1
[EXHIBIT 10.3]
MASTER LOAN PARTICIPATION AGREEMENT
dated as of
August 2, 2000
among
The DF Participants Party Hereto,
The Participating Banks Party Hereto,
and
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Administrative Agent
Relating to Loans Made
by the
Participating Banks
to
Vlasic Foods International Inc.
2
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 DEFINITIONS
SECTION 1.01. Definitions ........................................................ 2
ARTICLE 2 THE PARTICIPATIONS
SECTION 2.01. Purchase Obligations ............................................... 6
SECTION 2.02. Notice and Funding ................................................. 6
SECTION 2.03. Participations ..................................................... 8
SECTION 2.04. Repayments of Loans and Terminations of Revolving Credit Commitments 10
SECTION 2.05. Obligations Absolute ............................................... 11
SECTION 2.06. Obligations Several and Not Joint .................................. 12
SECTION 2.07. Reinstatement in Certain Circumstances ............................. 12
SECTION 2.08. Additional Conditions to Lending ................................... 13
ARTICLE 3 RIGHTS TO AND PRIORITIES OF PAYMENTS
SECTION 3.01. Rights to Payments; Priority ....................................... 13
SECTION 3.02. Interest ........................................................... 14
SECTION 3.03. Facility Fees ...................................................... 14
SECTION 3.04. Tranche B Additional Fees .......................................... 15
SECTION 3.05. Principal .......................................................... 15
SECTION 3.06. DF Participants' Compensation ...................................... 16
SECTION 3.07. Payments to DF Participants ........................................ 16
SECTION 3.08. Certain Other Amounts .............................................. 17
SECTION 3.09. Indirect Recoveries, Etc ........................................... 17
SECTION 3.10. Bankruptcy, Etc .................................................... 17
ARTICLE 4 AS AMONG THE PARTIES HERETO
SECTION 4.01. Non-reliance ....................................................... 18
SECTION 4.02. No Duties .......................................................... 18
SECTION 4.03. Nature of Arrangements ............................................. 19
SECTION 4.04. Certain Actions .................................................... 20
SECTION 4.05. Assignment Upon Bank Payout ........................................ 21
SECTION 4.06. Participating Bank Assignments, Etc ................................ 21
SECTION 4.07. Administrative Agent ............................................... 22
3
ARTICLE 5 VOTING, ETC
SECTION 5.01. Voting Matters ..................................................... 22
SECTION 5.02. Maximum Amount; Extension of Waiver Expiry Date .................... 23
SECTION 5.03. Principal Amount ................................................... 23
SECTION 5.04. Unrestricted Voting ................................................ 23
SECTION 5.05. Collateral Proceeds ................................................ 24
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE DF PARTICIPANTS
SECTION 6.01. Purchase for Investment ............................................ 24
SECTION 6.02. This Agreement, Etc ................................................ 24
SECTION 6.03. Suitability of Investment .......................................... 25
SECTION 6.04. Familiarity with the Company ....................................... 25
SECTION 6.05. Withholding Taxes .................................................. 25
ARTICLE 7 MISCELLANEOUS
SECTION 7.01. Notices ............................................................ 25
SECTION 7.02. Descriptive Headings ............................................... 26
SECTION 7.03. Specific Performance ............................................... 26
SECTION 7.04. GOVERNING LAW ...................................................... 26
SECTION 7.05. Counterparts; Effectiveness ........................................ 27
SECTION 7.06. Severability ....................................................... 27
SECTION 7.07. Entire Agreement ................................................... 27
SECTION 7.08. Amendment and Waiver ............................................... 27
SECTION 7.09. No Third Party Beneficiaries ....................................... 28
SECTION 7.10. Binding Effect ..................................................... 28
SECTION 7.11. No Partnership ..................................................... 29
SECTION 7.12. Shareholder Capacity ............................................... 29
SECTION 7.13. Termination; Certain Notices ....................................... 29
SECTION 7.14. Waiver of Jury Trial ............................................... 29
4
MASTER LOAN PARTICIPATION AGREEMENT
AGREEMENT dated as of August 2, 2000 among the DF PARTICIPANTS listed
on the signature pages hereof, the PARTICIPATING BANKS listed on the signature
pages hereof and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Administrative
Agent under the Credit Agreement referred to below (the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, Vlasic Foods International Inc. (the "COMPANY"), the
Participating Banks, The Chase Manhattan Bank, as Syndication Agent (the
"SYNDICATION AGENT"), and the Administrative Agent are parties to an Amended and
Restated Credit Agreement dated as of September 30, 1998 (as amended to the date
hereof and from time to time hereafter, the "CREDIT AGREEMENT");
WHEREAS, at the Company's request the Participating Banks have
waived certain defaults by the Company under the Credit Agreement and have also
made certain amendments to the Credit Agreement, all as set forth in Amendment
No. 2 and Waiver No. 5 dated as of June 28, 2000 under the Credit Agreement
("WAIVER NO. 5");
WHEREAS, pursuant to Waiver No. 5, the Participating Banks
also agreed, subject to the conditions set forth therein, to permit the Company
to borrow additional Revolving Loans in excess of the aggregate principal amount
of Revolving Loans outstanding under the Credit Agreement on the date of Waiver
No. 5 up to an aggregate principal amount of $35,000,000;
WHEREAS, it is a condition precedent to the ability of the
Company to borrow such additional Revolving Loans that the DF Participants enter
into this Agreement, pursuant to which they will fund a portion of such
additional Revolving Loans, if any, pursuant to the terms set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
5
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. Terms used herein and not otherwise defined
herein that are defined in Waiver No. 5 have the meanings assigned to them in
Waiver No. 5 and terms used herein and not otherwise defined herein or in Waiver
No. 5 that are defined in the Credit Agreement have the meanings assigned to
them in the Credit Agreement. References to the masculine gender include the
feminine gender as appropriate. The following additional terms, as used herein,
have the following respective meanings:
"ADDITIONAL FEES PAYMENT DATE" means any date upon which the
Administrative Agent receives from the Company or otherwise realizes funds to be
applied in respect of Tranche B Additional Fees owing pursuant to the Credit
Agreement.
"AGGREGATE PARTICIPATED AMOUNT" means, at any date, the aggregate
Participated Amounts of all the DF Participants on such date.
"BANK DEBT" means (a) all principal of and interest (including any
interest which accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of the Company
(or that would accrue but for the operation of applicable bankruptcy or
insolvency laws), whether or not allowed or allowable as a claim in any such
proceeding) on all Loans outstanding from time to time under the Credit
Agreement and (b) all other amounts now or hereafter payable by the Company to
any Lender Party under the Credit Agreement or under any other Financing
Document.
"BANK PAYOUT" occurs when no Bank Debt other than a principal amount of
the Revolving Loans equal to the Aggregate Participated Amount (and any interest
and Facility Fees attributable thereto) remains unpaid and the Revolving Credit
Commitments have been either terminated or reduced to an amount not exceeding
the Aggregate Participated Amount on such date (determined after giving effect
to any repayment of New Revolving Loans made on such date and any related
payment to the DF Participants pursuant to Section 3.05).
"BASE REVOLVING LOANS" means at any date Revolving Loans that were
outstanding on the Participation Effective Date or that were made thereafter but
did not constitute New Revolving Loans.
2
6
"BASE TRUE-UP AMOUNT" means on any date the amount, if any, by which
the Borrowing Limit on such date exceeds the outstanding principal amount of
Base Revolving Loans on such date.
"BORROWING LIMIT" has the meaning set forth in the Credit Agreement,
provided that if on any day on which an amount of additional Revolving Loans are
made the Base True-up Amount, determined before giving effect to such Revolving
Loans, is zero, but such amount of Revolving Loans (or a portion thereof, such
amount in any case being referred to as the "ADDITIONAL PERMITTED AMOUNT") are
not New Revolving Loans because of the proviso to the definition of New
Revolving Loans (a circumstance that could occur only if, pursuant to Section
3(b) of Waiver No. 5, the Required Banks subsequently permitted the Company to
make a Borrowing of Revolving Loans that would result in the aggregate
outstanding principal amount of Revolving Loans exceeding the sum of the
Borrowing Limit on such day (as so defined in the Credit Agreement) plus
$35,000,000), then for purposes of all calculations and determinations
hereunder, the Borrowing Limit shall be increased by the Additional Permitted
Amount and that portion of such Revolving Loans shall be Base Revolving Loans.
"COLLATERAL" has the meaning set forth in the Security Agreement.
