$125,000,000
CREDIT AGREEMENT
AMONG
RALCORP HOLDINGS, INC.
as Borrower,
THE LENDERS NAMED HEREIN,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
DATED AS OF
April 28, 1999
BANC ONE CAPITAL MARKETS, INC.,
as Arranger
and
WACHOVIA BANK, N.A.,
as Documentation Agent
TABLE OF CONTENTS
-------------------
ARTICLE I
DEFINITIONS 1
ARTICLE II
THE FACILITY 18
2.1. The Facility 18
2.1.1. Description of Facility 18
2.1.2. Facility Amount 19
2.1.3. Availability of Facility 19
2.2. Ratable Advances 19
2.2.1. Ratable Advances 19
2.2.2 Ratable Advance Rate Options 19
2.2.3. Method of Selecting Types and Interest Periods
for Ratable Advances 19
2.2.4. Conversion and Continuation of Outstanding Ratable Advances 20
2.3. Competitive Bid Advances 21
2.3.1. Competitive Bid Option 21
2.3.2. Competitive Bid Quote Request 21
2.3.3. Invitation for Competitive Bid Quotes 21
2.3.4. Submission and Contents of Competitive Bid Quotes 22
2.3.5. Notice to Borrower 23
2.3.6. Acceptance and Notice by Borrower 23
2.3.7. Allocation by Agent 24
2.4. Swing Line Loans 24
2.5. Availability of Funds 26
2.6. Commitment Fee; Reductions and Increases in Aggregate Commitment 26
2.7. Minimum Amount of Each Ratable Advance 27
2.8. Optional Principal Payments 27
2.9. Changes in Interest Rate, etc. 27
2.10. Rates Applicable After Default 28
2.11. Method of Payment 28
2.12. Notes; Telephonic Notices 28
2.13. Interest Payment Dates; Interest and Fee Basis 29
2.14. Notification of Advances, Interest Rates, Prepayments, Commitment
Reductions and Issuance Requests 29
2.15. Lending Installations 29
2.16. Non-Receipt of Funds by the Agent 29
2.17. Taxes 30
2.18. Agent's Fees 31
2.19. Facility Letters of Credit 31
2.19.1. Issuance of Facility Letters of Credit 31
2.19.2 Participating Interests 31
2.19.3 Facility Letter of Credit Reimbursement Obligations 32
2.19.4 Procedure for Issuance 33
2.19.5 Nature of the Lenders' Obligations 34
2.19.6 Facility Letter of Credit Fees 34
2.20. Extension of Facility Termination Date 35
ARTICLE III
CHANGE IN CIRCUMSTANCES 35
3.1. Yield Protection 35
3.2. Changes in Capital Adequacy Regulations 36
3.3. Availability of Types of Advances 37
3.4. Funding Indemnification 37
3.5. Lender Statements; Survival of Indemnity 37
ARTICLE IV
CONDITIONS PRECEDENT 37
4.1. Initial Loans and Facility Letters of Credit 37
4.2. Each Future Advance and Facility Letter of Credit 39
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ARTICLE V
REPRESENTATIONS AND WARRANTIES 40
5.1. Corporate Existence and Standing 40
5.2. Authorization and Validity 40
5.3. Compliance with Laws and Contracts 40
5.4 Governmental Consents 41
5.5. Financial Statements 41
5.6. Material Adverse Change 41
5.7. Taxes 41
5.8. Litigation and Contingent Obligations 41
5.9 Subsidiaries and Capitalization 42
5.10 ERISA 42
5.11. Defaults 43
5.12. Federal Reserve Regulations 43
5.13. Investment Company; Public Utility Holding Company Act 43
5.14. Certain Fees 43
5.15. Solvency 43
5.16. Ownership of Properties 43
5.17. Indebtedness 44
5.18. Subordinated Indebtedness 44
5.19. Employee Controversies 44
5.20. Material Agreements 44
5.21. Environmental Laws 44
5.22. Insurance 44
5.23. Disclosure 44
5.24 Year 2000 45
ARTICLE VI
COVENANTS 45
6.1. Financial Reporting 45
6.2. Use of Proceeds 46
6.3. Notice of Default. 47
6.4. Conduct of Business 47
6.5. Taxes 47
6.6. Insurance 47
6.7. Compliance with Laws 47
6.8. Maintenance of Properties 47
6.9. Inspection 47
6.10. Capital Stock and Dividends 48
6.11. Indebtedness 48
6.12. Merger 48
6.13. Sale of Assets 49
6.14. Sale of Accounts 49
6.15. Investments and Purchases 49
6.16. Contingent Obligations 50
6.17. Liens 50
6.18. Lease Rentals 51
6.19. Affiliates 52
6.20. Subordinated Indebtedness; Other Indebtedness 52
6.21. Environmental Matters 52
6.22. Change in Corporate Structure; Fiscal Year 52
6.23. Inconsistent Agreements 52
6.24. Financial Covenants 52
6.24.1. Adjusted Net Worth 52
6.24.2. Leverage Ratio 53
6.24.3. Interest Expense Coverage Ratio 53
6.25. ERISA Compliance 53
6.26. Material Subsidiaries 53
ARTICLE VII
DEFAULTS 53
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 55
8.1. Acceleration 55
8.2. Amendments 56
8.3. Preservation of Rights 56
ARTICLE IX
GENERAL PROVISIONS 57
9.1. Survival of Representations 57
9.2. Governmental Regulation 57
9.3. Taxes 57
9.4. Headings 57
9.5. Entire Agreement 57
9.6. Several Obligations; Benefits of this Agreement 57
9.7. Expenses; Indemnification 57
9.8. Numbers of Documents 58
9.9. Accounting 58
9.10. Severability of Provisions 58
9.11. Nonliability of Lenders 58
9.12. CHOICE OF LAW 59
9.13. CONSENT TO JURISDICTION 59
9.14. WAIVER OF JURY TRIAL 59
9.15. Disclosure 59
9.16. Counterparts 59
9.17. Confidentiality 60
ARTICLE X
THE AGENT 60
10.1. Appointment 60
10.2. Powers 60
10.3. General Immunity 60
10.4. No Responsibility for Loans, Recitals, etc. 61
10.5. Action on Instructions of Lenders 61
10.6. Employment of Agents and Counsel 61
10.7. Reliance on Documents; Counsel 61
10.8. Agent's Reimbursement and Indemnification 61
10.9. Notice of Default 62
10.10. Rights as a Lender 62
10.11. Lender Credit Decision 62
10.12. Successor Agent 62
10.13. Documentation Agent 63
ARTICLE XI
SETOFF; RATABLE PAYMENTS 63
11.1. Setoff 63
11.2. Ratable Payments 63
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 64
12.1. Successors and Assigns 64
12.2. Participations. 64
12.2.1. Permitted Participants; Effect. 64
12.2.2. Voting Rights 64
12.2.3. Benefit of Setoff 64
12.3. Assignments 65
12.3.1. Permitted Assignments 65
12.3.2. Effect; Effective Date 65
12.4. Dissemination of Information 65
12.5. Tax Treatment 65
ARTICLE XIII
NOTICES 66
13.1. Giving Notice 66
13.2. Change of Address 66
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EXHIBITS
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Exhibit A - Note (Ratable Loan)
Exhibit B - Note (Competitive Bid Loan)
Exhibit C - Competitive Bid Quote Request
Exhibit D - Invitation for Competitive Bid Quotes
Exhibit E - Competitive Bid Quote
Exhibit F - Note (Swing Line Loan)
Exhibit G - Compliance Certificate
Exhibit H - Assignment Agreement
Exhibit I - Form of General Counsel Opinion
SCHEDULES
---------
Schedule 1 - Commitments
Schedule 5.8 - Material Contingent Obligations
Schedule 5.9 - Subsidiaries and Capitalization
Schedule 5.10 - ERISA
Schedule 5.14 - Brokers' Fees
Schedule 5.16 - Properties
Schedule 5.17 - Indebtedness
Schedule 6.15 - Investments
Schedule 6.17 - Liens
-iv-
CREDIT AGREEMENT
This Credit Agreement, dated as of April 28, 1999, is among RALCORP
HOLDINGS, INC., a Missouri corporation, the Lenders and THE FIRST NATIONAL BANK
OF CHICAGO, individually and as Agent.
R E C I T A L S:
---------------
A. The Borrower has requested that the Lenders make financial
accommodations to it in an initial aggregate principal amount of $125,000,000,
the proceeds of which the Borrower will use for the (i) general corporate needs
of the Borrower and its Subsidiaries, (ii) working capital for the Borrower and
its Subsidiaries, and (iii) non-hostile acquisitions by the Borrower.
B. The Lenders are willing to extend such financial accommodations on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the
Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement:
"Absolute Rate" means, with respect to an Absolute Rate Loan made by a
given Lender for the relevant Absolute Rate Interest Period, the rate of
interest per annum (rounded to the nearest 1/100 of 1%) offered by such Lender
and accepted by the Borrower.
"Absolute Rate Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Absolute Rate Loans made by some or all of the
Lenders to the Borrower at the same time and for the same Interest Period.
"Absolute Rate Auction" means a solicitation of Competitive Bid Quotes
setting forth Absolute Rates pursuant to Section 2.3.
------------
"Absolute Rate Interest Period" means, with respect to an Absolute Rate
Advance, a period of not less than 7 and not more than 180 days commencing on a
Business Day selected by the Borrower pursuant to this Agreement. If such
Absolute Rate Interest Period would end on a day which is not a Business Day,
such Absolute Rate Interest Period shall end on the next succeeding Business
Day.
"Absolute Rate Loan" means a Loan which bears interest at the Absolute
Rate.
"Accounts Receivable Financing Program" means a program of sales or
securitization of, or transfers of interests in, accounts receivable and related
contract rights ("Receivables") by the Borrower or any Subsidiary on a limited
-----------
recourse basis pursuant to which the aggregate amount of financing thereunder
shall not exceed $50,000,000 at any time outstanding, provided that such sale or
transfer qualifies as a sale under Agreement Accounting Principles.
"Adjusted EBITDA" means, for any applicable computation period, the sum of
(a) EBIT for such period plus (b) the Borrower's and Subsidiaries' amortization
----
and depreciation deducted in determining Net Income for such period; provided,
--------
however, that (i) Adjusted EBITDA shall be calculated giving pro forma effect
-------
for any Permitted Purchase during such period as though such Permitted Purchase
occurred on the first day of such period, and (ii) in the event that the
Borrower sells or otherwise disposes of all or any portion of the capital stock
of Vail Resorts, Inc. during such period, then Adjusted EBITDA shall be
calculated by subtracting (adding) all equity earnings (losses) attributable to
such divested interest for such period.
"Adjusted Net Income" means, for any computation period (a) Net Income for
such period, minus (plus) (b) earnings (losses) during such period attributable
----- ----
to the equity investment by the Borrower and its Subsidiaries in Vail Resorts,
Inc. and included in the computation of Net Income for such period, plus (c) to
----
the extent not included in the computation of Net Income for such period, the
sum of all proceeds in excess of book value (net of related costs, expenses,
fees and taxes) received by the Borrower or any Subsidiary of the Borrower
during such period from the sale or other disposition of the capital stock of
Vail Resorts, Inc.
"Adjusted Net Worth" means at any date (a) Net Worth minus (b) the value of
-----
the equity investment of the Borrower and its Subsidiaries in Vail Resorts, Inc.
included in the computation of Net Worth at such date.
"Advance" means a borrowing hereunder consisting of the aggregate amount of
the several Loans made by some or all of the Lenders to the Borrower on the same
Borrowing Date, of the same Type (or on the same interest basis in the case of
Competitive Bid Advances) and, when applicable, for the same Interest Period and
includes a Competitive Bid Advance and a Swing Line Loan.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means First Chicago in its capacity as agent for the Lenders
pursuant to Article X, and not in its individual capacity as a Lender, and any
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successor Agent appointed pursuant to Article X.
----------
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders hereunder. The initial Aggregate Commitment is $125,000,000 as of the
date hereof, as adjusted from time to time pursuant to the terms of this
Agreement.
"Agreement" means this Credit Agreement, as it may be amended, modified or
restated and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
those used in preparing the Financial Statements; provided, however, that for
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purposes of all computations required to be made with respect to compliance by
the Borrower with Section 6.24, such term shall mean generally accepted
-------------
accounting principles as in effect on the date hereof, applied in a manner
consistent with those used in preparing the Financial Statements.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (a) the Corporate Base Rate for such day and (b) the
Federal Funds Effective Rate most recently determined by the Agent plus of 1%
per annum.
"Alternate Base Rate Advance" means a Ratable Advance which bears interest
at the Alternate Base Rate.
"Alternate Base Rate Loan" means a Ratable Loan which bears interest at the
Alternate Base Rate.
"Alternate Swing Line Rate" means a rate agreed upon from time to time by
the Borrower and the Swing Line Lender.
"Applicable Commitment Fee Percentage" means, subject to the last sentence
of this definition, for any period, the applicable of the following percentages
in effect with respect to such period as the Leverage Ratio shall fall within
the indicated ranges:
Leverage Ratio Applicable Commitment Fee Percentage
--------------------- ------------------------------------
Greater than But less than or Equal to
------------ -------------------------
2.5:1.0 -------- .25%
1.5:1.0 2.5:1.0 .20%
0.5:1.0 1.5:1.0 .175%
-- 0.5:1.0 .15%
The Leverage Ratio shall be calculated by the Borrower as of the end of each of
its Fiscal Quarters commencing June 30, 1999 and shall be reported to the Agent
pursuant to a certificate executed by the chief financial officer, treasurer or
controller of the Borrower and delivered in accordance with Section 6.1(d)
--------------
hereof. The Applicable Commitment Fee Percentage shall be adjusted, if
necessary, quarterly as of the tenth day after the required delivery date for
the certificate referenced above; provided, that if such certificate, together
--------
with the financial statements to which such certificate relates, are not
delivered by such tenth day, then the Applicable Commitment Fee Percentage shall
be equal to .25% until such certificate and related financial statements are so
delivered. Until adjusted as described above for the Fiscal Quarter ended
September 30, 1999 the Applicable Commitment Fee Percentage shall be equal to
.175%; provided, that the Applicable Commitment Fee Percentage shall be
--------
increased (but not decreased), if necessary, based on the delivery of the
certificate and related financial statements referenced above for the Fiscal
Quarter ending June 30, 1999 pursuant to the terms and conditions provided
above.
"Applicable Eurodollar Margin" means, subject to the last sentence of this
definition, for any period, the applicable of the following percentages in
effect with respect to such period as the Leverage Ratio shall fall within the
indicated ranges:
Leverage Ratio Applicable Eurodollar Margin
--------------------- ----------------------------
Greater than But less than or Equal to
------------ -------------------------
2.5:1.0 -------- 1.00%
1.5:1.0 2.5:1.0 .875%
0.5:1.0 1.5:1.0 .75%
-- 0.5:1.0 .625%
The Leverage Ratio shall be calculated by the Borrower as of the end of each of
its Fiscal Quarters commencing June 30, 1999 and shall be reported to the Agent
pursuant to a certificate executed by the chief financial officer, treasurer or
controller of the Borrower and delivered in accordance with Section 6.1(d)
--------------
hereof. The Applicable Eurodollar Margin shall be adjusted, if necessary,
quarterly as of the tenth day after the required delivery date for the
certificate referenced above; provided, that if such certificate, together with
--------
the financial statements to which such certificate relates, are not delivered by
such tenth day, then the Applicable Eurodollar Margin shall be equal to 1.00%
until such certificate and related financial statements are so delivered. Until
adjusted as described above for the Fiscal Quarter ended September 30, 1999, the
Applicable Eurodollar Margin shall be equal to .75%; provided, that the
--------
Applicable Eurodollar Margin shall be increased (but not decreased), if
necessary, based on the delivery of the certificate and related financial
statements referenced above for the Fiscal Quarter ending June 30, 1999 pursuant
to the terms and conditions provided above.
"Arranger" means Banc One Capital Markets, Inc. and its successors.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Asset Disposition" means any sale, transfer or other disposition of any
asset of the Borrower or any Subsidiary in a single transaction or in a series
of related transactions (other than the sale of inventory or unused or obsolete
equipment in the ordinary course).
"Authorized Officer" means any of the president, chief financial officer,
treasurer or controller of the Borrower, acting singly.
"Bankruptcy Code" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, sections 1 et seq.,
-- ---
as the same may be amended from time to time, and any successor thereto or
replacement therefor which may be hereafter enacted.
"Borrower" means Ralcorp Holdings, Inc., a Missouri corporation.
"Borrowing Date" means a date on which an Advance is made or a Facility
Letter of Credit is issued hereunder.
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago for the conduct of substantially all
of their commercial lending activities and on which dealings in United States
dollars are carried on in the London interbank market, and (b) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities.
"Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change" is defined in Section 3.2.
------------
"Change in Control" means (a) the acquisition by any Person, or two or more
Persons acting in concert, including without limitation any acquisition effected
by means of any transaction contemplated by Section 6.12, of beneficial
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ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or more of the
outstanding shares of voting stock of the Borrower, or (b) during any period of
25 consecutive calendar months, commencing on the date of this Agreement, the
ceasing of those individuals (the "Continuing Directors") who (i) were directors
--------------------
of the Borrower on the first day of each such period or (ii) subsequently became
directors of the Borrower and whose initial election or initial nomination for
election subsequent to that date was approved by a majority of the Continuing
Directors then on the board of directors of the Borrower, to constitute a
majority of the board of directors of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commercial Letter of Credit" means a trade or commercial Facility Letter
of Credit issued by an Issuer pursuant to Section 2.19 hereof.
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"Commitment" means, for each Lender, the obligation of such Lender to make
Loans (other than Swing Line Loans) and participate in Facility Letters of
Credit not exceeding the amount set forth in Schedule 1 hereto and as set forth
in any Notice of Assignment relating to any assignment which has become
effective pursuant to Section 12.3.2, as such amount may be modified from time
--------------
to time pursuant to the terms hereof.
"Competitive Bid Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Competitive Bid Loans made by some or all of the
Lenders to the Borrower at the same time and for the same Interest Period.
"Competitive Bid Borrowing Notice" is defined in Section 2.3.6.
--------------
"Competitive Bid Loan" means a Eurodollar Bid Rate Loan or an Absolute Rate
Loan, or both, as the case may be.
