of ERISA and the Code with respect to any
Plan which could result in liability to the Borrower or any other member of the
Controlled Group which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
63
6.27. Subsidiary Guaranties and Personal Property Pledges. Effective upon
---------------------------------------------------
any Person (including Gourmet) becoming a Subsidiary, the Borrower shall cause
such Person to (i) execute and deliver to the Agent for the benefit of the
Lenders a guaranty of the Obligations pursuant to a guaranty substantially
similar to the Guaranty and (ii) pledge to the Agent for the benefit of the
Lenders a first priority security interest in all personal property owned by
such Person pursuant to a security agreement substantially similar to the
Subsidiary Security Agreement, all pursuant to documentation (including related
certificates, opinions and financing statements) reasonably acceptable to the
Agent; provided, that a foreign Subsidiary shall be required to provide the
--------
foregoing guaranty and pledge to the maximum amount which does not have adverse
tax consequences upon the Borrower or such Subsidiary and is legally
permissible. The Borrower shall promptly notify the Agent at any time at which
a Person becomes a Subsidiary.
6.28. Subsidiary Stock Pledge. Effective upon any Person becoming a
-----------------------
Subsidiary (including Gourmet), the Borrower shall pledge, or shall cause to be
pledged, all of the stock or other equity interests thereof owned by the
Borrower or any Subsidiary to the Agent for the benefit of the Lenders pursuant
to an amendment to the Borrower Security Agreement and other documentation
(including related certificates, opinions and financing statements) reasonably
acceptable to the Agent; provided, that a foreign Subsidiary shall be required
--------
to provide the foregoing pledge to the maximum amount which does not have
adverse tax consequences upon the Borrower or such Subsidiary and is legally
permissible. The Borrower shall promptly notify the Agent at any time at which
a Person becomes a Subsidiary.
6.29. Post-Closing Covenants. (a) On or before the date that is 90 days
----------------------
following the Closing Date (or such later date as may be approved by the Agent),
the Borrower shall execute and place of record a leasehold mortgage for the
leasehold property of the Borrower located in ▇▇▇▇▇▇▇, Ohio as well as obtain
such title policies in respect thereof with such coverages and endorsements as
the Agent may request and such other documents and opinions of counsel as the
Agent may require in connection with this Section 6.29, in the case of each of
the foregoing, in form and substance satisfactory to the Agent.
(b) On or before the date that is 30 days following the Closing Date (or
such later date as may be approved by the Agent), the Borrower shall cause to be
delivered to the Agent duly executed landlord waivers or bailee waivers, as
applicable, in each case in form and substance satisfactory to the Agent, with
respect to each of the locations listed in Parts B and C of Exhibit A to the
Borrower Security Agreement and Subsidiary Security Agreement.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or
in connection with this Agreement, any Credit Extension, or any certificate or
information delivered in connection with
64
this Agreement or any other Loan Document shall be materially false on the date
as of which made.
7.2. Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation within one Business Day after the same becomes due, or
nonpayment of interest upon any Loan or of any commitment fee, LC Fee or other
obligations under any of the Loan Documents within five days after the same
becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.3(a) or 6.10 through 6.29.
7.4. The breach by the Borrower (other than a breach which constitutes a
Default under another Section of this Section 7.1, 7.2 or 7.3) of any of the
terms or provisions of this Agreement which is not remedied within thirty (30)
days after written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when due any
Indebtedness aggregating in excess of $5,000,000 ("Material Indebtedness"); or
the default by the Borrower or any of its Subsidiaries in the performance
(beyond the applicable grace period with respect thereto, if any) of any term,
provision or condition contained in any agreement under which any such Material
Indebtedness was created or is governed, or any other event shall occur or
condition exist, the effect of which default or event is to cause, or to permit
the holder or holders of such Material Indebtedness to cause, such Material
Indebtedness to become due prior to its stated maturity; or any Material
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the
Borrower or any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or any of
its Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
65
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of the Borrower and its Subsidiaries which, when taken together with
all other Property of the Borrower and its Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Substantial
Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money in excess of $3,000,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall exceed
in the aggregate $3,000,000 or any Reportable Event shall occur in connection
with any Plan.