"DF ESCROW AGENT" means ▇▇▇▇▇ Fargo Bank Minnesota, National
Association ("▇▇▇▇▇ FARGO"), as the DF Escrow Agent (or its successor as such)
pursuant to the Escrow Agreement.
"DF ESCROW AGREEMENT" means the Escrow Agreement dated as of August 2,
2000 among the DF Participants, ▇▇▇▇▇ Fargo, as the DF Escrow Agent, the Company
and certain of its Subsidiaries and the Administrative Agent, as such agreement
may be amended from time to time.
"DF INTEREST AMOUNT" means, with respect to any Interest Payment Date,
the aggregate amount of interest being paid by the Company on such date that is
allocable to the Aggregate Participated Amount as determined pursuant to Section
2.03(e).
"DF PARTICIPANT" means each individual listed on the signature pages
hereof and identified as such, acting severally in accordance with his
Percentage Share and not jointly, and his heirs, legal representatives,
successors and permitted assigns.
"DF PARTICIPANT EXPOSURE" means, with respect to each DF Participant,
his Percentage Share of $17,500,000.
3
7
"DF PARTICIPANT COMPENSATION LETTER" has the meaning set forth in
Section 3.06.
"FACILITY FEE PAYMENT DATE" means any date upon which the
Administrative Agent receives from the Company or otherwise realizes funds to be
applied in respect of Facility Fees owing pursuant to the Credit Agreement.
"INTEREST PAYMENT DATE" means any date upon which the Administrative
Agent receives from the Company or otherwise realizes funds to be applied in
respect of interest due on the Loans.
"LENDER PARTY" means each Participating Bank and the Administrative
Agent.
"MAJORITY DF PARTICIPANTS" means at any time at least eight out of the
nine DF Participants at such time.
"MAJORITY PARTICIPATING BANKS" means at any time Participating Banks
having more than 50% of the aggregate Credit Exposures of the Participating
Banks at such time.
"NEW REVOLVING LOANS" means, with respect to any date on which the
Company is making a Borrowing of Revolving Loans, an amount of such Revolving
Loans equal to the amount by which the amount of such Borrowing exceeds the Base
True-up Amount on such date, provided that the aggregate amount of New Revolving
Loans may not exceed $35,000,000.
"NEW TRUE-UP AMOUNT" has the meaning set forth in the definition of
"Purchase Price."
"PARTICIPATED AMOUNT" means, with respect to any DF Participant at any
date, the aggregate outstanding amount of Participations held on such date by
such DF Participant.
"PARTICIPATING BANKS" means the banks listed on the signature pages
hereto and identified as such, and their successors and assigns (including any
Assignee as contemplated by Section 4.06).
"PARTICIPATION" means, with respect to any DF Participant on any date,
a participation in the New Revolving Loans of the Participating Banks purchased
by such DF Participant on such date pursuant to Section 2.01 (subject to
re-allocation pursuant to Section 2.03(b)).
4
8
"PARTICIPATION EFFECTIVE DATE" means the date that this Master
Participation Agreement becomes effective as provided in Section 7.05.
"PARTICIPATION TERMINATION DATE" has the meaning set forth in Section
2.01(b).
"PERCENTAGE SHARE" means, with respect to each DF Participant, the
percentage set forth opposite his name on the signature pages hereto.
"PRINCIPAL PAYMENT DATE" means any date upon which the Administrative
Agent receives from the Company or otherwise realizes funds to be applied in
respect of principal due on the Loans.
"PROCEEDS REPAYMENT" means a repayment of Loans by the Company pursuant
to Section 2.12 of the Credit Agreement.
"PURCHASE DATE" means any date upon which a Borrowing requested by the
Company in a Notice of Committed Borrowing, all or any portion of which will
constitute New Revolving Loans, is to be made.
"PURCHASE PRICE" means, with respect to any New Revolving Loans to be
made on any Purchase Date, an amount equal to 50% of that portion, if any, of
the requested Borrowing of Loans set forth in the related Notice of Committed
Borrowing that will constitute New Revolving Loans as is specified by the
Administrative Agent pursuant to Section 2.02(a), provided that if the Aggregate
Participated Amount on such Purchase Date is more than 50% of the outstanding
principal amount of New Revolving Loans (determined in each case without giving
effect to the requested Borrowing and any related purchase of Participations,
the amount of such excess being referred to as the "New True-up Amount"), such
Purchase Price shall be either such lesser amount as will, after giving effect
to such Borrowing and purchase, result in the Aggregate Participated Amount
equaling 50% of the outstanding principal amount of New Revolving Loans or, if
an amount equal to double the New True-up Amount equals or exceeds the amount of
the requested Borrowing that constitutes New Revolving Loans, zero.
"SPECIFIED EVENT OF DEFAULT" means an Event of Default described in
clause (a), (e) or (f) of Section 6.01 of the Credit Agreement.
"SUBSIDIARY GUARANTOR" means each Subsidiary that is a party to the
Subsidiary Guaranty Agreement.
5
9
"WORKING CAPITAL REPAYMENT" means a repayment of Loans by the Company
pursuant to Section 2.11 of the Credit Agreement or Section 3(d) of Waiver No.
5.
ARTICLE 2
THE PARTICIPATIONS
SECTION 2.1. Purchase Obligations. (a) Subject to the terms and
conditions set forth herein, each DF Participant agrees that on each Purchase
Date such DF Participant shall purchase from the Participating Banks, pro rata
in proportion to the Revolving Credit Commitments of the Participating Banks and
without recourse to the Participating Banks (but without prejudice to the rights
of the DF Participants hereunder), undivided participations in the New Revolving
Loans of the Participating Banks (subject to Section 2.03(b)) in an aggregate
amount equal to his Percentage Share of the Purchase Price of the New Revolving
Loans being made on such Purchase Date, provided that no DF Participant shall be
required to purchase any Participation on any Purchase Date (1) to the extent
that, after giving effect thereto and such New Revolving Loans, (i) his
Participated Amount would exceed his DF Participant Exposure, (i) the Aggregate
Participated Amount would exceed 50% of the outstanding principal amount of New
Revolving Loans or (iii) the aggregate amount of all Participations being
purchased on such Purchase Date would exceed 50% of the New Revolving Loans
being made on such date or (2) if the Company has violated Section 7(c) of the
Escrow Agreement and the Participating Banks have waived the provisions of
Section 2.08 without the consent of the Majority DF Participants. Also, no DF
Participant shall be obligated to make any purchase of a Participation in
respect of any amount of Revolving Loans made on any date to the extent that,
after giving effect to such Revolving Loans, the aggregate principal amount of
outstanding Revolving Loans would (i) exceed the sum of $35,000,000 plus the
Borrowing Limit on such date or (ii) be equal to or less than the Borrowing
Limit on such date, provided that all such Revolving Loans shall be entitled to
the benefits of the priorities of payment and other provisions set forth in
Article 3.
(b) The obligations of the DF Participants to purchase Participations
pursuant hereto shall automatically terminate upon the earlier to occur of (i)
the Termination Date and (ii) the termination of the Revolving Credit
Commitments (such earlier date being the "Participation Termination Date").
(c) Each Participating Bank agrees to, and hereby does, sell
Participations in its Loans to the DF Participants as provided herein.
6
10
SECTION 2.2. Notice and Funding. (a) Upon receipt of any Notice of
Committed Borrowing, the Administrative Agent will determine whether all or any
portion of such Borrowing will constitute New Revolving Loans, and, if so, the
Administrative Agent shall, using a form of notice substantially in the form of
Exhibit A to the DF Escrow Agreement, promptly notify the DF Escrow Agent of the
contents of such Notice of Borrowing (but not earlier than concurrently with
notifying the Participating Banks of such Notice of Borrowing pursuant to
Section 2.04(a) of the Credit Agreement), setting forth in such notice the date
of such Borrowing, the amount of such Borrowing that will constitute New
Revolving Loans and the Purchase Price, if any, payable by the DF Participants
in respect thereof. Each DF Participant hereby confirms his irrevocable and
unconditional authorization and instruction to the DF Escrow Agent, upon receipt
of any such notice and without the requirement of any notice to or action by
such DF Participant, to make available to the Administrative Agent, at its
address referred to in Section 7.01, in Federal or other funds immediately
available in New York City, from his funds held in the DF Escrow Account, an
amount equal to his Percentage Share of such Purchase Price, as provided in the
Escrow Agreement. The Administrative Agent undertakes to telephone the DF Escrow
Agent (at the telephone number for it provided pursuant to Section 7.01)
promptly after sending any notice, advising it that such a notice has been sent,
but any failure or delay in doing so, or inability to reach an appropriate
individual at the DF Escrow Agent, shall not excuse the obligations of the DF
Participants or affect the right of the Administrative Agent to receive such
Purchase Price from the DF Escrow Account as contemplated hereby pursuant to the
DF Escrow Agreement.