"Competitive Bid Margin" means the margin above or below the applicable
Eurodollar Base Rate offered for a Eurodollar Bid Rate Loan, expressed as a
percentage (rounded to the nearest 1/100 of 1%) to be added or subtracted from
such Eurodollar Base Rate.
"Competitive Bid Note" means a promissory note in substantially the form of
Exhibit B hereto, with appropriate insertions, duly executed and delivered to
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the Agent by the Borrower for the account of a Lender and payable to the order
of such Lender, including any amendment, modification, renewal or replacement of
such promissory note.
"Competitive Bid Quote" means a Competitive Bid Quote substantially in the
form of Exhibit E hereto completed and delivered by a Lender to the Agent in
----------
accordance with Section 2.3.4.
--------------
"Competitive Bid Quote Request" means a Competitive Bid Quote Request
substantially in the form of Exhibit C hereto completed and delivered by the
---------
Borrower to the Agent in accordance with Section 2.3.2.
--------------
"Condemnation" is defined in Section 7.8.
------------
"Consolidated" or "consolidated", when used in connection with any
calculation, means a calculation to be determined on a consolidated basis for
the Borrower and its Subsidiaries in accordance with Agreement Accounting
Principles.
"Consolidated Interest Expense" means, with respect to any period, the sum
(without duplication) of (i) Consolidated interest expense of the Borrower and
its Consolidated Subsidiaries for such period before the effect of interest
income, as reflected on the Consolidated statements of income for the Borrower
and its Consolidated Subsidiaries for such period, and (ii) Consolidated
interest, yield or discount accrued during such period on the aggregate
outstanding investment or claim held by purchasers, assignees or other
transferees of (or of interests in) receivables of the Borrower and its
Consolidated Subsidiaries in connection with a revolving Accounts Receivable
Financing Program (regardless of the accounting treatment of such Accounts
Receivable Financing Program).
"Consolidated Person" means, for the taxable year of reference, each Person
which is a member of the affiliated group of the Borrower if Consolidated
returns are or shall be filed for such affiliated group for federal income tax
purposes or any combined or unitary group of which the Borrower is a member for
state income tax purposes.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement or take-or-pay contract or application for a Letter of Credit.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
------------
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when and
as said corporate base rate changes. The Corporate Base Rate is a reference
rate and does not necessarily represent the lowest or best rate of interest
actually charged to any customer. First Chicago may make commercial loans or
other loans at rates of interest at, above or below the Corporate Base Rate.
"Default" means an event described in Article VII.
------------
"EBIT" means, for any applicable computation period, the Borrower's and
Subsidiaries' Net Income on a consolidated basis, plus (a) consolidated Federal,
----
state, local and foreign income and franchise taxes paid or accrued during such
period and (b) Consolidated Interest Expense for such period, minus (or plus)
----- ----
equity earnings (or losses) during such period attributable to equity
investments by the Borrower and its Subsidiaries in the capital stock or other
equity interests in any Person which is not a Subsidiary (other than Vail
Resorts, Inc.).
"Environmental Claims" means all claims, investigations, litigation,
administrative proceedings, notices, requests for information, whether pending
or threatened, or judgements or orders, however asserted, by any Governmental
Authority or other Person alleging potential liability or responsibility for any
violation of any Environmental Laws, or for any Release or injury to the
environment.
"Environmental Laws" means all federal, state and local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, direct duties, requests, licenses, approvals,
certificates, decrees, standards, permits and other authorizations of, and
agreements with, any Governmental Authority, in each case relating to
environmental, health, safety and land use matters, including without
limitations, chemical substances, air emissions, effluent discharges and the
storage, treatment, transport and disposal of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Advance" means a Eurodollar Bid Rate Advance or a Eurodollar
Ratable Advance, or both, as the case may be.
"Eurodollar Auction" means a solicitation of Competitive Bid Quotes setting
forth Eurodollar Bid Rates pursuant to Section 2.3.
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"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Eurodollar Interest Period, the rate determined by the Agent to be the
rate at which deposits in U.S. dollars are offered by First Chicago to
first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Eurodollar
Interest Period, in the approximate amount of First Chicago's relevant
Eurodollar Ratable Loan (or in the case of a Eurodollar Bid Rate Advance, in an
amount comparable to the amount of such Advance) and having a maturity
approximately equal to such Eurodollar Interest Period; provided, that the
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Eurodollar Base Rate for a Eurodollar Ratable Advance having a seven day
Interest Period shall be determined by reference to a maturity of one month.
"Eurodollar Bid Rate" means, with respect to a Eurodollar Bid Rate Loan
made by a given Lender for the relevant Eurodollar Interest Period, the sum of
(a) the Eurodollar Base Rate and (b) the Competitive Bid Margin offered by such
Lender and accepted by the Borrower.
"Eurodollar Bid Rate Advance" means a Competitive Bid Advance which bears
interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" means a Loan which bears interest at the
Eurodollar Bid Rate.
"Eurodollar Interest Period" means, with respect to a Eurodollar Ratable
Advance or a Eurodollar Bid Rate Advance, a period of seven days or one, two,
three or six months commencing on a Business Day selected by the Borrower
pursuant to this Agreement. A Eurodollar Interest Period of one, two, three or
six months shall end on (but exclude) the day which corresponds numerically to
such date one, two, three or six months thereafter; provided, however, that if
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there is no such numerically corresponding day in such next, second, third or
sixth succeeding month, such Eurodollar Interest Period shall end on the last
Business Day of such next, second, third or sixth succeeding month. If a
Eurodollar Interest Period would otherwise end on a day which is not a Business
Day, such Eurodollar Interest Period shall end on the next succeeding Business
Day; provided, however, that if, with respect to a Eurodollar Default Period of
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one, two, three or six month, said next succeeding Business Day falls in a new
month, such Eurodollar Interest Period shall end on the immediately preceding
Business Day.
"Eurodollar Loan" means a Eurodollar Ratable Loan or Eurodollar Bid Rate
Loan, or both, as the case may be.
"Eurodollar Ratable Advance" means an Advance which bears interest at a
Eurodollar Rate requested by the Borrower pursuant to Section 2.2.3.
--------------
"Eurodollar Ratable Loan" means a Loan requested by the Borrower pursuant
to Section 2.2.3 which bears interest at a Eurodollar Rate.
--------------
"Eurodollar Rate" means, with respect to a Eurodollar Ratable Advance for
the relevant Eurodollar Interest Period, the sum of (a) the quotient of (i) the
Eurodollar Base Rate applicable to such Eurodollar Interest Period, divided by
(ii) one minus the Reserve Requirement (expressed as a decimal) applicable to
such Eurodollar Interest Period, plus (b) the Applicable Eurodollar Margin plus
(c) only in the case of Eurodollar Ratable Advances having a seven day Interest
Period, .125%. The Eurodollar Rate shall be rounded to the next higher multiple
of 1/16 of 1% if the rate is not such a multiple.
"Existing Credit Agreement" means that certain credit agreement among First
Chicago, as agent, the financial institutions party thereto, and Ralcorp
Holdings, Inc. dated as of January 31, 1997, as amended.
"Facility Letter of Credit" means a Letter of Credit issued pursuant to
Section 2.19.
-------------
"Facility Letter of Credit Obligations" means as at the time of
determination thereof, the sum of (a) the Reimbursement Obligations then
outstanding and (b) the aggregate then undrawn face amount of the then
outstanding Facility Letters of Credit.
"Facility Letter of Credit Sublimit" means an aggregate amount of
$10,000,000.
"Facility Termination Date" means April 28, 2002, as such date may be
extended pursuant to Section 2.20.
-------------
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financial Statements" is defined in Section 5.5.
------------
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its successors.
"Fiscal Quarter" means one of the four three-month accounting periods
comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period ending September 30
of each year.
"Governmental Authority" means any government (foreign or domestic) or any
state or other political subdivision thereof or any governmental body, agency,
authority, department or commission (including without limitation any taxing
authority or political subdivision) or any instrumentality or officer thereof
(including without limitation any court or tribunal) exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any corporation, partnership or other entity directly or
indirectly owned or controlled by or subject to the control of any of the
foregoing.
"Guarantors" means ▇▇▇▇▇▇▇, Inc., Flavor House Products, Inc., ▇▇▇▇▇▇
▇▇▇▇▇▇ & Co., Inc., Nutcracker Brands, Inc., RH Financial Corporation, Southern
Roasted Nuts of Georgia, Inc., Sugar Kake Cookie Inc., ▇▇▇▇▇ Company, and each
other Material Subsidiary.
"Hazardous Materials" means any toxic or hazardous waste, substance or
chemical or any pollutant, contaminant, chemical or other substance defined or
regulated pursuant to any Environmental Laws, including, without limitation,
asbestos, petroleum or crude oil.
"Indebtedness" of a Person means such Person's (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (c) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or similar instruments,
(e) Capitalized Lease Obligations, (f) Rate Hedging Obligations, (g) Contingent
Obligations, (h) obligations for which such Person is obligated pursuant to or
in respect of a Facility Letter of Credit and the face amount of any other
Letter of Credit, (i) obligations under so-called "synthetic leases" and (j)
repurchase obligations or liabilities of such Person with respect to accounts or
notes receivable sold by such Person.
"Interest Expense Coverage Ratio" means for any applicable computation
period of the Borrower, the ratio of EBIT to the Borrower's Consolidated
Interest Expense for such period, all as determined in accordance with Agreement
Accounting Principles.
"Interest Period" means a Eurodollar Interest Period or an Absolute Rate
Interest Period. Notwithstanding the foregoing, each Swing Line Loan bearing
interest at the Alternate Swing Line Rate shall be deemed to have an Interest
Period of from one to seven days as agreed upon between the Borrower and the
Swing Line Lender.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade), deposit
account or contribution of capital by such Person to any other Person or any
investment in, or purchase or other acquisition of, the stock, partnership
interests, notes, debentures or other securities of any other Person made by
such Person.
"Invitation for Competitive Bid Quotes" means an Invitation for Competitive
Bid Quotes substantially in the form of Exhibit D hereto, completed and
----------
delivered by the Agent to the Lenders in accordance with Section 2.3.3.
-------------
"Issuance Request" is defined in Section 2.19.4.
---------------
"Issuer" means First Chicago.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Cash Collateral Account" is defined in Section 8.1. Such
-----------
account and the related cash collateralization shall be subject to documentation
satisfactory to the Agent.
"Leverage Ratio" means, with respect to the Borrower on a consolidated
basis with its Subsidiaries, at the end of any Fiscal Quarter, the ratio of (a)
Total Debt at the end of such Fiscal Quarter to (b) Adjusted EBITDA for the four
Fiscal Quarters then ending.
"Lien" means any security interest, lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance and "Loans" means, with respect to the Lenders, the aggregate of all
Advances. The terms "Loan" and "Loans" shall also include any Swing Line Loans.
"Loan Documents" means this Agreement, the Notes, the Subsidiary Guaranty,
the Reimbursement Agreements and the other documents and agreements contemplated
hereby and executed by the Borrower in favor of the Agent or any Lender.
"Margin Stock" has the meaning assigned to that term under Regulation U.
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or other) and results of operations of
the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform its obligations under the Loan Documents, or (c) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent or the Lenders thereunder.
"Material Subsidiary" means a Subsidiary of the Borrower organized under
the laws of a jurisdiction located within the United States and at any time
having assets with a fair market value in excess of $10,000,000; provided,
however, that any special purpose Subsidiary established for the purpose of
entering into the Accounts Receivable Financing Program shall not be a Material
Subsidiary.
"Moody's" means ▇▇▇▇▇'▇ Investor Services, Inc.
"Net Income" means, for any computation period, with respect to the
Borrower on a consolidated basis with its Subsidiaries (other than any
Subsidiary which is restricted from declaring or paying dividends or otherwise
advancing funds to its parent whether by contract or otherwise), cumulative net
income earned during such period as determined in accordance with Agreement
Accounting Principles, but (i) excluding any non-cash charges or gains which are
unusual, non-recurring or extraordinary and (ii) including, to the extent not
otherwise included in the determination of Net Income, all cash dividends and
cash distributions received by the Borrower or any Subsidiary from any Person in
which the Borrower or such Subsidiary has made an Investment pursuant to Section
-------
6.15(j).
-------
"Net Worth" means at any date the consolidated common stockholders' equity
of the Borrower and its consolidated Subsidiaries determined in accordance with
Agreement Accounting Principles.
"Notes" means, collectively, the Competitive Bid Notes, the Ratable Notes
and the Swing Line Note; and "Note" means any one of the Notes.
"Notice of Assignment" is defined in Section 12.3.2.
---------------
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Notes, the Facility Letter of Credit Obligations and all other
liabilities (if any), whether actual or contingent, of the Borrower with respect
to Facility Letters of Credit, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent or any indemnified party hereunder arising under any
of the Loan Documents.
"Participants" is defined in Section 12.2.1.
---------------
"Payment Date" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permitted Purchase" means an acquisition permitted by Section 6.15(m).
---------------
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, limited liability company, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan, as defined in Section 3(2)
of ERISA, as to which the Borrower or any member of the Controlled Group may
have any liability.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro-rata" means, when used with respect to a Lender, and any described
aggregate or total amount, an amount equal to such Lender's pro-rata share or
portion based on its percentage of the Aggregate Commitment or if the Aggregate
Commitment has been terminated, its percentage of the aggregate principal amount
of outstanding Advances and Facility Letter of Credit Obligations.
"Purchase" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (a) acquires any ongoing business or all or substantially
all of the assets of any firm, corporation or division or line of business
thereof, whether through purchase of assets, merger or otherwise, or (b)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding partnership interests of a partnership.
"Purchasers" is defined in Section 12.3.1.
---------------
"▇▇▇▇▇▇▇ Obligations" means the indemnification obligations of the Borrower
existing on the date hereof in favor of ▇▇▇▇▇▇▇ Purina Company with respect to
its guaranty of the obligations of ▇▇▇▇▇▇▇ Resorts, Inc. under the Sports
Facilities Refunding Revenue Bonds identified on Schedule 5.8.
-------------
"Ratable Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Ratable Loans made by the Lenders to the Borrower at the
same time, of the same Type and for the same Interest Period.
"Ratable Borrowing Notice" is defined in Section 2.2.3.
--------------
"Ratable Loan" means a Loan made by a Lender pursuant to Section 2.2
-----------
hereof.
"Ratable Note" means a promissory note in substantially the form of Exhibit
-------
A hereto, duly executed and delivered to the Agent by the Borrower for the
account of each Lender and payable to the order of a Lender in the amount of its
Commitment, including any amendment, modification, renewal or replacement of
such promissory note.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (b) any and all
cancellations, buybacks, reversals, terminations or assignments of any of the
foregoing.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to depositary institutions.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of such Board of Governors relating
to the extension of credit by securities brokers and dealers for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to such Persons.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by the specified lenders for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Reimbursement Agreement" means a letter of credit application and
reimbursement agreement in such form as the Issuer may from time to time employ
in the ordinary course of business.
"Reimbursement Obligations" means, at any time, the aggregate (without
duplication) of the Obligations of the Borrower to the Lenders, the Issuer
and/or the Agent in respect of all unreimbursed payments or disbursements made
by the Lenders, the Issuer and/or the Agent under or in respect of draws made
under the Facility Letters of Credit.
"Release" is defined in the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. 39601 et seq.
-- ---
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any operating lease of Property.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event; provided, that a failure to meet the minimum
--------
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Required Lenders" means Lenders in the aggregate having at least 51% of
the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
51% of the sum of (a) the aggregate unpaid principal amount of the outstanding
Loans plus (b) the aggregate amount of the outstanding Facility Letter of Credit
Obligations.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Risk-Based Capital Guidelines" is defined in Section 3.2.
------------
"S&P" means Standard & Poor's Ratings Group, a division of the ▇▇▇▇▇▇-▇▇▇▇
Companies.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan subject to Title IV of ERISA maintained
by the Borrower or any member of the Controlled Group for employees of the
Borrower or any member of the Controlled Group, other than a Multiemployer Plan.
"Solvent" means, when used with respect to a Person, that (a) the fair
saleable value of the assets of such Person is in excess of the total amount of
the present value of its liabilities (including for purposes of this definition
all liabilities (including loss reserves as determined by such Person), whether
or not reflected on a balance sheet prepared in accordance with Agreement
Accounting Principles and whether direct or indirect, fixed or contingent,
secured or unsecured, disputed or undisputed), (b) such Person is able to pay
its debts or obligations in the ordinary course as they mature and (c) such
Person does not have unreasonably small capital to carry out its business as
conducted and as proposed to be conducted. "Solvency" shall have a correlative
meaning.
"Standby Letter of Credit" means a Facility Letter of Credit which is not a
Commercial Letter of Credit.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Obligations to the
written satisfaction of the Agent.
"Subsidiary" of a Person means (a) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(b) any partnership, association, joint venture, limited liability company or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.
"Subsidiary Guaranty" means that certain Guaranty, dated as of the date
hereof, duly executed and delivered by the Guarantors in favor of the Agent, on
behalf of the Lenders, as the same may be amended, supplemented or otherwise
modified from time to time.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (a) represents more than 15% of the
consolidated tangible assets of the Borrower and its Subsidiaries, as would be
shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the end of the Fiscal Quarter next preceding the date on
which such determination is made, or (b) is responsible for more than 5% of the
consolidated Net Income from continuing operations of the Borrower and its
Subsidiaries for the 12-month period ending as of the end of the Fiscal Quarter
next preceding the date of determination.
"Swing Line Lender" means First Chicago or any other Lender as a successor
Swing Line Lender.
"Swing Line Commitment" means the obligation of the Swing Line Lender to
make Swing Line Loans hereunder in an aggregate amount at any one time
outstanding not to exceed $10,000,000. The Swing Line Commitment will
automatically and permanently terminate on the Facility Termination Date.
"Swing Line Loan" means a Loan made by the Swing Line Lender pursuant to
Section 2.4.
------------
"Swing Line Note" means a promissory note substantially in the form of
Exhibit F hereto, duly executed and delivered to the Agent by the Borrower and
----------
payable to the order of the Swing Line Lender in the amount of its Swing Line
Commitment, including any amendment, modification, renewal or replacement of
such promissory note.