7.11. The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $500,000 or requires
payments exceeding $3,000,000 per annum.
7.12. The Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and the other members of the Controlled
Group (taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the respective plan years of
each such Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $3,000,000.
7.13. The Borrower or any of its Subsidiaries shall (i) be the subject of
any proceeding or investigation pertaining to the release by the Borrower, any
of its Subsidiaries or any other Person of any toxic or hazardous waste or
substance into the environment, or (ii) violate any Environmental Law, which, in
the case of an event described in clause (i) or clause (ii), could reasonably be
expected to have a Material Adverse Effect.
7.14. Any Change in Control shall occur.
66
7.15. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.
7.16. Nonpayment by the Borrower or any Subsidiary of any Rate Management
Obligation in excess of $1,000,000 when due or the breach by the Borrower or any
Subsidiary of any term, provision or condition contained in any Rate Management
Transaction.
7.17. Except to the extent released in writing by all of the Lenders, any
Guaranty shall fail to remain in full force or effect or any action shall be
taken to discontinue or to assert the invalidity or unenforceability of any
Guaranty, or any Guarantor shall fail to comply with any of the terms or
provisions of any Guaranty to which it is a party, or any Guarantor shall deny
that it has any further liability under any Guaranty to which it is a party, or
shall give notice to such effect.
7.18. Any Collateral Document shall for any reason fail to create a valid
and perfected first priority security interest in any collateral purported to be
covered thereby, except as permitted by the terms of any Collateral Document, or
except to the extent terminated by all of the Lenders, any Collateral Document
shall fail to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any Collateral
Document, or the Borrower shall fail to comply with any of the terms or
provisions of any Collateral Document (after giving effect to any applicable
cure period thereunder).
7.19. The representations and warranties set forth in Section 5.15 (Plan
Assets; Prohibited Transactions") shall at any time not be true and correct in
all material respects.
7.20. The Borrower or any Subsidiary shall fail to pay when due any
obligation with respect to a Letter of Credit, obligation under a Sale and
Leaseback Transaction or Contingent Obligation where such obligation exceeds
$3,000,000.
7.21. Without the consent of the Lenders, the subordination provisions of
the Senior Subordinated Debt Documents are for any reason revoked or
invalidated, or otherwise cease to be in full force and effect or the
Obligations hereunder are for any reason subordinated or do not have the
priority contemplated by this Agreement or such subordination provisions.
7.22 During the twelve month period immediately following the occurrence
of a default under Section 7.2 or a default under Section 7.3 arising out of a
breach of Section 6.25 (each a "Triggering Default"), or during any successive
twelve month period, the Borrower shall make payments in excess of $1,000,000 in
the aggregate to ▇▇▇▇▇▇▇▇ International Ltd., Inc. pursuant to the Consulting
Agreement; provided that no default under this Section 7.22 shall arise if at
the time of such payments all Triggering Defaults have been cured or waived.
67
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration; Facility LC Collateral Account. (i) If any Default
--------------------------------------------
described in Section 7.6 or 7.7 occurs with respect to the Borrower, the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the LC Issuer or any Lender and the Borrower
will be and become thereby unconditionally obligated, without any further
notice, act or demand, to pay to the Agent an amount in immediately available
funds, which funds shall be held in the Facility LC Collateral Account, equal to
the difference of (x) the amount of LC Obligations at such time, less (y) the
amount on deposit in the Facility LC Collateral Account at such time which is
free and clear of all rights and claims of third parties and has not been
applied against the Obligations (such difference, the "Collateral Shortfall
Amount"). If any other Default occurs and is continuing, the Required Lenders
(or the Agent with the consent of the Required Lenders) may by written notice to
the Borrower (a) terminate or suspend the obligations of the Lenders to make
Loans hereunder and the obligation and power of the LC Issuer to issue Facility
LCs, or declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which the Borrower hereby
expressly waives, and (b) upon written notice to the Borrower and in addition to
the continuing right to demand payment of all amounts payable under this
Agreement, make demand on the Borrower to pay, and the Borrower will, forthwith
upon such demand and without any further notice or act, pay to the Agent the
Collateral Shortfall Amount, which funds shall be deposited in the Facility LC
Collateral Account.
(ii) If at any time while any Default is continuing, the Agent determines
that the Collateral Shortfall Amount at such time is greater than zero, the
Agent may make demand on the Borrower to pay, and the Borrower will, forthwith
upon such demand and without any further notice or act, pay to the Agent the
Collateral Shortfall Amount, which funds shall be deposited in the Facility LC
Collateral Account.
(iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Borrower to the Lenders or the LC Issuer under the Loan
Documents.
(iv) At any time while any Default is continuing, neither the Borrower
nor any Person claiming on behalf of or through the Borrower shall have any
right to withdraw any of the funds held in the Facility LC Collateral Account.
After all of the Obligations have been indefeasibly paid in full and the
Aggregate Commitment has been terminated, any funds remaining in the Facility LC
Collateral Account shall be returned by the Agent to the Borrower or paid to
whomever may be legally entitled thereto at such time.
68
(v) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the LC Issuer to issue Facility LCs hereunder as a
result of any Default (other than any Default as described in Section 7.6 or 7.7
with respect to the Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII, the
----------
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
-----------------
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan, or extend the expiry
date of any Facility LC to a date after the Facility
Termination Date unless, with respect to any Facility LC, the
terms of Section 2.21.1 are satisfied or postpone any regularly
--------------
scheduled payment of principal of any Loan or forgive all or
any portion of the principal amount thereof or any
Reimbursement Obligation related thereto, or reduce the rate or
extend the time of payment of interest or fees thereon or
Reimbursement Obligations related thereto.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date or reduce the amount or
extend the payment date for, the mandatory payments required
under Section 2.2 (other than reductions associated with
increases in the Aggregate Commitment or the addition of new
tranches of Loans hereunder), or increase, without the consent
of such Lender, the Commitment of such Lender hereunder or the
commitment to issue Facility LCs, or permit the Borrower to
assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release any guarantor of any Advance or, except as provided in
the Collateral Documents, release all or substantially all of
the Collateral.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. No amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer and no amendment of any provision of this Agreement
relating to the Swing Line Lender or any Swing Line Loans shall be effective
without the written consent of the Swing Line Lender. The Agent may waive
payment of the fee required under Section 12.3.2 without obtaining the consent
of any other party to this
69
Agreement. Notwithstanding the foregoing, upon the execution and delivery of all
documentation required by Section 2.6(b) to be delivered in connection with an
increase to the Aggregate Revolving Credit Commitment, this Agreement shall be
deemed amended without further action by any party to reflect, as applicable,
the new Lenders and their new Revolving Credit Commitments and any increase in
the Revolving Credit Commitment of any existing Lender.
8.3. Preservation of Rights. No delay or omission of the Lenders, the LC
----------------------
Issuer or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Credit Extension notwithstanding the existence of a
Default or the inability of the Borrower to satisfy the conditions precedent to
such Credit Extension shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent, the LC
Issuer and the Lenders until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and warranties of
---------------------------
the Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to the
-----------------------
contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for convenience
--------
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement and
----------------
understanding among the Borrower, the Agent, the LC Issuer and the Lenders and
supersede all prior agreements and understandings among the Borrower, the Agent,
the LC Issuer and the Lenders relating to the subject matter thereof other than
the fee letter described in Section 10.13.
9.5. Several Obligations; Benefits of this Agreement. The respective
-----------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any
70
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns, provided,
--------
however, that the parties hereto expressly agree that the Arranger shall enjoy
-------
the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent
specifically set forth therein and shall have the right to enforce such
provisions on its own behalf and in its own name to the same extent as if it
were a party to this Agreement.
9.6. Expenses; Indemnification. (i) The Borrower shall reimburse the
-------------------------
Agent and the Arranger for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the Agent
and the Arranger, which attorneys may be employees of the Agent) paid or
incurred by the Agent or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, review, amendment, modification,
and administration of the Loan Documents and the monitoring of the Collateral.
Without limiting the foregoing, the Borrower agrees to pay all of the Agent's
costs, fees and expenses (including, without limitation, travel expenses and the
cost of any allocated fees of internal auditors) incurred in connection with
such inspections and audits of the Collateral. The Borrower also agrees to
reimburse the Agent, the Arranger, the LC Issuer and the Lenders for any costs,
internal charges and out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent, the Arranger, the LC Issuer and the Lenders,
which attorneys may be employees of the Agent, the Arranger, the LC Issuer or
the Lenders) paid or incurred by the Agent, the Arranger, the LC Issuer or any
Lender in connection with the collection and enforcement of the Loan Documents.
Expenses being reimbursed by the Borrower under this Section include, without
limitation, costs and expenses incurred in connection with the Reports described
in the following sentence. The Borrower acknowledges that from time to time
Bank One may prepare and may distribute to the Lenders (but shall have no
obligation or duty to prepare or to distribute to the Lenders) certain audit
reports (the "Reports") pertaining to the Borrower's assets for internal use by
Bank One from information furnished to it by or on behalf of the Borrower, after
Bank One has exercised its rights of inspection pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify the Agent, the
Arranger, the LC Issuer and each Lender, its directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent, the Arranger, the LC Issuer or
any Lender is a party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Credit Extension hereunder except to the
extent that they are determined in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the party seeking indemnification. The obligations of the Borrower
under this Section 9.6 shall survive the termination of this Agreement.
(iii) The Borrower shall indemnify, pay and hold the Agent and each Lender
harmless from and against any and all losses, costs (including, without
limitation, court costs and
71
attorneys' fees), liabilities, injuries, expenses, claims and damages whatsoever
incurred or suffered by or asserted against the Agent or such Lender by reason
of any violation of any applicable Environmental Law for which the Borrower or
any of its Subsidiaries is liable or which is related to any real estate owned,
leased or operated by the Borrower or any of its Subsidiaries, or by reason of
the imposition of any governmental lien for the recovery of environmental
cleanup or response costs expended by reason of any such violation, or by reason
of any breach of any representation, warranty or affirmative or negative
covenant of this Agreement, including, without limitation, by reason of any
matter disclosed in Schedule 3 hereto; provided, however, that, to the extent
-------- -------
that the Borrower or any of its Subsidiaries is strictly liable under any such
statute, order or regulation, the Borrower's obligation to the Agent and each
Lender under this indemnity shall likewise be without regard to fault on the
part of the Borrower or any of its Subsidiaries with respect to the violation of
law which results in liability to the Agent or any Lender. The provisions of and
undertakings and indemnification set out in this Section 9.7(iii) shall survive
the termination of this Agreement and the payment and satisfaction of the
Obligations and shall continue to be the liability, obligation and
indemnification of the Borrower, binding upon the Borrower.
(iv) A Person seeking to be indemnified under clause (ii) or clause (iii)
of this Section 9.6 shall use reasonable efforts to notify the Borrower within
ten Business Days following such Person's receipt of written notice of the
commencement of any action or proceeding giving rise to a claim for
indemnification hereunder; provided, however, that failure to give such notice
-----------------
shall neither give rise to any liability on the part of such Person nor diminish
such Person's entitlement to indemnification hereunder.
9.7. Numbers of Documents. All statements, notices, closing documents,
--------------------
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
----------
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Borrower and all its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Borrower's
audited financial statements.
9.9. Severability of Provisions. Any provision in any Loan Document that
--------------------------
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on
-----------------------
the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent, the Arranger,
the LC Issuer nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent, the Arranger, the LC Issuer nor
72
any Lender undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations. The Borrower agrees that neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have liability to the Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined in a final non-
appealable judgment by a court of competent jurisdiction that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger, the LC Issuer nor any
Lender shall have any liability with respect to, and the Borrower hereby waives,
releases and agrees not to ▇▇▇ for, any special, indirect or consequential
damages suffered by the Borrower in connection with, arising out of, or in any
way related to the Loan Documents or the transactions contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
---------------
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.4.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
-----------
on or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Credit
Extensions provided for herein.
ARTICLE X
THE AGENT
---------
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
-----------------------------------
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting
as an
73
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under the
------
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
----------------
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
-------------------------------------------
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any
guarantor of any of the Obligations or of any of the Borrower's or any such
guarantor's respective Subsidiaries. The Agent shall have no duty to disclose
to the Lenders information that is not required to be furnished by the Borrower
to the Agent at such time, but is voluntarily furnished by the Borrower to the
Agent (either in its capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases be
---------------------------------
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata
74
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of its
--------------------------------
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
------------------------------
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
-----------------------------------------
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
--------
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(vii) shall, notwithstanding the provisions of this
Section 10.8, be paid by the relevant Lender in accordance with the provisions
thereof. The obligations of the Lenders under this Section 10.8 shall survive
payment of the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrower referring to
this Agreement describing such
75
Default or Unmatured Default and stating that such notice is a "notice of
default". In the event that the Agent receives such a notice, the Agent shall
give prompt notice thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the Agent
------------------
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent
and its Affiliates may accept deposits from, lend money to, and generally engage
in any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person. The Agent, in its
individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent, the Arranger or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrower and the Lenders (and with the consent of the Borrower so
long as no Default or Unmatured Default exists, which consent shall not be
unreasonably withheld), a successor Agent. If no successor Agent shall have
been so appointed by the Required Lenders within thirty days after the resigning
Agent's giving notice of its intention to resign, then the resigning Agent may
appoint, on behalf of the Borrower and the Lenders (and with the consent of the
Borrower so long as no Default or Unmatured Default exists, which consent shall
not be unreasonably withheld), a successor Agent. Notwithstanding the previous
sentence, the Agent may at any time without the consent of the Borrower or any
Lender, appoint any of its Affiliates which is a commercial bank as a successor
Agent hereunder. If the Agent has resigned or been removed and no successor
Agent has been appointed, the Lenders may perform all the duties of the Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Agent shall be deemed to be appointed hereunder until
such successor Agent has accepted the appointment. Any such successor Agent
shall be a commercial bank having capital and retained earnings of at least
$100,000,000. Upon the acceptance of any appointment as Agent hereunder
76
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning or
removed Agent. Upon the effectiveness of the resignation or removal of the
Agent, the resigning or removed Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents. After the effectiveness of
the resignation or removal of an Agent, the provisions of this Article X shall
continue in effect for the benefit of such Agent in respect of any actions taken
or omitted to be taken by it while it was acting as the Agent hereunder and
under the other Loan Documents. In the event that there is a successor to the
Agent by merger, or the Agent assigns its duties and obligations to an Affiliate
pursuant to this Section 10.12, then the term "Prime Rate" as used in this
Agreement shall mean the prime rate, base rate or other analogous rate of the
new Agent.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the Agent
-----------------------
and the Arranger, for their respective accounts, the fees agreed to by the
Borrower, the Agent and the Arranger pursuant to that certain letter agreement
dated November 29, 2000 or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree that
------------------------
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers,
agents and employees) which performs duties in connection with this Agreement
shall be entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Execution of Collateral Documents. The Lenders hereby empower and
---------------------------------
authorize the Agent to execute and deliver to the Borrower on their behalf the
Borrower Security Agreement and the Subsidiary Security Agreement and all
related financing statements and any financing statements, agreements, documents
or instruments as shall be necessary or appropriate to effect the purposes of
the Borrower Security Agreement and the Subsidiary Security Agreement.
10.16. Collateral Releases. The Lenders hereby empower and authorize the
-------------------
Agent to execute and deliver to the Borrower on their behalf any agreements,
documents or instruments as shall be necessary or appropriate to effect any
releases of Collateral which shall be permitted by the terms hereof or of any
other Loan Document or which shall otherwise have been approved by the Required
Lenders (or, if required by the terms of Section 8.2, all of the Lenders) in
writing.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. Setoff. In addition to, and without limitation of, any rights of
------
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs and is continuing, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time held or owing by
any Lender or any Affiliate of any Lender to or for the credit or account of the
Borrower may be offset and applied toward the payment of the Obligations owing
to such
77
Lender, whether or not the Obligations, or any part hereof, shall then be due,
and written notice of such setoff shall thereafter be provided to the Borrower
within a reasonable time.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
----------------
has payment made to it upon its Term Loan or Outstanding Revolving Credit
Exposure (other than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5)
in a greater proportion than that received by any other Lender, such Lender
agrees, promptly upon demand, to purchase a portion of Term Loan and the
Aggregate Outstanding Revolving Credit Exposure held by the other Lenders so
that after such purchase each Lender will hold its Pro Rata Share of the Term
Loan and Aggregate Outstanding Revolving Credit Exposure. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their respective Pro Rata
Shares of the Term Loan and Aggregate Outstanding Revolving Credit Exposure. In
case any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1. Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. The parties to this Agreement acknowledge that clause (ii)
of this Section 12.1 relates only to absolute assignments and does not prohibit
assignments creating security interests, including, without limitation, (x) any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a
Lender which is a fund, any pledge or assignment of all or any portion of its
rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
-----------------
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided, however, that the
-----------------
Agent may in its discretion (but shall not be required to) follow instructions
from the Person which made any Loan or which holds any Note to direct payments
relating to such Loan or Note to another Person. Any assignee of the rights to
any Loan or any Note agrees by acceptance of such assignment to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder or assignee of the rights to such Loan.
78
12.2. Participations.
--------------
12.2.1 Permitted Participants; Effect. Any Lender may, in the
------------------------------
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Term Loan or Outstanding Revolving Credit
Exposure of such Lender, any Note held by such Lender, any Commitment of
such Lender or any other interest of such Lender under the Loan Documents.
In the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall
remain the owner of its Term Loan and Outstanding Revolving Credit Exposure
and the holder of any Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right to
-------------
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Credit Extension
or Commitment in which such Participant has an interest which would require
consent of all of the Lenders pursuant to the terms of Section 8.2 or of
any other Loan Document.
12.2.3 Benefit of Setoff. The Borrower agrees that each
-----------------
Participant shall be deemed to have the right of setoff provided in Section
11.1 in respect of its participating interest in amounts owing under the
Loan Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of setoff provided in
--------
Section 11.1 with respect to the amount of participating interests sold to
each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of setoff provided in Section
11.1, agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance
with Section 11.2 as if each Participant were a Lender.
12.3. Assignments.
-----------
12.3.1 Permitted Assignments. Any Lender may, in the ordinary
---------------------
course of its business and in accordance with applicable law, at any time
assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents. Such
assignment shall be substantially in the form of Exhibit B or in such other
form as may be agreed to by the parties thereto. The consent of the
Borrower, the Agent and the LC Issuer shall be required prior to an
assignment becoming effective with respect to a Purchaser which is not a
Lender or an Affiliate thereof; provided, however,
-----------------
79
that if a Default has occurred and is continuing, the consent of the
Borrower shall not be required. Such consent shall not be unreasonably
withheld or delayed. Each such assignment with respect to a Purchaser which
is not a Lender or an Affiliate thereof shall (unless each of the Borrower
and the Agent otherwise consents) be in an amount not less than the lesser
of (i) $5,000,000 or (ii) the remaining amount of the assigning Lender's
Commitment (calculated as at the date of such assignment) or outstanding
Loans (if the applicable Commitment has been terminated).
12.3.2 Effect; Effective Date. Upon (i) delivery to the Agent of a
----------------------
notice of assignment, substantially in the form attached as Exhibit I to
Exhibit B (a "Notice of Assignment"), together with any consents required
by Section 12.3.1, and (ii) payment of a $3,500 fee to the Agent for
processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Commitment
and Outstanding Revolving Credit Exposure under the applicable assignment
agreement are "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be
"plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the
Lenders and shall have all the rights and obligations of a Lender under the
Loan Documents, to the same extent as if it were an original party hereto,
and no further consent or action by the Borrower, the Lenders or the Agent
shall be required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Outstanding Revolving Credit
Exposure assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2, the transferor
Lender, the Agent and the Borrower shall, if the transferor Lender or the
Purchaser desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their respective Commitments, as adjusted pursuant to
such assignment.
12.4. Dissemination of Information. The Borrower authorizes each Lender
----------------------------
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
--------
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is transferred
-------------
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 3.5(iv).
80
ARTICLE XIII
NOTICES
-------
13.1. Notices. Except as otherwise permitted by Section 2.14 with respect
-------
to Borrowing Notices, all notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth below its signature hereto or (z) in the
case of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and the Borrower in
accordance with the provisions of this Section 13.1. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Agent under Article II shall not
be effective until received.
13.2. Change of Address. The Borrower, the Agent and any Lender may each
-----------------
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIV
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent, the LC Issuer
and the Lenders and each party has notified the Agent by facsimile transmission
or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
------------------------------------------------------------
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
81
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
-----------------------
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY
AFFILIATE OF THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE LC ISSUER AND
--------------------
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
82
IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer, the Swing
Line Lender and the Agent have executed this Agreement as of the date first
above written.
LUIGINO'S, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title:
--------------------------------
(address)
--------------------------------
--------------------------------
Attention:
----------------------------
Telephone: ( )
FAX: ( )
BANK ONE, NA,
Individually and as Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
--------------------------------
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
U. S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
--------------------------------
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Telephone: (▇▇▇-▇▇▇-▇▇▇▇)
FAX: (▇▇▇-▇▇▇-▇▇▇▇)
83
COMMITMENT SCHEDULE
Revolving Loan Term Loan Total
Lender Commitment Commitment Commitment
------ ---------- ---------- ----------
Bank One, NA $30,000,000 $45,000,000 $ 75,000,000
U.S. Bank
National Association $10,000,000 $15,000,000 $ 25,000,000
----------- ----------- ------------
$40,000,000 $60,000,000 $100,000,000
=========== =========== ============
84
PRICING SCHEDULE
================================================================================================================
Applicable Margin Level I Status Level II Status Level III Status Level IV Status Level V Status
================================================================================================================
Eurodollar Rate 2.25% 2.50% 2.75% 3.00% 3.25%
----------------------------------------------------------------------------------------------------------------
Floating Rate 1.00% 1.25% 1.50% 1.75% 2.00%
================================================================================================================
================================================================================================================
Applicable Fee Rate Level I Status Level II Status Level III Status Level IV Status Level V Status
================================================================================================================
Commitment Fee 0.375% 0.375% 0.500% 0.500% 0.500%
================================================================================================================
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"Financials" means the annual or quarterly financial statements of the
Borrower delivered pursuant to Section 6.1(i) or (ii).
"Level I Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, the Leverage
Ratio is less than 2.50 to 1.00.
"Level II Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status and (ii) the Leverage Ratio is
less than 3.00 to 1.00.
"Level III Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Leverage Ratio is less than 3.50 to 1.00.
"Level IV Status" exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I, Level II or Level III Status, and (ii)
the Leverage Ratio is less than 4.00 to 1.00.
"Level V Status" exists at any date if the Borrower has not qualified for
Level I Status, Level II Status, Level III Status or Level IV Status.
"Status" means either Level I Status, Level II Status, Level III Status,
Level IV Status or Level V Status.
85
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's Status as reflected
in the then most recent Financials. Adjustments, if any, to the Applicable
Margin or Applicable Fee Rate shall be effective five Business Days after the
Agent has received the applicable Financials. If the Borrower fails to deliver
the Financials to the Agent at the time required pursuant to Section 6.1, then
the Applicable Margin and Applicable Fee Rate shall be the highest Applicable
Margin and Applicable Fee Rate set forth in the foregoing table until five days
after such Financials are so delivered. Notwithstanding anything herein to the
contrary, the Applicable Margin with respect to Eurodollar Loans shall be fixed
at 3.25% and the Applicable Rate with respect to Floating Rate Loans shall be
fixed at 2.00% in each case until delivery of the Borrower's October 7, 2001
financial statements pursuant to Section 6.1, after which time the Applicable
Margin shall be adjusted as contemplated by the first sentence hereof.
86