(b) Pursuant to Section 3(c) of Waiver No. 5, the Banks are not
obligated to make any New Revolving Loans unless the Administrative Agent has
actually received the portion thereof, if any, to be funded by the DF
Participants pursuant to this Agreement. The Administrative Agent shall, when
notifying each Participating Bank of a Notice of Committed Borrowing pursuant to
Section 2.04(a) of the Credit Agreement, indicate the portion thereof, if any,
that will constitute Base Revolving Loans and the portion thereof, if any, that
will constitute New Revolving Loans and, in the case of any New Revolving Loans,
the Purchase Price, if any, payable in respect thereof and, if any Purchase
Price is payable, both the amount of such Bank's share of such Borrowing without
regard to this Agreement (its "Facility Commitment Amount") and its share net of
the aggregate Participations in any such New Revolving Loan to be made by it to
be purchased by the DF Participants (its "Funding Commitment (Net) Amount").
Notwithstanding the provisions of Section 2.04(b) of the Credit Agreement, on
any Purchase Date on which any New Revolving Loans are to be made each
Participating Bank shall make available to the Administrative Agent only its
Funding Commitment (Net) Amount and the Administrative Agent is authorized and
directed, subject to the provisions of the last sentence of Section 2.04(b) of
7
11
the Credit Agreement, to make such Bank's share of funds representing the
Purchase Price of such Participations available to the Company on its behalf,
provided that the Administrative Agent agrees for the benefit of the DF
Participants that it shall not make available to the Company any funds
representing the Purchase Price of any Participations unless it makes such funds
available to the Company together with an amount equal to the aggregate related
Funding Commitment (Net) Amounts of the Participating Banks. The Company
acknowledges and agrees to the foregoing.
Concurrently with sending each Participating Bank notice pursuant to
Section 2.07(g) of the Credit Agreement of any interest rate determined with
respect to New Revolving Loans, the Administrative Agent shall send each DF
Participant a copy of such notice.
(c) If on any Purchase Date the Administrative Agent, for any reason,
does not make the requested Borrowing available to the Company, the
Administrative Agent shall promptly (and in any event by the next succeeding
Domestic Business Day) make available to the DF Escrow Agent, at its address
referred to in Section 7.01, in Federal or other funds immediately available in
New York City, an amount equal to any Purchase Price paid to the Administrative
Agent in respect of such Borrowing, and concurrently shall notify the DF Escrow
Agent that it is doing so. The Administrative Agent shall have no liability to
the DF Escrow Agent or any DF Participant for any interest on or other
investment earnings with respect to any such funds.
(d) Each DF Participant has, on or before the Participation Effective
Date, paid to the DF Escrow Agent for deposit in the DF Escrow Account, in
immediately available funds, an amount equal to his DF Participant Exposure.
Each DF Participant agrees that so long as the Revolving Credit Commitments are
in effect, he will maintain on deposit in the DF Escrow Account an amount equal
to his DF Participant Exposure less his Participated Amount, and will neither
request nor accept withdrawal of any of his funds on deposit in the DF Escrow
Account if such withdrawal would violate the foregoing covenant, but if the
Participation Termination Date occurs, any funds of a DF Participant on deposit
in the DF Escrow Account may be returned to him. The Administrative Agent agrees
to give prompt notice to the DF Escrow Agent and the DF Participants of the
occurrence of the Participation Termination Date.
SECTION 2.3. Participations. (a) Upon the making of any New Revolving
Loans to the Company, each DF Participant, subject to the payment of his
Percentage Share of the related Purchase Price, shall acquire and own an
undivided participating interest in the New Revolving Loans of the Participating
Banks in an amount equal to his Percentage Share of such Purchase Price,
8
12
allocated among the Participating Banks pro rata in proportion to their
Revolving Credit Commitments. The Participated Amount of each DF Participant is,
however, subject to re-allocation among the Participating Banks as provided in
Section 2.03(b).
(b) If on any date a Specified Event of Default occurs or the
Participation Termination Date occurs, then on such date the Participated Amount
of each DF Participant shall, automatically and without the requirement of any
action on the part of such DF Participant, the Administrative Agent or any
Participating Bank, be re-constituted as an undivided participating interest in
all Loans of the Participating Banks, allocated among the Participating Banks
pro rata in proportion to their Credit Exposures on such date.
(c) The rights of each DF Participant to receive payments from the
Participating Banks in respect of his Participated Amount are subject to the
priorities of payment and other provisions set forth in Article 3.
(d) If the Participation Termination Date occurs, no credit to or other
adjustment in the Aggregate Participated Amount shall be made regardless of
whether at such time the Aggregate Participated Amount exceeds 50% of the
aggregate outstanding New Revolving Loans.
(e) The Administrative Agent shall maintain records indicating:
(i) as to each DF Participant, the date and amount of each
Participation purchased by it, the Group of New Revolving Loans in
which such Participation was purchased, its Participated Amount and the
portion thereof attributable to each Participating Bank and the date
and amount of each payment of principal of and interest on the Loans,
Facility Fees and Tranche B Additional Fees paid or payable to him; and
(ii) as to each Participating Bank, the aggregate amount of
Participations purchased from it and the portion thereof attributable
to each DF Participant; and
(iii) as to any funds deposited in a Collateral Account
pursuant to Article 3, the nature and amount of each such deposit.
On each Interest Payment Date, the Administrative Agent shall determine
the aggregate amount of interest being paid by the Company on account of each
outstanding Group of Loans and, based upon the foregoing records, calculate the
aggregate amount of such interest allocable to the Aggregate Participated
Amount, if any, attributable to such Group of Loans (which shall be a fraction,
the
9
13
numerator of which is such attributed Aggregate Participated Amount and the
denominator of which is the aggregate outstanding principal amount of such Group
of Loans).
On each Facility Fee Payment Date and Additional Fees Payment Date, the
Administrative Agent shall, based on the foregoing records, calculate the
aggregate amount of Facility Fees or Tranche B Additional Fees, as the case may
be, payable on such date to the DF Participants as provided in Section 3.03(a)
(assuming for this purpose no Event of Default has occurred or is continuing) or
Section 3.04, as the case may be.
On each Principal Payment Date, the Administrative Agent shall, based
on the foregoing records, calculate the aggregate amount of principal of the
Loans payable on such date to the DF Participants as provided in Section 3.05.
The Administrative Agent agrees that it will promptly make available to
any DF Participant or Participating Bank such copies of or other extracts from
its records relating to the Participations as such DF Participant or
Participating Bank shall reasonably request.
SECTION 2.4. Repayments of Loans and Terminations of Revolving Credit
Commitments. Each Participating Bank and the Company agrees that, in order to
give effect to this Agreement, the provisions of Article 2 of the Credit
Agreement (including, without limitation, Sections 2.12(f) and 2.12(i)) and
Section 3 of Waiver No. 5 are modified as follows.
(a) If on any date after the Participation Effective Date the Company
makes a Working Capital Repayment, such Repayment shall be applied, first, to
repay any outstanding Base Revolving Loans, second, to repay any outstanding New
Revolving Loans in an amount by which such outstanding amount exceeds the
Aggregate Participated Amount on such date, third, to repay any outstanding Term
Loans, and, fourth, to repay any New Revolving Loans remaining outstanding on
such date after application pursuant to subclause second.
(b) If on any date the Company makes a Working Capital Repayment and
any portion of such Repayment is applied pursuant to subclause (a) fourth above,
then the Revolving Credit Commitments shall automatically be reduced on such
date to an amount equal to the outstanding Aggregate Participated Amount on such
date (determined after giving effect to such application, including any related
payments made to the DF Participants pursuant to Section 3.05).
(c) If on any date the Company makes a Proceeds Repayment and any Term
Loans are outstanding, such Repayment shall be applied, first, to repay any
10
14
outstanding Base Revolving Loans (and the Revolving Credit Commitments shall be
ratably reduced by an amount equal to such repayment) and, second, to repay
outstanding Term Loans (and, if the Revolving Credit Commitments on such date,
after giving effect to any reduction on such date pursuant to subclause (c)
first, exceed $35,000,000, the Revolving Credit Commitments shall be ratably
reduced by the amount of such payment (but not, pursuant to this subclause
second, to less than $35,000,000), provided that if, after giving effect to
these subclauses first and second any portion of such Repayment remains
un-applied, the following clause (d) shall apply.