"Termination Event" means, with respect to a Plan which is subject to Title
IV of ERISA, (a) a Reportable Event, (b) the withdrawal of the Borrower or any
other member of the Controlled Group from such Plan during a plan year in which
the Borrower or any other member of the Controlled Group was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such under
Section 4068(f) of ERISA, (c) the termination of such Plan, the filing of a
notice of intent to terminate such Plan or the treatment of an amendment of such
Plan as a termination under Section 4041 of ERISA, (d) the institution by the
PBGC of proceedings to terminate such Plan or (e) any event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
appointment of a trustee to administer, such Plan.
"Thomson" means Thomson BankWatch Inc.
"Total Debt" means (a) all Indebtedness of the Borrower and its
Subsidiaries, on a consolidated basis, reflected on a balance sheet prepared in
accordance with Agreement Accounting Principles, plus, without duplication (b)
----
the face amount of all outstanding Letters of Credit in respect of which the
Borrower or any Subsidiary has any reimbursement obligation and the principal
amount of all Contingent Obligations of the Borrower and its Subsidiaries, plus
----
(c) the aggregate principal amount of all Indebtedness of a special purpose
Subsidiary of the Borrower formed in connection with the sale of accounts
receivable and other forms of off-balance sheet financing, minus (d) to the
-----
extent included in clause (b) above, (i) up to $15,000,000 in aggregate face or
principal amount of surety bonds and Letters of Credit relating to workers'
compensation and similar benefits and (ii) the ▇▇▇▇▇▇▇ Obligations.
"Transferee" is defined in Section 12.4.
-------------
"Type" means, with respect to any Advance, its nature as an Alternate Base
Rate Advance, Eurodollar Advance or Absolute Rate Advance.
"UCC" means the Illinois Uniform Commercial Code as amended or modified and
in effect from time to time.
"Unfunded Liability" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under a Single Employer Plan exceeds
the fair market value of assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plans using PBGC actuarial
assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Unrefunded Swing Line Loans" is defined in Section 2.4(d).
---------------
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (b) any partnership, association, joint venture, limited
liability company or similar business organization 100% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled.
"Year 2000 Issues" means anticipated cost, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the Borrower and its
Subsidiaries.
"Year 2000 Program" is defined in Section 5.24.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE FACILITY
-------------
2.1. The Facility.
-------------
2.1.1. Description of Facility. The Lenders hereby establish in
-----------------------
favor of the Borrower a revolving credit facility pursuant to which, and upon
the terms and subject to the conditions herein set out:
(a) each Lender severally agrees to make Ratable Loans to the Borrower
in accordance with Section 2.2 in amounts not to exceed in the aggregate at any
-----------
one time outstanding the amount of its Commitment less the sum of (i) the amount
of such Lender's pro-rata share of the outstanding principal amount of all
Competitive Bid Advances (regardless of which Lender or Lenders made such
Competitive Bid Advances) exclusive of Competitive Bid Advances being repaid
substantially contemporaneously with the making of any such Ratable Loans, plus
----
(ii) the amount of such Lender's pro-rata share of the outstanding principal
amount of all Swing Line Loans exclusive of Swing Line Loans being repaid
substantially contemporaneously with the making of any such Ratable Loans, plus
----
(iii) the amount of such Lender's pro-rata share of the outstanding Facility
Letter of Credit Obligations exclusive of Facility Letter of Credit Obligations
being repaid substantially contemporaneously with the making of any such Ratable
Loans;
(b) each Lender may, in its sole discretion, make bids to make
Competitive Bid Loans to the Borrower, and make such Loans, in accordance with
Section 2.3; and
------------
(c) the Swing Line Lender agrees to make Swing Line Loans to the
Borrower in accordance with Section 2.4.
------------
2.1.2. Facility Amount. In no event may the
----------------
sum of (a) the aggregate principal amount of all outstanding Advances (including
the Ratable Advances, the Competitive Bid Advances and the Swing Line Loans)
plus (b) the outstanding amount of Facility Letter of Credit Obligations at any
----
time exceed the Aggregate Commitment. If at any time the aggregate amount of
the sum of the Loans and the Facility Letter of Credit Obligations exceeds the
Aggregate Commitment, the Borrower shall repay immediately its then outstanding
Loans (first Swing Line Loans, then Ratable Loans and then Competitive Bid
Loans) in such amount as may be necessary to eliminate such excess; provided,
--------
that if an excess remains after repayment of all outstanding Loans, then the
Borrower shall cash collateralize the Facility Letter of Credit Obligations by
depositing into the Letter of Credit Cash Collateral Account such amount as may
be necessary to eliminate such excess.
2.1.3. Availability of Facility.
--------------------------
Subject to the terms of this Agreement, from and including the date hereof to,
but not including the Facility Termination Date the Borrower may borrow, repay
and reborrow Advances hereunder. All outstanding Loans and Advances and all
other unpaid Obligations shall be due and payable in full by the Borrower on the
Facility Termination Date.
2.2. Ratable Advances.
-----------------
2.2.1. Ratable Advances. Each Ratable
-----------------
Advance hereunder shall consist of borrowings made from the several Lenders
ratably in proportion to the amounts of their respective Commitments. The
Borrower's obligation to pay the principal of, and interest on, the Ratable
Advances shall be evidenced by the Ratable Notes. Although the Ratable Notes
shall be dated the date of the initial Advance, interest in respect thereof
shall be payable only for the periods during which the Loans evidenced thereby
are outstanding and, although the stated amount of each Ratable Note shall be
equal to the applicable Lender's Commitment, each Ratable Note shall be
enforceable, with respect to the Borrower's obligation to pay the principal
amount thereof, only to the extent of the unpaid principal amount of the Ratable
Loans at the time evidenced thereby.
2.2.2 Ratable Advance Rate Options. The Ratable Advances may
-------------------------------
be Alternate Base Rate Advances or Eurodollar Ratable Advances, or a combination
thereof, selected by the Borrower in accordance with Section 2.2.3 or 2.2.4.
------------- -----
No Ratable Advance may mature after, or have an Interest Period which extends
beyond, the Facility Termination Date.
2.2.3. Method of Selecting Types and Interest Periods for Ratable
----------------------------------------------------------------
Advances. The Borrower shall select the Type of each Ratable Advance and,
--------
in the case of each Eurodollar Ratable Advance, the Eurodollar Interest Period
applicable to such Ratable Advance from time to time. The Borrower shall give
the Agent irrevocable notice (a "Ratable Borrowing Notice") not later than 10:00
------------------------
a.m. (Chicago time) on the Borrowing Date of each Alternate Base Rate Advance
and three Business Days before the Borrowing Date for each Eurodollar Ratable
Advance. Notwithstanding the foregoing, a Ratable Borrowing Notice for an
Alternate Base Rate Advance may be given not later than 30 minutes after the
time which the Borrower is required to reject one or more bids offered in
connection with an Absolute Rate Auction pursuant to Section 2.3.6 and a Ratable
-------------
Borrowing Notice for a Eurodollar Ratable Advance may be given not later than 30
minutes after the time the Borrower is required to reject one or more bids
offered in connection with a Eurodollar Auction pursuant to Section 2.3.6. A
-------------
Ratable Borrowing Notice shall specify:
(a) the Borrowing Date, which shall be a Business Day, of such Ratable
Advance;
(b) the aggregate amount of such Ratable Advance, which, when added to
all outstanding Ratable Advances, Swing Line Loans and Competitive Bid Advances
and after giving effect to the repayment of any such outstanding Advances or
Loans out of the proceeds of the requested Ratable Advance, shall not exceed the
Aggregate Commitment;
(c) the Type of Advance selected; and
(d) in the case of each Eurodollar Ratable Advance, the Eurodollar
Interest Period applicable thereto (which may not end after the Facility
Termination Date).
2.2.4. Conversion and Continuation of Outstanding Ratable Advances
----------------------------------------------------------------
Alternate Base Rate Advances shall continue as Alternate Base Rate Advances
unless and until such Alternate Base Rate Advances are converted into
Eurodollar Ratable Advances. Each Eurodollar Ratable Advance shall continue as
a Eurodollar Ratable Advance until the end of the then applicable Eurodollar
Interest Period therefor, at which time such Eurodollar Ratable Advance shall be
automatically converted into an Alternate Base Rate Advance unless the Borrower
shall have given the Agent a Conversion/Continuation Notice requesting that, at
the end of such Eurodollar Interest Period, such Eurodollar Ratable Advance
continue as a Eurodollar Ratable Advance for the same or another Eurodollar
Interest Period. Subject to the terms of Section 2.7, the Borrower may elect
-----------
from time to time to convert all or any part of a Ratable Advance of any Type
into any other Type or Types of Ratable Advances; provided that any conversion
--------
of any Eurodollar Ratable Advance shall be made on, and only on, the last day of
the Eurodollar Interest Period applicable thereto. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of a Ratable Advance or continuation of a Eurodollar Ratable Advance not later
than 10:00 a.m. (Chicago time) at least one Business Day, in the case of a
conversion into an Alternate Base Rate Advance, or at least three Business Days,
in the case of a conversion into or continuation of a Eurodollar Ratable
Advance, prior to the date of the requested conversion or continuation,
specifying:
(a) the requested date, which shall be a Business Day, of such
conversion or continuation;
(b) the aggregate amount and Type of Ratable Advance which is to be
converted or continued; and
(c) the amount and Type(s) of Ratable Advance(s) into which such
Ratable Advance is to be converted or continued and, in the case of a conversion
into or continuation of an Eurodollar Ratable Advance, the duration of the
Eurodollar Interest Period applicable thereto.
2.3. Competitive Bid Advances.
--------------------------
2.3.1. Competitive Bid Option. In addition to Ratable Advances pursuant
----------------------
to Section 2.2, but subject to the terms and conditions of this Agreement
-----------
(including, without limitation, the limitation set forth in Section 2.1.2 as to
-------------
the maximum aggregate principal amount of all outstanding Advances and Facility
Letter of Credit Obligations hereunder), prior to the Facility Termination Date
the Borrower may, as set forth in this Section 2.3, request the Lenders to make
-----------
offers to make Competitive Bid Advances to the Borrower. Each Lender may, but
shall have no obligation to, make such offers and the Borrower may, but shall
have no obligation to, accept any such offers in the manner set forth in this
Section 2.3. The Borrower's obligation to pay the principal of, and interest
-----------
on, the Competitive Bid Advances shall be evidenced by the Competitive Bid
Notes. Although the Competitive Bid Notes shall be dated the date of the
initial Advance, interest in respect thereof shall be payable only for the
periods during which the Loans evidenced thereby are outstanding. Each
Competitive Bid Loan shall be repaid in full by the Borrower on the last day
of the Interest Period applicable thereto.
2.3.2. Competitive Bid Quote Request. When the Borrower wishes to
--------------------------------
request offers to make Competitive Bid Loans under this Section 2.3, it shall
-----------
transmit to the Agent by telecopy a Competitive Bid Quote Request substantially
in the form of Exhibit C hereto so as to be received no later than (a)10:00 a.m.
---------
(Chicago time) at least five Business Days prior to the Borrowing Date
proposed therein, in the case of a Eurodollar Auction or (b) 9:00 a.m. (Chicago
time) at least one Business Day prior to the Borrowing Date proposed therein, in
the case of an Absolute Rate Auction specifying:
(a) the proposed Borrowing Date, which shall be a Business Day, for the
proposed Competitive Bid Advance;
(b) the aggregate principal amount of such Competitive Bid Advance;
(c) whether the Competitive Bid Quotes requested are to set forth a
Eurodollar Bid Rate, an Absolute Rate, or both; and
(d) the Interest Period applicable thereto (which may not end after the
Facility Termination Date).
The Borrower may request offers to make Competitive Bid Loans for more than one
Interest Period in a single Competitive Bid Quote Request. No Competitive Bid
Quote Request shall be given within 5 Business Days (or such other number of
days as the Borrower and the Agent may agree) of any other Competitive Bid Quote
Request. A Competitive Bid Quote Request that does not conform substantially to
the format of Exhibit C hereto shall be rejected, and the Agent shall promptly
---------
notify the Borrower of such rejection by telecopy.
2.3.3. Invitation for Competitive Bid Quotes. Promptly and in any
-----------------------------------------
event before the close of business on the same Business Day of receipt of a
Competitive Bid Quote Request that is not rejected pursuant to Section 2.3.2,
-------------
the Agent shall send to each of the Lenders by telex or telecopy an Invitation
for Competitive Bid Quotes substantially in the form of Exhibit D hereto,
----------
which shall constitute an invitation by the Borrower to each Lender to submit
Competitive Bid Quotes offering to make the Competitive Bid Loans to which such
Competitive Bid Quote Request relates in accordance with this Section 2.3.
-----------
2.3.4. Submission and Contents of Competitive Bid Quotes
-------------------------------------------------------
(a) Each Lender may, in its sole discretion, submit a Competitive Bid
Quote containing an offer or offers to make Competitive Bid Loans in response to
any Invitation for Competitive Bid Quotes. Each Competitive Bid Quote must
comply with the requirements of this Section 2.3.4 and must be submitted to the
-------------
Agent by telex or telecopy at its offices specified in or pursuant to Article
XIII not later than (i) 9:00 a.m. (Chicago time) at least four Business Days
prior to the proposed Borrowing Date, in the case of a Eurodollar Auction or
(ii) 9:00 a.m. (Chicago time) on the proposed Borrowing Date, in the case of an
Absolute Rate Auction (or, in either case upon reasonable prior notice to the
Lenders, such other time and date as the Borrower and the Agent may agree);
provided that Competitive Bid Quotes submitted by First Chicago may only be
--------
submitted if the Agent or First Chicago notifies the Borrower of the terms of
the offer or offers contained therein not later than 15 minutes prior to the
latest time at which the relevant Competitive Bid Quotes must be submitted by
the other Lenders. Subject to Articles IV and VIII, any Competitive Bid Quote
so made shall be irrevocable except with the written consent of the Agent given
on the instructions of the Borrower.
(b) Each Competitive Bid Quote shall be in substantially the form of
Exhibit E hereto and shall in any case specify:
----------
(i) the proposed Borrowing Date, which shall be the same as that set
forth in the applicable Invitation for Competitive Bid Quotes;
(ii) the principal amount of the Competitive Bid Loan for which each
such offer is being made, which principal amount a) may be greater than, less
than or equal to the Commitment of the quoting Lender, b) must be at least
$5,000,000 and an integral multiple of $1,000,000, and c) may not exceed the
principal amount of Competitive Bid Loans for which offers were requested;
(iii) in the case of a Eurodollar Auction, the Competitive Bid Margin
offered for each such Competitive Bid Loan;
(iv) the minimum amount, if any, of the Competitive Bid Loan which may
be accepted by the Borrower;
(v) in the case of an Absolute Rate Auction, the Absolute Rate offered
for each such Competitive Bid Loan; and
(vi) the identity of the quoting Lender.
(c) The Agent shall reject any Competitive Bid Quote that:
(i) is not substantially in the form of Exhibit E hereto or does not
---------
specify all of the information required by Section 2.3.4(b);
-----------------
(ii) contains qualifying, conditional or similar language, other than
any such language contained in Exhibit E hereto;
----------
(iii) proposes terms other than or in addition to those set forth in
the applicable Invitation for Competitive Bid Quotes; or
(iv) arrives after the time set forth in Section 2.3.4(a).
-----------------
If any Competitive Bid Quote shall be rejected pursuant to this Section
-------
2.3.4(c), then the Agent shall promptly notify the relevant Lender of such
--------
rejection.
2.3.5. Notice to Borrower. The Agent shall promptly notify the
--------------------
Borrower of the terms (a) of any Competitive Bid Quote submitted by a Lender
that is in accordance with Section 2.3.4 and (b) of any Competitive Bid Quote
-------------
that amends, modifies or is otherwise inconsistent with a previous Competitive
Bid Quote submitted by such Lender with respect to the same Competitive Bid
Quote Request. Any such subsequent Competitive Bid Quote shall be disregarded
by the Agent unless such subsequent Competitive Bid Quote specifically states
that it is submitted solely to correct a manifest error in such former
Competitive Bid Quote. The Agent's notice to the Borrower shall specify the
aggregate principal amount of Competitive Bid Loans for which offers have been
received for each Interest Period specified in the related Competitive Bid
Quote Request and the respective principal amounts and Eurodollar Bid Rates or
Absolute Rates, as the case may be, so offered.
2.3.6. Acceptance and Notice by Borrower. Not later than
-------------------------------------
(a) 10:00 a.m. (Chicago time) at least three Business Days prior to the
proposed Borrowing Date, in the case of a Eurodollar Auction or (b) 10:00 a.m.
(Chicago time) on the proposed Borrowing Date, in the case of an Absolute
Rate Auction (or, in either case upon reasonable prior notice to the
Lenders, such other time and date as the Borrower and the Agent may
agree), the Borrower shall notify the Agent of its acceptance or rejection
of the offers so notified to it pursuant to Section 2.3.5; provided, however,
------------- -------- -------
that the failure by the Borrower to give such notice to the Agent shall be
deemed to be a rejection of all such offers. In the case of acceptance, such
notice (a "Competitive Bid Borrowing Notice") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Competitive Bid Quote in whole or in part (subject to
the terms of Section 2.3.4(b)(iv)); provided that:
--------------------- --------
(a) the aggregate principal amount of each Competitive Bid Advance may
not exceed the applicable amount set forth in the related Competitive Bid Quote
Request,
(b) acceptance of offers may only be made on the basis of ascending
Eurodollar Bid Rates or Absolute Rates, as the case may be, and
(c) the Borrower may not accept any offer that is described in Section
-------
2.3.4(c) or that otherwise fails to comply with the requirements of this
--------
Agreement.
---------
2.3.7. Allocation by Agent. If offers are made by two or more
---------------------
Lenders with the same Eurodollar Bid Rates or Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in respect
of which offers are accepted for the related Interest Period, the principal
amount of Competitive Bid Loans in respect of which such offers are accepted
shall be allocated by the Agent among such Lender as nearly as possible
(in such multiples, not greater than $1,000,000, as the Agent may deem
appropriate) in proportion to the aggregate principal amount of such offers;
provided, however, that no Lender shall be allocated a portion of any
-------- -------
Competitive Bid Advance which is less than the minimum amount which such Lender
has indicated that it is willing to accept. Allocations by the Agent of the
amounts of Competitive Bid Loans shall be conclusive in the absence of manifest
error. The Agent shall promptly, but in any event on the same Business Day,
notify each Lender of its receipt of a Competitive Bid Borrowing Notice and the
aggregate principal amount of such Competitive Bid Advance allocated to each
participating Lender.
