EXHIBIT 4.5(a)
Execution Counterpart
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364-DAY CREDIT AGREEMENT
dated as of
July 15, 1997
among
SMITHFIELD FOODS, INC.,
THE SUBSIDIARY GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
-------------------------
CHASE SECURITIES INC.,
as Arranger
and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH,
as Co-Agent
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Exhibit G -- Intercreditor Agreement
364-DAY CREDIT AGREEMENT dated as of July 15, 1997, among
SMITHFIELD FOODS, INC., a Delaware corporation (the "Borrower"), each of the
Subsidiaries of the Borrower identified under the caption "SUBSIDIARY
GUARANTORS" on the signature pages hereto or that, pursuant to Section 5.09
hereof, shall become a "Subsidiary Guarantor" hereunder (individually, a
"Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors" and,
together with the Borrower, the "Obligors"), each of the lenders that is a party
hereto identified under the caption "LENDERS" on Schedule 2.01 hereto or that,
pursuant to Section 10.04 hereof, shall become a "Lender" hereunder
(individually, a "Lender" and, collectively, the "Lenders") and THE CHASE
MANHATTAN BANK, in its capacity as administrative agent for the Lenders
hereunder (the "Administrative Agent").
The Borrower and its subsidiaries are engaged as an integrated
group in the business of pork production, hog farming, pork processing and
manufacturing spices and chemicals, and in related businesses, and in furnishing
the required supplies, services, equipment, credit and other facilities for such
integrated operation. The integrated operation requires financing on such a
basis that credit supplied to the Borrower be made available from time to time
to the Subsidiary Guarantors, as required for the continued successful operation
of the Obligors, separately, and the integrated operation as a whole. In that
connection, the Obligors have requested that the Lenders make loans (to be made
available by the Borrower directly or indirectly to the Subsidiary Guarantors
and other of its Subsidiaries in the circumstances specified herein) in an
aggregate principal or face amount not exceeding $50,000,000 to refinance
certain existing indebtedness of the Obligors and to finance the working capital
needs and for other general corporate purposes of the Borrower and its
subsidiaries in the ordinary course of business.
To induce the Lenders to extend such credit, the Obligors, the
Lenders and the Administrative Agent propose to enter into this Agreement
pursuant to which the Lenders will make loans to the Borrower and each
Subsidiary Guarantor will guarantee the credit so extended to the Borrower and
each of the Obligors will agree to execute and deliver a security agreement
providing for security interests and liens to be granted by the Obligors on
certain of their respective properties as collateral security for the
obligations of the Obligors to the Lenders and the Administrative Agent
hereunder and, in the case of each Obligor (other than the Borrower) as
collateral security for the payment of certain of the Intercompany Notes (as
defined below). Each of the Obligors expects to derive benefit, directly or
indirectly, from the credit so extended to the Borrower and each other
Subsidiary Guarantor, both in its separate capacity and as a member of the
integrated group, since the successful operation of each of the Obligors is
dependent on the continued successful performance of the functions of the
integrated group as a whole.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this
Agreement, the following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Acquisition" means any transaction, or any series of related
transactions, consummated after the date of this Agreement, by which the
Borrower and/or any of its Subsidiaries (a) acquires any going business or all
or substantially all of the assets of any Person, whether through purchase of
assets, merger or otherwise, (b) directly or indirectly acquires control of at
least a majority (in number of votes) of the securities of a corporation that
have ordinary voting power for the election of directors or (c) directly or
indirectly acquires control of at least a majority of the partner, member or
other ownership interests of any Person that is not a corporation.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Aggregate Consideration" means, in connection with any
Acquisition, an amount equal to (a) the aggregate consideration, in whatever
form (including, without limitation, cash payments, the principal amount of
promissory notes and Indebtedness assumed, the aggregate amounts payable to
acquire, extend and exercise any option, the aggregate amount payable under
non-competition agreements and management agreements, and the fair market value
of other property delivered) paid, delivered or assumed by the Borrower and its
Subsidiaries for such Acquisition minus (b) the amount, if any, of any increase
in the Consolidated Borrowing Base resulting from such Acquisition on the date
of the Consummation thereof.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the Total Commitment represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Total Commitment most recently in effect, giving
effect to any assignments.
"Applicable Rate" means, with respect to any ABR Loan,
Eurodollar Loan or Federal Funds Loan, or with respect to the Commitment Fees
payable hereunder, for each Rate Period (as defined below), the respective rate
per annum indicated below for Loans of such Type or Commitment Fees, as
applicable, opposite the applicable Interest Coverage Ratio (as defined below)
indicated below for such Rate Period:
Interest Coverage Applicable Applicable Rate
Ratio Rate for for Eurodollar
ABR Loans Loans and Commitment
Federal Funds Fees
Loans
----------------- ---------- ---------------- ----------
Greater than or -0- 0.750% 0.100%
equal to 5.0 to 1
("Tier I")
Less than 5.0 to 1 -0- 0.875% 0.110%
and greater than or
equal to 4.5 to 1
("Tier II")
Less than 4.5 to 1 -0- 1.000% 0.125%
and greater than or
equal to 4.0 to 1
("Tier III")
Less than 4.0 to 1 0.125% 1.125% 0.140%
and greater than or
equal to 3.5 to 1
("Tier IV")
Less than 3.5 to 1 0.250% 1.250% 0.150%
("Tier V")
For purposes hereof, (i) a "Rate Period" means (x) initially,
the period commencing on the date hereof to but not including the first Rate
Reset Date (as defined below) thereafter and (y) thereafter, the period
commencing on a Rate Reset Date to but not including the immediately following
Rate Reset Date; (ii) a "Rate Reset Date" means, with respect to any fiscal
quarter or fiscal year, the earlier of (x) the date on which the Borrower
delivers the certificate referred to in Section 5.01(c) (a "Compliance
Certificate") in respect of such fiscal quarter or fiscal year, as the case may
be, and (y) the date on which the Borrower is required to have delivered the
financial statements under Section 5.01(a) or (b) in respect of such fiscal
quarter or fiscal year, as the case may be (provided that the first Rate Reset
Date shall be determined by reference to the fiscal quarter of the Borrower
ending on October 30, 1997); and (iii) "Interest Coverage Ratio" means, for any
Rate Period, the ratio of Consolidated EBITDA for the period of four fiscal
quarters of the Borrower ending on or most recently prior to the first day of
such Rate Period to Consolidated Interest Expense for such period of four
consecutive fiscal quarters.
Anything in this Agreement to the contrary notwithstanding,
but subject to Section 2.12(d), the Applicable Rate shall be (i) the applicable
rate provided for in Tier V in the table set forth above in this definition (x)
during any period when an Event of Default shall have occurred and be
continuing, or (y) if the applicable Compliance Certificate shall not be
delivered within the time that the applicable financial statements are required
to be delivered by Section 5.01(a) or (b), as the case may be (but only, in the
case of this clause (y), with respect to the portion of such Rate Period prior
to the delivery of such Compliance Certificate) and (ii) subject to the
preceding clause (i), the applicable rate provided for in Tier III in the table
set forth above in this definition during the first Rate Period.
"Arranger" means Chase Securities Inc.
"Assessment Rate" means, for any day, the annual
assessment rate in effect on such day that is payable by a member of the Bank
Insurance Fund classified as "well-capitalized" and within supervisory subgroup
"B" (or a comparable successor risk classification) within the meaning of 12
C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance
Corporation for insurance by such Corporation of time deposits made in dollars
at the offices of such member in the United States; provided that if, as a
result of any change in any law, rule or regulation, it is no longer possible to
determine the Assessment Rate as aforesaid, then the Assessment Rate shall be
such annual rate as shall be determined by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Base CD Rate" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrowing" means Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
"Borrowing Base" means, at any time for any First Tier
Subsidiary, an amount equal to (a) 75% of the result obtained from the following
calculation: (i) the aggregate amount of Eligible Inventory (valued at the lower
of (x) cost, on a first- in-first-out basis or (y) fair market value) of such
First Tier Subsidiary and its subsidiaries that are Subsidiary Guarantors,
determined on a consolidated basis, plus (ii) the aggregate amount of Eligible
Receivables of such First Tier Subsidiary and its subsidiaries that are
Subsidiary Guarantors at such time, in each case as reflected in the Borrowing
Base Certificate then most recently received by the Administrative Agent
hereunder minus (iii) reserves maintained by such First Tier Subsidiary and its
subsidiaries that are Subsidiary Guarantors in respect of Eligible Receivables
relating to discounts, advertising, allowances and similar items minus (b) the
aggregate amount of outstanding checks for the purchase of Farm Products (as
defined in the Security Agreement) drawn by such First Tier Subsidiary and its
Subsidiaries that have not cleared.
"Borrowing Base Certificate" means a certificate substantially
in the form of Exhibit B hereto signed by a Financial Officer.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Expenditures" means, with respect to any Person, for
any period, all expenditures made and liabilities incurred during such period
for the acquisition of assets (including any replacement in the ordinary course
of business without reduction for sales, retirements or replacements) which are
not, in accordance with GAAP, treated as expense items for such Person in the
year made or incurred or as a prepaid expense applicable to a future year or
years, and shall include (i) all Capital Lease Obligations and (ii) an amount
(not less than zero) equal to any net increase from the beginning of such period
through the end of such period in the aggregate outstanding principal amount of
advances to hog production operations (other than Subsidiaries) in which the
Borrower or any of its Subsidiaries has invested as a joint venturer or partner.
The amount of Capital Expenditures in any period shall be calculated without
duplication in accordance with GAAP. Notwithstanding the foregoing, with respect
to the acquisition of replacement sows by the Borrower or any of its
Subsidiaries in the ordinary course of business, the amount included in Capital
Expenditures shall be the acquisition cost of such sows, reduced by the proceeds
received by the Borrower or any of its Subsidiaries from the sale of the
replaced sows.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Flow" means, for any period, the sum, for the Borrower
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) Consolidated Net Income plus (b)
depreciation and amortization (to the extent deducted in determining
Consolidated Net Income) for such period.
"Change in Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof),
of shares representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower; (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Borrower by Persons who were neither (i) nominated by the board
of directors of the Borrower nor (ii) appointed by directors so nominated; or
(c) the acquisition of direct or indirect Control of the Borrower by any Person
or group.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.14(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Chase" means The Chase Manhattan Bank.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral Agent" means Chase, as collateral agent
under the Security Agreement.
"Commitment" means, with respect to each Lender, the
commitment of such Lender to make Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Credit Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.04. The initial amount
of each Lender's Commitment is set forth on Schedule 2.01, or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Commitment, as applicable. The initial aggregate amount of the Total
Commitment is $50,000,000.
"Commitment Fee" means the fees payable at the Applicable Rate
pursuant to Section 2.11(a).
"Consolidated Borrowing Base" means, at any time, the
aggregate amount of the Borrowing Bases at such time of the First Tier
Subsidiaries that are Subsidiary Guarantors.
"Consolidated Current Ratio" means, on any date, the ratio of
(i) the consolidated current assets of the Borrower and its Subsidiaries on such
date to (ii) the sum on such date (without duplication) of the consolidated
current liabilities of the Borrower and its Subsidiaries plus the aggregate
outstanding principal amount of the Loans and Pari Passu Debt plus the aggregate
principal amount of Indebtedness of the Borrower and its Subsidiaries that would
be characterized as current liabilities but for the existence of the Commitments
hereunder or any commitments of lenders to make Pari Passu Debt available to the
Borrower or any of its Subsidiaries.
"Consolidated EBITDA" means, for any period, an amount equal
to (a) the sum for such period of Consolidated Net Income and, to the extent
subtracted in determining such Consolidate Net Income, provisions for (i) taxes
based on income, (ii) Consolidated Interest Expense and (iii) depreciation and
amortization expense minus (b) any items of gain (or plus any items of loss)
which were included in determining such Consolidated Net Income and were (i) not
realized in the ordinary course of business or (ii) the result of any sale of
assets.
"Consolidated Fixed Charges" means, on any date, the sum
(without duplication) of (i) the aggregate amount of all Capital Expenditures
and the Aggregate Consideration for all Acquisitions by the Borrower and its
Subsidiaries during the preceding four quarters plus (ii) scheduled principal
payments on Indebtedness of the Borrower and its Subsidiaries due within the
succeeding four quarters (including any principal payments to be made as a
result of mandatory reductions under revolving credit facilities, but excluding
principal payments at maturity of Pari Passu Debt) plus (iii) the gross interest
accrued on such Indebtedness during the preceding four quarters plus (iv) the
aggregate amount of any dividends paid or other distributions made during the
preceding four quarters.
"Consolidated Intangible Assets" means, on any date, the
aggregate amount of Intangible Assets of the Borrower and its Subsidiaries,
determined on a consolidated basis at such time.
"Consolidated Interest Expense" means, for any period, the
consolidated interest expense of the Borrower and its Subsidiaries (whether cash
or non-cash interest expense or deferred or accrued interest expense and the
interest portion of all Capital Lease Obligations during such period).
"Consolidated Net Income" means, for any period, the net
income (or deficit) of the Borrower and its Subsidiaries; provided, however,
that there shall be excluded from Consolidated Net Income (i) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Borrower or such Person's assets are
acquired by the Borrower, (ii) the income (or deficit) of any Person (other than
a consolidated Subsidiary) in which the Borrower has an ownership interest,
except to the extent that any such income has been actually received by the
Borrower in the form of dividends or similar distributions, (iii) the
undistributed earnings of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions of such Subsidiary is restricted
and (iv) any income or gain resulting from any write-up or revaluation of the
assets of the Borrower or its Subsidiaries.
"Consolidated Shareholders' Equity" means, on any date, the
aggregate amount of shareholders' equity of the Borrower and its Subsidiaries on
such date, determined on a consolidated basis.
"Consolidated Tangible Net Worth" means, on any date, the
excess of Consolidated Shareholders' Equity over Consolidated Intangible Assets
on such date.
"Consolidated Total Liabilities" means, on any date, the
aggregate amount at which all liabilities of the Borrower and its Subsidiaries
(including, without limitation, (a) all Guarantees of Indebtedness by such
Persons and (b) all amounts attributable to Mandatorily Redeemable Stock of the
Borrower and its Subsidiaries to the extent that such Mandatorily Redeemable
Stock is redeemable within one year of such date) would be shown on a
consolidated balance sheet of such Persons at such time.
"Consolidated Working Capital" means, on any date, the excess
of (i) the consolidated current assets of the Borrower and its Subsidiaries on
such date over (ii) the sum on such date (without duplication) of the
consolidated current liabilities of the Borrower and its Subsidiaries plus the
aggregate outstanding principal amount of the Loans and Pari Passu Debt plus the
aggregate principal amount of any commercial paper or other short-term
Indebtedness of the Borrower and its Subsidiaries that would be characterized as
current liabilities but for the existence of the Commitments hereunder or any
commitments of lenders to make Pari Passu Debt available to the Borrower or any
of its Subsidiaries.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Credit Exposure" means, with respect to any Lender, at any
time, the aggregate outstanding principal amount of such Lender's Loans at such
time.
"Debt Issuance" means any issuance or incurrence by the
Borrower or any of its Subsidiaries of any Indebtedness.
"Debt Service" means, for any period, the sum, for the
Borrower and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all regularly
scheduled payments or prepayments of principal of Indebtedness made during such
period plus (b) all Interest Expense for such period.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 3.06.
"Disposition" means any sale, assignment, transfer or other
disposition of any property (whether now owned or hereafter acquired) by the
Borrower or any of its Subsidiaries to any other Person excluding any sale,
assignment, transfer or other disposition of any property sold or disposed of in
the ordinary course of business or the revenue from which would otherwise be
included in the calculation of Cash Flow.
"dollars" or "$" refers to lawful money of the United
States of America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
10.02).
"Eligible Inventory" means, as at any date with respect
to any Person, all Inventory (i) that is owned by (and in the possession or
under the control of) such Person as at such date, (ii) that is located in a
jurisdiction in the United States of America, (iii) as to which (before the
Security Termination Date) appropriate Uniform Commercial Code financing
statements have been filed naming such Person as "debtor" and the Collateral
Agent as "secured party", and over which (before the Security Termination Date)
the Collateral Agent has a perfected security interest subject to no prior or
equal Lien (other than the pari passu security interest securing the Pari Passu
Debt), subject to Section 10.13, (iv) that meets all standards imposed by any
governmental agency or department or division thereof having regulatory
authority over such inventory, its use or sale, (v) for which such Person has
made full and final payment and (vi) that is currently usable in the
manufacturing process or saleable in the normal course of such Person's business
without any notice to, or consent of, any governmental agency or department or
division thereof (excluding however, except to the extent that the Required
Lenders otherwise agree with respect to any specific customer or third-party
processor, any such Inventory that has been shipped to a customer of such
Person, including third-party processors, even if on a consignment or "sale or
return" basis, and excluding repair and replacement parts for machinery and
equipment). Notwithstanding anything in clause (vi) of the foregoing sentence to
the contrary (but subject to clauses (i) through (v) of the foregoing sentence),
Eligible Inventory shall include but not be limited to all ▇▇▇▇▇▇▇, gilts,
boars, sows, feeder pigs, suckling pigs, nursery pigs and commercial sows and
boars, multiplier hogs, nucleus hogs and other hogs (collectively, "Hogs") at
the time of determination owned and being raised at facilities owned by such
Person or at facilities subject to an exclusive contract with such Person (i.e.,
the operator of such facility has no similar contract with any other Person) for
the feeding and raising of Hogs.
"Eligible Receivables" means, as at any date with respect to
any Person, the aggregate amount of all accounts (as defined in the Uniform
Commercial Code) of such Person arising from the sale by such Person of
Inventory in the ordinary course of its business and (before the Security
Termination Date) over which the Collateral Agent has a perfected security
interest subject to no prior or equal Lien (other than the pari passu security
interest securing the Pari Passu Debt), subject to Section 10.13, other than the
following (determined without duplication):
(a) any account not payable in Dollars,
(b) any account that is not paid within 60 days (subject to
the last sentence of this definition of "Eligible Receivables") after
the date of the invoice for the related inventory,
(c) any account owing from a subsidiary or Affiliate
of such Person,
(d) any account (other than an LC-Backed Receivable) owing
from an account debtor whose principal place of business is located
outside of the United States of America, provided that the aggregate
amount of accounts that are not excluded from the definition of
"Eligible Receivables" pursuant to this clause (d) by virtue of their
constituting LC-Backed Receivables (other than LC-Backed Receivables
the related letter of credit for which has been delivered to the
Collateral Agent in pledge under the Security Agreement) may not exceed
10% of the Consolidated Borrowing Base,
(e) any account owing from an account debtor that is
insolvent or the subject of a bankruptcy case,
(f) any account that is more than 28 days (subject to the last
sentence of this definition of "Eligible Receivables") past due,
(g) all accounts of any account debtor if more than 20% of the
aggregate amount of the accounts owing from such account debtor are
more than 28 days (subject to the last sentence of this definition of
"Eligible Receivables") past due,
(h) all accounts owing from any account debtor if the accounts
owing from such account debtor and its Affiliates at the time exceed
10% of all accounts then payable to the Obligors,
(i) any account as to which there is any unresolved dispute
with the respective account debtor (but only to the extent of the
amount thereof in dispute),
(j) any account evidenced by an instrument (as defined
in the Uniform Commercial Code) not in the possession of the
Collateral Agent and containing all necessary endorsements,
(k) any account representing an obligation for goods sold on
consignment, approval or a sale-or-return basis or subject to any other
repurchase, return or offset arrangement,
(l) any amount as to which there is an offsetting liability
from the Borrower, any Subsidiary or any Affiliate of the Borrower (but
only to the extent of the amount of such offsetting liability), and
(m) all amounts reserved by any Subsidiary or Affiliate of the
Borrower related to advertising and promotional programs for the
respective account debtor (excluding general promotional reserves that
are not reserved on a specific account basis).
In recognition of the fact that, on the date of this Agreement, the accounting
systems of certain Subsidiaries are unable to track the number of days specified
in clauses (b), (f) and (g) above, such numbers of days for each such Subsidiary
shall be deemed for purposes hereof to be the number of days that the accounting
system of such Subsidiary can track that is closest to such specified number of
days, provided that (i) if such specified number of days is exactly equidistant
from two numbers of days that can be so tracked, such specified number of days
shall be deemed to be the lower of such two numbers, (ii) if the closest such
number of days that can be so tracked is more than seven days higher than such
specified number of days, such specified number of days shall be deemed to be
the closest number of days that can be so tracked that is lower than such number
of specified days and (iii) this sentence shall cease to have any effect after
the date falling six months after the date hereof.
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Issuance" means any issuance or sale by the Borrower
after the Effective Date of any of its capital stock.
"Equity Rights" means, with respect to any Person, any
outstanding subscriptions, options, warrants, commitments, preemptive rights or
agreements of any kind (including, without limitation, any stockholders' or
voting trust agreements) for the issuance, sale, registration or voting of, or
outstanding securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such
term in Article VII.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender or any other recipient of any payment to be made by or on
account of any obligation of the Obligors hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which an Obligor is located and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a request by the Obligors
under Section 2.18(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.16(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.16(a).
"Existing Credit Agreement" means the Fourth Amended, Restated
and Continued Revolving Credit Agreement, dated as of April 30, 1996, among the
Subsidiary Guarantors, Rabobank Nederland, as agent, and the banks referred to
therein, as amended.
"Federal Funds", when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Federal Funds
Rate.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Federal Funds Rate" means the "offered rate", as determined
by the Administrative Agent, for overnight federal funds.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
"First Tier Subsidiary" means (i) a Subsidiary all of the
issued and outstanding capital stock of which is owned directly by the Borrower
or (ii) ▇▇▇▇▇'▇ of Carolina, Inc.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"GAAP" means generally accepted accounting principles
in the United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any swap agreement, cap agreement,
collar agreement, put or call, futures contract, forward contract or similar
agreement or arrangement entered into in respect of interest rates, foreign
exchange rates or prices of commodities.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. The Indebtedness
of a Person shall not include obligations of such Person to pay rent under
operating leases to the extent that such obligations do not constitute Capital
Lease Obligations.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Intangible Assets" means, with respect to any Person on any
date, the following:
(a) patents, copyrights, trademarks, trade names, service
marks, brand names, franchises, goodwill, experimental expenses and
other similar intangibles;
(b) deferred assets (other than prepaid taxes, prepaid
insurance, prepaid contract payments, prepaid license fees and other
prepaid expenses which are refundable);
(c) unamortized debt discount and expense; and
(d) all other property or assets (whether real, personal or
mixed, and whether tangible or intangible) which would be considered to
be intangible under GAAP.
"Intercompany Note" has the meaning assigned to such
term in Section 5.08(a).
"Intercreditor Agreement" means an intercreditor agreement
substantially in the form of Exhibit G hereto, as the same shall be modified and
supplemented and in effect from time to time.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.07.
"Interest Expense" means, for any period, the sum, for the
Borrower (determined without duplication in accordance with GAAP), of the
following: (a) all interest in respect of Indebtedness accrued or capitalized
during such period (whether or not actually paid during such period) plus (b)
the net amounts payable (or minus the net amounts receivable) under Hedging
Agreements related to interest and accrued during such period (whether or not
actually paid or received during such period).
"Interest Payment Date" means (a) with respect to any ABR
Loan, the last day of each March, June, September and December, (b) with respect
to any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period and (c) with
respect to any Federal Funds Loan, the last day of each month.
"Interest Period" means with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Inventory" means, collectively, "Inventory" and "Farm
Products" as defined in the Security Agreement.
"Investment" means, for any Person: (a) the acquisition
(whether for cash, property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such short sale); (b) the making of any deposit with, or advance, loan or
other extension of credit to, any other Person (including the purchase of
property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such property to such Person, but excluding
any such advance, loan or extension of credit having a term not exceeding 90
days representing the purchase price of programming, advertising, inventory or
supplies sold in the ordinary course of business); (c) the entering into of any
Guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person or (d) any Hedging
Agreement having the commercial effect of a synthetic or derivative Investment.
"LC-Backed Receivable" means an account (as defined in the
Uniform Commercial Code) to the extent that the payment thereof is backed by a
letter of credit issued for account of the related account debtor, or confirmed,
by a domestic office of a commercial bank organized under the laws of the United
States of America or any state thereof the short term deposits of which are
rated A-1 or better by S&P or P-1 by Moody's.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities. The interest of a lessor in any property leased pursuant to an
operating lease shall not constitute a Lien over such property securing
obligations of the related lessee to pay rent under such lease to the extent
that such obligations do not constitute Capital Lease Obligations.
"Loan Documents" means this Agreement, any promissory notes
evidencing Loans hereunder, any Intercompany Notes, and the Security Documents.
"Loans" means the loans made by the Lenders to the
Borrower pursuant to this Agreement.
"Mandatorily Redeemable Stock" means, with respect to any
Person, each share of such Person's capital stock to the extent that it is (a)
redeemable, payable or required to be purchased or otherwise retired or
extinguished, or convertible into Indebtedness of such Person (i) at a fixed or
determinable date, whether by operation of a sinking fund or otherwise, (ii) at
the option of any Person other than such Person or (iii) upon the occurrence of
a condition not solely within the control of such Person, such as redemption
required to be made out of future earnings or (b) convertible into other
Mandatorily Redeemable Stock of such Person.
"Margin Stock" means margin stock within the meaning of
Regulations G, U and X.
"Material Adverse Effect" means a material adverse effect on
(a) the Transactions, (b) the business, assets, operations, property, prospects
or condition, financial or otherwise, of the Obligors taken as a whole, (c) the
ability of any Obligor to perform any of its obligations under this Agreement or
the other Loan Documents or (d) the rights of or benefits available to the
Lenders under this Agreement or the other Loan Documents.
"Material Indebtedness" means Indebtedness (other than the
Loans), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $5,000,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
"Maturity Date" means July 14, 1998.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Funds Flow" means, on any date, the amount (not less than
zero) resulting from the following calculation (without duplication): (i) Cash
Flow for the period commencing on June 30, 1997 and ending on the last day of
the fiscal quarter of the Borrower ending on or most recently ended prior to
such date plus (ii) the proceeds of any Debt Issuance (other than Indebtedness
incurred hereunder or Pari Passu Debt) or Equity Issuance received during the
period (the "Calculation Period") commencing on the date hereof and ending on
such date plus (iii) the aggregate amount of proceeds of Dispositions received
by the Borrower and its Subsidiaries during the Calculation Period (in the case
of each of (i), (ii) and (iii) above, to the extent the proceeds thereof have
been applied to reduce Indebtedness incurred hereunder or Pari Passu Debt) minus
(iv) Restricted Payments made in cash during the Calculation Period to any
Person other than the Borrower or any wholly-owned Subsidiary minus (v) Capital
Expenditures and the Aggregate Consideration for all Acquisitions to the extent
paid in cash during the Calculation Period (except to the extent made directly
from the proceeds of Indebtedness incurred hereunder or Pari Passu Debt) minus
(vi) the aggregate principal amount of all payments or prepayments of
Indebtedness (other than Indebtedness incurred hereunder or Pari Passu Debt) of
the Borrower and its Subsidiaries made during the Calculation Period.
"Obligors" means the Borrower and the Subsidiary Guarantors.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Pari Passu Debt" means any Indebtedness (a) in respect of
which the Borrower is primarily liable as the borrower and the Subsidiary
Guarantors (but no other Subsidiary) are liable as guarantors, (b) that is
secured, and only secured, by the Lien created by the Security Agreement and (c)
that all of the Lenders consent to as being treated as Pari Passu Debt. All of
the requirements set forth in the preceding clauses (a), (b) and (c) must be
satisfied in order for any Indebtedness to be Pari Passu Debt.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet
due or are being contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 5.04;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Borrower or any
Subsidiary;
(f) Liens securing judgments to the extent, for an
amount and for a period not resulting in an Event of Default
under Article VII(k); and
(g) Liens created under the Federal Packers and
Stockyards Act, as amended;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning set forth in Section 9.04.
"Regulations G, U and X" means, respectively, Regulations G, U
and X of the Board, as the same may be amended from time to time.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Credit
Exposures and unused Commitments representing more than 50% of the sum of the
total Credit Exposures and unused Commitments at such time.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any such shares of capital stock of the Borrower or any Subsidiary.
"Solvent" has the meaning assigned to such term in Section
4.01(1).
"S&P" means Standard & Poor's Ratings Services.
"Security Agreement" means a Collateral Agency, Pledge and
Security Agreement substantially in the form of Exhibit C hereto between the
Borrower, the Subsidiary Guarantors, the Administrative Agent, the agent for the
holders from time to time of the Pari Passu Debt, and the Collateral Agent, as
the same shall be modified and supplemented and in effect from time to time.
"Security Documents" means the Security Agreement and all
Uniform Commercial Code financing statements required by the Security Agreement
to be filed with respect to the security interests in personal property created
pursuant to the Security Agreement.
"Security Termination Date" means the date, if any, that the
Security Agreement is terminated in accordance with Section 10.02(c)(ii).
"Senior Note Documents" means (i) the Note Purchase Agreement
dated as of July 15, 1996 among the Borrower and the Purchasers referred to
therein and (ii) the Joint and Several Guaranty, the Notes and the Security
Documents referred to in said Note Purchase Agreement, in each of the cases
referred to in the foregoing clauses (i) and (ii), as the same shall, subject to
Section 6.09, be modified and supplemented and in effect from time to time.
"Special Counsel" means Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, in
its capacity as special counsel to Chase, as Administrative Agent of the credit
facility contemplated hereby.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject (a) with respect to the Base CD Rate, for new negotiable nonpersonal
time deposits in dollars of over $100,000 with maturities approximately equal to
(i) three months, in the case of the Base CD Rate, and (b) with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"Total Commitment" means, at any time, the aggregate amount of
the Lenders' Commitments as in effect at such time.
"Transactions" means (i) with respect to the Borrower, the
execution, delivery and performance by the Borrower of Loan Documents to which
it is a party, the borrowing of Loans hereunder and the use of the proceeds
thereof and (ii) with respect to any Obligor (other than the Borrower), the
execution, delivery and performance by such Obligor of the Loan Documents to
which it is a party.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate, the
Alternate Base Rate or the Federal Funds Rate.
"Unguaranteed Exposure" means, on any date, an amount equal to
the aggregate principal amount of all Loans made to the Borrower that are
outstanding on such date to the extent that the proceeds thereof (without
double-counting) have been advanced, directly or indirectly, by First Tier
Subsidiaries to Subsidiaries that are not Subsidiary Guarantors.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans and Borrowings may be classified and referred
to by Type (e.g., a "Eurodollar Loan" or a "Federal Funds Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount (i) that
will not result in such Lender's Credit Exposure exceeding such Lender's
Commitment and (ii) that will not result in the sum of the aggregate amount of
the Credit Exposures of all of the Lenders plus the aggregate principal amount
of all Pari Passu Debt then outstanding exceeding the Consolidated Borrowing
Base. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Loans.
SECTION 2.02. Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting
of Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.13, each Borrowing shall be comprised
entirely of ABR Loans, Federal Funds Loans or Eurodollar Loans as the Borrower
may request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Borrowing and each Federal Funds Borrowing is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and
not less than $5,000,000; provided that an ABR Borrowing or a Federal Funds
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Total Commitment. Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time be more
than a total of 3 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. Requests for Loan. To request a Loan, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of the proposed Borrowing, (b) in the
case of an ABR Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of the proposed Borrowing or (c) in the case of a
Federal Funds Borrowing, not later than 12:00 noon, New York City time, on the
date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a
Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing,
a Federal Funds Borrowing or a Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account
to which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Federal Funds Borrowing. Promptly following receipt of a
Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. [INTENTIONALLY OMITTED]
SECTION 2.05. [INTENTIONALLY OMITTED]
SECTION 2.06. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower maintained with the Administrative Agent in New York City and
designated by the Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) for the first three Business Days, (A) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (B) in the case of the Borrower, the Federal Funds Rate and (ii)
thereafter, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election
Request applies and, if different options are being elected with
respect to different portions thereof, the portions thereof to be
allocated to each resulting Borrowing (in which case the information to
be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant
to such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing, a Federal Funds Borrowing or a Eurodollar
Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto after giving
effect to such election, which shall be a period contemplated by the
definition of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to a Federal Funds Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to a Federal Funds
Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.08. Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments
shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $5,000,000 and
not less than $10,000,000 and (ii) the Borrower shall not terminate or reduce
the Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.10, the sum of the Credit Exposures would
exceed the Total Commitment.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.09. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan on the Maturity Date.
(b) 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, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.10. Prepayment of Loans.
(a) The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with paragraph (b) of this Section and provided that the
aggregate principal amount of any prepayment that does not result in the
prepayment of a Borrowing in full shall be in an integral multiple of
$1,000,000.
(b) Until the Maturity Date, the Borrower shall from time to
time prepay the Loans in such amounts as shall be necessary so that at all times
the sum of the aggregate outstanding amount of Credit Exposure plus the
aggregate principal amount of Pari Passu Debt then outstanding shall not exceed
the Consolidated Borrowing Base.
(c) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing or a Federal Funds Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date and
the principal amount of each Borrowing or portion thereof to be prepaid;
provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.08, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.08. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.12.
SECTION 2.11. Fees.
(a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a Commitment Fee, which shall accrue at the
Applicable Rate on the daily unused amount of the Commitment of such Lender
during the period from and including the date hereof to but excluding the date
on which such Commitment terminates. Accrued Commitment Fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate, commencing on the first such
date to occur after the date hereof; provided that any Commitment Fees accruing
after the date on which the Commitments terminate shall be payable on demand.
All Commitment Fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(b) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for distribution, in
the case of Commitment Fees, and participation fees, to the Lenders. Fees paid
shall not be refundable under any circumstances.
SECTION 2.12. Interest.
(a) The Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Federal Funds Borrowing shall
bear interest at the Federal Funds Rate plus the Applicable Rate.
(c) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(d) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Loans as provided in paragraph (a) of this
Section.
(e) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (d) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan or a Federal
Funds Loan prior to the end of the Availability Period), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(f) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Federal Funds Rate and Adjusted LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.13. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.14. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (except any
such reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans made
by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or the Loans made by such Lender, to a
level below that which such Lender, or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company, as the case
may be, as specified in paragraph (a) or (b) of this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender pursuant to this Section 2.14 for any
increased costs or reductions incurred more than 270 days prior to the date that
such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
SECTION 2.15. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.10(b) and is revoked in accordance therewith) or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.18, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.16. Taxes.
(a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing
of Set-offs.
(a) The Borrower shall make each payment required to be made
by it hereunder and under the other Loan Documents (whether of principal,
interest or fees, or of amounts payable under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, except that payments pursuant to Sections 2.14, 2.15, 2.16 and
10.03 shall be made directly to the Persons entitled thereto. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Obligor pursuant to and in accordance with the express terms of this
Agreement or the other Loan Documents or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). Each Obligor consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Obligor in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In such
event, if the Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.06(b) or 2.17(d), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender's obligations under such Sections
until all such unsatisfied obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.14, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.14 or 2.16 as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.14 or payments required to be made pursuant to Section 2.16, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and
its Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions
are within each Obligor's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. Each of this Agreement
and the other Loan Documents has been duly executed and delivered by each
Obligor and constitutes a legal, valid and binding obligation of each Obligor,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except for
filings and recordings in respect of the Liens created pursuant to the Security
Documents, (b) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of the Borrower or any of its
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon the Borrower or any of its Subsidiaries or its assets, or give rise to a
right thereunder to require any payment to be made by the Borrower or any of its
Subsidiaries, and (d) except for the Lien created by the Security Documents,
will not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse
Change.
(a) The Borrower has heretofore furnished to the Lenders (i)
its consolidated balance sheet, statements of income, stockholders equity and
cash flows and pro forma information as of and for the fiscal year ended April
28, 1996, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public accountants and
(ii) its consolidated balance sheet, statements of income, stockholders equity
and cash flows and pro forma information as of and for the three fiscal periods
ended January 26, 1997. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Borrower and its consolidated Subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the statements referred to in clause
(ii) above.
(b) Since April 28, 1996, there has been no event, development
or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect, except as reflected in the financial statements referred to in
Section 3.04(a) as of and for the three fiscal periods ended January 26, 1997.
(c) The Borrower does not have on the date of this Agreement
any contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments
in each case that are material, except as referred to or reflected in the
balance sheets as at April 28, 1996 and January 26, 1997 referred to above.
SECTION 3.05. Properties.
(a) Each of the Borrower and its Subsidiaries has good title
to, or valid leasehold interests in, all its real and personal property material
to its business, except for minor defects in title that do not materially
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.06. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge of
the Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries (i) as to which an adverse determination is reasonably likely and
that, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect or (ii) that involve this
Agreement, the other Loan Documents or the Transactions.
(b) Except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the aggregate,
has resulted in, or materially increased the likelihood of, a Material Adverse
Effect. As of the date hereof, the Borrower does not believe that the Disclosed
Matters individually or in the aggregate are reasonably likely to have a
Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither
the Borrower nor any of its Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed by more than $50,000,000 the fair market value of the assets of such
Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$50,000,000 the fair market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Borrower and its Subsidiaries
have disclosed to the Lenders all agreements, instruments and corporate or other
restrictions to which they are subject, and all other matters known to them,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Obligors to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Obligors represent only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.
SECTION 3.12. Regulations G, U and X.
Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock and no part of the proceeds of any extension of credit
hereunder will be used to buy or carry any Margin Stock.
SECTION 3.13. Material Agreements and Liens.
(a) Part A of Schedule 3.13 hereto is a complete and correct
list, as of the date of this Agreement, of each credit agreement, loan
agreement, indenture, note purchase agreement, guarantee, letter of credit or
other arrangement providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or guarantee
by, the Borrower or any of its Subsidiaries (other than the Existing Credit
Agreement and the Senior Note Documents) the aggregate principal or face amount
of which equals or exceeds (or may equal or exceed) $100,000 and the aggregate
principal or face amount outstanding or that may become outstanding under each
such arrangement is correctly described in Part A of said Schedule 3.13.
(b) Part B of Schedule 3.13 hereto is a complete and correct
list, as of the date of this Agreement, of each Lien securing Indebtedness of
any Person covering any property of the Borrower or any of its Subsidiaries, and
the aggregate Indebtedness secured (or which may be secured) by each such Lien
and the property covered by each such Lien is correctly described in Part B of
said Schedule 3.13.
SECTION 3.14. Subsidiaries, Etc.
(a) Set forth in Part A of Schedule 3.14 hereto is a
complete and correct list, as of the date hereof, of all of the
Subsidiaries of the Borrower, together with, for each Subsidiary, (i)
the jurisdiction of organization of such Subsidiary, (ii) each Person
holding ownership interests in such Subsidiary and (iii) the nature of
the ownership interests held by each such Person and the percentage of
ownership of such Subsidiary represented by such ownership interests.
Except as disclosed in Part A of Schedule 3.14 hereto, (x) each of the
Borrower and its Subsidiaries owns, free and clear of Liens (other than
Liens created pursuant to the Security Documents), and has the
unencumbered right to vote, all outstanding ownership interests in each
Person shown to be held by it in Part A of Schedule 3.14 hereto, (y)
all of the issued and outstanding capital stock of each such Person
organized as a corporation is validly issued, fully paid and
nonassessable and (z) there are no outstanding Equity Rights with
respect to such Person.
(b) Set forth in Part B of Schedule 3.14 hereto is a complete
and correct list, as of the date of this Agreement, of all Investments
(other than Investments disclosed in Part A of said Schedule 3.14
hereto) held by the Borrower or any of its Subsidiaries in Person and,
for each such Investment, (x) the identity of the Person or Persons
holding such Investment and (y) the nature of such Investment. Except
as disclosed in Part B of Schedule 3.14 hereto, each of the Borrower
and its Subsidiaries owns, free and clear of all Liens (other than
Liens created pursuant to the Security Documents), all such
Investments.
SECTION 3.15. Solvency.
On and as of the Effective Date, immediately prior to and
after consummation of the Transactions and after giving effect to all Loans and
other obligations and liabilities being incurred on such date in connection
therewith, and on the date of each subsequent Loan or other extension of credit
hereunder and after giving effect to application of the proceeds thereof in
accordance with the terms of the Loan Documents, the Borrower and its
Subsidiaries, taken as a whole, are, and each Obligor is, and will be Solvent
(as defined in Section 4.01(l)).
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders
to make Loans hereunder shall not become effective until the date on which each
of the following conditions is satisfied (or waived in accordance with Section
10.02):
(a) The Administrative Agent (or Special Counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of each Obligor, the authorization of the Transactions and any
other legal matters relating to each Obligor, this Agreement, the other
Loan Documents or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.
(c) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02.
(d) The Administrative Agent shall have received a Borrowing
Base Certificate not more than 3 days prior to the Effective Date.
(e) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Battle & ▇▇▇▇▇▇ LLP,
counsel for the Obligors, substantially in the form of Exhibit D, and
covering such other matters relating to the Obligors, this Agreement,
the other Loan Documents or the Transactions as the Required Lenders
shall reasonably request (and the Borrower hereby requests such counsel
to deliver such opinion).
(f) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of Special Counsel substantially in the
form of Exhibit E hereto (and the Administrative Agent hereby requests
such counsel to deliver such opinion).
(g) The Administrative Agent shall have received evidence
satisfactory to it of the execution by each First Tier Subsidiary
required to do so of an Intercompany Note.
(h) The Administrative Agent (or Special Counsel) shall have
received a counterpart of the Security Agreement duly executed and
delivered by all of the Persons stated to be parties thereto.
(i) The Administrative Agent (or Special Counsel) shall have
received a counterpart of copies of duly completed and executed Uniform
Commercial Code Financing Statements covering the personal property
subject to the Liens created by the Security Agreement, together with
evidence that such Financing Statements have been duly filed in all
jurisdictions in which such filing is necessary or appropriate.
(j) The Administrative Agent (or Special Counsel) shall have
received a counterpart of the results of Uniform Commercial Code, tax
and judgment searches as may be requested by the Administrative Agent
and which searches reveal no liens on any asset of the Borrower except
for liens permitted under this Agreement.
(k) The Administrative Agent (or Special Counsel) shall have
received evidence that the principal of and any interest on, and all
other amounts owing in respect of, the Indebtedness outstanding under
the Existing Credit Agreement shall have been (or shall be
simultaneously) repaid in full, that all commitments to extend credit
under the Existing Credit Agreement shall have been canceled or
terminated and that Liens securing any such Indebtedness shall have
been released; and such Uniform Commercial Code termination statements
and other instruments, in each case in proper form for recording, as
the Administrative Agent shall have requested to release and terminate
of record any Liens securing such Indebtedness.
(l) The Administrative Agent (or Special Counsel) shall have
received a certificate of the Borrower, to the effect that, as of the
Effective Date (after giving effect to the Transactions), (a) the
aggregate value of all properties of the Borrower and its Subsidiaries
at their present fair saleable value (i.e., the amount which may be
realized within a reasonable time, considered to be six months to one
year, either through collection or sale at the regular market value,
regular market value to mean the amount which could be obtained for the
property in question within such period by a capable and diligent
business person from an interested buyer who is willing to purchase
under ordinary selling conditions), exceed the amount of all the debts
and liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of the Borrower and its Subsidiaries, (b) the
Borrower and its Subsidiaries will not, on a consolidated basis, have
an unreasonably small capital with which to conduct its business
operations as contemplated to be conducted and (c) the Borrower and its
Subsidiaries will have, on a consolidated basis, sufficient cash flow
to enable them to pay their debts as they mature (satisfaction of items
(a) through (c) of this paragraph (m) is herein referred to as being
"Solvent").
(m) The Administrative Agent shall have received evidence
satisfactory to it that the Joint and Several Guaranty included in the
Senior Note Documents shall have been amended in a manner satisfactory
to the Administrative Agent to provide that (i) the Lenders shall be
entitled to benefit from Section 2.9 of the Joint and Several Guaranty,
on a pro rata basis, to the same extent as the holders of the senior
secured notes under the Note Purchase Agreements included in the Senior
Note Documents and (ii) for purposes of Section 2.18 of the Joint and
Several Guaranty, the full amount of the Loans shall be deemed to have
been borrowed on the date of issuance of the senior secured notes and
to have remained continuously outstanding thereafter.
(n) The Administrative Agent shall have received a
satisfactory independent audit prepared by Chase's Specialized Due
Diligence Group or another firm of national standing with respect to
such matters, as to the accounts receivable and inventory of the
Borrower and its Subsidiaries, both on an individual and a consolidated
basis.
(o) The Administrative Agent, the Lenders and the Arranger
shall have received all fees and other amounts due and payable on or
prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Obligors hereunder.
(p) The Administrative Agent (or Special Counsel) shall have
received a counterpart of the Intercreditor Agreement duly executed and
delivered by all of the Persons stated to be parties thereto.
(q) The Administrative Agent shall have received such other
documents as the Administrative Agent or any Lender or Special Counsel
may reasonably request.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 10.02) at or prior to 3:00 p.m., New York City time, on July
15, 1997 (and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each
Lender to make a Loan on the occasion of any Borrowing is subject to the
satisfaction of the following conditions:
(a) The representations and warranties of the Obligors set
forth in this Agreement and the other Loan Documents shall be true and
correct on and as of the date of such Borrowing.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a)
and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, (i) its audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of the
end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent public accountants of
recognized national standing (without a "going concern" or like
modification, qualification or exception and without any modification,
qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied and (ii) its consolidating
balance sheet and related statements of operations, stockholders'
equity and cash flows as of the end of and for such year, setting forth
in each case in comparative form the figures for the previous fiscal
year, certified by one of its Financial Officers as presenting fairly
in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a
consolidating basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, (i) its
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year and (ii) its
consolidating balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects
the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis or consolidating
basis, as the case may be, in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence
of footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower (i) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations of the Interest Coverage Ratio
as at the last day of the fiscal quarter or fiscal year, as the case
may be, in respect of which such financial statements are delivered,
and demonstrating compliance with Section 6.12 and (iii) stating
whether any change in GAAP or in the application thereof has occurred
since the date of the audited financial statements referred to in
Section 3.04 and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such
certificate;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national
securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be;
(f) as soon as available and in any event within 5 Business
Days after the end of each monthly accounting period, a Borrowing Base
Certificate certifying, in the case of the Borrower, as to the
Consolidated Borrowing Base, and, in the case of each First Tier
Subsidiary, as to its Borrowing Base, as at the last day of such
accounting period;
(g) as soon as available, and in any event within 90 days,
after the end of each fiscal year of the Borrower a report (prepared at
the expense of the Borrower) of an independent collateral auditor
(which may be, or be affiliated with, one of the Lenders) approved by
the Administrative Agent with respect to the Receivables and Inventory
components included in the Consolidated Borrowing Base as at the end of
such fiscal year which report shall indicate that, based upon a review
by such auditors of the Receivables (including, without limitation,
verification with respect to the amount, aging, identity and credit of
the respective account debtors and the billing practices of the
Borrower and its Subsidiaries) and Inventory (including, without
limitation, verification as to the value, location and respective
types), the information set forth in the Borrowing Base Certificate
delivered by the Borrower as at the end of such fiscal year is accurate
and complete in all material respects; and
(h) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Borrower or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries in
an aggregate amount exceeding $250,000; and
(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Borrower
will, and will cause each of its Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
SECTION 5.04. Payment of Obligations. The Borrower will, and
will cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The
Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
SECTION 5.06. Books and Records; Inspection Rights. The
Borrower will, and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Borrower will, and
will cause each of its Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority, including all Environmental Laws, and
with all other material obligations, applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds.
(a) The proceeds of each Loan shall be lent by the Borrower to
First Tier Subsidiaries that are Subsidiary Guarantors, provided that the
aggregate principal amount of loans owing by each First Tier Subsidiary to the
Borrower shall not exceed the Borrowing Base of such First Tier Subsidiary. All
such loans made to each First Tier Subsidiary shall be evidenced by a single
demand promissory note executed and delivered by such First Tier Subsidiary to
the Borrower substantially in the form of Exhibit F hereto (each, an
"Intercompany Note"), and pledged by the Borrower to the Collateral Agent under
the Security Agreement for the benefit of the Secured Parties referred to in the
Security Agreement. Each First Tier Subsidiary shall use the proceeds of such
loans for its own working capital and other general corporate purposes and
(subject to Section 6.13) to make advances to the Borrower and Subsidiaries. In
the event that the Borrower receives any payment of principal of any
Intercompany Note, it shall immediately lend the proceeds of such payment to
another First Tier Subsidiary (to be evidenced by an Intercompany Note of such
other First Tier Subsidiary that has been pledged by the Borrower to the
Collateral Agent under the Security Agreement for the benefit of the Secured
Parties referred to in the Security Agreement), or pay or prepay the Loans
and/or the Pari Passu Debt, such that at no time will the aggregate outstanding
principal amount of the Loans and the Pari Passu Debt exceed the aggregate
outstanding principal amount of the Intercompany Notes.
(b) Subject to the foregoing paragraph (a), the proceeds of
the Loans will be used only (i) to pay Indebtedness outstanding under the
Existing Credit Agreement and (ii) for working capital and other general
corporate purposes of the Borrower and its Subsidiaries. No part of the proceeds
of any Loan will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations G, U and X.
SECTION 5.09. Additional Subsidiary Guarantors. The
Borrower will take such action, and will cause each of its Subsidiaries to take
such action, from time to time as shall be necessary to ensure that each
Subsidiary the inventory or receivables of which are included in the calculation
of the Consolidated Borrowing Base is a Subsidiary Guarantor and, thereby, an
"Obligor" hereunder and under the Security Agreement pursuant to documentation
satisfactory to the Administrative Agent in form and substance. In addition,
the Borrower may cause any of its other Subsidiaries to become a Subsidiary
Guarantor and, thereby, an "Obligor" hereunder and under the Security Agreement
pursuant to documentation satisfactory to the Administrative Agent in form and
substance. Each such new Subsidiary Guarantor shall deliver such proof of
corporate action, incumbency of officers, opinions of counsel and other
documents as is consistent with those delivered by each other Obligor pursuant
to Section 4.01 or as any Lender or the Administrative Agent shall have
reasonably requested.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness. The Borrower will not,
and will not permit any Subsidiary to, create, incur or assume
any Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Pari Passu Debt;
(c) any extensions, renewals or replacements of any
Indebtedness existing on the date hereof and set forth in Schedule
6.01, provided that the aggregate principal amount of such Indebtedness
is not thereby increased;
(d) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(e) other Indebtedness in an aggregate principal amount not
exceeding $20,000,000 created, incurred or assumed in any fiscal year
of the Borrower; and
(f) other Indebtedness provided that, on the date (the
"Incurrence Date") such Indebtedness is created, incurred or assumed
(as the case may be), the Borrower furnishes to the Administrative
Agent reasonable projections demonstrating in reasonable detail that
the Borrower will be in compliance with Section 6.12(e) on the last day
of each of the next succeeding four fiscal quarters of the Borrower
that end after the Incurrence Date after giving effect to such
creation, incurrence or assumption, together with a certificate of a
Financial Officer to the effect that such projections are based upon
reasonable assumptions and reflect the Borrower's best estimate as to
the matters covered thereby.
For purposes of the foregoing paragraphs (e) and (f), the Acquisition of any
Person shall be deemed to constitute the assumption of the Indebtedness of such
Person by a Subsidiary of the Borrower at the time of the consummation of such
Acquisition.
SECTION 6.02. Liens. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Permitted Encumbrances;
(b) Liens created by the Senior Note Documents as in effect on
the date hereof; provided that there shall be no Lien securing any
obligations under the Senior Note Documents at any time after the
Security Termination Date;
(c) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 6.02
(other than Liens created by the Senior Note Documents); provided that
(i) such Lien shall not apply to any other property or asset of the
Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof;
(d) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on
any property or asset of any Person that becomes a Subsidiary after the
date hereof prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary,
as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such
Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as
the case may be;
(e) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness incurred to finance such
acquisition, construction or improvement, (ii) such security interests
and the Indebtedness secured thereby are incurred prior to or within 90
days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 80%
of the cost of acquiring, constructing or improving such fixed or
capital assets and (iv) such security interests shall not apply to any
other property or assets of the Borrower or any Subsidiary;
(f) the Lien created by the Security Agreement; provided that
there shall be no Lien securing any Pari Passu Debt at any time after
the Security Termination Date;
(g) any extensions, renewals or replacements of any of the
Liens permitted by the foregoing clauses (a) through (f) effected in
connection with any extension, renewal or replacement of the
Indebtedness secured thereby; provided that (i) the aggregate principal
amount of such Indebtedness is not thereby increased, (ii) such Lien
shall not be extended to cover any additional property and (iii) there
shall be no Lien securing any extension, renewal or replacement of the
Pari Passu Debt or any obligations under the Senior Note Documents at
any time after the Security Termination Date; and
(h) other Liens that (whether before or after the Security
Termination Date) do not cover any Collateral (as defined in the
Security Agreement).
Notwithstanding anything contained herein to the contrary, the aggregate amount
of obligations of the Borrower and its Subsidiaries secured by Liens permitted
by any of clauses (c), (d), (e), (g) (to the extent extending, renewing or
replacing any of the Liens permitted by any of clauses (c), (d) and (e)) and (h)
shall not exceed 15% of Consolidated Tangible Net Worth at any time on or after
the Security Termination Date.
SECTION 6.03. Fundamental Changes.
(a) The Borrower will not, and will not permit any Subsidiary
to, merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or
substantially all of its assets, or all or substantially all of the stock of any
of its Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing (i) any
Subsidiary may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in
a transaction in which the surviving entity is a Subsidiary, provided that if
any such transaction shall be between a Subsidiary Guarantor and a Subsidiary
not a Subsidiary Guarantor, and such Subsidiary Guarantor is not the continuing
or surviving corporation, then the continuing or surviving corporation shall
have assumed all of the obligations of such Subsidiary Guarantor hereunder and
under the other Loan Documents pursuant to documentation satisfactory to the
Administrative Agent in form and substance, (iii) any Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary, provided that if any such transaction shall be between a Subsidiary
Guarantor and a Subsidiary not a Subsidiary Guarantor, and if such Subsidiary
Guarantor is not the continuing or surviving corporation, then the continuing or
surviving corporation shall have assumed all of the obligations of such
Subsidiary Guarantor hereunder and under the other Loan Documents pursuant to
documentation satisfactory to the Administrative Agent in form and substance,
(iv) any Subsidiary may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders; provided that any
such merger that would otherwise be permitted by this Section 6.03 involving a
Person that is not a wholly owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 6.04 and (v) the
Borrower may merge into a newly formed, "shell" corporation organized under the
laws of the Commonwealth of Virginia in a transaction intended merely to
"reincorporate" the Borrower as a Virginia corporation, provided that (i) the
continuing or surviving corporation shall have assumed all of the obligations of
the Borrower hereunder and under the other Loan Documents pursuant to
documentation satisfactory to the Administrative Agent in form and substance,
(ii) no Default shall have occurred and be continuing or would result therefrom
and (iii) the Lenders shall have received a legal opinion from counsel to the
Borrower acceptable to the Administrative Agent and in form, scope and substance
acceptable to the Administrative Agent as to such merger and such assumption.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments by the Borrower existing on the date
hereof in the capital stock of its Subsidiaries;
(c) loans or advances made by the Borrower to any
Subsidiary and made by any Subsidiary to the Borrower or any
other Subsidiary;
(d) Guarantees constituting Indebtedness permitted by
Section 6.01;
(e) Investments constituting Acquisitions permitted by
Section 6.12(f);
(f) Investments in an aggregate amount not exceeding
$10,000,000 at any one time outstanding in a cold storage warehouse and
distribution center in Sioux Falls, South Dakota constituting a joint
venture between Freezer Services Inc., the Borrower and ▇▇▇▇ ▇▇▇▇▇▇▇ &
Co.; and
(g) other Investments not exceeding $5,000,000 in the
aggregate amount outstanding at any time.
SECTION 6.05. Hedging Agreements. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities.
SECTION 6.06. Restricted Payments. The Borrower will not, and
will not permit any of its Subsidiaries to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, except that (a) the
Borrower may declare and pay dividends with respect to its capital stock payable
solely in additional shares of its common stock, (b) Subsidiaries may declare
and pay dividends ratably with respect to their capital stock and (c) the
Borrower may make Restricted Payments pursuant to and in accordance with stock
option plans or other benefit plans for management or employees of the Borrower
and its Subsidiaries.
SECTION 6.07. Transactions with Affiliates. The Borrower will
not, and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) in the ordinary course of business at prices and
on terms and conditions not less favorable to the Borrower or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties,
(b) transactions between or among the Borrower and its Subsidiaries not
involving any other Affiliate and (c) any Restricted Payment permitted by
Section 6.06.
SECTION 6.08. Restrictive Agreements. The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets, or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any shares of its capital stock or to
make or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by this Agreement or any of the other Loan Documents, (ii) the foregoing
shall not apply to restrictions and conditions existing on the date hereof
identified on Schedule 6.08 (but shall apply to any extension or renewal of, or
any amendment or modification expanding the scope of, any such restriction or
condition), (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause
(a) of the foregoing shall not apply to restrictions or conditions imposed by
any agreement relating to secured Indebtedness permitted by this Agreement or
any of the other Loan Documents if such restrictions or conditions apply only to
the property or assets securing such Indebtedness, (v) clause (a) of the
foregoing shall not apply to customary provisions in leases restricting the
assignment thereof and (vi) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement under which the Indebtedness
governed by the Senior Note Documents is refinanced, provided that such
restrictions or conditions are not materially more restrictive than those
contained in the Senior Note Documents on the date hereof (and, if such
agreement does not provide that the Indebtedness created thereunder will be
secured by Liens on property or assets of the Borrower or any Subsidiary, such
agreement may contain restrictions or conditions limiting Liens on property or
assets of the Borrower or any Subsidiary which are not the subject of Liens
granted under the Security Agreement and such restrictions or conditions shall
not be deemed more onerous than those contained in the Senior Note Documents on
the date hereof).
SECTION 6.09. Senior Note Documents. Promptly following the
execution thereof, the Borrower will supply each Lender with a copy of any
modification, supplement or waiver to a Senior Note Document.
SECTION 6.10. Limitation on Sale and Leaseback Transactions.
The Borrower will not, and will not permit any of its Subsidiaries to, enter
into, renew or extend any transaction or series of related transactions pursuant
to which the Borrower or such Subsidiary sells or transfers any property in
connection with the leasing, or the release against installment payments, or as
part of an arrangement involving the leasing or resale against installment
payments, of such property to the seller or transferor.
SECTION 6.11. Fiscal Periods. If the Borrower changes the
manner of determining the last day of its fiscal year or the last days of the
first three fiscal quarters in each of its fiscal years, the parties hereto
shall negotiate in good faith to agree to modify any financial calculations and
determinations hereunder to reflect their original intent in light of such
changes, and if they fail so to agree all such financial calculations
determinations hereunder shall continue to be made as if such change had not
occurred.
SECTION 6.12. Financial Covenants.
(a) The Borrower will not permit the Consolidated Current
Ratio to be less than 1.05 to 1 at any time.
(b) The Borrower will not permit Consolidated Working Capital
to be less than $35,000,000 at any time.
(c) The Borrower will not permit the ratio of Consolidated
Total Liabilities to Consolidated Tangible Net Worth on any date to be
more than the ratio set forth below opposite the period during which
such date falls:
Period Ratio
------ -----
From the Effective Date through
May 2, 1998 3.00 to 1
From May 3, 1998 and thereafter 2.75 to 1
(d) The Borrower will not permit Consolidated Tangible Net
Worth on any date (the "Determination Date") to be less than the sum of
(i) $225,000,000 plus (ii) 50% of the aggregate amount of Consolidated
Net Income for each quarter that ends after the Effective Date and on
or before the Determination Date in respect of which Consolidated Net
Income is greater than zero plus (iii) 50% of the aggregate amount of
increases in Consolidated Tangible Net Worth after the Effective Date
and on or before the Determination Date resulting from the issuance by
it of capital stock as consideration in Acquisitions made by it and its
Subsidiaries.
(e) The Borrower will not permit the ratio of Consolidated
EBITDA to Consolidated Fixed Charges for any period of four consecutive
fiscal quarters of the Borrower to be less than the ratio set forth
below opposite the period during which the last day of such period of
four consecutive fiscal quarters falls:
Period Ratio
------ -------
From the Effective Date through
January 31, 1998 0.85 to 1
From February 1, 1998 through
July 31, 1999 1.00 to 1
From August 1, 1999
and thereafter 1.10 to 1
(f) The Borrower will not permit the sum (without duplication)
of (i) Capital Expenditures made by the Borrower and its Subsidiaries
in any fiscal year of the Borrower plus (ii) the Aggregate
Consideration for all Acquisitions made by the Borrower and its
Subsidiaries in such fiscal year to exceed the higher of (x) the sum of
Consolidated Net Income plus depreciation for the Borrower and its
Subsidiaries for such fiscal year or (y) $100,000,000.
SECTION 6.13. Unguaranteed Exposure. Notwithstanding
anything contained herein to the contrary, the Borrower will not permit the
Unguaranteed Exposure to exceed $30,000,000.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three or more
Business Days;
(c) any representation or warranty made or deemed made by or
on behalf of any Obligor in or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof
or waiver hereunder or thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in
connection with this Agreement or any other Loan Document or any
amendment or modification hereof or thereof or waiver hereunder or
thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.03 (with
respect to the existence of the Borrower or any Subsidiary) or 5.08 or
in Article VI;
(e) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement or any other Loan
Document (other than those specified in clause (a), (b) or (d) of this
Article), and such failure shall continue unremedied for a period of 30
days after notice thereof from the Administrative Agent to the Borrower
(which notice will be given at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become
due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Subsidiary or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary or for a substantial part
of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the
foregoing;
(j) the Borrower or any Subsidiary shall become
unable, admit in writing or fail generally to pay its debts
as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against the
Borrower, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets
of the Borrower or any Subsidiary to enforce any such judgment;
(l) the Borrower or any Subsidiary receives any notice,
notification, demand, request for information, citation, summons or
order or there has been filed any compliant or any penalty has been
assessed or an investigation or review is pending or threatened by any
governmental or other entity, in each case with respect to any alleged
failure by the Borrower or any of its Subsidiaries to have any
environmental, health or safety permit, license or other authorization
required under any Environmental Law in connection with the conduct of
the business of the Borrower or any of its Subsidiaries or with respect
to any generation, treatment, storage, recycling, transportation,
discharge or disposal, or any release of any Hazardous Materials
generated by the Borrower or any of its Subsidiaries, in each case
which could reasonably be expected to result in a Material Adverse
Effect.
(m) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
(i) $2,000,000 in any year or (ii) $10,000,000 for all periods;
(n) any of the following shall occur: (i) subject to Section
10.13, the Lien created by any Security Document shall at any time
cease to constitute a valid and perfected Lien on the collateral
intended to be covered thereby before the Security Termination Date;
(ii) subject to Section 10.13, except for expiration in accordance with
its terms, any Security Document shall for whatever reason be
terminated, or shall cease to be in full force and effect
before the Security Termination Date; or (iii) subject to Section
10.13, the actual or asserted invalidity of any Security Document or of
any guarantee under Article VIII hereof or the validity of any Security
Document or of any guarantee under Article VIII hereof or the validity
of any subordination provision contained in Article VIII hereof shall
be contested by any party before (in the case of any Security Document)
the Security Termination Date; or
(o) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Obligors accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Obligors.
ARTICLE VIII
Guarantee
SECTION 8.01 The Guarantee. The Subsidiary Guarantors hereby
jointly and severally guarantee to each Lender and the Administrative Agent and
their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest on the Loans made by the Lenders to the Borrower and all other
amounts from time to time owing to the Lenders or the Administrative Agent by
the Borrower under this Agreement and by any Obligor under any of the other Loan
Documents, and all obligations of the Borrower to any Lender in respect of any
Hedging Agreement, in each case strictly in accordance with the terms thereof
(such obligations being herein collectively called the "Guaranteed
Obligations"). The Subsidiary Guarantors hereby further jointly and severally
agree that if the Borrower shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the
Subsidiary Guarantors will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
SECTION 8.02 Obligations Unconditional. The obligations of the
Subsidiary Guarantors under Section 8.01 hereof are absolute and unconditional,
joint and several, irrespective of the value, genuineness, validity, regularity
or enforceability of the obligations of the Borrower under this Agreement or any
other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 8.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein or
therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent or any Lender or Lenders as security for any
of the Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Lender exhaust any right, power or remedy or proceed
against the Borrower under this Agreement or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
SECTION 8.03 Reinstatement. The obligations of the Subsidiary
Guarantors under this Article VIII shall be automatically reinstated if and to
the extent that for any reason any payment by or on behalf of the Borrower in
respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise and the Subsidiary
Guarantors jointly and severally agree that they will indemnify the
Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the
Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
SECTION 8.04 Subrogation. The Subsidiary Guarantors hereby
jointly and severally agree that until the payment and satisfaction in full of
all Guaranteed Obligations and the expiration and termination of the Commitments
under this Agreement they shall not exercise any right or remedy arising by
reason of any performance by them of their guarantee in Section 8.01 hereof,
whether by subrogation or otherwise, against the Borrower or any other guarantor
of any of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
SECTION 8.05 Remedies. The Subsidiary Guarantors jointly and
severally agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of the Borrower under this Agreement may be declared to be forthwith
due and payable as provided in Article VII hereof (and shall be deemed to have
become automatically due and payable in the circumstances provided in said
Article VII) for purposes of Section 8.01 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against the Borrower and that, in the
event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by the Borrower) shall forthwith become due and payable by the Subsidiary
Guarantors for purposes of said Section 8.01.
SECTION 8.06 Instrument for the Payment of Money. Each
Subsidiary Guarantor hereby acknowledges that the guarantee in this Article VIII
constitutes an instrument for the payment of money, and consents and agrees that
any Lender or the Administrative Agent, at its sole option, in the event of a
dispute by such Subsidiary Guarantor in the payment of any moneys due hereunder,
shall have the right to bring motion-action under New York CPLR Section 3213.
SECTION 8.07 Continuing Guarantee. The guarantee in this
Article VIII is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 8.08 Rights of Contribution. The Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the payment
by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the Properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of a
Subsidiary Guarantor to any Excess Funding Guarantor under this Section 8.08
shall be subordinate and subject in right of payment to the prior payment in
full of the obligations of such Subsidiary Guarantor under the other provisions
of this Article VIII and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such obligations.
For purposes of this Section 8.08, (i) "Excess Funding
Guarantor" means, in respect of any Guaranteed Obligations, a Subsidiary
Guarantor that has paid an amount in excess of its Pro Rata Share of such
Guaranteed Obligations, (ii) "Excess Payment" means, in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guaranteed Obligations and (iii) "Pro Rata Share"
means, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of
(x) the amount by which the aggregate present fair saleable value of all
properties of such Subsidiary Guarantor (excluding any shares of stock of any
other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities
of such Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all properties of all of the Subsidiary
Guarantors exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Borrower and the Subsidiary Guarantors hereunder and
under the other Loan Documents) of all of the Subsidiary Guarantors, determined
(A) with respect to any Subsidiary Guarantor that is a party hereto on the
Effective Date, as of the Effective Date, and (B) with respect to any other
Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a
Subsidiary Guarantor hereunder.
SECTION 8.09 General Limitation on Guarantee Obligations. In
any action or proceeding involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Subsidiary Guarantor under
Section 8.01 would otherwise, taking into account the provisions of Section
8.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under said Section 8.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, any Lender, the Administrative Agent or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
ARTICLE IX
The Administrative Agent
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting the
generality of the foregoing (a) the Administrative Agent shall not be subject to
any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 10.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.02) or in the absence of its own gross
negligence or wilful misconduct. The Administrative Agent shall be deemed not to
have knowledge of any Default unless and until written notice thereof is given
to the Administrative Agent by the Borrower or a Lender, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall take such action (subject to
Section 10.02(b) hereof and subject to the right of the Administrative Agent to
receive further assurances to its satisfaction from the Lenders of their
indemnification obligations under Section 10.03(c) hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take such action) with respect to the notice of a Default referred
to in the preceding paragraph as shall be directed by the Required Lenders,
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
notice of Default as it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of the
Required Lenders or all of the Lenders.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such subagent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 10.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
The Arranger identified on the cover page of this Agreement
shall have no duties or responsibilities hereunder. The Co-Agent identified on
the cover page of this Agreement shall have no duties or responsibilities
hereunder other than as a Lender hereunder.
ARTICLE X
Miscellaneous
SECTION 10.01. Notices. Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at Smithfield Foods, Inc. at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, Attention:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇ (Telecopy No. ▇▇▇- ▇▇▇-▇▇▇▇) and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
(Telecopy No. 757-365-3023);
(b) if to any Subsidiary Guarantor, at the address for
notices to the Borrower as provided herein;
(c) if to the Administrative Agent, or the Collateral Agent,
to The Chase Manhattan Bank, Agent Bank Services Group, ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(Telecopy No. 212-552-5658), with a copy to The Chase Manhattan Bank,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇ ▇▇▇▇▇▇
(Telecopy No. 212-344-0246); and
(d) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02. Waivers; Amendments.
(a) No failure or delay by the Administrative Agent or any
Lender in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Obligor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof, nor the
Intercreditor Agreement nor any provision thereof, may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Obligors and the Required Lenders or by the Obligors and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.17(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender, (vi) change the reference to 75% in the definition of "Borrowing
Base" to a higher percentage without the written consent of each Lender; or
(vii) release all or substantially all of the Subsidiary Guarantors from their
obligations in respect of their Guarantee hereunder without the written consent
of each Lender; provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent hereunder
without the prior written consent of the Administrative Agent.
(c) Neither any Security Document nor any provision thereof
may be waived, amended or modified, nor may any collateral thereunder be
released, except pursuant to an agreement or agreements in writing entered into
by the Obligors party thereto, and by the Administrative Agent with the consent
of the Lenders. Notwithstanding the foregoing, the Administrative Agent shall,
at the request of the Borrower, (i) agree to release from the Lien of the
Security Agreement any property that is the subject of a permitted sale
hereunder to a Person other than the Borrower or a Subsidiary and (ii) agree to
terminate the Security Agreement if (w) at the time of such release, the
aggregate amount of obligations of the Borrower and its Subsidiaries secured by
Liens permitted by any of clauses (c), (d), (e), (g) (to the extent extending,
renewing or replacing any of the Liens permitted by any of clauses (c), (d) and
(e)) and (h) does not exceed 15% of Consolidated Tangible Net Worth, (x) the
long term senior, unsecured debt of the Borrower is rated at least Baa3 by
▇▇▇▇▇'▇ and is rated at least BBB- by S&P, (y) no Default has occurred and is
continuing and (z) all collateral security provided with respect to the Senior
Note Documents and the Pari Passu Debt shall have been released.
SECTION 10.03. Expenses; Indemnity: Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, in connection with the syndication of the credit facilities provided for
herein, the preparation and administration of this Agreement and the other Loan
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated) and (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents, including its rights under this
Section, or in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement or the
other Loan Documents or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or wilful
misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent under paragraph (a) or (b)
of this Section, each Lender severally agrees to pay to the Administrative Agent
such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 10.04. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that an Obligor may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by such Obligor
without such consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent and the Lenders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Borrower and the Administrative Agent must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld or
delayed), (ii) except in the case of an assignment to a Lender or an Affiliate
of a Lender or an assignment of the entire remaining amount of the assigning
Lender's Commitment, the amount of the Commitment of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $10,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement, (iv) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, and (v)
the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire; provided further that any consent of the
Borrower otherwise required under this paragraph shall not be required if an
Event of Default under clause (h) or (i) of Article VII has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.15, 2.16 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and
2.16 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.08 as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.17(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 10.05. Survival. All covenants, agreements,
representations and warranties made by the Obligors herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement and the other Loan Documents shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.14,
2.15, 2.16 and 10.03 and Article IX shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Commitments or
the termination of this Agreement or any provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of any Obligor against any of and all the obligations of such Obligor now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Consent to
Service of Process.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
(b) EACH OBLIGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT,
AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against any Obligor or its properties
in the courts of any jurisdiction.
(c) Each Obligor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 10.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 10.12. Confidentiality. Each of the Administrative
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement or the other Loan Documents, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the other Loan Documents or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement or the other Loan
Documents, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender
on a nonconfidential basis from a source other than the Borrower. For the
purposes of this Section, "Information" means all information received from any
Obligor relating to such Obligor or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the
case of information received from any Obligor after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 10.13. Perfection of Security Interests.
Notwithstanding anything contained herein or in any Security Document to the
contrary, neither the Borrower nor any of its Subsidiaries shall be responsible
for the failure of the Lien created by the Security Agreement to be perfected
(a) to the extent that such failure results from the failure by the Collateral
Agent to file continuation statements under the Uniform Commercial Code in
respect of such Lien, (b) to the extent that such failure relates to Liens over
letters of credit supporting LC-Backed Receivables, provided that the aggregate
amount of LC-Backed Receivables in respect of which such Liens over the related
letters of credit are not perfected does not exceed 10% of the Consolidated
Borrowing Base, (c) to the extent that such failure relates to Liens over
Inventory stored in warehouses, provided that the amount of the Consolidated
Borrowing Base attributable to such Inventory shall not exceed $250,000 for any
single warehouse and that the amount of the Consolidated Borrowing Base
attributable to such Inventory and to Eligible Receivables referred to in the
following clause (d) shall not exceed $20,000,000 in the aggregate or (d) to the
extent that such failure relates to Liens over Eligible Receivables and results
from such Eligible Receivables being due from Governmental Authorities, provided
that the amount of the Consolidated Borrowing Base attributable to such Eligible
Receivables and to Inventory referred to in the preceding clause (c) shall not
exceed $20,000,000 in the aggregate. If the amount of Collateral subject to any
such failure exceeds any relevant amount referred to in clause (a), (b) or (c)
of the preceding sentence, then, (i) on the date (the "Trigger Date") that the
Borrower determines that such excess exists, the Borrower shall immediately
notify the Administrative Agent and the Collateral Agent of such event, (ii) the
Borrower shall furnish to the Administrative Agent on the Trigger Date a
Borrowing Base Certificate calculated on the basis of the Borrowing Base
Certificate most recently furnished hereunder but recalculating the Borrowing
Base with pro forma adjustments reflecting the exclusion of such excess
Collateral from the Eligible Receivables or Eligible Inventory, as the case may
be, (iii) the Borrower shall forthwith on the Trigger Date comply with its
obligations under Section 2.10(b) after giving effect to the Borrowing Base as
so calculated and (iv) not later than 30 days following the Trigger Date, the
Borrower shall have taken such action as shall be necessary to eliminate such
excess. If the Borrower is in compliance with the preceding sentence, then (x)
except as expressly provided in the preceding sentence, no account or Inventory
shall be excluded from Eligible Receivables or Eligible Inventory, as the case
may be, (y) no Obligor shall be deemed to have breached any covenant or made any
untrue representation or warranty and (z) no Default or Event of Default shall
be deemed to have occurred or be continuing, in each of the cases referred to in
the foregoing clauses (x), (y) and (z) solely because any Lien created by the
Security Agreement shall fail to be perfected if such failure is described in
clause (a), (b) or (c) of the first sentence or this Section 10.13; except that,
notwithstanding the preceding provisions of this Section 10.13, the Borrower
shall from time to time upon the request of the Administrative Agent or the
Required Lenders deliver or cause to be delivered to the Collateral Agent in
pledge under the Security Agreement the letters of credit supporting LC-Backed
Receivables.
SECTION 10.14. Acknowledgements.
Each Obligor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or fiduciary duty to any Obligor arising
out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Administrative Agent and
the Lenders, on the one hand, and the Obligors, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among any party or parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SMITHFIELD FOODS, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice-President,
Secretary and Treasurer
THE SMITHFIELD PACKING COMPANY,
INCORPORATED
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇▇ OF SMITHFIELD, LTD.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INCORPORATED
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇ MEAT GROUP, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇'▇ OF CAROLINA, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
▇▇▇▇▇▇▇'▇ OLD FASHIONED COUNTRY
HAMS, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
VALLEYDALE FOODS, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
COPAZ PACKING CORPORATION
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
SUNNYLAND, INC.
By_________________________
Name: ▇▇▇▇▇ ▇ ▇▇▇▇
Title: Secretary
SMITHFIELD PACKING-LANDOVER, INC.
By_________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
By_________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN -
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH,
By_________________________
Name:
Title:
By_________________________
Name:
Title:
AGRIBANK, FCB,
By_________________________
Name:
Title:
CAISSE NATIONALE DE CREDIT
AGRICOLE,
By_________________________
Name:
Title:
DG BANK, DEUTSCHE
GENOSSENSCHAFTSBANK,
CAYMAN ISLANDS BRANCH,
By_________________________
Name:
Title:
By_________________________
Name:
Title:
NATIONSBANK OF TEXAS, N.A.,
By_________________________
Name:
Title:
NATIONSBANK, N.A.,
By_________________________
Name:
Title:
BOATMEN'S FIRST NATIONAL BANK
OF KANSAS CITY,
By_________________________
Name:
Title:
FBS AG CREDIT, INC.,
By_________________________
Name:
Title:
SUNTRUST BANK, ATLANTA,
By_________________________
Name:
Title:
By_________________________
Name:
Title:
BANK OF TOKYO-MITSUBISHI,
By_________________________
Name:
Title:
DRESDNER BANK AG,
By_________________________
Name:
Title:
FARM CREDIT SERVICES OF THE
MIDLANDS, PCA,
By_________________________
Name:
Title:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
By_________________________
Name:
Title:
SANWA BANK LIMITED,
By_________________________
Name:
Title:
SUMITOMO BANK, LIMITED,
NEW YORK BRANCH,
By_________________________
Name:
Title:
[SCHEDULES AND EXHIBITS OMITTED]