(d) If on any date the Company makes a Proceeds Repayment and no Term
Loans are outstanding (including any date upon which the Term Loans have been
repaid in full pursuant to the preceding clause (c)), such Repayment (or the
remaining portion thereof after application pursuant to the preceding clause
(c)) shall be applied to repay outstanding New Revolving Loans, and the
Revolving Credit Commitments shall automatically be reduced on such date to an
amount equal to the outstanding Aggregate Participated Amount on such date
(determined after giving effect to such application, including any related
payments made to the DF Participants pursuant to Section 3.05).
(e) If on any date after the Participation Effective Date the Company
makes a Borrowing of Revolving Loans and there is a Base True-up Amount on such
date (determined before giving effect to such Borrowing), then a portion of such
Borrowing equal to the Base True-up Amount shall be made as additional Base
Revolving Loans (as to which the DF Participants shall have no funding
obligation) and only the excess, if any, over such portion shall constitute New
Revolving Loans.
(f) Since Working Capital Repayments will be applied first to repay
outstanding Base Revolving Loans even if New Revolving Loans have been made and
remain outstanding (rather than, as contemplated by Section 3(c) of Waiver No.
5, being applied to New Revolving Loans), for purposes of Section 3(a) of Waiver
No. 5 New Revolving Loans shall be disregarded when determining whether any
Borrowing would cause the principal amount of outstanding Revolving Loans to
exceed the Borrowing Limit.
SECTION 2.5. Obligations Absolute. Subject to Sections 2.01(a) and (b),
the obligations of each DF Participant to purchase Participations pursuant to
Section 2.01(a) is absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any extension, renewal,
settlement, compromise, waiver or release in respect of any obligation of the
Company or any Subsidiary Guarantor under the Credit Agreement, Waiver No. 5 or
any other Financing Document, by operation of law or otherwise; (ii) any
modification or
11
15
amendment of or supplement to the Credit Agreement, Waiver No. 5 or any other
Financing Document; (iii) any release, non-perfection or invalidity of any
direct or indirect security for any obligation of the Company or any Subsidiary
Guarantor under the Credit Agreement, Waiver No. 5 or any other Financing
Document; (iv) any change in the corporate existence, structure or ownership of
the Company or any Subsidiary Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Company or any
Subsidiary Guarantor or any of its assets or any resulting release or discharge
of any obligation of the Company or any Subsidiary Guarantor contained in the
Credit Agreement, Waiver No. 5 or any other Financing Document; (v) the
existence of any claim, set-off or other rights which any DF Participant may
have at any time against the Company, any Subsidiary Guarantor, the
Administrative Agent, any Participating Bank or any other Person, whether in
connection herewith or any unrelated transactions, provided that nothing herein
shall prevent the assertion of any such claim by separate suit or compulsory
counterclaim; (vi) any invalidity or unenforceability relating to or against the
Company or any Subsidiary Guarantor for any reason of the Credit Agreement,
Waiver No. 5 or any other Financing Document, or any provision of applicable law
or regulation purporting to prohibit the payment by the Company or any
Subsidiary Guarantor of the principal of or interest on any Loan or any other
amount payable by the Company or any Subsidiary Guarantor under the Credit
Agreement, Waiver No. 5 or any other Financing Document; (vii) any other act or
omission to act or delay of any kind by the Company, any Subsidiary Guarantor,
the Administrative Agent, any Participating Bank or any other Person or any
other circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of such DF Participant's
obligations hereunder; (viii) the occurrence or continuance of a Default under
the Credit Agreement; (ix) any adverse change in the condition (financial or
otherwise) of the Company or any other Person; or (x) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing,
provided that the provisions of this Section 2.05 do not constitute a waiver of
the rights of the DF Participants under Article 5.
SECTION 2.6. Obligations Several and Not Joint. The obligations of each
DF Participant hereunder are several and not joint, provided that the failure by
any DF Participant to fund its purchase of any Participation hereunder in
accordance with the terms hereof shall constitute a breach of this Agreement,
which breach shall not excuse any other DF Participant from its obligations
hereunder but as provided in Section 3(c) of Waiver No. 5 the Banks are not
obligated to make any portion of any Borrowing of New Revolving Loans available
to the Company unless the Administrative Agent has received the entire Purchase
Price applicable thereto (but in the Banks' discretion may do so).
12
16
SECTION 2.7. Reinstatement in Certain Circumstances. If at any time any
payment of the principal of or interest on any Loan or any other amount payable
by the Company under the Credit Agreement is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, (i) the respective positions of the Participating Banks
and the DF Participants hereunder shall be reinstated as though such payment had
been due but not made at such time and (ii) each DF Participant will remit to
the Administrative Agent for the account of the Participating Banks any portion
of any payment remitted to such DF Participant by the Administrative Agent for
the account of the Participating Banks that, assuming such payment by the
Company under the Credit Agreement had not been made to the Participating Banks,
would not have been so payable to the DF Participants, together with an
allocable portion of any interest payable by such Participating Bank in respect
thereof, in any instance promptly after notice from the Administrative Agent
setting forth the calculation of such amount in reasonable detail.
SECTION 2.8. Additional Conditions to Lending. Pursuant to Section 7(c)
of the DF Escrow Agreement, the Company has agreed for the benefit of the DF
Participants that it will not create, or permit any Subsidiary to create, any
lien on any of its or their property or assets securing any obligation (other
than the Company's obligations under the DF Participant Fee Letter) that would
be permitted pursuant to Section 4.12 of the Indenture only in reliance upon
clause (m) of the definition of "Permitted Liens" in the Indenture. The Company
hereby agrees that, in addition to the requirements of Section 3.03 of the
Credit Agreement and Section 3 of Waiver No. 5, the Participating Banks shall
have no obligation to fund any Borrowing of Revolving Loans if the Company has
violated such agreement. The Participating Banks hereby agree, for the benefit
of the DF Participants, that, the provisions of Articles 4 and 5 hereof to the
contrary notwithstanding, they will not waive the foregoing condition without in
any instance the prior consent of the Majority DF Participants.
ARTICLE 3
RIGHTS TO AND PRIORITIES OF PAYMENTS
SECTION 3.1. Rights to Payments; Priority. No DF Participant shall have
the right to receive any payments from the Participating Banks with respect to
its Participations except as set forth in this Article 3, it being acknowledged
and agreed by the DF Participants that their right to payment in respect of
their Participations is, as between them and the Participating Banks, junior in
rank and priority to the extent and on the terms provided herein to the right of
the Participating Banks to receive payment in full of the principal of and
interest on
13
17
their Loans and all other amounts payable to them by the Company pursuant to the
Credit Agreement and the other Financing Documents. The priorities of payment
set forth in this Article 3 are, however, subject to any provision made pursuant
to clause (a) of Section 5.03.
SECTION 3.2. Interest. (a) On each Interest Payment Date, other than an
Interest Payment Date upon which an Event of Default has occurred or is
continuing, the Administrative Agent shall, from funds actually received by it
and on behalf of the Participating Banks, pay to the DF Participants, in the
same funds or form as received by it, the applicable DF Interest Amount and,
promptly thereafter, shall deliver (i) to the DF Participants, a notice setting
forth in reasonable detail the calculation of such payment, including the amount
allocable to each DF Participant, and (ii) to the Participating Banks, a notice
setting forth in reasonable detail the calculation of such payment and, for each
of them, its allocable portion of (1) such interest payment before deducting any
DF Interest Amount, (2) such DF Interest Amount and (3) such interest payment
net of such DF Interest Amount.
(b) If on any Interest Payment Date an Event of Default has occurred or
is continuing, the Administrative Agent shall not make any payment of the
applicable DF Interest Amount to the DF Participants (but shall still prepare
and deliver to the DF Participants and the Participating Banks notices with
comparable calculations as required by Section 3.02(a)), and instead shall, from
funds actually received by it that would otherwise constitute the applicable DF
Interest Amount (after applying such funds to any Bank Debt that is due and
unpaid), transfer to the Collateral Agent for deposit in a Collateral Account an
amount equal to the applicable DF Interest Amount (net of any such application).
Such funds shall be held in a Collateral Account until either (i) no Event of
Default any longer exists or Bank Payout has occurred, in which case the
Administrative Agent shall instruct the Collateral Agent to pay such funds to
the DF Participants, or (ii) a Specified Event of Default occurs, in which case
the Administrative Agent shall instruct the Collateral Agent to pay such funds
to the Participating Banks for application in the same order of priorities as is
set forth in Section 14 of the Security Agreement.