2.4. Swing Line Loans.
------------------
(a) On the terms and subject to the conditions and relying upon the
representations and warranties herein set forth, the Swing Line Lender agrees at
any time and from time to time from and including the date hereof to but
excluding the earlier of the Facility Termination Date and the termination of
the Commitments or the Swing Line Commitment, in accordance with the terms
hereof, to make Swing Line Loans to the Borrower in an aggregate principal
amount at any time outstanding not to exceed the lesser of (i) the amount of its
Swing Line Commitment at such time and (ii) an amount equal to (A) the Aggregate
Commitment at such time, minus (B) the sum of the aggregate principal amounts of
-----
all Ratable Loans, Competitive Bid Loans and Swing Line Loans outstanding at
such time, minus (C) the aggregate Facility Letter of Credit Obligations
-----
outstanding at such time. The Swing Line Loans shall be made by the Swing Line
Lender, at the option of the Borrower, either at the Alternate Base Rate or at
the Alternate Swing Line Rate. All Swing Line Loans shall be in a minimum
amount of $1,000,000 and in any integral multiple of $100,000 if in excess
thereof. In no event shall any Swing Line Loan be made hereunder if (i) the
Agent and the Swing Line Lender shall have received notice from the Required
Lenders prior to any such Swing Line Loan that a condition specified in Section
-------
4.1 or 4.2 has not been satisfied and (ii) such condition shall not have been
--- ---
subsequently waived in compliance with Section 8.2.
------------
(b) The Borrower shall give the Swing Line Lender (with a copy to the
Agent) telephonic, written or telecopy notice (in the case of telephonic notice,
such notice shall be promptly confirmed in writing or by telecopy) not later
than noon, Chicago time, on the day of a proposed Swing Line Loan. Such notice
shall be delivered on a Business Day, shall be irrevocable and shall refer to
this Agreement and shall specify the requested Borrowing Date (which shall be a
Business Day) and amount of such Swing Line Loan.
(c) The Swing Line Lender shall by 2:00 p.m., Chicago time, on the
requested Borrowing Date, make the requested Swing Line Loan by crediting the
principal amount thereof, in immediately available funds, to the account of the
Borrower maintained with the Swing Line Lender or to such other account as may
be designated by the Borrower and be acceptable to the Swing Line Lender.
(d) The Swing Line Loans shall be evidenced by the Swing Line Note and
each Swing Line Loan shall be paid in full by the Borrower on the earlier of the
Facility Termination Date and the date five Business Days after the making of
such Swing Line Loan.
(e) Notwithstanding the occurrence of any Default or Unmatured Default
or noncompliance with the conditions precedent set forth in Article IV, if (i)
----------
by 10:00 a.m. Chicago time on the fourth Business Day following the Borrowing
Date of any Swing Line Loan the Agent shall not have received a Ratable
Borrowing Notice delivered by the Borrower pursuant to Section 2.2.3 requesting
-------------
that Ratable Loans be made pursuant to Section 2.2 on the immediately succeeding
-----------
Business Day in an amount at least equal to the aggregate principal amount of
such Swing Line Loan or (ii) on any date the Swing Line Lender in its sole
discretion shall so request with respect to the outstanding Swing Line Loans,
the Agent shall be deemed to have received a Ratable Borrowing Notice from the
Borrower pursuant to Section 2.2.3 requesting that a Ratable Advance of
--------------
Alternate Base Rate Loans be made pursuant to Section 2.2 on such immediately
-----------
succeeding Business Day in an amount equal to the aggregate amount of such Swing
Line Loans, and the procedures set forth in Section 2.5 shall be followed in
-----------
making such Alternate Base Rate Loans. The proceeds of such Alternate Base Rate
Loans (or other Loans described in Section 2.4(e)(i), if requested) received by
-----------------
the Agent shall be immediately delivered to the Swing Line Lender and applied to
the direct repayment of such Swing Line Loans to the extent thereof. Effective
on the day such Ratable Loans are made, the portion of the Swing Line Loans so
paid shall no longer be outstanding as Swing Line Loans and shall be outstanding
as Ratable Loans of the Lenders bearing interest at a rate determined by
reference to the Alternate Base Rate, in accordance with the provisions of this
Article II. The Borrower authorizes the Agent and the Swing Line Lender to
-----------
charge the Borrower's account maintained with the Swing Line Lender (up to the
amount available in such account) in order to immediately pay the amount of the
Swing Line Loans to the extent amounts received from the Lenders are not
sufficient to repay in full such Swing Line Loans. If any portion of any such
amount paid (or deemed paid) to the Swing Line Lender should be recovered by or
on behalf of the Borrower from the Swing Line Lender in the event of the
bankruptcy or reorganization of the Borrower or otherwise, the loss of the
amount so recovered shall be ratably shared among all Lenders in the manner
contemplated by Section 11.2.
-------------
(f If, for any reason (including, without limitation, the occurrence of
a Default described in Section 7.6 or 7.7 of Article VII), Alternate Base Rate
----------- --- -----------
Loans may not be, or are not, made pursuant to paragraph (e) of this Section 2.4
-----------
to repay Swing Line Loans as required by such paragraph, effective on the date
such Alternate Base Rate Loans would otherwise have been made, (i) each Lender
severally, unconditionally and irrevocably agrees that it shall, without regard
to the occurrence of any Unmatured Default or Default, purchase a participating
interest in such Swing Line Loans ("Unrefunded Swing Line Loans") in an amount
---------------------------
equal to the amount of Alternate Base Rate Loans which would otherwise have been
made by such Lender pursuant to paragraph (e) of this Section 2.4 and (ii) each
-----------
Unrefunded Swing Line Loan previously bearing interest at the Alternate Swing
Line Rate shall commence accruing interest at the Alternate Base Rate. Each
Lender will immediately transfer to the Agent, in immediately available funds,
the amount of its participation, and the proceeds of such participation shall be
distributed by the Agent to the Swing Line Lender in such amount as will reduce
the amount of the participating interest retained by the Swing Line Lender in
the Swing Line Loans to the amount of the Alternate Base Rate Loans which were
to have been made by the Swing Line Lender pursuant to paragraph (e) of this
Section 2.4. In the event a Lender fails to make available to the Swing Line
------------
Lender the amount of such Lender's participation as provided in this paragraph
(f), the Swing Line Lender shall be entitled to recover such amount on demand
from such Lender together with interest at the customary rate set by the Swing
Line Lender for correction of errors among banks for one Business Day and
thereafter at the Alternate Base Rate then in effect. All payments in respect
of Unrefunded Swing Line Loans and participations therein shall be made in
accordance with Section 2.12.
-------------
(g Each Lender's obligation to make Ratable Loans pursuant to paragraph
(e) of this Section 2.4 and to purchase participating interests pursuant to
------------
paragraph (f) of this Section 2.4 shall be absolute and unconditional and shall
-----------
not be affected by any circumstance, including, without limitation, (i) any
setoff, counterclaim, recoupment, defense or other right which such Lender or
the Borrower may have against the Swing Line Lender, the Borrower or any other
Person, as the case may be, for any reason whatsoever; (ii) the occurrence or
continuance of a Default or Unmatured Default; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower or any of its Subsidiaries;
(iv) any breach of this Agreement by the Borrower, any of its Subsidiaries or
any Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
2.5. Availability of Funds. Not later than noon (Chicago time) on
-----------------------
each Borrowing Date, each Lender (or in the case of a Competitive Bid Advance,
each Lender making a portion of such Advance) shall make available its Loan or
Loans (other than Swing Line Loans), in funds immediately available in Chicago
to the Agent at its address specified pursuant to Article XIII. The Agent will
make the funds so received from the Lenders available to the Borrower at the
Agent's aforesaid address.
2.6. Commitment Fee; Reductions and Increases in Aggregate Commitment.
-----------------------------------------------------------------
(a The Borrower agrees to pay to the Agent for the ratable account of
each Lender a commitment fee equal to the Applicable Commitment Fee Percentage
per annum on the daily unborrowed portion of such Lender's Commitment (without
giving effect to any outstanding Swing Line Loans or Competitive Bid Loans) from
the date hereof to and including the Facility Termination Date applicable to
such Lender, payable in arrears on each Payment Date hereafter and on the
Facility Termination Date.
(b The Borrower may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Lenders, in a minimum amount of $10,000,000
or any integral multiple of $1,000,000 in excess thereof, upon at least three
Business Days' written notice to the Agent, which notice shall specify the
amount of any such reduction; provided, however, that the amount of the
-------- -------
Aggregate Commitment may not be reduced below the sum of (i) the aggregate
principal amount of the outstanding Loans, plus (ii) the aggregate amount of the
----
outstanding Facility Letter of Credit Obligations. All accrued commitment fees
shall be payable on the effective date of any termination of the obligations of
the Lenders to make Loans hereunder.
(c The Borrower may, at its option, seek to increase the Aggregate
Commitment by up to $50,000,000 upon at least three (3) Business Days' prior
notice to the Agent, which notice shall specify the amount of any such requested
increase (which shall be in an amount not less than $25,000,000) and shall be
delivered at a time when no Default or Unmatured Default has occurred or is
continuing. The Borrower may, after giving such notice, offer the increase in
the Aggregate Commitment to any of the existing Lenders and/or to other banks,
financial institutions or other entities acceptable to the Agent on a non
pro-rata basis in such amounts as determined by the Borrower and agreed to by
the Agent. The Borrower may elect to accept an increase in the Aggregate
Commitment in an amount equal to the aggregate increased commitments offered to
the Borrower. No increase in the Aggregate Commitment shall become effective
until (i) the existing or new Lender extending such incremental commitment
amount and the Borrower shall have executed and delivered to the Agent an
agreement in writing in form and substance reasonably acceptable to the Agent
pursuant to which such Lender states its Commitment amount and agrees to assume
and accept the obligations and rights of a Lender hereunder and (ii) the
Borrower has provided the Agent with such related certificates, opinions and
other documents as the Agent may reasonably request. In conjunction with such
increase, the Lenders (new or existing) shall accept (and the existing Lenders
shall make) an assignment at par of an interest in the Loans and Facility Letter
of Credit Obligations outstanding at the time of such Aggregate Commitment
increase such that, after giving effect thereto, all Loans and Facility Letter
of Credit Obligations are held by the Lenders on a pro-rata basis. The Borrower
shall make any payments under Section 3.4 resulting from such assignments.
2.7. Minimum Amount of Each Ratable Advance. Each Ratable Advance
-------------------------------------------
shall be in the minimum amount of $10,000,000 (and in integral multiples of
$1,000,000 if in excess thereof); provided, however, that (a) any Alternate Base
-------- -------
Rate Advance may be in the amount of the unused Aggregate Commitment or in an
amount borrowed pursuant to Section 2.4(e) and (b) in no event shall more than
--------------
six (6) Eurodollar Advances be permitted to be outstanding at any time.
2.8. Optional Principal Payments. The Borrower may from time to time
----------------------------
pay, without penalty or premium, all outstanding Advances (other than
Competitive Bid Advances, which may not be voluntarily prepaid), or, in a
minimum aggregate amount of $5,000,000 or any integral multiple of $1,000,000 in
excess thereof, any portion of the outstanding Advances (other than Competitive
Bid Advances) upon one Business Day's prior notice to the Agent in the case of
an Alternate Base Rate Advance or three Business Days' prior notice to the Agent
in the case of a Eurodollar Advance. Any prepayment of a Eurodollar Advance
prior to the last day of the applicable Eurodollar Interest Period shall be
subject to the indemnity provisions of Section 3.4.
------------
2.9. Changes in Interest Rate, etc. Each Alternate Base Rate Advance
-------------------------------
shall bear interest at the Alternate Base Rate from and including the date of
such Advance or the date on which such Advance was converted into an Alternate
Base Rate Advance to (but not including) the date on which such Alternate Base
Rate Advance is paid or converted to a Eurodollar Ratable Advance. Changes in
the rate of interest on that portion of any Advance maintained as an Alternate
Base Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Advance, Absolute Rate Advance and Swing
Line Loan shall bear interest from and including the first day of the Interest
Period applicable thereto to, but not including, the last day of such Interest
Period at the interest rate determined as applicable to such Eurodollar Advance,
Absolute Rate Advance or Swing Line Loan. No Interest Period may end after the
Facility Termination Date.
2.10. Rates Applicable After Default. Notwithstanding anything to the
-------------------------------
contrary contained in Section 2.2.3 and 2.2.4, no Advance may be made as,
-------------- -----
converted into or continued as a Eurodollar Ratable Advance (except with the
consent of the Agent and the Required Lenders) when any Default or Unmatured
Default has occurred and is continuing. During the continuance of a Default the
Required Lenders may, at their option, by notice to the Borrower (which notice
may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 8.2 requiring unanimous consent of the Lenders to changes
-----------
in interest rates), declare that each Eurodollar Advance, Alternate Base Rate
Advance and Swing Line Loan shall bear interest (for the remainder of the
applicable Interest Period in the case of Eurodollar Advances and Absolute Rate
Advances) at a rate per annum equal to the rate otherwise applicable plus two
percent (2%) per annum; provided, however, that such increased rate shall
-------- -------
automatically and without action of any kind by the Lenders become and remain
applicable until revoked by the Required Lenders in the event of a Default
described in Section 7.6 or 7.7.
------------ ---
2.11. Method of Payment. All payments of the Obligations hereunder
-------------------
shall be made, without setoff, deduction or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
-------------
writing by the Agent to the Borrower, by noon (Chicago time) on the date when
due and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
------------
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with First
Chicago for each payment of principal, interest and fees as it becomes due
hereunder, if the Agent has provided the Borrower with notice of each such
payment at least one day prior to its becoming due hereunder.
2.12. Notes; Telephonic Notices. Each Lender is hereby authorized to
---------------------------
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note; provided, however, that neither the failure to so
-------- -------
record nor any error in such recordation shall affect the Borrower's obligations
under such Note. The Borrower hereby authorizes the Lenders and the Agent to
extend, convert or continue Advances, effect selections of Types of Advances,
submit Competitive Bid Quotes and to transfer funds based on telephonic notices
made by any person or persons the Agent or any Lender in good faith believes to
be acting on behalf of the Borrower. The Borrower agrees to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer or
another management level employee designated in writing by an Authorized Officer
to the Agent. If the written confirmation differs in any material respect from
the action taken by the Agent and the Lenders, the records of the Agent and the
Lenders shall govern absent manifest error.
2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued
----------------------------------------------
on each Alternate Base Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, on any date
on which an Alternate Base Rate Advance is prepaid, whether due to acceleration
or otherwise, and at maturity. Interest upon each Swing Line Loan shall be
payable upon the date such Swing Line Loan is repaid and at its maturity.
Interest accrued on each Eurodollar Advance or Absolute Rate Advance shall be
payable on the last day of its applicable Interest Period, on any date on which
the Eurodollar Advance or Absolute Rate Advance is prepaid, whether by
acceleration or otherwise, and at maturity. Interest accrued on each Eurodollar
Advance or Absolute Rate Advance having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval during
such Interest Period. Interest and commitment fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Advance is made but not for the day of any payment on the amount
paid if payment is received prior to noon (Chicago time) at the place of
payment. If any payment of principal of or interest on an Advance shall become
due on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.14. Notification of Advances, Interest Rates, Prepayments, Commitment
-----------------------------------------------------------------
Reductions and Issuance Requests. Promptly after receipt thereof, the Agent
-----------------------------------
will notify each Lender of the contents of each Aggregate Commitment reduction
notice, Ratable Borrowing Notice, Conversion/Continuation Notice, Invitation for
Competitive Quotes, Issuance Request and repayment notice received by it
hereunder. The Agent will notify each Lender of the interest rate applicable to
each Eurodollar Advance promptly upon determination of such interest rate and
will give each Lender prompt notice of each change in the Alternate Base Rate.
2.15. Lending Installations. Each Lender may book its Loans at any
----------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.16. Non-Receipt of Funds by the Agent. Unless the Borrower or a
--------------------------------------
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (a) in the case of a Lender, the
proceeds of a Loan, or (b) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption.
If the Borrower has not in fact made such payment to the Agent, the Lenders
shall, on demand by the Agent, repay to the Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the Agent until the
date the Agent recovers such amount at a rate per annum equal to the Federal
Funds Effective Rate for such day. If any Lender has not in fact made such
payment to the Agent, such Lender or the Borrower shall, on demand by the Agent,
repay to the Agent the amount so made available together with interest thereon
in respect of each day during the period commencing on the date such amount was
so made available by the Agent until the date the Agent recovers such amount at
a rate per annum equal to (a) in the case of payment by a Lender, the Federal
Funds Effective Rate for such day, or (b) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.17. Taxes.
-----
(a Any payments made by the Borrower under this Agreement shall be made
free and clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes and franchise taxes or any other tax based upon any income imposed
on the Agent or any Lender by the jurisdiction in which the Agent or such Lender
is incorporated or has its principal place of business. If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Agent or any Lender hereunder, the amounts so payable to the
Agent or such Lender shall be increased to the extent necessary to yield to the
Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
or pursuant to this Agreement; provided, however, that the Borrower shall not be
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required to increase any such amounts payable to any Lender that is not
organized under the laws of the U.S. or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this Section 2.17. Whenever
------------
any Non-Excluded Taxes are payable by the Borrower, as promptly as practicable
thereafter the Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section 2.17 shall survive the termination of this Agreement and the payment of
-------------
all other amounts payable hereunder.
(b At least five Business Days prior to the first date on which
interest or fees are payable hereunder for the account of any Lender, each
Lender that is not incorporated under the laws of the United States of America,
or a state thereof, agrees that it will deliver to each of the Borrower and the
Agent two duly completed copies of United States Internal Revenue Service Form
1001 or 4224, certifying in either case that such Lender is entitled to receive
payments under this Agreement and the Notes without deduction or withholding of
any United States federal income taxes. Each Lender which so delivers a Form
1001 or 4224 further undertakes to deliver to each of the Borrower and the Agent
two additional copies of such form (or a successor form) on or before the date
that such form expires (currently, three successive calendar years for Form 1001
and one calendar year for Form 4224) or becomes obsolete or after the occurrence
of any event requiring a change in the most recent forms so delivered by it, and
such amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Agent, in each case certifying that such Lender
is entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes, unless an
event (including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax.
2.18. Agent's Fees. The Borrower shall pay to the Agent those fees, in
------------
addition to the commitment fees referenced in Section 2.6(a), in the amounts and
--------------
at the times separately agreed to between the Agent and the Borrower.
2.19. Facility Letters of Credit.
-----------------------------
2.19.1. Issuance of Facility Letters of Credit. (a) From and after the
--------------------------------------
date hereof, the Issuer agrees, upon the terms and conditions set forth in this
Agreement, to issue at the request and for the account of the Borrower, one or
more Facility Letters of Credit; provided, however, that the Issuer shall not be
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under any obligation to issue, and shall not issue, any Facility Letter of
Credit if (i) any order, judgment or decree of any governmental authority or
other regulatory body with jurisdiction over the Issuer shall purport by its
terms to enjoin or restrain such Issuer from issuing such Facility Letter of
Credit, or any law or governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) from any governmental
authority or other regulatory body with jurisdiction over the Issuer shall
prohibit, or request that the Issuer refrain from, the issuance of Facility
Letters of Credit in particular or shall impose upon the Issuer with respect to
any Facility Letter of Credit any restriction or reserve or capital requirement
(for which the Issuer is not otherwise compensated) or any unreimbursed loss,
cost or expense which was not applicable, in effect and known to the Issuer as
of the date of this Agreement and which the Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material
to it; (ii) one or more of the conditions to such issuance contained in Section
-------
4.2 is not then satisfied; or (iii) after giving effect to such issuance, the
---
aggregate outstanding amount of the Facility Letter of Credit Obligations would
exceed the Facility Letter of Credit Sublimit.
(b) In no event shall: (i) the aggregate amount of the Facility Letter
of Credit Obligations at any time exceed the Facility Letter of Credit Sublimit;
(ii) the sum at any time of (A) the aggregate amount of Facility Letter of
Credit Obligations and (B) the aggregate principal balance of outstanding
Advances exceed the amount of the Aggregate Commitment; or (iii) the expiration
date of any Facility Letter of Credit (including, without limitation, Facility
Letters of Credit issued with an automatic "evergreen" provision providing for
renewal absent advance notice by the Borrower or the Issuer), or the date for
payment of any draft presented thereunder and accepted by the Issuer, be later
than the date five (5) Business Days before the Facility Termination Date.
2.19.2 Participating Interests.
------------------------
Immediately upon the issuance by the Issuer of a Facility Letter of Credit in
accordance with Section 2.19.4, each Lender shall be deemed to have irrevocably
--------------
and unconditionally purchased and received from the Issuer, without recourse,
representation or warranty, an undivided participation interest equal to its
pro-rata share of the Aggregate Commitment of the face amount of such Facility
Letter of Credit and each draw paid by the Issuer thereunder. Each Lender's
obligation to pay its proportionate share of all draws under the Facility
Letters of Credit, absent gross negligence or willful misconduct by the Issuer
in honoring any such draw, shall be absolute, unconditional and irrevocable and
in each case shall be made without counterclaim or set-off by such Lender.
2.19.3 Facility Letter of Credit Reimbursement Obligations. (a) The
------------------------------------------------------
Borrower agrees to pay to the Issuer of a Facility Letter of Credit (i) on each
date that any amount is drawn under each Facility Letter of Credit a sum (and
interest on such sum as provided in clause (ii) below) equal to the amount so
drawn plus all other charges and expenses with respect thereto specified in
Section 2.19.6 or in the applicable Reimbursement Agreement and (ii) interest on
--------------
any and all amounts remaining unpaid under this Section 2.19.3 until payment in
--------------
full at the Alternate Base Rate plus the margin specified in Section 2.10. The
------------
Borrower agrees to pay to the Issuer the amount of all Facility Letter of Credit
Reimbursement Obligations owing in respect of any Facility Letter of Credit
immediately when due, under all circumstances, including, without limitation,
any of the following circumstances: (w) any lack of validity or enforceability
of this Agreement or any of the other Loan Documents; (x) the existence of any
claim, set-off, defense or other right which the Borrower may have at any time
against a beneficiary named in a Facility Letter of Credit, any transferee of
any Facility Letter of Credit (or any Person for whom any such transferee may be
acting), any Lender or any other Person, whether in connection with this
Agreement, any Facility Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction between the
Borrower and the beneficiary named in any Facility Letter of Credit); (y) the
validity, sufficiency or genuineness of any document which the Issuer has
determined in good faith complies on its face with the terms of the applicable
Facility Letter of Credit, even if such document should later prove to have been
forged, fraudulent, invalid or insufficient in any respect or any statement
therein shall have been untrue or inaccurate in any respect; or (z) the
surrender or impairment of any security for the performance or observance of any
of the terms hereof.
(b) Notwithstanding any provisions to the contrary in any Reimbursement
Agreement, the Borrower agrees to reimburse the Issuer for amounts which the
Issuer pays under such Facility Letter of Credit no later than the time
specified in this Agreement. If the Borrower does not pay any such Facility
Letter of Credit Reimbursement Obligations when due, the Borrower shall be
deemed to have immediately requested that the Lenders make an Alternate Base
Rate Advance under this Agreement in a principal amount equal to such
unreimbursed Facility Letter of Credit Reimbursement Obligations. The Agent
shall promptly notify the Lenders of such deemed request and, without the
necessity of compliance with the requirements of Sections 2.2.3 and 4.2, each
-------------- ---
Lender shall make available to the Agent its Loan in the manner prescribed for
Alternate Base Rate Advances. The proceeds of such Loans shall be paid over by
the Agent to the Issuer for the account of the Borrower in satisfaction of such
unreimbursed Facility Letter of Credit Reimbursement Obligations, which shall
thereupon be deemed satisfied by the proceeds of, and replaced by, such
Alternate Base Rate Advance.
(c) If the Issuer makes a payment on account of any Facility Letter of
Credit and is not concurrently reimbursed therefor by the Borrower and if for
any reason an Alternate Base Rate Advance may not be made pursuant to paragraph
(b) above, then as promptly as practical during normal banking hours on the date
of its receipt of such notice or, if not practicable on such date, not later
than noon (Chicago time) on the Business Day immediately succeeding such date of
notification, each Lender shall deliver to the Agent for the account of the
Issuer, in immediately available funds, the purchase price for such Lender's
interest in such unreimbursed Facility Letter of Credit Obligations, which shall
be an amount equal to such Lender's pro-rata share of such payment. Each Lender
shall, upon demand by the Issuer, pay the Issuer interest on such Lender's
pro-rata share of such draw from the date of payment by the Issuer on account of
such Facility Letter of Credit until the date of delivery of such funds to the
Issuer by such Lender at a rate per annum, computed for actual days elapsed
based on a 360-day year, equal to the Federal Funds Effective Rate for such
period; provided, that such payments shall be made by the Lenders only in the
--------
event and to the extent that the Issuer is not reimbursed in full by the
Borrower for interest on the amount of any draw on the Facility Letters of
Credit.
(d) At any time after the Issuer has made a payment on account of any
Facility Letter of Credit and has received from any other Lender such Lender's
pro-rata share of such payment, such Issuer shall, forthwith upon its receipt of
any reimbursement (in whole or in part) by the Borrower for such payment, or of
any other amount from the Borrower or any other Person in respect of such
payment (including, without limitation, any payment of interest or penalty fees
and any payment under any collateral account agreement of the Borrower or any
Loan Document but excluding any transfer of funds from any other Lender pursuant
to Section 2.19.3(b)), transfer to such other Lender such other Lender's ratable
-----------------
share of such reimbursement or other amount; provided, that interest shall
--------
accrue for the benefit of such Lender from the time such Issuer has made a
payment on account of any Facility Letter of Credit; provided, further, that in
-------- -------
the event that the receipt by the Issuer of such reimbursement or other amount
is found to have been a transfer in fraud of creditors or a preferential payment
under the United States Bankruptcy Code or is otherwise required to be returned,
such Lender shall promptly return to the Issuer any portion thereof previously
transferred by the Issuer to such Lender, but without interest to the extent
that interest is not payable by the Issuer in connection therewith.
2.19.4 Procedure for Issuance. Prior to the issuance of each Facility
-----------------------
Letter of Credit, and as a condition of such issuance, the Borrower shall
deliver to the Issuer (with a copy to the Agent) a Reimbursement Agreement
signed by the Borrower, together with such other documents or items as may be
required pursuant to the terms thereof, and the proposed form and content of
such Facility Letter of Credit shall be reasonably satisfactory to the Issuer.
Each Facility Letter of Credit shall be issued no earlier than two (2) Business
Days after delivery of the foregoing documents, which delivery may be by the
Borrower to the Issuer by telecopy, telex or other electronic means followed by
delivery of executed originals within five (5) days thereafter. The documents
so delivered shall be in compliance with the requirements set forth in Section
-------
2.19.1(b), and shall specify therein (i) the stated amount of the Facility
---------
Letter of Credit requested, (ii) the effective date of issuance of such
requested Facility Letter of Credit, which shall be a Business Day, (iii) the
date on which such requested Facility Letter of Credit is to expire, which shall
be a Business Day prior to the date five (5) Business Days prior to the Facility
Termination Date, (iv) the entity for whose benefit the requested Facility
Letter of Credit is to be issued, which shall be the Borrower or a Subsidiary,
and (v) the aggregate amount of Facility Letter of Credit Obligations which are
outstanding and which will be outstanding after giving effect to the requested
Facility Letter of Credit issuance. The delivery of the foregoing documents and
information shall constitute an "Issuance Request" for purposes of this
Agreement. Subject to the terms and conditions of Section 2.19.1 and provided
-------------- --------
that the applicable conditions set forth in Section 4.2 hereof have been
------------
satisfied, the Issuer shall, on the requested date, issue a Facility Letter of
Credit on behalf of the Borrower in accordance with the Issuer's usual and
customary business practices. In addition, any amendment of an existing
Facility Letter of Credit shall be deemed to be an issuance of a new Facility
Letter of Credit and shall be subject to the requirements set forth above. The
Issuer shall give the Agent prompt written notice of the issuance of any
Facility Letter of Credit.
2.19.5 Nature of the Lenders' Obligations. (a) As between the
-------------------------------------
Borrower and the Lenders, the Borrower assumes all risks of the acts and
omissions of, or misuse of the Facility Letters of Credit by, the respective
beneficiaries of the Facility Letters of Credit. In furtherance and not in
limitation of the foregoing, the Lenders shall not be responsible for (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an
issuance of a Facility Letter of Credit, even if it should in fact prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Facility Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) the failure of the beneficiary
of a Facility Letter of Credit to comply fully with conditions required to be
satisfied by any Person other than the Issuer in order to draw upon such
Facility Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise; (v) errors in the interpretation of technical terms; (vi) the
misapplication by the beneficiary of a Facility Letter of Credit of the proceeds
of any drawing under such Facility Letter of Credit; or (vii) any consequences
arising from causes beyond control of the Issuer.
(b) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuer
under or in connection with the Facility Letters of Credit or any related
certificates, if taken or omitted in good faith, shall not put the Agent or any
Lender under any resulting liability to the Borrower or relieve the Borrower of
any of its obligations hereunder to the Issuer or any such Person.
2.19.6 Facility Letter of Credit Fees. The Borrower hereby agrees to
--------------------------------
pay to the Agent for the account of the Issuer or the Lenders, as applicable,
letter of credit fees with respect to each Facility Letter of Credit from and
including the date of issuance thereof until the date such Facility Letter of
Credit is fully drawn, canceled or expired, (a) for the account of the Issuer,
computed at such rate as may be agreed upon between the Issuer and the Borrower,
on the aggregate initial face amount of such Facility Letter of Credit payable
on the date of issuance, and (b) for the ratable account of the Lenders, equal
to (i) in the case of Commercial Letters of Credit, 50% of the Applicable
Eurodollar Margin times the aggregate initial face amount of such Commercial
Letter of Credit, payable upon the date of issuance thereof, and (ii) in the
case of Standby Letters of Credit, the Applicable Eurodollar Margin times the
aggregate amount from time to time available to be drawn on such Standby
Facility Letter of Credit, calculated with respect to actual days elapsed on the
basis of a 360-day year and payable quarterly in arrears on each Payment Date in
each year and upon the expiration, cancellation or utilization in full of such
Facility Letter of Credit. In addition to the foregoing, the Borrower agrees to
pay the Issuer any other fees customarily charged by it in respect of Letters of
Credit issued by it.
2.20. Extension of Facility Termination Date. The Borrower may request
--------------------------------------
an extension of the Facility Termination Date by submitting a request for an
extension to the Agent (an "Extension Request") no more than 60 days but no less
than 40 days prior to the then effective Facility Termination Date. The
Extension Request must specify the new Facility Termination Date requested by
the Borrower and the date (which must be at least 30 days after the Extension
Request is delivered to the Agent) as of which the Lenders must respond to the
Extension Request (the "Extension Date"). The new Facility Termination Date
shall be no more than 364 days after the Extension Date, including the Extension
Date as one of the days in the calculation of the days elapsed. Promptly upon
receipt of an Extension Request, the Agent shall notify each Lender of the
contents thereof and shall request each Lender to approve the Extension Request.
Each Lender may, in its sole discretion, elect to approve or deny such Extension
Request. Failure of a Lender to respond to an Extension Request by the
Extension Date shall be deemed a refusal to approve such Extension Request.
Each Lender approving the Extension Request shall deliver its written consent no
later than the Extension Date. Any consent delivered by a Lender to the Agent
prior to the Extension Date may be revoked prior to the Extension Date by the
Lender giving written notice of such revocation to the Agent before the
Extension Date. If the consent of each of the Lenders is received by the Agent
and remains in effect on the Extension Date, the Facility Termination Date
specified in the Extension Request shall become effective on the Extension Date
and the Agent shall promptly notify the Borrower and each Lender of the new
Facility Termination Date. Otherwise, the then effective Facility Termination
Date shall be unchanged. In no event shall the Borrower be entitled to seek or
obtain more than two extensions pursuant to this Section 2.20.
-------------
ARTICLE III
CHANGE IN CIRCUMSTANCES
-------------------------
3.1. Yield Protection. If, after the date hereof, the adoption of or
-----------------
any change in any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any interpretation thereof, or the compliance of any Lender therewith,
(a subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the Borrower
(excluding taxation of the overall net income of any Lender or applicable
Lending Installation imposed by the jurisdiction in which such Lender or Lending
Installation is incorporated or has its principal place of business), or changes
(excluding increases in the income tax rates imposed by the jurisdiction in
which the applicable Lender or Lending Installation is incorporated or has its
principal place of business) the basis of taxation of principal, interest or any
other payments to any Lender or Lending Installation in respect of its Loans,
its interest in the Facility Letters of Credit or other amounts due it
hereunder, or
(b imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar Advances), or
(c imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making, funding or
maintaining Loans or issuing Facility Letters of Credit or reduces any amount
receivable by any Lender or any applicable Lending Installation in connection
with any Loans or Facility Letters of Credit, or requires any Lender or any
applicable Lending Installation to make any payment calculated by reference to
the amount of Loans held, Facility Letters of Credit issued or participated in
or interest received by it, by an amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or resulting in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans, its interest in the Facility Letters of Credit and its
Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender determines
-----------------------------------------
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans, its
interest in the Facility Letters of Credit or its obligation to make Loans or
participate in or issue Facility Letters of Credit hereunder (after taking into
account such Lender's policies as to capital adequacy). "Change" means (a) any
------
change after the date of this Agreement in the Risk-Based Capital Guidelines, or
(b) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (a) the
-------------------------------
risk-based capital guidelines in effect in the United States on the date of this
Agreement and (b) the corresponding capital regulations promulgated by
regulatory authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory Practices
entitled "International Convergence of Capital Measurements and Capital
Standards" and any amendments to such regulations adopted prior to the date of
this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
----------------------------------
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (a) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available, or (b) the interest rate applicable to a Type of Advance does not
accurately or fairly reflect the cost of making or maintaining such Advance,
then the Agent shall suspend the availability of the affected Type of Advance
until such circumstance no longer exists and require any Eurodollar Advances of
the affected Type to be repaid.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
------------------------
or Swing Line Advance bearing interest at the Alternate Swing Line Rate occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or any such Advance is not
made on the date specified by the Borrower for any reason other than default by
the Lenders, the Borrower will indemnify the Agent and each Lender for any loss
or cost incurred by it resulting therefrom, including, without limitation, any
loss or cost in liquidating or employing deposits acquired to fund or maintain
such Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1 and 3.2 or to avoid the unavailability of a Type of
------------- ---
Advance under Section 3.3, so long as such designation is not disadvantageous to
-----------
such Lender. Each Lender shall deliver a written statement of such Lender to
the Borrower (with a copy to the Agent) as to the amount due, if any, under
Section 3.1, 3.2 or 3.4. Such written statement shall set forth in reasonable
------------ --- ---
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection with
a Eurodollar Loan shall be calculated as though each Lender funded its
Eurodollar Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by the Borrower of the written
statement. The obligations of the Borrower under Sections 3.1, 3.2 and 3.4
------------ --- ---
shall survive payment of the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
---------------------
4.1. Initial Loans and Facility Letters of Credit. The Lenders shall
----------------------------------------------
not be required to make the initial Advances hereunder and the Issuer shall not
be required to issue any Facility Letter of Credit hereunder unless the Borrower
has furnished the following to the Agent with sufficient copies for the Lenders
and the other conditions set forth below have been satisfied, in each case on or
before April 30, 1999:
(a Charter Documents; Good Standing Certificates. Copies of the
-------------------------------------------------
certificate of incorporation of the Borrower, together with all amendments and
other modifications thereto, certified by the appropriate governmental officer
in its jurisdiction of incorporation, together with a good standing certificate
issued by the Secretary of State of the jurisdiction of its incorporation and
such other jurisdictions as shall be requested by the Agent.
(b By-Laws and Resolutions. Copies, certified by the Secretary or
-------------------------
Assistant Secretary of the Borrower, of its by-laws and of its Board of
Directors' resolutions authorizing the execution, delivery and performance of
the Loan Documents to which the Borrower is a party.
(c Secretary's Certificate. An incumbency certificate, executed by the
-----------------------
Secretary or Assistant Secretary of the Borrower, which shall identify by name
and title and bear the signature of the officers of the Borrower authorized to
sign the Loan Documents and to make borrowings hereunder, upon which certificate
the Agent and the Lenders shall be entitled to rely until informed of any change
in writing by the Borrower.
(d Officer's Certificate. A certificate, dated the date hereof, signed
---------------------
by an Authorized Officer of the Borrower, in form and substance satisfactory to
the Agent, to the effect that: (i) on the initial Borrowing Date (both before
and after giving effect to the making of any Loans (or issuance of any Facility
Letters of Credit hereunder) no Default or Unmatured Default has occurred and is
continuing; (ii) no injunction or temporary restraining order which would
prohibit the making of any Loans (or issuance of any Facility Letters of Credit)
or other litigation which could reasonably be expected to have a Material
Adverse Effect is pending or, to the best of such Person's knowledge,
threatened; (iii) each of the representations and warranties set forth in
Article V of this Agreement is true and correct on and as of the initial
----------
Borrowing Date; and (iv) since September 30, 1998, no event or change has
occurred that has caused or evidences a Material Adverse Effect.
(e Legal Opinions. A written opinion of ▇. ▇. ▇▇▇▇▇▇▇▇, General
---------------
Counsel for the Borrower and the Guarantors, addressed to the Agent and the
Lenders in the form of Exhibit I attached hereto.
----------
(f Notes. Notes payable to the order of each of the Lenders duly
-----
executed by the Borrower.
(g Loan Documents. Executed originals of this Agreement and each of
---------------
the Loan Documents, which shall be in full force and effect, together with all
schedules, exhibits, certificates, instruments, opinions, documents and
financial statements required to be delivered pursuant hereto and thereto.
(h Letters of Direction. Written money transfer instructions with
----------------------
respect to Advances in form and substance acceptable to the Agent and its
counsel addressed to the Agent and signed by an Authorized Officer, together
with such other related money transfer authorizations as the Agent may have
reasonably requested.
(i Guarantor Charter Documents; Good Standing Certificates. Copies of
--------------------------------------------------------
the articles or certificates of incorporation of each Guarantor, together with
all amendments thereto, both certified by the Secretary or Assistant Secretary
of such Guarantor, together with a good standing certificate issued by the
Secretary of State of the jurisdiction of its incorporation and such other
jurisdictions as shall be requested by the Agent.
(j Guarantor By-Laws and Resolutions. Copies, certified by the
------------------------------------
Secretary or Assistant Secretary of each Guarantor, of its by-laws and Board of
Directors' resolutions of such Guarantor (and resolutions of other bodies, if
any are deemed necessary by counsel for the Agent) authorizing the execution,
delivery and performance of the Loan Documents to which each such Guarantor is a
party.
(k Guarantor Secretary's Certificate. An incumbency certificate,
-----------------------------------
executed by the Secretary or Assistant Secretary of each Guarantor, which shall
identify by name and title and bear the signature of the officers of such
Guarantor authorized to sign the Loan Documents upon which certificate the Agent
and the Lenders shall be entitled to rely until informed of any change in
writing by the Borrower.
(l Termination of Existing Credit Agreement. The Existing Credit
--------------------------------------------
Agreement shall have terminated and all outstanding obligations thereunder shall
be paid in full and all commitments thereunder shall have terminated, and the
Agent shall have received an executed payoff letter evidencing the same.
(m Other. Such other documents as the Agent, any Lender or their
-----
counsel may have reasonably requested.
4.2. Each Future Advance and Facility Letter of Credit. The Lenders
----------------------------------------------------
shall not be required to make any Advance and the Issuer shall not be obligated
to issue any future Facility Letter of Credit unless on the applicable Borrowing
Date:
(a There exists no Default or Unmatured Default and none would result
from such Advance or issuance of such Facility Letter of Credit;
(b The representations and warranties contained in Article V are true
---------
and correct as of such Borrowing Date;
(c A Borrowing Notice or Issuance Request, as applicable, shall have
been properly submitted; and
(d All legal matters incident to the making of such Advance or issuance
of such Facility Letter of Credit shall be satisfactory to the Lenders and their
counsel.
Each Ratable Borrowing Notice and Competitive Bid Quote Request with
respect to each such Advance and each Issuance Request with respect to each such
Facility Letter of Credit shall constitute a representation and warranty by the
Borrower that the conditions contained in Section 4.2 have been satisfied. Any
-----------
Lender may require a duly completed compliance certificate in substantially the
form of Exhibit G hereto as a condition to making an Advance or issuing a
----------
Facility Letter of Credit.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
--------------------------------
The Borrower represents and warrants to the Agent and the Lenders that:
5.1. Corporate Existence and Standing. The Borrower and each Material
---------------------------------
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and is
duly qualified and in good standing as a foreign corporation and is duly
authorized to conduct its business in each jurisdiction in which its business is
conducted or proposed to be conducted except where the failure to be so
qualified or authorized could not reasonably be expected to have a Material
Adverse Effect.
5.2. Authorization and Validity. The Borrower and each Guarantor have
---------------------------
all requisite power and authority (corporate and otherwise) and legal right to
execute and deliver (or file, as the case may be) each of the Loan Documents to
which it is a party and to perform its obligations thereunder. The execution
and delivery (or filing, as the case may be) by the Borrower and each Guarantor
of the Loan Documents to which it is a party and the performance of their
respective obligations thereunder have been duly authorized by proper corporate
proceedings and the Loan Documents constitute legal, valid and binding
obligations of the Borrower or such Guarantor, as applicable, enforceable
against the Borrower or such Guarantor, as applicable, in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally or by
general principles of equity.
5.3. Compliance with Laws and Contracts. The Borrower and its
--------------------------------------
Subsidiaries have complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof, having jurisdiction over
the conduct of their respective businesses or the ownership of their respective
properties, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Neither the execution and delivery
by the Borrower or any Guarantor of the Loan Documents to which it is a party,
the application of the proceeds of the Loans and the Facility Letters of Credit,
the consummation of any transaction contemplated in the Loan Documents, nor
compliance with the provisions of the Loan Documents will, or at the relevant
time did, (a) violate any law, rule, regulation (including Regulations T, U and
X), order, writ, judgment, injunction, decree or award binding on the Borrower
or any Subsidiary or the Borrower's or any Subsidiary's charter, articles or
certificate of incorporation or by-laws, (b) violate the provisions of or
require the approval or consent of any party to any indenture, instrument or
agreement to which the Borrower or any Subsidiary is a party or is subject, or
by which it, or its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien (other than
Liens permitted by, the Loan Documents) in, of or on the property of the
Borrower or any Subsidiary pursuant to the terms of any such indenture,
instrument or agreement, or (c) require any consent of the stockholders of any
Person.
5.4. Governmental Consents. No order, consent, approval,
----------------------
qualification, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of, Governmental
Authority, or any subdivision thereof, any securities exchange or other Person
is or at the relevant time was required to authorize, or is or at the relevant
time was required in connection with the execution, delivery, consummation or
performance of, or the legality, validity, binding effect or enforceability of,
any of the Loan Documents, the application of the proceeds of the Loans or the
Facility Letters of Credit or any other transaction contemplated in the Loan
Documents.
5.5. Financial Statements. The Borrower has heretofore furnished to
---------------------
each of the Lenders (a) the September 30, 1998 audited consolidated financial
statements of the Borrower and its Subsidiaries, and (b) the unaudited
consolidated financial statements of the Borrower and its Subsidiaries through
December 31, 1998 (collectively, the "Financial Statements"). Each of the
---------------------
Financial Statements was prepared in accordance with Agreement Accounting
Principles and fairly presents the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such dates and the
consolidated results of their operations for the respective periods then ended
(except, in the case of such unaudited statements, for normal year-end audit
adjustments).
5.6. Material Adverse Change. Since September 30, 1998, there has been
-----------------------
no change from that reflected in the Financial Statements, in the business,
Property, condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries taken as a whole which could reasonably be
expected to have a Material Adverse Effect.
5.7. Taxes. The Borrower and its Subsidiaries have filed or caused to
-----
be filed in correct form all United States federal and applicable foreign, state
and local tax returns and all other tax returns which are required to be filed
and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except such taxes, if
any, as are being contested in good faith and as to which adequate reserves have
been provided in accordance with Agreement Accounting Principles and as to which
no Lien exists. No tax liens have been filed and no claims are being asserted
with respect to any such taxes which could reasonably be expected to have a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of any taxes or other governmental
charges are in accordance with Agreement Accounting Principles.
5.8. Litigation and Contingent Obligations. There is no litigation,
----------------------------------------
arbitration, proceeding, inquiry or governmental investigation (including,
without limitation, by the Federal Trade Commission) pending or, to the
knowledge of any of their officers, threatened against or affecting the Borrower
or any Subsidiary or any of their respective Properties which could reasonably
be expected to have a Material Adverse Effect or to prevent, enjoin or unduly
delay the making of the Loans or the issuance of Facility Letters of Credit
under this Agreement. Neither the Borrower nor any Subsidiary has any material
Contingent Obligations except as set forth on Schedule 5.8.
-------------
5.9. Subsidiaries and Capitalization. Schedule 5.9 hereto contains an
-------------------------------- ------------
accurate list of all of the existing Subsidiaries as of the date of this
Agreement, setting forth their respective jurisdictions of incorporation and the
percentage of their capital stock owned by the Borrower or other Subsidiaries.
All of the issued and outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued, are fully paid and non-assessable,
and are free and clear of all Liens, other than the Liens created by the Loan
Documents. No authorized but unissued or treasury shares of capital stock of
the Borrower or any Subsidiary are subject to any option, warrant, right to call
or commitment of any kind or character. Except as set forth on Schedule 5.9,
------------
neither the Borrower nor any Subsidiary has any outstanding stock or securities
convertible into or exchangeable for any shares of its capital stock, or any
right issued to any Person (either preemptive or other) to subscribe for or to
purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to any of its capital stock or any stock or securities
convertible into or exchangeable for any of its capital stock other than as
expressly set forth in the certificate or articles of incorporation of the
Borrower or such Subsidiary. Neither the Borrower nor any Subsidiary is subject
to any obligation (contingent or otherwise) to repurchase or otherwise acquire
or retire any shares of its capital stock or any convertible securities, rights
or options of the type described in the preceding sentence except as otherwise
set forth on Schedule 5.9. Except as set forth on Schedule 5.9, as of the date
------------ ------------
hereof the Borrower does not own or hold, directly or indirectly, any capital
stock or equity security of, or any equity or partnership interest in any Person
other than such Subsidiaries and Vail Resorts, Inc.
5.10. ERISA. Except as disclosed on Schedule 5.10, neither the
----- --------------
Borrower nor any other member of the Controlled Group maintains any Single
Employer Plans, and no Single Employer Plan has any Unfunded Liability. Neither
the Borrower nor any other member of the Controlled Group has incurred, or is
reasonably expected to incur, any withdrawal liability to any Multiemployer Plan
which could reasonably be expected to have a Material Adverse Effect. Each Plan
complies in all respects with all applicable requirements of law and
regulations, except where the failure to so comply could not reasonably be
expected to cause the relevant Plan to become disqualified under the Code.
Neither the Borrower nor any member of the Controlled Group has, with respect to
any Plan, failed to make any contribution or pay any amount required under
Section 412 of the Code or Section 302 of ERISA or the terms of such Plan.
There are no pending or, to the knowledge of the Borrower, threatened claims,
actions, investigations or lawsuits against any Plan, any fiduciary thereof, or
the Borrower or any member of the Controlled Group with respect to a Plan which
could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any member of the Controlled Group has engaged in any prohibited
transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in
connection with any Plan which would subject such Person to any material
liability. Within the last five years neither the Borrower nor any member of
the Controlled Group has engaged in a transaction which resulted in a Single
Employer Plan with an Unfunded Liability being transferred out of the Controlled
Group. No Termination Event has occurred or is reasonably expected to occur
with respect to any Plan which is subject to Title IV of ERISA.
5.11. Defaults. No Default or Unmatured Default has occurred and is
--------
continuing.
5.12. Federal Reserve Regulations. Neither the Borrower nor any
-----------------------------
Subsidiary is engaged, directly or indirectly, principally, or as one of its
important activities, in the business of extending, or arranging for the
extension of, credit for the purpose of purchasing or carrying Margin Stock.
Neither the making of any Advance or issuance of any Facility Letters of Credit
hereunder, the use of the proceeds thereof, will violate or be inconsistent with
the provisions of Regulation T, Regulation U or Regulation X. Following the
application of the proceeds of the Loans, less than 25% of the value (as
determined by any reasonable method) of the assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder taken as a whole have been, and will continue to be,
represented by Margin Stock.
5.13. Investment Company; Public Utility Holding Company Act. Neither
-------------------------------------------------------
the Borrower nor any Subsidiary is, or after giving effect to any Advance will
be, an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended. Neither
the Borrower nor any Subsidiary is a "holding company" or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
5.14. Certain Fees. Other than as disclosed on Schedule 5.14, no
------------- -------------
broker's or finder's fee or commission was, is or will be payable by the
Borrower or any Subsidiary with respect to the transactions contemplated by this
Agreement. The Borrower hereby agrees to indemnify the Agent and the Lenders
against and agrees that it will hold each of them harmless from any claim,
demand or liability for broker's or finder's fees or commissions alleged to have
been incurred by the Borrower in connection with any of the transactions
contemplated by this Agreement and any expenses (including, without limitation,
attorneys' fees and time charges of attorneys for the Agent or any Lender, which
attorneys may be employees of the Agent or any Lender) arising in connection
with any such claim, demand or liability.
5.15. Solvency. As of the date hereof, after giving effect to the
--------
consummation of the transactions contemplated by the Loan Documents and the
payment of all fees, costs and expenses payable by the Borrower or its
Subsidiaries with respect to the transactions contemplated by the Loan
Documents, each of the Borrower and each Guarantor is Solvent.
5.16. Ownership of Properties. Except as set forth on Schedule 5.16
------------------------- -------------
hereto, the Borrower and its Subsidiaries have a subsisting leasehold interest
in, or good and marketable title, free of all Liens, other than those permitted
by Section 6.17 or by any of the other Loan Documents, to all of the properties
------------
and assets reflected in the Financial Statements as being owned by it, except
for assets sold, transferred or otherwise disposed of in the ordinary course of
business since the date thereof. To the knowledge of the Borrower, there are no
actual, threatened or alleged defaults with respect to any leases of real
property under which the Borrower or any Subsidiary is lessee or lessor which
could reasonably be expected to have a Material Adverse Effect. The Borrower
and its Subsidiaries own or possess rights to use all material licenses,
patents, patent applications, copyrights, service marks, trademarks and trade
names necessary to continue to conduct their business as heretofore conducted,
and no such license, patent or trademark has been declared invalid, been limited
by order of any court or by agreement or is the subject of any infringement,
interference or similar proceeding or challenge, except for proceedings and
challenges which could not reasonably be expected to have a Material Adverse
Effect.
5.17. Indebtedness. Attached hereto as Schedule 5.17 is a complete and
------------ -------------
correct list of all Indebtedness of the Borrower and its Subsidiaries
outstanding on the date of this Agreement (other than Indebtedness in a
principal amount not exceeding $100,000 for a single item of Indebtedness and
$500,000 in the aggregate for all such Indebtedness listed), showing the
aggregate principal amount which was outstanding on such date.
5.18. Subordinated Indebtedness. The principal of and interest on the
--------------------------
Notes and all other Obligations will constitute "senior debt" as that or any
similar term is or may be used in any other instrument evidencing or applicable
to any Subordinated Indebtedness of the Borrower.
5.19. Employee Controversies. There are no strikes, work stoppages or
-----------------------
controversies pending or threatened between the Borrower or any Subsidiary and
any of its employees, other than strikes, work stoppages or controversies
arising in the ordinary course of business, which, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
5.20. Material Agreements. Neither the Borrower nor any Subsidiary is
--------------------
a party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect or which restricts or imposes conditions upon the ability of the
Borrower or any Subsidiary to (a) pay dividends or make other distributions on
its capital stock (b) make loans or advances to the Borrower, (c) repay loans or
advances from Borrower or (d) grant Liens to the Agent to secure the
Obligations. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect.
5.21. Environmental Laws. The Borrower and its Material Subsidiaries
-------------------
each conduct in the ordinary course of business a review of the effects of then
existing Environmental Laws and then existing Environmental Claims on its
business, condition (financial and other), results of operations and Property,
and as a result thereof the Borrower and its Material Subsidiaries have
reasonably concluded that the application of such Environmental Laws and the
existence of such Environmental Claims, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
5.22. Insurance. The Borrower and its Subsidiaries maintain with
---------
financially sound and reputable insurance companies insurance on their Property
in such amounts and covering such risks as is consistent with sound business
practice.
5.23. Disclosure. None of the (a) information, exhibits or reports
----------
furnished or to be furnished by the Borrower or any Subsidiary to the Agent or
to any Lender in connection with the negotiation of the Loan Documents, or (b)
representations or warranties of the Borrower or any Subsidiary contained in
this Agreement, the other Loan Documents or any certificate or other written
information furnished to the Agent or the Lenders by or on behalf of the
Borrower or any Subsidiary pursuant to a request from the Agent or the Lenders
permitted hereunder and for use in connection with the transactions contemplated
by this Agreement, contained, contains or will contain any untrue statement of a
material fact or omitted, omits or will omit to state a material fact necessary
in order to make the statements contained herein or therein not misleading in
light of the circumstances in which the same were made. The pro forma financial
information contained in such materials is based upon good faith estimates and
assumptions believed by the Borrower to be reasonable at the time made. There
is no fact known to the Borrower (other than matters of a general economic
nature) that has had or could reasonably be expected to have a Material Adverse
Effect and that has not been disclosed herein or in such other documents,
certificates and other written information furnished to the Lenders for use in
connection with the transactions contemplated by this Agreement.
5.24. Year 2000. The Borrower has made a full and complete assessment
----------
of the Year 2000 Issues and has a realistic and achievable program for
remediating the Year 2000 Issues on a timely basis (the "Year 2000 Program").
Based on such assessment and on the Year 2000 Program, the Borrower does not
reasonably anticipate that Year 2000 Issues will have a Material Adverse Effect.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and
--------------------
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, consistently applied,
and furnish to the Lenders:
(a) As soon as practicable and in any event within 95 days after the
close of each of its Fiscal Years, an unqualified audit report certified by
independent certified public accountants, acceptable to the Lenders, prepared in
accordance with Agreement Accounting Principles on a consolidated and
consolidating basis (consolidating statements need not be certified by such
accountants) for itself and its Subsidiaries, including balance sheets as of the
end of such period and related statements of income, retained earnings and cash
flows (but not consolidating statements of retained earnings or cash flows)
accompanied by a certificate of said accountants that, in the course of the
examination necessary for their certification of the foregoing, they have
obtained no knowledge of Default or Unmatured Default, or if, in the opinion of
such accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof.
(b) As soon as practicable and in any event within 50 days after the
close of the first three Fiscal Quarters of each of its Fiscal Years, for itself
and its Subsidiaries, consolidated and consolidating unaudited balance sheets as
at the close of each such period and consolidated and consolidating statements
of income, retained earnings and cash flows (but not consolidating statements of
retained earnings or cash flows)for the period from the beginning of such Fiscal
Year to the end of such quarter, all certified by its chief financial officer,
controller or treasurer.
(c) As soon as available, but in any event not later than the last
Business Day in November of each year, a copy of the plan and forecast of the
Borrowers, and its Subsidiaries for the next Fiscal Year organized by individual
lines of business (including a projected consolidated and consolidating balance
sheet, income statement and funds flow statement).
(d) Together with the financial statements required by clauses (a) and
-----------
(b) above, a compliance certificate in substantially the form of Exhibit G
--- ---------
hereto signed by its chief financial officer, controller or treasurer showing
the calculations necessary to determine compliance with this Agreement and
stating that no Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof.
(e) Within 270 days after the close of each Fiscal Year, a statement of
the Unfunded Liabilities of each Single Employer Plan, certified as correct by
an actuary enrolled under ERISA.
(f) As soon as possible and in any event within 10 days after the
Borrower knows that any Termination Event has occurred with respect to any Plan,
a statement, signed by the chief financial officer, treasurer or controller of
the Borrower, describing said Termination Event and the action which the
Borrower proposes to take with respect thereto.
(g) As soon as possible and in any event within 10 days after the
Borrower learns thereof, notice of the assertion or commencement of any claims,
action, suit or proceeding against or affecting the Company or any Subsidiary
which could reasonably be expected to have a Material Adverse Effect.
(h) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements so
furnished.
(i) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which the
Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission.
(j) Such other information (including non-financial information) as the
Agent or any Lender may from time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each
-----------------
Subsidiary to, use the proceeds of the Advances to meet the general corporate
and working capital needs of the Borrower and its Subsidiaries, including the
making of stock redemptions and repurchases, dividends on its capital stock,
Investments and non-hostile Purchases, all as permitted hereunder. The Borrower
will not, nor will it permit any Subsidiary to, use any of the proceeds of the
Advances or any Facility Letter of Credit to purchase or carry any "margin
stock" (as defined in Regulation U) or to finance the Purchase of any Person
which has not been approved and recommended by the board of directors (or
functional equivalent thereof) of such Person.
6.3. Notice of Default. The Borrower will give prompt notice in
--------------------
writing to the Lenders of the occurrence of (a) any Default or Unmatured Default
and (b) of any other event or development, financial or other, relating
specifically to the Borrower or any of its Subsidiaries (and not of a general
economic or political nature) which could reasonably be expected to have a
Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
---------------------
Subsidiary to, carry on and conduct its business in substantially the same
manner as is presently conducted or in other consumer products markets and the
manufacturing of ingredients therefor, and to do all things necessary to remain
duly incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to maintain such authority could not
reasonably be expected to have a Material Adverse Effect.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
-----
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by applicable law and pay when due all
material taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside.
6.6. Insurance. The Borrower will, and will cause each Subsidiary to,
---------
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice for similarly situated businesses in the industries in
which the Borrower and its Subsidiaries operate, and the Borrower will furnish
to the Agent and any Lender upon request full information as to the insurance
carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
----------------------
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, the
failure to comply with which could reasonably be expected to have a Material
Adverse Effect.
6.8. Maintenance of Properties. The Borrower will, and will cause each
-------------------------
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
6.9. Inspection. The Borrower will, and will cause each Subsidiary to,
----------
permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, corporate books and financial records of
the Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Lenders may designate. The Borrower will
keep or cause to be kept, and cause each Subsidiary to keep or cause to be kept,
appropriate records and books of account in which complete entries are to be
made reflecting its and their business and financial transactions, such entries
to be made in accordance with Agreement Accounting Principles consistently
applied.
6.10. Capital Stock and Dividends. The Borrower will not, nor will it
----------------------------
permit any Subsidiary to, (a) issue or have outstanding any preferred stock,
other than preferred stock not having mandatory redemption, retirement and other
repurchase dates commencing less than 91 days after the Facility Termination
Date then in effect or (b) declare or pay any dividends or make any
distributions on its capital stock (other than dividends payable in its own
capital stock) or redeem, repurchase or otherwise acquire or retire any of its
capital stock or any options or other rights in respect thereof at any time
outstanding, except that (i) any Subsidiary may declare and pay dividends or
make distributions to the Borrower or to a Guarantor, (ii) so long as no Default
or Unmatured Default exists before or after giving effect to the declaration or
payment of such dividends or repurchase or redemption of such stock, the
Borrower may repurchase or redeem its capital stock or declare and, within 45
days thereafter, pay dividends on its capital stock in an amount which, when
added to the amount of all prior dividends and stock repurchases or redemptions
from and after the date hereof does not exceed 20% of Net Worth at such time
(before giving effect to such dividend, repurchase or redemption).
6.11. Indebtedness. The Borrower will not, nor will it permit any
------------
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(a) the Loans;
(b) Indebtedness existing on the date hereof and described in Schedule
--------
5.17;
----
(c) Contingent Obligations permitted by Section 6.16;
-------------
(d) Rate-Hedging Obligations incurred in the ordinary course of
business;
(e) Indebtedness arising in connection with the Accounts Receivable
Financing Program; and
(f) other Indebtedness so long as immediately after giving effect to
the incurrence of such Indebtedness, the Borrower is in compliance with the
financial covenants set forth in Section 6.24.
-------------
6.12. Merger. The Borrower will not, nor will it permit any Subsidiary
------
to, merge or consolidate with or into any other Person, except that (a) a
Wholly-Owned Subsidiary may merge into the Borrower or any Wholly-Owned
Subsidiary of the Borrower, (b) the Borrower or any Subsidiary may merge or
consolidate with any other Person so long as the Borrower or such Subsidiary is
the continuing or surviving corporation and, prior to and after giving effect to
such merger or consolidation, no Default or Unmatured Default shall exist, and
(c) any Subsidiary may enter into a merger or consolidation as a means of
effecting a disposition permitted by Section 6.13.
-------------
6.13. Sale of Assets. The Borrower will not, nor will it permit any
----------------
Subsidiary to, lease, sell, transfer or otherwise dispose of its Property to any
other Person except for (a) sales of inventory or unused or obsolete equipment
in the ordinary course of business, and (b) leases, sales, transfers or other
dispositions of its Property that, together with all other Property of the
Borrower and its Subsidiaries previously leased, sold, transferred or otherwise
disposed of (other than inventory or unused or obsolete equipment sold in the
ordinary course of business and accounts receivables transactions permitted by
Section 6.14) as permitted by this Section 6.13 since the date hereof, do not
------------- ------------
constitute a Substantial Portion of the Property of Borrower and its
Subsidiaries.
6.14. Sale of Accounts. The Borrower will not, nor will it permit any
-----------------
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse, except that the Borrower or any Subsidiary
may sell or otherwise grant an interest in its accounts receivable to other
Persons, in each case pursuant to an Accounts Receivable Financing Program;
provided, however, that any such sales or granting of interests in accounts
-------- -------
receivable shall, for all purposes of this Agreement, and regardless of the
treatment thereof by the Borrower on its financial statements, be deemed an
incurrence of Indebtedness.
6.15. Investments and Purchases. The Borrower will not, nor will it
---------------------------
permit any Subsidiary to, make or suffer to exist any Investments (including,
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Purchases, except:
(a) Short-term obligations of, or fully guaranteed by, the United
States of America and short-term obligations of United States government
agencies;
(b) Commercial paper rated A-1 or better by S&P or P-1 or better by
▇▇▇▇▇'▇;
(c) Demand deposit and money market bank accounts maintained in the
ordinary course of business with commercial banks which are members of the
Federal Deposit Insurance Corporation;
(d) Bankers acceptances and certificates of deposit issued by and time
deposits with commercial banks (whether domestic or foreign) rated B or better
by Thomson, A or better by S&P or A2 or better by ▇▇▇▇▇'▇;
(e) Repurchase agreements with commercial banks (whether domestic or
foreign) rated B or better by Thomson, A or better by S&P or A2 or better by
▇▇▇▇▇'▇, so long at least 102% of the principal amount of each repurchase
agreement is collateralized by obligations of, or fully guaranteed by, the
United States of America or by commercial paper rated A-1 or better by S&P or
P-1 or better by ▇▇▇▇▇'▇;
(f) Loan participations and master notes with corporations rated A-1 or
better by S&P or P-1 or better by ▇▇▇▇▇'▇ and with commercial banks rated B or
better by Thomson, A or better by S&P or A2 or better by ▇▇▇▇▇'▇;
(g) Money market preferred stock accounts in corporations rated A or
better by S&P or A2 or better by ▇▇▇▇▇'▇ or in other corporations so long as
such Investments are secured by Letters of Credit issued by commercial banks
rated B or better by Thomson, A or better by S&P or A2 or better by ▇▇▇▇▇'▇;
(h) Existing Investments in Subsidiaries and additional Investments in
Guarantors;
(i) Other Investments in existence on the date hereof and described in
Schedule 6.15 hereto;
--------------
(j) Other Investments in Persons or Subsidiaries which are not
Guarantors (including, without limitation, (i) any Investment in a joint venture
and (ii) the creation of and the Investment in any Subsidiary that is not a
Guarantor) in an aggregate amount not exceeding $20,000,000;
(k) Investments in, and the creation of, any special purpose Subsidiary
created for the purpose of entering into the Accounts Receivable Financing
Program;
(l) Additional equity Investments in Vail Resorts, Inc. necessary to
permit the Borrower to retain equity accounting treatment for such Investment;
and
(m) (i) Purchases not exceeding $15,000,000 in the case of any single
Purchase or series of related Purchases, provided that there shall exist no
--------
Default or Unmatured Default either immediately before or immediately after
giving effect to any such Purchase, or (ii) Purchases in excess of $15,000,000
in the case of any single Purchase or series of related Purchases, provided
--------
that (A) there shall exist no Default or Unmatured Default either immediately
before or immediately after giving effect to any such Purchases and (B) the
Borrower submits a certificate executed by the chief financial officer,
treasurer or controller of the Borrower prior to closing any such transaction
showing that the pro forma Leverage Ratio calculated after giving effect to such
transaction for the period consisting of the four consecutive Fiscal Quarters
then most recently ended (treating such Purchase as having occurred on the first
day of such four-quarter period) does not exceed 2.50:1.
6.16. Contingent Obligations. The Borrower will not, nor will it
-----------------------
permit any Subsidiary to, make or suffer to exist any Contingent Obligation
(including, without limitation, any Contingent Obligation with respect to the
obligations of a Subsidiary), except (a) by endorsement of instruments for
deposit or collection in the ordinary course of business, (b) the Subsidiary
Guaranty and (c) the ▇▇▇▇▇▇▇ Obligations.
6.17. Liens. The Borrower will not, nor will it permit any Subsidiary
-----
to, create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter can
be paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with generally
accepted principles of accounting shall have been set aside on its books;
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure the payment of obligations not more than 60 days past due
or which are being contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its books;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation;
(d) Liens arising out of good faith deposits in connection with or to
secure performance of statutory obligations, surety and appeal bonds, government
contracts, leases otherwise permitted hereunder, performance and return of money
bonds and other similar obligations incurred in the ordinary course of business;
(e) Easements, minor defects or irregularities in title, building
restrictions and such other encumbrances or charges against real property, all
of which as are of a nature generally existing with respect to properties of a
similar character and which do not in any material way affect the marketability
of the same or interfere with the use thereof in the business of the Borrower or
the Subsidiaries;
(f) Liens existing on the date hereof and described in Schedule 6.17
-------------
hereto, including extensions, renewals and replacements thereof in whole or in
part, so long as the principal amount of the Indebtedness secured thereby at the
time of such extension, renewal or replacement is limited to all or any part of
the Property (including improvements thereon) securing the Lien so extended,
renewed or replaced;
(g) Liens on the Property of a Subsidiary of the Borrower and
exclusively securing Indebtedness of such Subsidiary to the Borrower or any
Guarantor;
(h) Liens of purchasers or providers of financing under an Accounts
Receivable Financing Program in accordance with Section 6.14 herein; and
-------------
(i) Other Liens securing aggregate principal Indebtedness at no time
exceeding $25,000,000.
6.18. Lease Rentals. The Borrower will not, nor will it permit any
--------------
Subsidiary to, create, incur or suffer to exist obligations for Rentals in
excess of $30,000,000 during any one Fiscal Year on a non-cumulative basis in
the aggregate for the Borrower and its Subsidiaries.
6.19. Affiliates. The Borrower will not, and will not permit any
----------
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (a) in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction, (b) transactions among the Borrower and
Guarantors and (c) in connection with the Accounts Receivable Financing Program.
6.20. Subordinated Indebtedness; Other Indebtedness. The Borrower will
---------------------------------------------
not, and will not permit any Subsidiary to, make any amendment or modification
to the indenture, note or other agreement evidencing or governing any
Subordinated Indebtedness, or directly or indirectly voluntarily prepay, defease
or in substance defease, purchase, redeem, retire or otherwise acquire, any
Subordinated Indebtedness.
6.21. Environmental Matters. The Borrower shall and shall cause each
----------------------
of its Material Subsidiaries to conduct in the ordinary course of its business
reviews of the effects of then existing Environmental Laws and then existing
Environmental Claims on its business, condition (financial and other), results
of operations and Property and to take all actions required by such
Environmental Laws and in respect of such Environmental Claims, except where the
failure to so act could not reasonably be expected to have a Material Adverse
Effect.
6.22. Change in Corporate Structure; Fiscal Year. The Borrower shall
--------------------------------------------
not, nor shall it permit any Subsidiary to, (a) permit any amendment or
modification to be made to its certificate or articles of incorporation or
by-laws which is materially adverse to the interests of the Lenders or (b)
change its Fiscal Year to end on any date other than September 30 of each year.
6.23. Inconsistent Agreements. The Borrower shall not, nor shall it
------------------------
permit any Subsidiary to, enter into any indenture, agreement, instrument or
other arrangement which, (a) directly or indirectly prohibits or restrains, or
has the effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence of the Obligations, the granting of Liens to
secure the Obligations, the provision of the Subsidiary Guaranty, the amending
of the Loan Documents or the ability of any Subsidiary (other than a special
purpose Subsidiary created for the purpose of entering into the Accounts
Receivable Financing Program) to (i) pay dividends or make other distributions
on its capital stock, (ii) make loans or advances to the Borrower or (iii) repay
loans or advances from the Borrower or (b) contains any provision which would be
violated or breached by the making of Advances, by the issuance of Facility
Letters of Credit or by the performance by the Borrower or any Subsidiary of any
of its obligations under any Loan Document.
6.24. Financial Covenants. The Borrower on a consolidated basis with
--------------------
its Subsidiaries shall:
6.24.1. Adjusted Net Worth. At all times after the date hereof, maintain
-------------------
a minimum Adjusted Net Worth at least equal to the sum of (a) 80% of Adjusted
Net Worth determined for the Borrower and its Subsidiaries as of December 31,
1998 based on financial information received by the Agent from the Borrower,
plus (b) the sum of all cash proceeds (net of related costs, expenses, fees and
taxes) received by the Borrower or any Subsidiary of the Borrower from the
issuance of its capital stock, plus (c) for each Fiscal Quarter ending after the
----
date hereof and prior to the time of determination, 50% of the Borrower's
positive Adjusted Net Income for such Fiscal Quarter.
6.24.2. Leverage Ratio. As of the end of each Fiscal Quarter, maintain a
---------------
Leverage Ratio of not more than 3.00:1.00
6.24.3. Interest Expense Coverage Ratio. As of the end of each four
----------------------------------
Fiscal Quarters ending after the date hereof, maintain an Interest Expense
Coverage Ratio of not less than 3.00:1.00
6.25. ERISA Compliance.
-----------------
With respect to any Plan, neither the Borrower nor any Subsidiary shall:
(a) engage in any "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) for which a civil penalty
pursuant to Section 502(i) of ERISA or a tax pursuant to Section 4975 of the
Code in excess of $2,000,000 could be imposed;
(b) incur any "accumulated funding deficiency" (as such term is defined
in Section 302 of ERISA) in excess of $2,000,000, whether or not waived, or
permit any Unfunded Liability to exceed $2,000,000;
(c) permit the occurrence of any Termination Event which could result
in a liability to the Borrower or any other member of the Controlled Group in
excess of $2,000,000; or
(d) permit the establishment or amendment of any Plan or fail to comply
with the applicable provisions of ERISA and the Code with respect to any Plan
which could result in liability to the Borrower or any other member of the
Controlled Group which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
6.26. Material Subsidiaries. The Borrower shall cause each of its
----------------------
Subsidiaries which becomes a Material Subsidiary on or after the date hereof to
join the Subsidiary Guaranty as a Guarantor pursuant to a joinder agreement in
the form attached to the Subsidiary Guaranty within thirty (30) days of such
Person becoming a Material Subsidiary.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the Agent under or
in connection with this Agreement, any other Loan Document, any Loan, any
Facility Letter of Credit or any certificate or information delivered in
connection with this Agreement or any other Loan Document shall be false in any
material respect on the date as of which made or deemed made.
7.2. Nonpayment of (a) any principal of any Note or any Reimbursement
Obligation when due, or (b) any interest upon any Note or any commitment fee or
other fee or obligations under any of the Loan Documents within five days after
the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, Section 6.3(a) or Sections 6.10 through 6.24.
---------- --------------- -------------- ----
7.4. The breach by the Borrower (other than a breach which constitutes
a Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of
----------- --- ---
this Agreement which is not remedied within thirty (30) days after written
notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay any
Indebtedness aggregating in excess of $25,000,000 when due; or the default by
the Borrower or any of its Subsidiaries in the performance of any term,
provision or condition contained in any agreement or agreements under which any
such Indebtedness was created or is governed, or the occurrence of any other
event or existence of any other condition, the effect of any of which is to
cause, or to permit the holder or holders of such Indebtedness to cause, such
Indebtedness to become due prior to its stated maturity; or any such
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity thereof.
7.6. The Borrower or any of its Subsidiaries shall (a) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (b) make an assignment for the benefit of creditors, (c)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
custodian, trustee, examiner, liquidator or similar official for it or any
Substantial Portion of its Property, (d) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (e)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.6, (f) fail to contest in good faith any appointment
-----------
or proceeding described in Section 7.7 or (g) become unable to pay, not pay, or
-----------
admit in writing its inability to pay, its debts generally as they become due.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section 7.6(d)
--------------
shall be instituted against the Borrower or any of its Subsidiaries and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of thirty consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of (each a "Condemnation"),
------------
all or any portion of the Property of the Borrower and its Subsidiaries which,
when taken together with all other Property of the Borrower and its Subsidiaries
so condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within thirty
days to pay, bond or otherwise discharge any judgments or orders for the payment
of an aggregate amount in excess of $10,000,000, which is not covered by
undisputed insurance or stayed on appeal or otherwise being appropriately
contested in good faith and as to which no enforcement actions have been
commenced.
7.10. Any Change in Control shall occur.
7.11. The Subsidiary Guaranty shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of the Subsidiary Guaranty, or any Guarantor shall fail to
comply with any of the terms or provisions of the Subsidiary Guaranty, or any
Guarantor denies that it has any further liability under the Subsidiary
Guaranty, or gives notice to such effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
--------------------------------------------------
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
------------ ----------- ---
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans or issue Facility Letters of Credit hereunder shall automatically
terminate and the Obligations shall immediately become due and payable without
any election or action on the part of the Agent or any Lender. If any other
Default occurs, the Required Lenders (or the Agent with the consent of the
Required Lenders) may terminate or suspend the obligations of the Lenders to
make Loans or issue Facility Letters of Credit hereunder, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives. In
addition to the foregoing, following the occurrence and during the continuance
of a Default, so long as any Facility Letter of Credit has not been fully drawn
and has not been canceled or expired by its terms, upon demand by the Agent, the
Borrower shall deposit in an account (the "Letter of Credit Cash Collateral
--------------------------------
Account") maintained with First Chicago in the name of the Agent, for the
-------
ratable benefit of the Lenders and the Agent, cash in an amount equal to the
aggregate undrawn face amount of all outstanding Facility Letters of Credit and
all fees and other amounts due or which may become due with respect thereto.
The Borrower shall have no control over funds in the Letter of Credit Cash
Collateral Account, which funds shall be invested by the Agent from time to time
in its discretion in certificates of deposit of First Chicago having a maturity
not exceeding thirty days. Such funds shall be promptly applied by the Agent to
reimburse the Issuer for drafts drawn from time to time under the Facility
Letters of Credit. Such funds, if any, remaining in the Letter of Credit Cash
Collateral Account following the payment of all Obligations in full or the
earlier termination of all Defaults shall, unless the Agent is otherwise
directed by a court of competent jurisdiction, be promptly paid over to the
Borrower.
If, within ten Business Days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
------------ ---
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII, the
---------- ------------
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
-------- -------
without the consent of each Lender:
(a) Extend the final maturity of any Loan or Note or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest or fees thereon;
(b) Reduce the percentage specified in the definition of Required
Lenders;
(c) Reduce the amount of or extend the date for the mandatory payments
required under Section 2.1.2, increase the amount of the Commitment of any
--------------
Lender hereunder (except in accordance with Section 2.6(c)), or amend Section
-------------- -------
2.6(c) to allow the Aggregate Commitment to increase by more than $50,000,000;
------
(d) Subject to Section 2.20, extend the Facility Termination Date or
-------------
permit any Facility Letter of Credit to have an expiry date beyond the Facility
Termination Date then in effect;
(e) Amend this Section 8.2;
------------
(f) Release any Guarantor from the Subsidiary Guaranty; or
(g) Permit any assignment by the Borrower of its Obligations or its
rights hereunder.
No amendment of any provision of this Agreement relating to (i) the Agent shall
be effective without the written consent of the Agent, (ii) the Issuer or the
Facility Letters of Credit shall be effective without the consent of the Issuer
or (iii) Swing Line Loans shall be effective without the consent of the Swing
Line Lender. The Agent may waive payment of the fee required under Section
-------
12.3.2 without obtaining the consent of any other party to this Agreement.
------
8.3. Preservation of Rights. No delay or omission of the Lenders or
------------------------
the Agent to exercise any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or an acquiescence therein, and
the making of a Loan notwithstanding the existence of a Default or the inability
of the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
-----------
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE IX
GENERAL PROVISIONS
-------------------
9.1. Survival of Representations. All representations and warranties
-----------------------------
of the Borrower contained in this Agreement or of the Borrower or any Subsidiary
contained in any Loan Document shall survive delivery of the Notes and the
making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
------------------------
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Taxes. Any stamp, documentary or similar taxes, assessments or
-----
charges payable or ruled payable by any governmental authority in respect of the
Loan Documents shall be paid by the Borrower, together with interest and
penalties, if any.
9.4. Headings. Section headings in the Loan Documents are for
--------
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the entire agreement
-----------------
and understanding among the Borrower, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent, and the
Lenders relating to the subject matter thereof other than the fee letter dated
March 16, 1999 in favor of First Chicago.
9.6. Several Obligations; Benefits of this Agreement. The respective
-------------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any
of its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse the
--------------------------
Agent, and the Arranger for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the Agent
and the Arranger, which attorneys may be employees of the Agent or the Arranger)
paid or incurred by the Agent or the Arranger in connection with the
preparation, negotiation, execution, delivery, review, amendment, modification,
syndication and administration of the Loan Documents. The Borrower also agrees
to reimburse the Agent, the Arranger and the Lenders for any costs, internal
charges and out-of-pocket expenses (including attorneys' fees and time charges
of attorneys for the Agent, the Arranger and the Lenders, which attorneys may be
employees of the Agent, the Arranger or the Lenders) paid or incurred by the
Agent, the Arranger or any Lender in connection with the collection and
enforcement of the Loan Documents. The Borrower further agrees to indemnify the
Agent, the Arranger and each Lender, its directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent, the Arranger or any Lender is a
party thereto) which any of them may pay or incur arising out of or relating to
this Agreement, the other Loan Documents, the transactions contemplated hereby
or thereby or the direct or indirect application or proposed application of the
proceeds of any Loan hereunder or the use or intended use of any Facility Letter
of Credit, except to the extent that they arise out of the gross negligence or
willful misconduct of the party seeking indemnification. The obligations of the
Borrower under this Section shall survive the termination of this Agreement.
9.8. Numbers of Documents. All statements, notices, closing documents,
--------------------
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.9. Accounting. Except as provided to the contrary herein, all
----------
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.10. Severability of Provisions. Any provision in any Loan Document
----------------------------
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11. Nonliability of Lenders. The relationship between the Borrower
-------------------------
and the Lenders and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities to
the Borrower. Neither the Agent nor any Lender undertakes any responsibility to
the Borrower to review or inform the Borrower of any matter in connection with
any phase of the Borrower's business or operations. The Borrower shall rely
entirely upon its own judgment with respect to its business, and any review,
inspection or supervision of, or information supplied to the Borrower by the
Agent or the Lenders is for the protection of the Agent and the Lenders and
neither the Borrower nor any other Person is entitled to rely thereon. The
Borrower agrees that neither the Agent nor any Lender shall have any liability
with respect to, and the Borrower hereby waives, releases and agrees not to ▇▇▇
for, any punitive, special, indirect or consequential damages suffered by the
Borrower in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby or the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
-----------------------
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS
OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS; PROVIDED, THAT SUCH PROCEEDINGS MAY BE BROUGHT IN OTHER COURTS IF
--------
JURISDICTION MAY NOT BE OBTAINED IN A COURT IN CHICAGO, ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
-----------------------
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. Disclosure. The Borrower and each Lender hereby (a) acknowledge
----------
and agree that First Chicago and/or its Affiliates from time to time may hold
other investments in, make other loans to or have other relationships with the
Borrower, including, without limitation, in connection with any interest rate
hedging instruments or agreements or swap transactions, and (b) waive any
liability of First Chicago or such Affiliate to the Borrower or any Lender,
respectively, arising out of or resulting from such investments, loans or
relationships other than liabilities arising out of the gross negligence or
willful misconduct of First Chicago or its Affiliates.
9.16. Counterparts. This Agreement may be executed in any number of
------------
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower, the Agent and the Lenders and each party has notified the Agent that
it has taken such action.
9.17. Confidentiality. Each Lender agrees to take normal and
---------------
reasonable precautions and exercise due care to maintain the confidentiality of
all information provided to it by the Borrower, or by the Agent on the
Borrower's behalf, in connection with this Agreement or any other Loan Document,
and no Lender shall use any such information for any purpose or in any manner
other than pursuant to the terms contemplated by this Agreement, except to the
extent such information (a) was or becomes generally available to the public
other than as a result of a disclosure by such Lender, or (b) was or becomes
available on a non-confidential basis from a source other than the Borrower,
provided that such source is not bound by a confidentiality agreement with the
--------
Borrower or its agents known to such Lender; provided, further, however, that
-------- ------- -------
any Lender may disclose such information (i) after being advised by counsel
(including internal counsel), at the request or pursuant to any requirement of
any governmental or regulatory authority to which such Lender is subject or in
connection with an examination of such Lender by any such authority; (ii)
pursuant to subpoena or other court process, provided that, if it is lawful to
--------
do so, such Lender shall give prompt notice to the Borrower of service thereof
so that the Borrower may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this Section 9.17; (iii) after being
------------
advised by counsel (including internal counsel), when required to do so in
accordance with the provisions of any applicable requirement of law; (iv) to the
extent reasonably required in connection with any litigation or proceeding
involving the Borrower or any of its Subsidiaries to which the Agent, any Lender
or their respective Affiliates may be party, (v) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document, (vi) to such Lender's independent auditors and other
professional advisors as to which such information has been identified as
confidential, and (vii) to such Lender's Affiliates which have agreed to be
bound by the same confidentiality obligations as apply to such Lender.
ARTICLE X
THE AGENT
----------
10.1. Appointment. First Chicago is hereby appointed Agent hereunder
-----------
and under each other Loan Document, and each of the Lenders authorizes the Agent
to act as the agent of such Lender. The Agent agrees to act as such upon the
express conditions contained in this Article X. The Agent shall not have a
---------
fiduciary relationship in respect of the Borrower or any Lender by reason of
this Agreement.
10.2. Powers. The Agent shall have and may exercise such powers under
------
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder, except any action specifically provided
by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
-----------------
officers, agents or employees shall be liable to the Borrower or any Lender for
any action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith except for its or
their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
----------------------------------------------
nor any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (a) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder, (b) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
----------
receipt of items required to be delivered to the Agent and not waived at
closing, or (d) the validity, effectiveness, sufficiency, enforceability or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Borrower to the Agent at
such time, but is voluntarily furnished by the Borrower to the Agent (either in
its capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases
----------------------------------
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders (or, to the extent required by Section 8.2, all Lenders), and
-----------
such instructions and any action taken or failure to act pursuant thereto shall
be binding on all of the Lenders and on all holders of Notes. The Agent shall
be fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
----------------------------------
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
--------------------------------
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
------------------------------------------
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any amounts not
reimbursed by the Borrower for which the Agent is entitled to reimbursement by
the Borrower under the Loan Documents, (b) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents, and
(c) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents;
provided, that no Lender shall be liable for any of the foregoing to the extent
--------
they arise from the gross negligence or willful misconduct of the Agent. The
obligations of the Lenders under this Section 10.8 shall survive payment of the
------------
Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
-------------------
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or the
Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a "notice of default". In the event
that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
---------------------
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
------------------------
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
----------------
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, the Required Lenders shall have
the right to appoint, on behalf of the Lenders, a successor Agent. If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty days after the resigning Agent's
giving notice of its intention to resign, then the resigning Agent may appoint,
on behalf of the Borrower and the Lenders, a successor Agent. If the Agent has
resigned and no successor Agent has been appointed, the Lenders may perform all
the duties of the Agent hereunder and the Borrower shall make all payments in
respect of the Obligations to the applicable Lender and for all other purposes
shall deal directly with the Lenders. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the appointment.
Any such successor Agent shall be a commercial bank having capital and retained
earnings of at least $50,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent. Upon the effectiveness of the resignation of the Agent,
the resigning Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation of an Agent, the provisions of this Article X shall continue in
---------
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents.
10.13. Documentation Agent. Any Lender identified in this Agreement as
-------------------
a Documentation Agent shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of such Lenders shall
have or be deemed to have a fiduciary relationship with any Lender. Each Lender
hereby makes the same acknowledgments with respect to such Lenders as it makes
with respect to the Agent in Section 10.11.
--------------
ARTICLE XI
SETOFF; RATABLE PAYMENTS
--------------------------
11.1. Setoff. In addition to, and without limitation of, any rights of
------
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default or Unmatured Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time held or owing by
any Lender to or for the credit or account of the Borrower may be offset and
applied toward the payment of the Obligations owing to such Lender, whether or
not the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
----------------
has payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2 or 3.4) in a greater proportion than its pro-rata share of such
----------- --- ---
Loans, such Lender agrees, promptly upon demand, to purchase a portion of the
Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made. If an
amount to be setoff is to be applied to Indebtedness of the Borrower to a
Lender, other than Indebtedness evidenced by any of the Notes held by such
Lender, such amount shall be applied ratably to such other Indebtedness and to
the Indebtedness evidenced by such Notes.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-----------------------------------------------------
12.1. Successors and Assigns. The terms and provisions of the Loan
------------------------
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (a) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents, and (b) any assignment by any Lender must be made in compliance
with Section 12.3. Notwithstanding clause (b) of this Section, any Lender may
------------- ----------
at any time, without the consent of the Borrower or the Agent, assign all or any
portion of its rights under this Agreement and its Notes to a Federal Reserve
Bank; provided, however, that no such assignment to a Federal Reserve Bank shall
-------- -------
release the transferor Lender from its obligations hereunder. The Agent may
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until such payee complies with Section 12.3 in the case of an assignment
------------
thereof or, in the case of any other transfer, a written notice of the transfer
is filed with the Agent. Any assignee or transferee of a Note agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
12.2. Participations.
--------------
12.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary
--------------------------------
course of its business and in accordance with applicable law, at any time sell
to one or more banks or other entities ("Participants") participating interests
------------
in any Loan owing to such Lender, any Note held by such Lender, any Lender's
interest in any Facility Letter of Credit Obligation, any Commitment of such
Lender or any other interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating interests to a Participant,
such Lender's obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder of any such
Note for all purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right to
--------------
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver which effects any of the modifications referenced in
clauses (a) through (g) of Section 8.2.
------------
12.2.3. Benefit of Setoff. The Borrower agrees that each Participant
-------------------
shall be deemed to have the right of setoff provided in Section 11.1 in respect
------------
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents; provided, that each Lender shall
--------
retain the right of setoff provided in Section 11.1 with respect to the amount
------------
of participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount received
------------
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.
-------------
12.3. Assignments.
-----------
12.3.1. Permitted Assignments. Any Lender may, in the ordinary course of
----------------------
its business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its rights and
----------
obligations under the Loan Documents; provided, however, that in the case of an
-------- -------
assignment to an entity which is not a Lender or an Affiliate of a lender, such
assignment shall be in a minimum amount of $5,000,000. Such assignment shall be
substantially in the form of Exhibit H hereto or in such other form as may be
---------
agreed to by the parties thereto. The consent of the Agent and, so long as no
Default is continuing, the Borrower shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender or an
Affiliate thereof. Such consent shall not be unreasonably withheld.
12.3.2. Effect; Effective Date. Upon (a) delivery to the Agent of a
------------------------
notice of assignment, substantially in the form attached as Exhibit I to Exhibit
-------
H hereto (a "Notice of Assignment"), together with any consents required by
- ----------------------
Section 12.3.1, and (b) payment of a $3,500 fee to the Agent for processing such
--------------
assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. On and after the effective date of such
assignment, (a) such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party hereto, and (b) the transferor Lender
shall be released with respect to the percentage of the Aggregate Commitment and
Loans assigned to such Purchaser without any further consent or action by the
Borrower, the Lenders or the Agent. Upon the consummation of any assignment to
a Purchaser pursuant to this Section 12.3.2, the transferor Lender, the Agent
--------------
and the Borrower shall make appropriate arrangements so that replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case, to the extent
applicable, in principal amounts reflecting their Commitment, as adjusted
pursuant to such assignment.
12.4. Dissemination of Information. The Borrower authorizes each
------------------------------
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
----------
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries.
12.5. Tax Treatment. If any interest in any Loan Document is
--------------
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.17.
-------------
ARTICLE XIII
NOTICES
-------
13.1. Giving Notice. Except as otherwise permitted by Section 2.12
-------------- ------------
with respect to borrowing notices, all notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing, by facsimile, first class U.S. mail or overnight courier and addressed
or delivered to such party at its address set forth below its signature hereto
or at such other address as may be designated by such party in a notice to the
other parties. Any notice, if mailed and properly addressed with first class
postage prepaid, return receipt requested, shall be deemed given three (3)
Business Days after deposit in the U.S. mail; any notice, if transmitted by
facsimile, shall be deemed given when transmitted; and any notice given by
overnight courier shall be deemed given when received by the addressee.
13.2. Change of Address. The Borrower, the Agent and any Lender may
-------------------
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
[signature pages to follow]
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
RALCORP HOLDINGS, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------------
Title: Corporate Vice President - Treasurer
-----------------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
--------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
WACHOVIA BANK, N.A.,
Individually as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
-----------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
COMMERCE BANK, N.A.,
Individually as a Lender
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Print Name: ▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Title: Vice President
-------------------------------------------
Address: ▇▇▇▇▇▇▇ Banking Center
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
MERCANTILE BANK NATIONAL ASSOCIATION,
Individually as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
-----------------------------------------
Address: #▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
PNC BANK, NATIONAL ASSOCIATION
Individually as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Senior Vice President
------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
SUNTRUST BANK, ATLANTA,
Individually as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
SCHEDULE 1
LENDER COMMITMENT
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The First National Bank of Chicago $27,500,000
Wachovia Bank, N.A. $25,500,000
Commerce Bank, N.A. $16,000,000
Mercantile Bank National Association $16,000,000
PNC Bank, National Association $20,000,000
SunTrust Bank, Atlanta $20,000,000
INITIAL AGGREGATE COMMITMENT: $125,000,000
S-5