SECTION 3.3. Facility Fees. (a) On each Facility Fee Payment Date,
other than a Facility Fee Payment Date upon which an Event of Default has
occurred or is continuing, the Administrative Agent shall, from funds actually
received by it and on behalf of the Participating Banks, pay to the DF
Participants, in the same funds or form as received by it, an amount (the "DF
Participant Facility Fee") equal to a fraction of the total Facility Fees paid
on such date, the numerator of which is the aggregate DF Participant Exposures
and the denominator of which is the aggregate Credit Exposures of the
Participating
14
18
Banks (provided that, in the case of the first Facility Fee Payment Date, the
amount payable to the DF Participants shall be a further fraction of the amount
so determined, the numerator of which is the number of days on and after the
effective date of this Agreement that fall within the period for which such
Facility Fees are being paid and the denominator of which is the total number of
days in such period), and concurrently shall deliver to the DF Participants and
the Participating Banks a notice setting forth in reasonable detail the
calculation of such payments.
(b) If on any Facility Fee Payment Date an Event of Default has
occurred or is continuing, the Administrative Agent shall not make any payment
on account of Facility Fees to the DF Participants (but shall still prepare and
deliver to the DF Participants and the Participating Banks notices with
comparable calculations as required by Section 3.03(a)), and instead shall, from
funds actually received by it that would otherwise constitute the applicable DF
Participant Facility Fee (after applying such funds to any Bank Debt that is due
and unpaid), transfer to the Collateral Agent for deposit in a Collateral
Account an amount equal to the applicable DF Participant Facility Fee (net of
any such application). Such funds shall be held in a Collateral Account until
either (i) no Event of Default any longer exists or Bank Payout has occurred, in
which case the Administrative Agent shall instruct the Collateral Agent to pay
such funds to the DF Participants, or (ii) a Specified Event of Default occurs,
in which case the Administrative Agent shall instruct the Collateral Agent to
pay such funds to the Participating Banks for application in the same order of
priorities as is set forth in Section 14 of the Security Agreement.
SECTION 3.4. Tranche B Additional Fees. On each Additional Fees Payment
Date, the Administrative Agent shall, from funds actually received by it and on
behalf of the Participating Banks, pay to the DF Participants, in the same funds
or form as received by it, a portion of the total Tranche B Additional Fees
received equal to the fraction 17.5/325, and concurrently shall deliver to the
DF Participants and the Participating Banks a notice setting forth in reasonable
detail the calculation of such payments.
SECTION 3.5. Principal. Until Bank Payout has occurred, no DF
Participant shall be entitled to receive any payment in respect of amounts the
Administrative Agent receives from the Company or otherwise realizes on account
of the principal of the Loans, and on each Principal Payment Date all such
amounts shall be paid by the Administrative Agent to the Participating Banks,
allocated to each Bank on the basis of the Loans to which such principal relates
as provided in the Financing Documents (as modified by Section 2.04). If after
Bank Payout has occurred the Administrative Agent shall receive from the Company
or otherwise realize any funds on account of the principal of the Loans,
15
19
the Administrative Agent shall on any such Principal Payment Date, from such
funds and on behalf of the Participating Banks, pay to the DF Participants, in
the same funds or form as received by it, the amount of such funds. On each date
on which the Administrative Agent makes any payments of principal pursuant to
this Section 3.05, it concurrently shall deliver to the DF Participants and,
unless Bank Payout has occurred, the Participating Banks a notice setting forth
in reasonable detail the calculation of such payments.
SECTION 3.6. DF Participants' Compensation. In connection with the DF
Participants entering into this Agreement, the Company has agreed to make
certain payments to the DF Participants in consideration for their commitments
to purchase Participations hereunder, as set forth in the Company's letter to
the DF Participants dated July 24, 2000 (the "DF Participant Compensation
Letter"). The Company has, pursuant to Section 2.20(c) of the Credit Agreement,
provided for the amounts payable by it under the DF Participant Compensation
Letter to be Secured Obligations and Guaranteed Obligations, but on a basis
junior to the Secured Obligations of the Banks and the Agents and the Company
and its Subsidiaries have also, independent of the Company doing so and in order
to assure such obligations being secured as intended, granted to the DF
Participants a security interest in the assets comprising the Collateral to
secure such amounts, but also on a basis junior to the Secured Obligations of
the Banks and the Agents. The Participating Banks confirm their consent to the
foregoing. Each DF Participant hereby acknowledges and agrees that no amount
owing by the Company to it under the DF Participant Compensation Letter shall be
payable until after Bank Payout has occurred and that any security interest in
assets of the Company or any of its Subsidiaries securing such amounts are
junior and subordinate in priority to the Secured Obligations of the Banks and
the Agents, whether now or hereafter existing, and further agrees that if the
Administrative Agent, in its capacity as Collateral Agent, should receive or
otherwise realize any funds constituting proceeds of the Collateral that are in
respect of amounts payable under the DF Participant Compensation Letter, all
such funds shall be applied pursuant to Section 14 of the Security Agreement
giving effect to the priority rights of the Participating Banks to such funds as
provided herein.
SECTION 3.7. Payments to DF Participants. Whenever in this Article 3 or
elsewhere in this Agreement reference is made to the Administrative Agent making
a payment to the DF Participants, the Administrative Agent shall (and each DF
Participant expressly confirms and agrees that the Administrative Agent shall)
pay to each DF Participant, pursuant to his payment instructions as set forth in
Schedule I to this Agreement (which payment instructions each DF Participant may
from time to time change by notice to the Administrative Agent, any such change
not to be effective until the first Domestic Business Day after actual receipt
of notice by the Administrative Agent), his Percentage Share of the
16
20
aggregate amount in question, without regard to any notice or demand to the
contrary from any other DF Participant or any other Person, and shall have no
duty to inquire as to the application by any DF Participant of any amount
distributed to him.
SECTION 3.8. Certain Other Amounts. Pursuant to Section 9.06(b) of the
Credit Agreement, the Participating Banks hereby provide that each DF
Participant shall be entitled to the benefits of Article 8 and Sections 2.14 and
2.16 of the Credit Agreement with respect to its Participated Amount to the
fullest extent provided in the Credit Agreement, and the Company acknowledges
and agrees thereto.
SECTION 3.9. Indirect Recoveries, Etc. (a) Each DF Participant
acknowledges and agrees that should such DF Participant collect or receive,
directly or indirectly, any payment of any kind or character, whether in cash or
property, in respect of any Participation (and whether by way of payment of
principal or interest, redemption, purchase, other acquisition, distribution,
guarantee, grant of a security interest, realization of security or the proceeds
thereof, set-off, exercise of contractual or statutory rights or otherwise),
prior to the time when such DF Participant is entitled to such payments under
the terms of this Agreement, such DF Participant will forthwith deliver the same
to the Administrative Agent for the benefit of the Participating Banks as
appropriate in precisely the form received (except for the endorsement or the
assignment of or by such DF Participant where necessary) for application to
payment of the Bank Debt as provided and with the priorities set forth herein
and, until so delivered, the same shall be held in trust by such DF Participant
as the property of the Participating Banks.
(b) Each Participating Bank agrees that if it should receive payment of
any amount to which the DF Participants rather than it were entitled pursuant
hereto, such Participating Bank will promptly return such payment to the
Administrative Agent for re-application to the DF Participants as provided
herein.
SECTION 3.10. Bankruptcy, Etc. Each DF Participant agrees that the
provisions of this Article 3 shall apply mutatis mutandis to any notes or other
property received by the Participating Banks in replacement or satisfaction of
the Notes in any bankruptcy, involvency or liquidation proceedings relating to
the Company.
17
21
ARTICLE 4
AS AMONG THE PARTIES HERETO
SECTION 4.1. Non-reliance. (a) Each DF Participant represents and
warrants to each Lender Party that he has, independently and without reliance on
any Lender Party, and based upon such documents and information as he has deemed
appropriate, made his own analysis and decision to enter into this Agreement,
and that in connection with that decision neither any Lender Party nor any of
its affiliates has made (and has no responsibility with respect to), and such DF
Participant is not relying upon and in the future will not rely upon, any
representation or warranty, express or implied, or other duty of disclosure by
any Lender Party or any of its affiliates as to any matters relating to the
Company. Each DF Participant confirms that he has obtained directly from the
Company such documents as he has deemed necessary to review in order to purchase
the Participations hereunder, and is not relying upon the Administrative Agent
or any Participating Bank to have furnished him copies of the Financing
Documents or any other document. Each DF Participant further acknowledges and
agrees that each Lender Party or its affiliates may have confidential or
material non-public adverse information, or adverse information that it or they
reasonably believe is confidential or material and non-public, concerning the
Company ("Confidential Information"), as a result of such Lender Party or its
affiliate having credit exposure to the Company or its Subsidiaries or
otherwise, and that neither such Lender Party nor any of its affiliates has any
obligation to have disclosed such Confidential Information, if any, to any DF
Participant.
(b) Without limiting the generality of Section 4.01(a), each DF
Participant acknowledges and agrees that no Lender Party makes any
representation or warranty in connection with, and shall have no responsibility
with respect to, the past, present or future solvency, financial condition or
statements of the Company or any of its Subsidiaries, or the validity and
enforceability of the obligations of the Company and its Subsidiaries in respect
of the Credit Agreement and the other Financing Documents or the adequacy,
genuineness, validity, perfection or priority of any Collateral or any security
interests granted under the Financing Documents, and he will continue to be
responsible for making his own independent analysis of such matters.
SECTION 4.2. No Duties. (a) Each DF Participant confirms that he has
made his own arrangements directly with the Company for obtaining in the future
information relating to the Company and the Loans, including copies of any
reports or other documents described in Section 5.01 of the Credit Agreement and
copies of any Notices of Committed Borrowing and any other notices given to or
by the Company by or to, as the case may be, the Administrative Agent or any
Bank or to or by the Administrative Agent by or to, as the case may be, the
18
22
Company or any Bank. Each DF Participant acknowledges and agrees that from the
date of this Agreement no Lender Party or any of its affiliates shall, except as
explicitly provided herein, have any obligation or duty to convey to or share
with such DF Participant (i) any such information or copies, (ii) any
Confidential Information that such Lender Party or any of its affiliates may
from time to time have or (iii) any other information or financial or legal
advice that they may receive from or concerning the Company and its business and
affairs, nor shall any DF Participant be entitled to notice of, to participate
in or be advised as to the outcome of, any meetings, conference calls or other
communications among the Lender Parties (whether or not the Company and its
legal and financial advisers participate in any portion thereof and whether or
not the DF Participants, pursuant to Article 5, have any right to vote in
respect of any matter discussed therein, provided that if in respect of any
matter being voted upon by the Banks the DF Participants, pursuant to Article 5,
have the right to participate in such vote, the Administrative Agent shall
advise the DF Participants of the results of such vote). Neither the execution
and delivery of this Agreement nor the purchase of any Participations hereunder
shall impose any fiduciary or other similar duty on the Administrative Agent or
any Participating Bank in relation to any DF Participant, or any other duty
other than as explicitly provided herein.
(b) Each DF Participant agrees that, except as explicitly provided in
Article 5, neither the Administrative Agent nor any Participating Bank shall
have any duty of any kind whatsoever to any DF Participant with respect to the
Collateral or any portion thereof or the Subsidiary Guaranty Agreement or any
action or failure to act with respect thereto and each DF Participant hereby
waives, to the fullest extent it may do so under applicable law, any duty that
the Administrative Agent or any Participating Bank might otherwise have to any
DF Participant with respect to the Collateral or any portion thereof or the
Subsidiary Guaranty Agreement, or any action or failure to act with respect
thereto, whether arising by law, in equity, by contract or otherwise, or any
right it may now have or hereafter acquire, against the Administrative Agent or
any Participating Bank with respect to the Collateral or any portion thereof or
the Subsidiary Guaranty Agreement or any action or failure to act with respect
thereto, whether arising by law, in equity, by contract or otherwise. Each DF
Participant agrees that the holders of the Bank Debt have sole discretion with
respect to the determination to, the timing and the manner of any release or
other disposition of Collateral or enforcement of the Subsidiary Guaranty
Agreement and the application of the proceeds of any such release or disposition
or enforcement, and that no DF Participant shall have the right to vote or take
any other action with respect to the Collateral or any portion thereof or the
Subsidiary Guaranty Agreement except as explicitly provided in Article 5.
19
23
SECTION 4.3. Nature of Arrangements. Each DF Participant acknowledges
that his purchase of Participations is the purchase of an interest in a
commercial debt in order to assist the Company in meeting its immediate working
capital needs, and is being made at his request and suggestion based upon the
request of the Company to the Participating Banks. Each DF Participant further
acknowledges that, notwithstanding the form of certain representations made by
him in Article 6, this Agreement and the Participations hereunder are not
intended to constitute a security for purposes of any applicable securities law.
SECTION 4.4. Certain Actions. (a) Each DF Participant agrees and
consents that except as explicitly provided in Article 5 and Section 2.08,
without notice to or assent by any DF Participant the Participating Banks, in
their sole and absolute discretion and without any duty or responsibility to the
DF Participants (notwithstanding their junior priority with respect to certain
payments):
(i) may agree that the obligations and liabilities of the
Company or any Subsidiary party to the Credit Agreement or any other
Financing Documents, or the rights of the Lender Parties, from time to
time, in whole or in part, shall be renewed, extended, modified,
amended, restated, accelerated, compromised, supplemented, terminated,
sold, exchanged, waived or released (and in particular may determine
whether the conditions precedent to their obligations to make New
Revolving Loans or any other Revolving Loans have been met or should be
waived or agree to change the rate of or date for payment of any
interest or Facility Fees or agree to extend or otherwise modify Waiver
No. 5);
(ii) may (or direct or allow the Administrative Agent or
Collateral Agent to) exchange, release or surrender any Collateral to
the Company or any other Person, waive, release or subordinate any
security interest, obtain a guaranty of any person or a security
interest in or mortgage or other encumbrance on any additional property
as collateral for any obligations of the Company, in each case as they
in their sole discretion may elect;
(iii) may apply amounts paid by the Company or any other
Person or otherwise realized to such portion of the Bank Debt as they
elect;
(iv) may (or direct or allow the Administrative Agent or the
Collateral Agent to) exercise or refrain from exercising any right,
remedy or power granted by or in connection with the Credit Agreement,
any other Financing Documents or any other agreements relating thereto;
20
24
(v) may (or direct or allow the Administrative Agent or the
Collateral Agent to) surrender or release, from time to time, in whole
or in part, any balance or balances of funds with the Administrative
Agent, the Collateral Agent or any Participating Bank at any time
standing to the credit of the Company; and
(vi) may (or direct or allow the Administrative Agent or the
Collateral Agent to), from time to time, take or not take any other
action whatsoever in respect of the Loans and the Credit Agreement and
other Financing Documents; all without impairing, abridging,
diminishing, releasing or affecting the obligations of the DF
Participants, or the rights and priorities of the Participating Banks
and the Administrative Agent, hereunder.
(b) Each DF Participant acknowledges and agrees that nothing contained
herein shall impair the rights of any Participating Bank in connection with
exercising any right of set-off or counterclaim as set forth in the proviso in
Section 9.04 of the Credit Agreement.
SECTION 4.5. Assignment Upon Bank Payout. Each Participating Bank
agrees that at any time after the date on which Bank Payout has occurred it
will, upon request of the DF Participants (which, if made to any Participating
Bank, must be made concurrently to all Participating Banks), assign to the DF
Participants, severally in proportion to their Percentage Shares, all of its
rights and obligations under the Credit Agreement and its Notes pursuant to
Section 9.06(c) of the Credit Agreement and duly executed Assignment and
Assumption Agreements, provided that (i) upon the effectiveness of any such
assignment, neither any Assignor nor any Assignee shall, any provision of the
Credit Agreement to the contrary notwithstanding, have any obligation to make
further Loans to the Company and (ii) it is understood and agreed that (a) no
payment shall be due from any Assignee to any Assignor in connection with such
assignments, (b) the DF Participants may be such Assignees notwithstanding that
they are not banks or other institutions and (c) as provided in Section 11(b) of
Waiver No. 5, the consent of neither the Company nor the Administrative Agent
shall be required for any such assignment. The Company consents to the
provisions of this Section 4.05.
SECTION 4.6. Participating Bank Assignments, Etc. (a Each Participating
Bank agrees that it will not assign all or any portion of its Revolving Credit
Commitment or its rights under this Agreement and its Notes pursuant to Section
9.06(c) of the Credit Agreement unless the Assignee has in connection therewith,
pursuant to an amendment or supplement to the related Assignment and Assumption
Agreement satisfactory as to form and substance to the Administrative Agent,
agreed to become a Participating Bank and a party to
21
25
this Agreement in respect to the amount and rights assigned. Each DF Participant
agrees that any such Assignee shall be a Participating Bank with the rights and
obligations of a Participating Bank hereunder in respect to the amount and right
assigned. The Administrative Agent shall promptly notify each DF Participant of
any such assignment, attaching thereto a copy of the instrument pursuant to
which such Assignee becomes a Participating Bank.
(b) Each Participating Bank represents and warrants to the DF
Participants that this Agreement is its valid and binding obligation and that it
owns its Loans and rights under the Credit Agreement free of any Liens and will
not in the future create any such Lien.
SECTION 4.7. Administrative Agent. (a) Each DF Participant and each
Participating Bank irrevocably appoints and authorizes the Administrative Agent
to take such action as Administrative Agent on its behalf and to exercise such
powers hereunder as are delegated to the Administrative Agent by the terms
hereof, together with all such powers as are reasonably incidental thereto.
(b) The actions of the Administrative Agent hereunder are subject to
the provisions of the Credit Agreement (and in particular the provisions of
Article 7 thereof shall inure to the benefit of the Administrative Agent in
respect of this Agreement). Without limiting the generality of the foregoing,
each DF Participant and each Participating Bank acknowledges and agrees that (a)
the obligations of the Administrative Agent hereunder are intended to be only
ministerial in nature and are only those expressly set forth herein and (b) the
Administrative Agent shall not be obligated to exercise any discretion under
this Agreement and there shall be no implied covenants, duties or other
obligations applicable to it read into this Agreement. All calculations and
distributions made by the Administrative Agent pursuant to this Agreement shall
be final (except in the case of manifest error) and the Administrative Agent
shall have no duty to inquire as to the application by any party hereto of any
such distribution received by it.
ARTICLE 5
VOTING, ETC.
SECTION 5.1. Voting Matters. (a) Except as expressly set forth in this
Article 5, no DF Participant shall, directly or indirectly, acquire (and each DF
Participant hereby waives) any right to vote on account of or in respect of any
Participation purchased pursuant to this Agreement in connection with or regard
to any matters whatsoever arising under or otherwise relating to the Credit
22
26
Agreement and the other Financing Documents and the Collateral, nor will he have
any right to proceed or deal directly with or against the Company or any
Subsidiary Guarantor with respect thereto or to set off any amounts owing to him
by the Company or any Subsidiary Guarantor on account of his Participated Amount
against any amount owing by him to the Borrower or any Subsidiary Guarantor,
provided that the foregoing provisions shall not apply on or after the date, if
ever, on which any assignments requested pursuant to Section 4.05 are effective.
SECTION 5.2. Maximum Amount; Extension of Waiver Expiry Date. Each
Participating Bank agrees that without the consent of each DF Participant it
will not agree to any amendment to the Credit Agreement that would result in
Loans being made and outstanding, or otherwise available, thereunder in a
principal amount greater than $325,000,000. Each Participating Bank further
agrees that it will not agree to an extension of the Waiver Expiry Time for a
period or periods aggregating more than 120 days after February 28, 2001 without
the prior consent of the Majority DF Participants.
SECTION 5.3. Principal Amount. Each Participating Bank agrees that
without the consent of each DF Participant it will not agree to any amendment to
the Financing Documents that would reduce the principal amount of any Loan,
provided that if an Event of Default described in clause (e) or (f) of Section
6.01 of the Credit Agreement has occurred and is continuing:
(a) unless the following clause (b) is applicable, the
Participating Banks may agree to a reduction in the principal amount of
the Loans if, but only if, effective provision is made whereby the
Participated Amounts, notwithstanding the otherwise applicable
priorities in Article 3, bear only a proportionate share of such
reduction; and
(b) at any time that the Aggregate Participated Amount exceeds
20% of the outstanding Loans, any Participating Bank may vote in favor
of any plan of reorganization the terms of which provide for a
reduction in the principal amount of the Loans but in connection
therewith each Participating Bank shall, as provided in Section 11(h)
of Waiver No. 5 and if so instructed by any DF Participant, vote
against such plan such portion, if any, of its Loans attributable to
such DF Participant's Participations therein.
SECTION 5.4. Unrestricted Voting. On and after the time at which the
Aggregate Participated Amount exceeds 50% of the aggregate outstanding Loans,
each Participant Bank shall, as provided in Section 11(h) of Waiver No.
23
27
5, vote each portion, if any, of its Loans attributable to the Participations of
any DF Participant so as to reflect the instructions of such DF Participant.
SECTION 5.5. Collateral Proceeds. (a) The Participating Banks and the
Collateral Agent agree that without the consent of the Majority DF Participants
they will not consent to any release of the Collateral other than in connection
with an Asset Sale the Net Proceeds of which are to be received by the
Collateral Agent for application to the Secured Obligations of the Banks and the
Agents and otherwise in accordance with Section 5.05(b).
(b) As set forth in Section 3.06, the Company has granted the DF
Participants a security interest in the assets comprising the Collateral,
including all proceeds thereof (junior to the Secured Obligations of the Banks
and the Agents), to secure its obligations to the DF Participants under the DF
Participant Compensation Letter. The Participating Banks and the Collateral
Agent agree that if at any time the Collateral Agent receives proceeds of
Collateral or otherwise has any cash in the Collateral Accounts and, after
application thereof all of the Secured Obligations have been paid in full (or
provided for pursuant to subsection (b) of Section 14 of the Security
Agreement), any surplus proceeds then remaining shall continue to be subject to
the lien of the DF Participants and shall be paid first to the DF Participants,
rather than to any Lien Grantor, in such an aggregate amount as they have
notified the Collateral Agent represents the amounts owed or potentially owing
to them under the DF Participant Compensation Letter or, if the Collateral Agent
has received no such notice, in the entire amount of such surplus.
(c) The Company, on behalf of itself and each other Lien Grantor,
consents and agrees to the foregoing.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE DF PARTICIPANTS
Each DF Participant represents and warrants to the Participating Banks
and the Administrative Agent as follows:
SECTION 6.1. Purchase for Investment. Such DF Participant will acquire
Participations hereunder for investment for his own account and not as agent or
nominee and not with a view to the distribution or resale thereof.
24
28
SECTION 6.2. This Agreement, Etc. This Agreement constitutes the valid
and binding obligation of such DF Participant and the funds deposited by him in
the DF Escrow Account are funds which he may properly apply for the purposes set
forth herein.
SECTION 6.3. Suitability of Investment. Such DF Participant has
carefully considered and has, to the extent he believes such discussion
necessary, discussed with his legal, tax and financial advisers the suitability
of his acquisition of the Participations contemplated hereby for his particular
tax and financial situation. Such DF Participant is capable of evaluating and
has evaluated carefully the merits and risks of purchasing the Participations
and is able to bear the economic risk of an investment therein. Such DF
Participant recognizes that neither any Participating Bank nor the
Administrative Agent is responsible for any losses or adverse tax consequences
resulting from his acquisition of Participations, and the DF Participant
represents that he is not relying on either any Participating Bank or the
Administrative Agent for investment or tax advice relating to such acquisition.
SECTION 6.4. Familiarity with the Company. Such DF Participant has the
knowledge, sophistication and experience in financial and business matters
necessary to comprehend the information furnished to him by the Company and to
evaluate the merits and risks of his acquiring Participations hereunder.
SECTION 6.5. Withholding Taxes. Such DF Participant is entitled to
receive any payments hereunder without the withholding of any tax and on or
before the first date upon which any payment is made to him hereunder will
furnish to the Administrative Agent the applicable Internal Revenue Service form
in evidence and confirmation thereof.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party or the DF
Escrow Agent: (v) in the case of the Administrative Agent, at its address or
facsimile number set forth on the signature pages hereof, (w) in the case of any
Participating Bank, at its address or facsimile number specified pursuant to
Section 9.01 of the Credit Agreement, (x) in the case of the DF Escrow Agent at
▇▇▇▇▇ Fargo Bank Minnesota, National Association, Corporate Trust Services,
N9303-120, Sixth and Marquette, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or facsimile
25
29
(▇▇▇) ▇▇▇-▇▇▇▇ or telephone number (▇▇▇) ▇▇▇-▇▇▇▇, in any case Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, (y) in the case of any DF Participant, to his address set forth on
the signature pages hereof, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇, Esq., Dechert, ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or facsimile (▇▇▇) ▇▇▇-▇▇▇▇, or (z)
in the case of any party, at such other address or facsimile number (or, in the
case of the DF Escrow Agent, such other telephone number) as such party may
hereafter specify for the purpose by notice to the other parties hereto. Each
such notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section.
SECTION 7.2. Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.
SECTION 7.3. Specific Performance. Without limiting the rights of each
party hereto to pursue all other legal and equitable rights available to such
party for the other parties' failure to perform their obligations under this
Agreement, the parties hereto acknowledge and agree that the remedy at law for
any failure to perform their obligations hereunder would be inadequate and that
each of them, respectively, shall be entitled to specific performance,
injunctive relief or other equitable remedies in the event of any such failure.
SECTION 7.4. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF LAW. EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH SUCH PARTY MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN
26
30
BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION
7.01. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS
AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 7.5. Counterparts; Effectiveness. This Agreement may be
executed simultaneously in any number of counterparts, each of which shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument. This Agreement shall become effective on the date when the
Administrative Agent shall have received:
(a) from each DF Participant, each Participating Bank and, as
contemplated on at the foot hereof, the Company, a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the Administrative Agent) that such party has signed a counterpart hereof;
(b) evidence satisfactory to it that the DF Escrow Agent has received
an aggregate of $17,500,000 from the DF Participants and deposited such funds in
the DF Escrow Account; and
(c) confirmation from Dechert, counsel for the DF Participants (each of
which hereby confirms and agrees that any such confirmation shall be conclusive
and binding upon him) that the DF Participants have received such documents,
certificates and opinions of counsel to the Company and comparable closing
documentation as they have reasonably requested from the Company in connection
herewith.
SECTION 7.6. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
SECTION 7.7. Entire Agreement. This Agreement is intended by the
parties hereto as a final and complete expression of their agreement and
understanding in respect to the subject matter contained herein. This Agreement
supersedes all prior agreement and understandings, written or oral, between the
parties with respect to such subject matter.
27
31
SECTION 7.8. Amendment and Waiver. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed by the Administrative Agent, the Majority DF Participants and the
Majority Participating Banks, provided that no such amendment or waiver shall,
unless signed by all DF Participants and all Participating Banks (i) increase or
decrease the amount of any DF Participant's or Participating Bank's commitment
with respect to funding of New Revolving Loans or otherwise subject it to any
additional obligation, (ii) alter the priorities of payment set forth in Article
3, (iii) adversely affect the voting rights of any DF Participant pursuant to
Article 5, (iv) change the percentage of the aggregate DF Participant Exposures
or the Credit Exposures of the Participating Banks, or the number of DF
Participants or Participating Banks, which shall be required for the DF
Participants or any of them or the Participating Banks or any of them, as the
case may be, to take any action under this Section 7.08 or (v) change any of the
provisions of this Section 7.08 or Section 7.13.
SECTION 7.9. No Third Party Beneficiaries. Nothing in this Agreement
shall convey any rights upon any person or entity which is not a party or an
assignee of a party to this Agreement.
SECTION 7.10. Binding Effect. The covenants of the DF Participants
contained herein shall be binding upon them and upon their respective heirs,
legal representatives, successors and permitted assigns. No DF Participant shall
assign any of its obligations under Article 2. Each DF Participant agrees that
it will not assign, pledge or otherwise transfer, for security purposes or
otherwise, any interest in the Participations held by it unless the
Administrative Agent shall have given its prior consent to such transfer (such
consent not to be unreasonably withheld, it being understood and agreed that the
Administrative Agent reserves the right to withhold consent to any assignment
that is not of all of a DF Participant's interest in the Participations held by
it) or for estate planning purposes (it being understood and agreed that a
transfer of such interests may also occur by operation of law upon the death or
incapacity of a DF Participant, and that such transfers are not a violation of
this Agreement), provided that if any DF Participant makes such an assignment
without the prior consent of the Administrative Agent (other than by operation
of law) (a) the Administrative Agent and the Participating Banks shall continue
to deal solely and directly with such DF Participant in connection with such DF
Participant's rights and obligations under this Agreement, including making
payments to the account of such DF Participant with respect to its
Participations, regardless of any notice or other demand to the contrary from
such DF Participant, the assignee or any other Person, (b) the documentation
relating to any such assignment shall provide that the DF Participant shall
retain the sole right and responsibility to exercise or enforce his rights under
this Agreement, including any voting rights pursuant to
28
32
Article 5, and that the assignee acknowledges and agrees to the requirements of
the preceding clause (i), (c) such DF Participant shall remain responsible for
the performance of its obligations hereunder and (d) such DF Participant agrees
to indemnify each Lender Party and hold it harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including
reasonable fees and disbursements of counsel, which are incurred by such Lender
Party in connection with or otherwise arising out of such assignment (except
that no Lender Party shall have the right to be indemnified for its own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction). Any Participating Bank may sell additional participations in, or
assign or otherwise transfer interests in, its Revolving Credit Commitment and
its Loans to other Persons without notice to or the consent of any DF
Participant, but any transfer other than a participation must be an assignment
pursuant to Section 9.06(c) of the Credit Agreement that is also in compliance
with Section 4.06. Any Assignee of a Participating Bank that becomes a party
hereto as contemplated by Section 4.06 shall as to its Loans be entitled to the
priorities of payment and other provisions of this Agreement, including Article
3.
SECTION 7.11. No Partnership. Nothing contained in this Agreement, and
no action taken by the holders of Bank Debt (or any of them) pursuant hereto, is
intended to constitute or shall be deemed to constitute the holders of Bank Debt
a partnership, association, joint venture or other entity.
SECTION 7.12. Shareholder Capacity. Each DF Participant signs this
Agreement solely in his capacity as a shareholder of the Company.
SECTION 7.13. Termination; Certain Notices. (a This Agreement shall
terminate upon the earliest to occur of (i) the Participation Termination Date
occurring on a date when no New Revolving Loans are outstanding, (ii) the date
any assignments requested pursuant to Section 4.05 become effective and (iii)
the date that the parties hereto agree to a termination of this Agreement,
provided that the provisions of Sections 2.07 and 3.09 and Article 4, as well as
of Article 3 as to any entitlement to interest, Facility Fees or other payments
that has accrued prior to such termination, shall survive any termination of
this Agreement.
(b) If the Participation Termination Date occurs or this Agreement
terminates pursuant to Section 7.13(a), then in each instance the Administrative
Agent shall promptly notify the DF Participants and, unless it has received
notice from the DF Escrow Agent that the Termination Date under the DF Escrow
Agreement has occurred, the DF Escrow Agent of the occurrence of such event.
SECTION 7.14. Waiver of Jury Trial. THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL
29
33
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
30
34
IN WITNESS WHEREOF, the parties have executed or have caused this
Agreement to be executed and delivered as of the date first above written.
DF PARTICIPANTS:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
__________________________________
▇▇▇▇▇ ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
__________________________________
31
35
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________________
Hope H. van Beuren
__________________________________
▇▇▇▇ ▇. van Beuren
__________________________________
32
36
PARTICIPATING BANKS:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK
By:________________________________
Name:
Title:
THE CHASE MANHATTAN BANK
By:________________________________
Name:
Title:
BANK OF AMERICA NT&SA
By:________________________________
Name:
Title:
BANK OF MONTREAL
By:________________________________
Name:
Title:
BARCLAYS BANK PLC
By:________________________________
Name:
Title:
33
37
BANKERS TRUST COMPANY
By:________________________________
Name:
Title:
DEUTSCHE BANK AG NEW YORK and/or
CAYMAN ISLANDS BRANCHES
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
BANK ONE, NA (Main office, Chicago)
By:________________________________
Name:
Title:
FLEET NATIONAL BANK
By:________________________________
Name:
Title:
MELLON BANK, N.A.
By:________________________________
Name:
Title:
34
38
PNC BANK, NATIONAL ASSOCIATION
By:________________________________
Name:
Title:
WACHOVIA BANK, N.A.
By:________________________________
Name:
Title:
▇▇▇ CAPITAL FUNDING LP
By:________________________________
Name:
Title:
ML CBO IV (CAYMAN), LTD
By:________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By:________________________________
Name:
Title:
FIRST UNION NATIONAL BANK
35
39
By:________________________________
Name:
Title:
SUNTRUST BANK
By:________________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE
NEW YORK BRANCH
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
BANCA NAZIONALE DEL LAVORO
S.p.A.-NEW YORK BRANCH
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
36
40
ADMINISTRATIVE AGENT:
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK., as
Administrative Agent
By:________________________________
Name:
Title:
Address for Notices:
▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative
Agent
c/o ▇▇ ▇▇▇▇▇▇ Services Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ - 3/OPS2
Re: Vlasic Foods International Inc.
with a copy to:
▇▇▇▇▇▇ Guaranty Trust Company
of New York, as Administrative
Agent
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Houston ▇. ▇▇▇▇▇▇▇▇
Re: Vlasic Foods International Inc.
Acknowledged and Agreed,
solely for the purposes of the references to
the Company in Sections 2.02(b), 2.04, 2.08,
3.08, 4.05 and 5.05.
VLASIC FOODS INTERNATIONAL INC.
By:__________________________________
Name:
Title: