Ex-4
Sequence 1
Description: Ex-4(a)
$20,000,000
AMENDED AND RESTATED
MULTICURRENCY CREDIT AGREEMENT
Dated as of November 30, 2000
among
MIDDLEBY MARSHALL INC.,
THE SUBSIDIARIES OF MIDDLEBY MARSHALL INC.,
and
BANK OF AMERICA, N.A.
ARTICLE I DEFINITIONS.................................................1
Section 1.1 Certain Defined Terms.......................................1
Section 1.2 Other Interpretive Provisions..............................22
Section 1.3 Accounting Principles......................................23
Section 1.4 Currency Equivalents Generally.............................23
ARTICLE II THE CREDITS................................................23
Section 2.1 Amounts and Terms of Commitments...........................24
Section 2.2 Loan Accounts..............................................24
Section 2.3 Procedure for Borrowing....................................24
Section 2.4 Conversion and Continuation Elections......................26
Section 2.5 Utilization of Offshore Currencies.........................28
Section 2.6 Voluntary Termination or Reduction of Commitment;
Optional Prepayments.......................................30
Section 2.7 Currency Exchange Fluctuations.............................30
Section 2.8 Repayment..................................................31
Section 2.9 Interest and Commitment Fees...............................31
Section 2.10 Computation of Fees and Interest...........................32
Section 2.11 Payments by the Borrowers..................................33
Section 2.12 Amount and Terms of Letters of Credit......................33
Section 2.13 Extension of the Commitment................................38
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY.....................39
Section 3.1 Taxes......................................................39
Section 3.2 Illegality.................................................40
Section 3.3 Increased Costs and Reduction of Return....................41
Section 3.4 Funding Losses.............................................42
Section 3.5 Inability to Determine Rates...............................43
Section 3.6 Certificates of Bank.......................................43
Section 3.7 Survival...................................................43
ARTICLE IV CONDITIONS PRECEDENT.......................................43
Section 4.1 Conditions of Initial Loans and Letters of Credit..........43
Section 4.2 Additional Conditions of Initial Loans and Letters
of Credit............................... ..................45
Section 4.3 Conditions to All Borrowings and Letter of
Credit Issuances................................ ..........46
ARTICLE V REPRESENTATIONS AND WARRANTIES.............................46
Section 5.1 Corporate Existence and Power..............................46
Section 5.2 Corporate Authorization; No Contravention..................47
Section 5.3 Governmental Authorization.................................47
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Section 5.4 Binding Effect.............................................48
Section 5.5 Litigation.................................................48
Section 5.6 No Default.................................................48
Section 5.7 ERISA Compliance...........................................48
Section 5.8 Use of Proceeds; Margin Regulations........................49
Section 5.9 Title to Properties........................................49
Section 5.10 Taxes......................................................50
Section 5.11 Financial Condition........................................50
Section 5.12 Environmental Matters......................................51
Section 5.13 Regulated Entities.........................................51
Section 5.14 No Burdensome Restrictions.................................51
Section 5.15 Copyrights, Patents, Trademarks and Licenses, etc..........51
Section 5.16 Subsidiaries...............................................51
Section 5.17 Insurance..................................................52
Section 5.18 Full Disclosure............................................52
Section 5.19 Indebtedness...............................................52
Section 5.20 Capital Stock..............................................52
Section 5.21 Foreign Assets Control Regulations, etc....................52
ARTICLE VI AFFIRMATIVE COVENANTS......................................53
Section 6.1 Financial Statements.......................................53
Section 6.2 Certificates; Other Information............................54
Section 6.3 Notices....................................................55
Section 6.4 Preservation of Corporate Existence, Etc...................56
Section 6.5 Maintenance of Property....................................56
Section 6.6 Insurance..................................................56
Section 6.7 Payment of Obligations.....................................57
Section 6.8 Compliance with Laws.......................................57
Section 6.9 Compliance with ERISA......................................57
Section 6.10 Inspection of Property and Books and Records...............57
Section 6.11 Environmental Laws.........................................58
Section 6.12 Use of Proceeds............................................58
Section 6.13 Subsidiaries...............................................58
ARTICLE VII NEGATIVE COVENANTS.........................................58
Section 7.1 Limitation on Liens........................................58
Section 7.2 Disposition of Assets......................................60
Section 7.3 Mergers, Subsidiaries, Etc.................................60
Section 7.4 Loans and Investments......................................61
Section 7.5 Limitation on Indebtedness.................................62
Section 7.6 Transactions with Affiliates...............................63
Section 7.7 Use of Proceeds............................................63
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Section 7.8 Contingent Obligations.....................................63
Section 7.9 Restricted Payments........................................64
Section 7.10 ERISA......................................................64
Section 7.11 Change in Business.........................................65
Section 7.12 Accounting Changes.........................................65
Section 7.13 Financial Covenants........................................65
Section 7.14 Negative Pledge............................................67
ARTICLE VIII EVENTS OF DEFAULT..........................................67
Section 8.1 Event of Default...........................................67
Section 8.2 Remedies...................................................69
Section 8.3 Rights Not Exclusive.......................................71
ARTICLE IX MISCELLANEOUS..............................................71
Section 9.1 Amendments and Waivers.....................................71
Section 9.2 Notices....................................................71
Section 9.3 No Waiver; Cumulative Remedies.............................72
Section 9.4 Costs and Expenses.........................................72
Section 9.5 Borrowers' Indemnification.................................72
Section 9.6 Payments Set Aside.........................................73
Section 9.7 Successors and Assigns.....................................73
Section 9.8 Assignments, Participations, etc...........................73
Section 9.9 Set-off....................................................74
Section 9.10 Automatic Debits of Fees...................................74
Section 9.11 Termination of Support Agreement...........................74
Section 9.12 Counterparts...............................................75
Section 9.13 Severability...............................................75
Section 9.14 No Third Parties Benefited.................................75
Section 9.15 Governing Law and Jurisdiction.............................75
Section 9.16 Waiver of Jury Trial.......................................76
Section 9.17 Judgment...................................................77
Section 9.18 Entire Agreement...........................................77
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AMENDED AND RESTATED
MULTICURRENCY CREDIT AGREEMENT
This AMENDED AND RESTATED MULTICURRENCY CREDIT AGREEMENT is entered into as
of November 30, 2000, among MIDDLEBY MARSHALL INC., a Delaware corporation
("Middleby"), those certain Subsidiaries of Middleby from time to time parties
to this Agreement (together with Middleby, individually, a "Borrower" and
collectively, the "Borrowers") and BANK OF AMERICA, N.A. (formerly known as Bank
of America National Trust and Savings Association), a national banking
association (the "Bank").
WHEREAS, Middleby, the Borrowers, and the Bank are parties to a
Multicurrency Credit Agreement, dated as of March 18, 1998, as amended by that
certain First Amendment dated as of July 4, 1998, that certain Second Amendment
and Waiver dated as of March 31, 1999, that certain Third Amendment dated as of
March 31, 2000 and that certain Fourth Amendment and Waiver dated as of October
16, 2000 (as amended, modified or supplemented, the "Original Credit
Agreement"); and
WHEREAS, the parties hereto agree that the Original Credit Agreement shall
be and hereby is amended and restated in its entirety as follows:
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means, as to any Person, any transaction or series of
related transactions for the purpose of or resulting, directly or
indirectly, in (a) the acquisition by such Person of all or substantially
all of the assets of another Person, or of any business or division of
another Person, (b) the acquisition by such Person of in excess of 50%
of the capital stock, partnership interests, membership interests or equity
of another Person, or otherwise causing another Person to become a
Subsidiary of such Person, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary
of such Person) provided that such Person is the surviving entity.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities,
membership interests, by contract, or otherwise.
"Agreed Alternative Currency" has the meaning specified in subsection
2.5(e).
"Agreement" means this Amended and Restated Multicurrency Credit
Agreement.
"Aggregate Commitment Sublimit" means $10,000,000, as such amount may
be reduced pursuant to Section 2.6 or as a result of one or more
assignments pursuant to Section 9.8.
"Applicable Currency" means, as to any particular payment, Letter of
Credit or Loan, Dollars or the Offshore Currency in which it is denominated
or is payable.
"Applicable Letter of Credit Fee" as at any date of determination,
means the rate per annum then applicable in the determination of the amount
payable under this Agreement with respect to Letters of Credit, determined
in accordance with the definition of the term, Applicable Margin, below.
"Applicable Margin" means subject to the provisions set forth below,
for any period, the applicable of the following percentages in effect with
respect to such period as the ratio of Indebtedness to EBITDA (the "Ratio")
determined pursuant to Section 7.13(b), shall fall within the indicated
ranges:
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--------------------------- ------------- ------------------ -------------------- ---------------------- ---------------
▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ 5
--------------------------- ------------- ------------------ -------------------- ---------------------- ---------------
Indebtedness/EBITDA <1.00 1.0 < x <1.50 1.50 < x <2.00 2.00 < x <2.50 2.50 < x
- - - -
--------------------------- ------------- ------------------ -------------------- ---------------------- ---------------
LIBOR or IBOR 0.75% 1.0% 1.13% 1.38% 1.75%
--------------------------- ------------- ------------------ -------------------- ---------------------- ---------------
Base Rate 0 0 0 0 0
--------------------------- ------------- ------------------ -------------------- ---------------------- ---------------
Commitment Fee 0.10% 0.15% 0.20% 0.20% 0.25%
--------------------------- ------------- ------------------ -------------------- ---------------------- ---------------
Letter of Credit Fee 0.3% 0.5% 0.75% 1% 1.50%
--------------------------- ------------- ------------------ -------------------- ---------------------- ---------------
For purposes of the foregoing, (a) from the initial Closing Date until
December 31, 2000, the Applicable Margin shall be determined in accordance
with Level 1, (b) from and after such date, the Applicable Margin shall be
determined at any time by reference to the Ratio in effect at the time, (c)
any change in the Applicable Margin based on a change in the Ratio shall be
effective for all purposes from the date of the receipt by the Bank of an
officer's certificate of Middleby with respect to the financial statements
to be delivered pursuant to Section 6.1, (i) setting forth in reasonable
detail the calculation of such ratio for such fiscal period and (ii)
stating that the Responsible Officer has reviewed the terms of this
Agreement and has made, or caused to be made under his or her supervision,
a review in reasonable detail of the transactions and condition of Middleby
and its Subsidiaries during the accounting period covered by the related
financial statements and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signer does
not have knowledge of the existence as at the date of such officer's
certificate, of any condition or event that constitutes a Default or an
Event of Default and (d) notwithstanding the foregoing provisions of
clauses (b) and (c), no reduction in the Applicable Margin shall be
effective if a Default or Event of Default shall have occurred and be
continuing. It is understood that the foregoing officer's certificate shall
be permitted to be delivered prior to, but in no event later than, the time
of the actual delivery of the financial statements required to be delivered
pursuant to Section 6.1 for the applicable fiscal period. Any change in the
Applicable Margin due to a change in the applicable Level shall be
effective on the effective date of such change in the applicable Level and
shall apply to all Offshore Rate Loans made on or after the commencement of
the period (and to Base Rate Loans that are outstanding at any time during
the period) commencing on the effective date of such change in the
applicable Level and ending on the date immediately preceding the effective
date of the next such change in applicable Level.
"Assignee" has the meaning specified in subsection 9.8(a).
3
"Attorney Costs" means and includes all fees and disbursements of any
law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"BA Leasing Documents" means that certain Lease Agreement dated as of
December 30, 1997 between BA Leasing and Capital Corporation, as lessor,
and Middleby, as lessee, and any other documents entered into in connection
therewith, which may be amended from time to time with the prior written
consent of the Bank after the date hereof.
"Bank" has the meaning specified in the introductory clause hereto.
"Banking Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City, San Francisco or Chicago are
authorized or required by law to close and (i) with respect to
disbursements and payments in Dollars, a day on which dealings are carried
on in the applicable offshore Dollar interbank market, and (ii) with
respect to any disbursements and payments in and calculations pertaining to
any Offshore Currency Loan, a day on which commercial banks are open for
foreign exchange business in London, England, and on which dealings in the
relevant Offshore Currency are carried on in the applicable offshore
foreign exchange interbank market in which disbursement of or payment in
such Offshore Currency will be made or received hereunder.
"Bank-Related Persons" means the Bank, its Affiliates and the
officers, directors, employees, agents and attorneys-in-fact of the Bank
and such Affiliates.
"Base Rate" means, for any day, the higher of : (a) 0.50% per annum
above the latest Federal Funds Rate; and (b) the Reference Rate.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C.ss.101, et seq.).
"Borrower" has the meaning specified in the introductory clause
hereto.
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"Borrowing" means a borrowing hereunder consisting of Loans of the
same Type and in the same Applicable Currency made to the same Borrower on
the same day by the Bank under Article II, and, other than in the case of
Base Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City, San Francisco or Chicago
are authorized or required by law to close and, if the applicable Business
Day relates to any Offshore Rate Loan, means a Banking Day.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"Change of Control" means any of the following: (a) the Parent
Corporation shall cease to own, free and clear of all liens or other
encumbrances, at least 51% of the outstanding shares of Voting Stock of
Middleby on a fully diluted basis; or (b) during any period of twelve
consecutive calendar months, individuals who at the beginning of such
period constituted Middleby's board of directors (together with any new
directors whose election by Middleby's board of directors or whose
nomination for election by Middleby's stockholders was approved by a vote
of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reasons
other than death or disability to constitute a majority of the directors
then in office.
"Closing Date" means, with respect to any Borrower, the date on which
all conditions precedent set forth in Section 4.1 and Section 4.3 and, if
applicable, Section 4.2, with respect to such Borrower are satisfied or
waived by the Bank.
"Closing Transactions" means the transactions contemplated by the Loan
Documents.
5
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Commitment" has the meaning specified in Section 2.1.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"Computation Date" has the meaning specified in subsection 2.5(a).
"Contingent Obligation" means, as to any Person, 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 financial condition of any other Person, or otherwise
assures any creditor of such other Person against loss.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its
property is bound.
"Conversion/Continuation Date" means any date on which, under Section
2.4, a Borrower (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Corporate Overhead Expense" means the following expenses of the
Parent Corporation: directors' fees and expenses, directors' and officers'
liability insurance premiums, shareholder reports, shareholder relations,
transfer agent fees and expenses, investor relations and corporate
communications, Securities and Exchange Commission filing fees and
expenses, stock exchange fees, chairman's and president's retirement plan
accrual (unfunded), legal fees regarding Securities and Exchange Commission
matters, stock option plan, stock ownership plan and corporate matters,
stock ownership plan administration expenses and benefits consulting fees
(related to directors and officers).
6
"Current Assets" means all cash, cash equivalents, accounts receivable
and inventory of Middleby and its Subsidiaries, on a consolidated basis, as
of any date of determination, calculated in accordance with GAAP, but
excluding Indebtedness due from Affiliates which are not in the same
consolidated group as Middleby.
"Current Commitment Termination Date" means the earlier to occur of
(a) the Current Commitment Termination Date then in effect, as
defined in Section 2.13; and
(b) the date on which the Commitment shall terminate pursuant to
Section 2.13 or otherwise in accordance with the provisions of
this Agreement.
"Current Liabilities" means all liabilities of Middleby and its
Subsidiaries, on a consolidated basis, as of any date of determination,
which should, in accordance with GAAP, be classified as current
liabilities.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Dollar Equivalent" means, at any time, (a) as to any amount
denominated in Dollars, the amount thereof at such time, and (b) as to any
amount denominated in an Offshore Currency, the equivalent amount in
Dollars as determined by the Bank at such time on the basis of the Spot
Rate for the purchase of Dollars with such Offshore Currency on the most
recent Computation Date provided for in subsection 2.5(a).
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"EBIT" means Net Income plus, without duplication and to the extent
deducted in determining such Net Income, interest and income tax expense,
all determined in accordance with a first-in, first-out basis of
accounting.
"EBITDA" means Net Income plus, without duplication and to the extent
deducted in determining such Net Income, interest, depreciation and
amortization
7
expense plus income tax expense, all determined in accordance with a
first-in, first-out basis of accounting.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $200,000,000; (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $200,000,000 or its Dollar Equivalent, provided
that such bank is acting through a branch or agency located in the United
States; and (c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of the Bank, (ii) a
Subsidiary of a Person of which the Bank is a Subsidiary, or (iii) a Person
of which the Bank is a Subsidiary.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with
all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and
land use matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with Middleby within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by Middleby or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as
8
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by Middleby or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer
Plan; or (f) the imposition of any liability under Title IV of ERISA, other
than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
Middleby or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances specified
in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"Existing Letters of Credit" means the letters of credit issued under
the Original Credit Agreement and outstanding on the date hereof.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Business Day opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such
day will be the arithmetic mean as determined by the Bank of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York City time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Bank.
"Fixed Charge Coverage Ratio" means the ratio of the sum of Net Income
before payment of income taxes, plus depreciation, amortization, interest
expense and lease
9
expense over the sum of current maturities of long term debt, including
current capital lease payments, plus interest expense, plus lease expense,
plus shareholder dividends or distributions paid.
"Foreign Borrower" means each Borrower organized and resident in a
country other than the United States of America.
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"Funded Debt" means, as to any Person, all Indebtedness for borrowed
money evidenced by notes, bonds, debentures, or similar evidences of
Indebtedness and which by its terms matures more than one year from, or is
directly or indirectly renewable or extendible at such Person's option
under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date
of creation thereof, and specifically including capitalized lease
obligations, current maturities of long-term debt, revolving credit and
short-term debt extendible beyond one year at the option of the debtor, and
also including the Obligations.
"Further Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges (including, without limitation, net income taxes and franchise
taxes), and all liabilities with respect thereto, imposed by any
jurisdiction on account of amounts payable or paid pursuant to Section 3.1.
"FX Trading Office" means the Foreign Exchange Trading Center,
Chicago, Illinois, of the Bank, or such other of the Bank's offices as the
Bank may designate from time to time.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to
the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory
10
authority) thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, and
any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guarantors" means Middleby and Middleby Worldwide.
"Guaranty" means the guaranty executed by the Guarantors in favor of
the Bank, in substantially the form of Exhibit E.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Indebtedness" means, as to any Person, and includes all (i)
obligations of such Person for borrowed money or which have been incurred
in connection with the acquisition of property other than current accounts
payable, (ii) obligations secured by any Lien or other charge upon property
owned by such Person, even though such Person has not assumed or become
liable for the payment of such obligations, (iii) noncontingent obligations
created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person, notwithstanding
the fact that the rights and remedies of the seller, lender or lessor under
such agreement in the event of default are limited to repossession or sale
of property, (iv) obligations (other than obligations under any lease which
is not a capitalized lease and obligations in an amount equal to the demand
component of any contract providing for usual and customary utility
services, including gas, water, electricity and wastewater treatment
services) to purchase any property or to obtain the services of another
Person if the contract requires that payment for such property or services
be made regardless of whether such property is delivered or such services
are performed, except that no obligation shall constitute Indebtedness
solely because the contract provides for liquidated damages or
reimbursement of expenses following cancellation, (v) capitalized rentals,
(vi) obligations in respect of letters of credit (a) but only to the extent
that such letters of credit do not support an obligation of such Person
already included in Indebtedness, and (b) in respect of standby letters of
credit in excess of $1,000,000 of the stated amount, and (vii) all
guaranties by such Person of obligations of the type described in the
foregoing clauses (i) through (vi).
"Indemnified Liabilities" has the meaning specified in Section 9.5.
"Indemnified Person" has the meaning specified in Section 9.5.
11
"Independent Auditor" has the meaning specified in subsection 6.1(a).
"Individual Commitment Sublimit" means, with respect to any Foreign
Borrower, the amount set forth below opposite the name of such Foreign
Borrower, as such amount may be reduced pursuant to Section 2.6 or as a
result of one or more assignments pursuant to Section 9.8.
Foreign Borrower Individual Commitment Sublimit
---------------- ------------------------------
Middleby Philippines Corporation $5,000,000
Middleby Japan Corporation 3,000,000
Middleby Taiwan Corporation 2,500,000
(f/k/a ▇▇▇▇▇▇ Worldwide
(Taiwan) Co., Ltd)
Middleby Korea Corporation 2,000,000
(f/k/a ▇▇▇▇▇▇ Worldwide
Korea Co., Ltd.)
Middleby Mexico, S.A. DE C.V. 2,000,000
(f/n/a ▇▇▇▇▇▇ Mexico, S.A. de C.V.)
Middleby Worldwide Spain, S.L.
(f/k/a ▇▇▇▇▇▇, ▇.▇.) 2,000,000
Aggregate Commitment Sublimit: $10,000,000
"Insolvency Proceeding" means, with respect to any Person, (a) any
case, action or proceeding with respect to such Person before any court or
other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or foreign
law, including the Bankruptcy Code.
12
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person
determined in accordance with GAAP for the relevant period ended on such
date, including, in any event, interest expense with respect to any Funded
Debt of such Person.
"Interest Payment Date" means, as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and, as
to any Base Rate Loan, the last Business Day of each month and each date
such Loan is converted into another Type of Loan; provided, however, that
if any Interest Period for an Offshore Rate Loan exceeds three months, the
date that falls three months after the beginning of such Interest Period
and after each Interest Payment Date thereafter is also an Interest Payment
Date; provided, further that if any Interest Period for a Quoted Rate Loan
exceeds one month, the date that falls one month after the beginning of
such Interest Period and after each Interest Payment Date thereafter is
also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two, three
or six months thereafter as selected by the applicable Borrower in its
Notice of Borrowing or Notice of Conversion/Continuation; provided, that:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following Business Day unless, in the case of an Offshore Rate Loan,
the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall
end on the preceding Business Day;
(ii) any Interest Period pertaining to an Offshore Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the calendar month at the end of such Interest Period; and
(iii) no Interest Period for any Revolving Loan shall extend
beyond the Revolving Termination Date.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
13
"LC Obligations" means, at any time, an amount equal to the sum of (a)
the aggregate Stated Amount of the outstanding Letters of Credit and (b)
the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to subsection 2.12(c).
"Lending Office" means the office or offices of the Bank specified as
its "Lending Office" or "Domestic Lending Office" or "Offshore Lending
Office", as the case may be, on Schedule 9.2, or such other office or
offices as the Bank may from time to time notify Middleby.
"Letter of Credit" means any letter of credit issued hereunder.
"Letter of Credit Cash Collateral Account" has the meaning specified
in Section 8.2.
"Letter of Credit Commitment Sublimit" means $10,000,000.
"Letter of Credit Payment" means all payments made by the Bank
pursuant to either a draft or demand for payment under a Letter of Credit.
"Letter of Credit Request" has the meaning specified in subsection
2.12(b).
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital lease, any financing
lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the Uniform Commercial
Code or any comparable law) and any contingent or other agreement to
provide any of the foregoing, but not including the interest of a lessor
under an operating lease.
"Loan" means an extension of credit by the Bank to a Borrower under
Article II, and may be a Base Rate Loan, an Offshore Rate Loan or a Quoted
Rate Loan (each, a "Type" of Loan).
14
"Loan Documents" means this Agreement, the Notes, the Guaranty and all
other documents delivered to the Bank in connection herewith.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means, with respect to any Person, (a) a
material adverse change in, or a material adverse effect upon, the
operations, business, properties, condition (financial or otherwise) or
prospects of such Person or such Person and its Subsidiaries taken as a
whole; (b) a material impairment of the ability of any Borrower to perform
under any Loan Document and to avoid any Event of Default; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Borrower of any Loan Document. As used in this
Agreement, Material Adverse Effect shall mean Material Adverse Effect with
respect to Middleby and its Subsidiaries taken as a whole.
"Middleby" has the meaning specified in the introductory clause
hereto.
"Middleby Worldwide" means Middleby Worldwide, Inc. (formerly known as
▇▇▇▇▇▇ Associates, Inc.), a Florida corporation.
"Minimum Tranche" means, in respect of Loans comprising part of the
same Borrowing, or to be converted or continued under Section 2.4, (a) in
the case of Base Rate Loans, $50,000 or any multiple of $50,000 in excess
thereof, and (b) in the case of Offshore Rate Loans, the Dollar Equivalent
amount of $250,000 or any Dollar Equivalent multiple of $50,000 in excess
thereof.
"Multiemployer Plan" means a "multiemployer plan", within the meaning
of Section 4001(a)(3) of ERISA, to which Middleby or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"Net Income" for any period means the gross revenues from any source
of Middleby and its Subsidiaries on a consolidated basis for such period
less all expenses and other proper charges, determined in accordance with
GAAP, but excluding in any event: (i) any gains or losses on the sale or
other disposition or loss to or destruction of investments or fixed or
capital assets, and any taxes on such excluded gains and any tax deductions
or credits on account of any such excluded losses; (ii) earnings resulting
from
15
any reappraisal, revaluation or write-up of assets, other than revaluations
of foreign currency; and (iii) any gain resulting from the acquisition of
any equity securities of Middleby or any Subsidiary.
"Note" means a promissory note executed by a Borrower in favor of the
Bank pursuant to subsection 2.2(b), in substantially the form of Exhibit D.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially
the form of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by the Borrowers
to the Bank or any Indemnified Person, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising.
"Offshore Currency" means, subject to availability pursuant to Section
2.5 and to the extent freely transferable and convertible into Dollars, (i)
at any time English pounds sterling, Canadian dollars, French francs,
German Deutsche Marks, Japanese yen, (ii) with respect to any Foreign
Borrower, the local currency of the jurisdiction in which such Borrower is
organized and resident, and (iii) any Agreed Alternative Currency, and such
other freely transferable and convertible foreign currencies as requested
by Middleby and acceptable to the Bank, in its reasonable discretion.
"Offshore Currency Loan" means any Offshore Rate Loan denominated in
an Offshore Currency.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/16th of 1%) determined by
the Bank as follows:
Offshore Rate = IBOR or LIBOR, as the case may be
---------------------------------
1.00 - Eurodollar Reserve Percentage
16
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to the Bank) under regulations issued from time to time by the
FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"IBOR" means the rate of interest per annum determined by the Bank as
the rate at which deposits in the Applicable Currency in the approximate
amount of the Bank's Offshore Rate Loan denominated in an Offshore Currency
for such Interest Period would be offered by the Bank's Nassau Branch,
Nassau, Bahamas (or such other office as may be designated for such purpose
by the Bank), to major banks in the offshore currency interbank market at
their request at approximately 11:00 a.m. (New York City time) two Business
Days prior to the commencement of such Interest Period. A Loan denominated
in an Offshore Currency shall bear interest based on IBOR.
"LIBOR" means the rate of interest per annum determined by the Bank to
be the arithmetic mean (rounded upward to the nearest 1/16th of 1%) of the
rates of interest per annum notified by the Bank as the rate of interest at
which dollar deposits in the approximate amount of the amount of the Loan
to be made or continued as, or converted into, an Offshore Rate Loan
denominated in Dollars by the Bank and having a maturity comparable to such
Interest Period would be offered to major banks in the London interbank
market at their request at or about 11:00 a.m. (London time) on the second
Business Day prior to the commencement of such Interest Period. A Loan
denominated in Dollars shall bear interest based on LIBOR.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate, and may be an Offshore Currency Loan or a Loan denominated
in Dollars.
17
"Organization Documents" means, for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of determination
or instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.
"Other Taxes" means any present or future stamp, court or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with
respect to, this Agreement or any other Loan Documents.
"Parent Corporation" means The Middleby Corporation, a Delaware
corporation.
"Participant" has the meaning specified in subsection 9.8(b).
"Payment Office" means (a) in respect of payments in Dollars, the
address for payments set forth on Schedule 9.2 or such other address as the
Bank may from time to time specify in accordance with Section 9.2, and (b)
in the case of payments in any Offshore Currency, the address for payments
set forth in Schedule 9.2 or such other address as the Bank may from time
to time specify in accordance with Section 9.2.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under
ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which Middleby sponsors, maintains, or
to which it makes, is making, or is obligated to make contributions, or in
the case of a multiple employer plan (as described in Section 4064(a) of
ERISA) has made contributions at any time during the immediately preceding
five (5) plan years.
"Permitted Liens" has the meaning specified in Section 7.1.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
18
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which Middleby sponsors or maintains or to which Middleby makes, is
making, or is obligated to make contributions and includes any Pension
Plan.
"Quoted Rate" means the rate of interest quoted by the Bank to the
applicable Borrower pursuant to Section 2.3(e) applicable to a Quoted Rate
Loan.
"Quoted Rate Interest Period" means the period which shall begin on
(and include) the date on which such Quoted Rate Loan is made and, unless
the final maturity of such Quoted Rate Loan is accelerated, shall end on
(but exclude) the subsequent day or the day one through sixty days
thereafter, as the applicable Borrower may select in its relevant notice
pursuant to Section 2.3; provided, however, that:
(a) absent such selection (or a selection to treat such Loan as
an Offshore Rate Loan, if available), such Borrower shall be deemed to
have selected such Loan to be a Base Rate Loan;
(b) any such Quoted Rate Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next
following Business Day; and
(c) there shall not be more than eight (8) Quoted Rate Interest
Periods and Interest Periods, in aggregate, in effect at any one time.
"Quoted Rate Loan" means any Loan which bears interest at a rate
determined by reference to the Quoted Rate.
"Reference Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by the Bank in San
Francisco, California as its "reference rate." The "reference rate" is a
rate set by the Bank based upon various factors including the Bank's costs
and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate. Any change in the reference rate
announced by the Bank shall take effect at the opening of business on the
day specified in the public announcement of such change.
19
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"Responsible Officer" means the chief financial officer or treasurer
of Middleby or the Parent Corporation, or any other officer having
substantially the same authority and responsibility.
"Revolving Loan" has the meaning specified in Section 2.1.
"Revolving Termination Date" means the earlier to occur of:
(a) the Current Commitment Termination Date; and
(b) the date (other than the Current Commitment Termination Date)
on which the Commitment shall terminate and/or the Obligations shall
become due and payable in accordance with the provisions of this
Agreement (other than Section 2.13 hereof)
"Same Day Funds" means (a) with respect to disbursements and payments
in Dollars, immediately available funds, and (b) with respect to
disbursements and payments in an Offshore Currency, same day or other funds
as may be determined by the Bank to be customary in the place of
disbursement or payment for the settlement of international banking
transactions in the relevant Offshore Currency.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Spot Rate" for a currency means the rate quoted by the Bank as the
spot rate for the purchase by the Bank of such currency with another
currency through its FX Trading Office at approximately 10:30 a.m. (Chicago
time) on the date two Banking Days prior to the date as of which the
foreign exchange computation is made.
20
"Standby Letter of Credit" means any Letter of Credit other than a
Trade Letter of Credit.
"Stated Amount" means the stated or face amount of a Letter of Credit
to the extent available at the time for drawing (subject to presentment of
all requested documents), as the same may be increased or decreased from
time to time in accordance with the terms of such Letter of Credit.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability Borrower, joint venture or other business
entity of which more than 50% of the voting stock, membership interests or
other equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or more of
the Subsidiaries of the Person, or a combination thereof. Unless the
context otherwise clearly requires, references herein to a "Subsidiary"
refer to a Subsidiary of Middleby.
"Subsidiary Borrower" means each Borrower other than Middleby.
"Surety Instruments" means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"Tangible Net Worth" means the excess of total assets of Middleby and
its Subsidiaries on a consolidated basis over total liabilities and
reserves of Middleby and its Subsidiaries on a consolidated basis, total
assets and total liabilities and reserves each to be determined in
accordance with GAAP excluding, however, from the determination of total
assets, all assets which would be classified as intangible assets under
GAAP including, without limitation, goodwill, patents, trademarks, trade
names, copyrights, franchises and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs and
deferred research and development expenses) and excluding the write-up of
assets above cost and also excluding the effect of gains or losses of the
type described in clause (i) of the definition of the term "Net Income".
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case
of the Bank, taxes imposed on or measured by the Bank's net income by the
jurisdiction (or any political subdivision thereof) under the laws of which
the Bank is organized or maintains a lending office.
21
"Trade Letter of Credit" means a trade or commercial Letter of Credit
issued by the Bank pursuant to Section 2.12.
"Type" has the meaning specified in the definition of "Loan."
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." each means the United States of America.
"Voting Stock" means securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect
a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-Owned Subsidiary" means, as to any Person, any Subsidiary in
which (other than directors' qualifying shares required by law) 100% of the
capital stock of each class having ordinary voting power, and 100% of the
capital stock of every other class, in each case, at the time as of which
any determination is being made, is owned, beneficially and of record, by
such Person, or by one or more of the other Wholly-Owned Subsidiaries of
such Person, or both.
Section 1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer to
this Agreement as a whole and not to any particular provision of this Agreement;
and subsection, Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(c) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and
22
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
(d) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
Section 1.3 Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer, unless
otherwise specified, to such fiscal periods of Middleby.
Section 1.4 Currency Equivalents Generally. For all purposes of this
Agreement (but not for purposes of the preparation of any financial statements
delivered pursuant hereto), the equivalent in any Offshore Currency or other
currency of an amount in Dollars, and the equivalent in Dollars of an amount in
any Offshore Currency or other currency, shall be determined at the Spot Rate.
ARTICLE II
THE CREDITS
Section 2.1 Amounts and Terms of Commitments. The Bank agrees, on the terms
and conditions set forth herein, to make loans to any Borrower (each such loan,
a "Revolving Loan") from time to time on any Business Day during the period from
the date hereof to the Revolving Termination Date, in an aggregate principal
Dollar Equivalent amount not to exceed (a) $20,000,000 at any time outstanding
for all Borrowers (such amount as the same may be reduced pursuant to Section
2.6 or as a result of one or more assignments pursuant to Section 9.8, the
Bank's "Commitment"), (b) the Aggregate Commitment Sublimit at any time
outstanding for the Foreign Borrowers, or (c) with respect to any Foreign
Borrower, the Individual Commitment Sublimit applicable thereto; provided,
however, that, after giving effect to any Borrowing of Revolving Loans or
issuance of a Letter of Credit, the aggregate principal Dollar Equivalent amount
of
23
all outstanding Revolving Loans plus the aggregate Dollar Equivalent amount of
outstanding LC Obligations shall not exceed (a) the Commitment, (b) with respect
to the Foreign Borrowers, the Aggregate Commitment Sublimit, (c) with respect to
any Foreign Borrower, the Individual Commitment Sublimit applicable thereto.
Anything herein to the contrary notwithstanding, the aggregate outstanding
Dollar Equivalent amount at any one time of all Loans plus the aggregate amount
of outstanding LC Obligations at such time shall not exceed the amount equal to
the Commitment less the outstanding obligations of Middleby (the "BA Leasing
Obligations") at such time under the BA Leasing Documents. Middleby agrees that
the BA Leasing Obligations shall be paid in full on or prior to December 31,
2000. Within the limits of the Bank's Commitment, and subject to the other terms
and conditions hereof, each Borrower may borrow under this Section 2.1, prepay
pursuant to Section 2.6 and reborrow pursuant to this Section 2.1.
Section 2.2 Loan Accounts.
(a) The Loans made by the Bank to each Borrower shall be evidenced by one
or more loan accounts or records maintained with respect to such Borrower by the
Bank in the ordinary course of business. The loan accounts or records maintained
by the Bank shall be presumptive evidence of the amount of the Loans made by the
Bank to such Borrower and the interest and payments thereon. Any failure so to
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of any Borrower hereunder to pay any amount owing with respect to
the Loans to such Borrower.
(b) The Loans made by the Bank to each Borrower shall also be evidenced by
one or more Notes of such Borrower as provided herein. The Bank shall endorse on
the schedules annexed to the Note(s) of each Borrower the date, amount and
maturity of each Loan made by the Bank thereunder and the amount and Applicable
Currency of each payment of principal made by such Borrower with respect
thereto. The Bank is irrevocably authorized by each Borrower to endorse its
Note(s), and the Bank's record with respect to each Borrower shall be conclusive
absent manifest error; provided, however, that the failure of the Bank to make,
or an error in making, a notation on the Note(s) of any Borrower with respect to
any Loan to such Borrower shall not limit or otherwise affect the obligations of
such Borrower hereunder or under any such Note to the Bank.
24
Section 2.3 Procedure for Borrowing.
(a) Each Borrowing by a Borrower shall be made upon such Borrower's
irrevocable written notice in substantially the form attached hereto as Exhibit
A (or telephonic notice promptly confirmed in writing) delivered to the Bank in
the form of a Notice of Borrowing (which notice must be received by the Bank
prior to 10:30 a.m. (Chicago time) (i) three (3) Business Days prior to the
requested Borrowing Date, in the case of Offshore Currency Loans; (ii) two (2)
Business Days prior to the requested Borrowing Date, in the case of Offshore
Rate Loans denominated in Dollars; and (iii) on the requested Borrowing Date, in
the case of Base Rate Loans), specifying:
(A) the name of such Borrower;
(B) the amount of the Borrowing, which shall be in an aggregate
amount not less than the Minimum Tranche;
(C) the requested Borrowing Date, which shall be a Business Day;
(D) the Type of Loans comprising the Borrowing;
(E) the duration of the Interest Period applicable to such Loans
included in such notice. If the Notice of Borrowing fails to specify
the duration of the Interest Period for any Borrowing comprised of
Offshore Rate Loans, such Interest Period shall be one month; and
(F) in the case of a Borrowing comprised of Offshore Currency
Loans, the Applicable Currency.
(b) The Dollar Equivalent amount of any Borrowing in an Offshore Currency
will be determined by the Bank for such Borrowing on the Computation Date
therefor in accordance with subsection 2.5(a).
(c) The proceeds of all Loans will be made available to the applicable
Borrower by the Bank by crediting the account of such Borrower on the books of
the Bank or by wire transfer in accordance with written instructions provided to
the Bank by such Borrower in Same Day Funds.
25
(d) After giving effect to any Borrowing and Quoted Rate Interest Periods,
in aggregate, there may not be more than eight (8) different Interest Periods in
effect at any one time.
(e) Quoted Rate Loans.
(i) Not later than 10:30 a.m., Chicago time, on any Business Day after
the initial Closing Date, a Borrower may submit a Notice of Borrowing to the
Bank requesting a Quoted Rate Loan. Each such Notice of Borrowing shall specify
the date on which the Quoted Rate Loan is requested, the amount of such Loan
(such amount being at least $250,000 and being an integral multiple of $50,000)
and the Quoted Rate Interest Period applicable thereto. All Quoted Rate Loans
must be denominated in Dollars.
(ii) The Bank shall telephonically notify the Borrower requesting a
Quoted Rate Loan pursuant to paragraph (i) above of the terms of the Quoted Rate
Loan pricing submitted by the Bank, and such Borrower (subject to Section 2.3
hereof) shall either accept or reject the Quoted Rate Loan upon receipt of such
notice.
Section 2.4 Conversion and Continuation Elections.
(a) A Borrower may, upon irrevocable written notice to the Bank in
accordance with subsection 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans, or
as of the last day of the applicable Interest Period, in the case of any other
Type of Loans denominated in Dollars, to convert any such Loans to such Borrower
(or any part thereof in an amount not less than the Minimum Tranche) into Loans
in Dollars of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period, to
continue any Loans to such Borrower having Interest Periods expiring on such day
(or any part thereof in an amount not less than the Minimum Tranche); provided,
that if at any time the aggregate amount of Offshore Rate Loans of any Borrower
denominated in Dollars in respect of any Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to be less than $250,000, such
Offshore Rate Loans denominated in Dollars shall automatically convert into Base
Rate Loans, and on and after such date the right of such Borrower to continue
such Loans as, and convert such Loans into Offshore Rate Loans shall terminate.
26
(b) A Borrower shall deliver a Notice of Conversion/Continuation to be
received by the Bank not later than 10:30 a.m. (Chicago time) (i) at least two
(2) Business Days in advance of the Conversion/Continuation Date, if Loans to
such Borrower are to be converted into or continued as Offshore Rate Loans
denominated in Dollars; (ii) at least three (3) Business Days in advance of the
continuation date, if Loans are to be continued as Offshore Currency Loans; and
(iii) on the Conversion/Continuation Date, if Loans are to be converted into
Base Rate Loans, specifying:
(A) the name of such Borrower;
(B) the proposed Conversion/Continuation Date;
(C) the aggregate amount of Loans to be converted or continued;
(D) the Type of Loans resulting from the proposed conversion or
continuation;
(E) other than in the case of conversions into Base Rate Loans,
the duration of the requested Interest Period; and
(F) in the case of conversions into Offshore Currency Loans, the
Applicable Currency.
(c) If upon the expiration of any Interest Period applicable to Offshore
Rate Loans in Dollars, a Borrower has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans, or if any Default or Event
of Default then exists, such Borrower shall be deemed to have elected to convert
such Offshore Rate Loans into Base Rate Loans effective as of the expiration
date of such Interest Period. If a Borrower has failed to select a new Interest
Period to be applicable to Offshore Currency Loans prior to the fourth Business
Day in advance of the expiration date of the current Interest Period applicable
thereto as provided in subsection 2.4(b), or if any Default or Event of Default
shall then exist, subject to the provisions of subsection 2.5(d), such Borrower
shall be deemed to have elected to continue such Offshore Currency Loans on the
basis of a one month Interest Period. The Bank shall give the applicable
Borrower(s) prompt written notice of any such conversion or continuation.
27
(d) During the existence of a Default or Event of Default, no Borrower may
elect to have a Loan in Dollars converted into or continued as an Offshore Rate
Loan in Dollars or an Offshore Currency Loan continued on the basis of an
Interest Period exceeding one month.
(e) After giving effect to any conversion or continuation of Loans, there
may not be more than eight (8) different Interest Periods in effect.
Section 2.5 Utilization of Offshore Currencies.
(a) The Bank will determine the Dollar Equivalent amount with respect to
any (i) Borrowing comprised of Offshore Currency Loans as of the requested
Borrowing Date, (ii) any Letter of Credit denominated in an Offshore Currency as
of the requested issuance date, (iii) outstanding Offshore Currency Loans and
Letters of Credit denominated in an Offshore Currency as of the last Banking Day
of each month, and (iv) outstanding Offshore Currency Loans as of any
redenomination date pursuant to this Section 2.5 or Section 3.5 (each such date
under clauses (i) through (iii) a "Computation Date").
(b) In the case of a proposed Borrowing by a Borrower comprised of Offshore
Currency Loans or a proposed issuance of a Letter of Credit denominated in an
Offshore Currency, the Bank shall be under no obligation to make Offshore
Currency Loans in the requested Offshore Currency as part of such Borrowing or
issue such Letter of Credit if the Bank cannot provide Loans or issue Letters of
Credit denominated in the requested Offshore Currency, in which event the Bank
will give notice to such Borrower no later than 10:30 a.m. (Chicago time) on the
third Business Day prior to the date of such Borrowing or issuance that the
Borrowing or issuance in the requested Offshore Currency is not then available.
If the Bank shall have so notified such Borrower that any such Borrowing or
issuance in a requested Offshore Currency is not then available, such Borrower
may, by notice to the Bank not later than 5:00 p.m. (Chicago time) three (3)
Business Days prior to the requested date of such Borrowing or issuance,
withdraw the Notice of Borrowing relating to such requested Borrowing or such
Letter of Credit Request relating to such proposed issuance. If such Borrower
does so withdraw such Notice of Borrowing or Letter of Credit Request, the
Borrowing or issuance requested therein shall not occur. If such Borrower does
not so withdraw such Notice of Borrowing or Letter of Credit Request, the Notice
of Borrowing shall be deemed to be a Notice of Borrowing that requests a
Borrowing comprised of Base Rate Loans in an aggregate amount equal to the
amount of the originally requested Borrowing as expressed in Dollars in the
Notice of Borrowing
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and the Letter of Credit Request shall be deemed to be a Letter of Credit
Request for a Letter of Credit denominated in Dollars in an equivalent aggregate
amount.
(c) In the case of a proposed continuation of Offshore Currency Loans by a
Borrower for an additional Interest Period pursuant to Section 2.4, the Bank
shall be under no obligation to continue such Offshore Currency Loans if the
Bank cannot continue to provide Loans in the relevant Offshore Currency, in
which event the Bank will give notice to such Borrower not later than 10:30 a.m.
(Chicago time) on the third Business Day prior to the requested date of such
continuation that the continuation of such Offshore Currency Loans in the
relevant Offshore Currency is not then available. If the Bank shall have so
notified such Borrower that any such continuation of Offshore Currency Loans is
not then available, any Notice of Continuation/Conversion with respect thereto
shall be deemed withdrawn and such Offshore Currency Loans shall be
redenominated into Base Rate Loans in Dollars with effect from the last day of
the Interest Period with respect to any such Offshore Currency Loans. The Bank
will promptly notify such Borrower of such redenomination.
(d) Notwithstanding anything herein to the contrary, during the existence
of a Default or an Event of Default, at the Bank's sole discretion, all or any
part of any outstanding Offshore Currency Loans shall be redenominated and
converted into Base Rate Loans in Dollars with effect from the last day of the
Interest Period with respect to any such Offshore Currency Loans. The Bank will
promptly notify the applicable Borrower(s) of any such redenomination and
conversion.
(e) A Borrower shall be entitled to request that Revolving Loans and
Letters of Credit hereunder also be permitted to be made in any other lawful
currency constituting a eurocurrency (other than Dollars), in addition to the
eurocurrencies specified in the definition of "Offshore Currency" herein, that
in the opinion of the Bank is at such time freely traded in the offshore
interbank foreign exchange markets and is freely transferable and freely
convertible into Dollars (an "Agreed Alternative Currency"). Any such Borrower
shall deliver to the Bank any request for designation of an Agreed Alternative
Currency in accordance with Section 9.2, to be received by the Bank not later
than 10:30 a.m. (Chicago time) at least ten (10) Business Days in advance of the
date of any Borrowing or Letter of Credit issuance hereunder proposed to be made
in such Agreed Alternative Currency. Upon receipt of any such request the Bank
will use its best efforts to respond to such request within two Business Days of
receipt thereof. The Bank may grant or accept such request in its sole
discretion and will promptly notify such Borrower of the acceptance or rejection
of any such request.
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Section 2.6 Voluntary Termination or Reduction of Commitment; Optional
Prepayments.
(a) Middleby may, upon not less than five (5) Business Days' prior notice
to the Bank, terminate the Commitment, or permanently reduce the Commitment by a
minimum Dollar Equivalent amount of $1,000,000 or any Dollar Equivalent multiple
of $500,000 in excess thereof; unless, after giving effect thereto and to any
prepayments of Loans made on the effective date thereof, the then-outstanding
principal Dollar Equivalent amount of the Loans would exceed the amount of the
Commitment then in effect. Once reduced in accordance with this Section, the
Commitment may not be increased. Upon any reduction of the Commitment to an
amount less than $15,000,000, the Aggregate Commitment Sublimit and the
Individual Commitment Sublimit applicable to each Foreign Borrower shall each be
reduced to the product (rounded downward to the nearest multiple of $50,000)
obtained by multiplying (i) the amount of the Aggregate Commitment Sublimit and
each Individual Commitment Sublimit then in effect by (ii) a fraction of the
numerator of which is the amount of the Commitment after giving effect to such
reduction and the denominator of which is the amount of the Commitment before
giving effect to such reduction (but after giving effect to all prior
reductions). All accrued commitment fees to, but not including the effective
date of any reduction or termination of the Commitment, shall be paid on the
effective date of such reduction or termination.
(b) Subject to Section 3.4, any Borrower may, at any time or from time to
time, prepay Loans to such Borrower in whole or in part, in minimum Dollar
Equivalent amounts of $50,000 or any multiple of 50,000 units of the Applicable
Currency in excess thereof. Any such Borrower shall deliver a notice of
prepayment in accordance with Section 11.2 to be received by the Bank not later
than 10:30 a.m. (Chicago time) (i) at least four Business Days in advance of the
prepayment date if the Loans to be prepaid are Offshore Currency Loans or at
least two Business Days in advance of the prepayment date if the Loans to be
prepaid are Offshore Rate Loans in Dollars, and (iii) on the prepayment date if
the Loans to be prepaid are Base Rate Loans. Such notice of prepayment shall
specify the date and amount of such prepayment, the Borrower and whether such
prepayment is of Base Rate Loans or Offshore Rate Loans, or any combination
thereof, and the Applicable Currency. Such notice shall not thereafter be
revocable. If such notice is given by a Borrower, such Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
3.4.
Section 2.7 Currency Exchange Fluctuations. Subject to Section 3.4, if on any
Computation Date the Bank shall have determined that the aggregate Dollar
Equivalent principal amount of all
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Loans then outstanding plus the aggregate amount of outstanding LC Obligations
exceeds the Commitment of the Bank, due to a change in applicable rates of
exchange between Dollars and Offshore Currencies, then the Bank shall give
notice to Middleby that a prepayment is required under this Section, and
Middleby agrees thereupon to make prepayments of Loans made to it such that,
after giving effect to such prepayment, the aggregate Dollar Equivalent amount
of all Loans plus the aggregate amount of outstanding LC Obligations does not
exceed the Commitment.
Section 2.8 Repayment. Each Borrower agrees to repay to the Bank on the
Revolving Termination Date the aggregate principal amount of Revolving Loans to
such Borrower and all other unpaid Obligations of such Borrower then due and
outstanding on such date.
Section 2.9 Interest and Commitment Fees.
(a) Each Loan shall bear interest on the outstanding principal amount
thereof from the applicable Borrowing Date at a rate per annum equal to the
Offshore Rate plus the Applicable Margin or the Base Rate plus the Applicable
Margin, as the case may be (and subject to each Borrower's right to convert to
other Types of Loans under Section 2.4).
(b) Each Borrower shall pay interest on each Loan made to it in arrears on
each Interest Payment Date. Interest shall also be paid by each Borrower on the
date of any prepayment of Loans made to such Borrower under Section 2.6 or 2.7
for the portion of the Loans so prepaid and upon payment (including prepayment)
in full thereof and, during the existence of any Event of Default, interest
shall be paid by the Borrowers on demand of the Bank.
(c) Notwithstanding subsection (a) of this Section, while any Event of
Default exists or after acceleration, each Borrower shall pay interest (after as
well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Obligations owing by such Borrower, at a
rate per annum which is determined by adding 2% per annum to the sum of the rate
then in effect for such Loans plus the Applicable Margin and, in the case of
Obligations not subject to an Applicable Margin, at a rate per annum equal to
the Base Rate plus 2%; provided, however, that, on and after the expiration of
any Interest Period applicable to any Offshore Rate Loan outstanding on the date
of occurrence of such Event of Default or acceleration, the principal amount of
such Loan shall, during the continuation of such Event of Default or after
acceleration, bear interest at a rate per annum equal to the Base Rate plus 2%.
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(d) Anything herein to the contrary notwithstanding, the obligations of
each Borrower to the Bank hereunder shall be subject to the limitation that
payments of interest by such Borrower shall not be required for any period for
which interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by the Bank would be contrary to
the provisions of any law applicable to the Bank limiting the highest rate of
interest that may be lawfully contracted for, charged or received by the Bank,
and in such event such Borrower shall pay the Bank interest at the highest rate
permitted by applicable law.
(e) Middleby shall pay to the Bank a commitment fee accruing at the rate
per annum then applicable in the determination of the amount payable hereunder
in accordance with the definition of the term, Applicable Margin with respect to
Commitment Fee, on the average daily amount for each quarter by which the
Commitment exceeds the sum of (i) the aggregate outstanding principal balance of
the Loans and (ii) the aggregate outstanding LC Obligations for such quarter,
such commitment fee being payable quarterly, in arrears, on the last Business
Day of each fiscal quarter occurring after the date hereof and on the Revolving
Termination Date; provided that, in connection with any reduction or termination
of the Commitment under Section 2.6, the accrued commitment fee calculated for
the period ending on such date shall also be paid on the date of such reduction
or termination, with the following quarterly payment being calculated on the
basis of the period from such reduction or termination date to such quarterly
payment date.
Section 2.10 Computation of Fees and Interest.
(a) All computations of interest for Base Rate Loans shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
All other computations of fees and interest shall be made on the basis of a
360-day year and actual days elapsed (which results in more interest being paid
than if computed on the basis of a 365-day year). Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.
(b) For purposes of determining utilization of the Bank's Commitment in
order to calculate the commitment fee due under Section 2.9(e), the amount of
any outstanding Offshore Currency Loan on any date shall be determined based
upon the Dollar Equivalent amount as of the most recent Computation Date with
respect to such Offshore Currency Loan.
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(c) Each determination of an interest rate or a Dollar Equivalent amount by
the Bank shall be conclusive and binding on each Borrower in the absence of
manifest error. The Bank will, at the request of any Borrower, deliver to such
Borrower a statement showing the quotations used by the Bank in determining any
interest rate or Dollar Equivalent amount.
Section 2.11 Payments by the Borrowers.
(a) All payments to be made by any Borrower shall be made without set-off,
recoupment or counterclaim. Except as otherwise expressly provided herein, all
payments by each Borrower shall be made to the Bank at the Payment Office, and,
with respect to principal of, interest on, and any other amounts relating to,
any Offshore Currency Loan or Letter of Credit denominated in an Offshore
Currency, shall be made in the Offshore Currency in which such Loan or Letter of
Credit is denominated or payable, and, with respect to all other amounts payable
hereunder, shall be made in Dollars. Such payments shall be made in Same Day
Funds, and (i) in the case of Offshore Currency payments, no later than such
time on the dates specified herein as may be determined by the Bank to be
necessary for such payment to be credited on such date in accordance with normal
banking procedures in the place of payment, and (ii) in the case of any Dollar
payments, no later than 12:00 noon (Chicago time) on the date specified herein.
Any payment which is received by the Bank later than 12:00 noon (Chicago time),
or later than the time specified by the Bank as provided in clause (i) above (in
the case of Offshore Currency payments), shall be deemed to have been received
on the following Business Day and any applicable interest or fee shall continue
to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
Section 2.12 Amount and Terms of Letters of Credit.
(a) Letter of Credit Commitments; Terms of Letters of Credit.
(i) Subject to and upon the terms and conditions herein set forth, at
any time and from time to time on or after the date hereof and to but not
including the Revolving Termination Date, the Bank agrees to issue, in its own
name or through an Affiliate, one or more Letters of Credit for the account of
any Borrower in an aggregate Stated Amount in Dollars or
33
any Offshore Currency at any one time that, the Dollar Equivalent of which
together with the aggregate Dollar Equivalent of the Stated Amount of all other
Letters of Credit issued pursuant hereto, does not exceed the Letter of Credit
Commitment Sublimit; provided, however, that the Bank shall not issue or extend
the expiration of any Letter of Credit if, immediately after giving effect to
such issuance or extension, (A) the Dollar Equivalent of the aggregate LC
Obligations in respect of Letters of Credit at such time would exceed the Letter
of Credit Commitment Sublimit, (B) the Commitment of the Bank would be exceeded
or (C) the aggregate Stated Amount of outstanding Standby Letters of Credit,
with a term extending more than one year, would exceed $1,000,000.
(ii) The Bank has issued the Existing Letters of Credit for the
account of the Borrowers, and after the Closing Date the Existing Letters of
Credit shall be deemed to be Letters of Credit issued under and subject to the
provisions of this Agreement with the effect that the Commitment and the Letter
of Credit Commitment Sublimit shall each be reduced by the aggregate amount
available thereunder and in the event that any provisions of the letter of
credit applications for the Existing Letters of Credit are inconsistent with the
provisions of this Agreement, the provisions of this Agreement shall govern.
(iii) No Standby Letter of Credit or renewal thereof shall be stated
to expire later than the day fifteen (15) days prior to the Revolving
Termination Date and no Trade Letter of Credit or renewal thereof shall be
stated to expire later than the day thirty (30) days prior to the Revolving
Termination Date.
(b) Procedure for Issuance of Letters of Credit. Whenever a Borrower
desires the issuance of a Letter of Credit hereunder, it shall give the Bank at
least five (5) Business Days' prior written notice specifying the requested day
of issuance thereof (which day shall be a Business Day), such notice to be given
prior to 10:00 a.m. (Chicago time) on the date specified for the giving of such
notice. Each such notice (each, a "Letter of Credit Request") shall be in the
form of letter of credit application customarily used by the Bank or such other
form as shall be reasonably acceptable to the Bank. No Letter of Credit shall
contain any provision for payment thereunder at any time earlier than 2:00 p.m.
(Chicago time) on the first Business Day after the presentation of all drafts,
demands for payment and all other documents, if any, required to be presented
pursuant to such Letter of Credit. Unless otherwise specified, all Letters of
Credit will be governed by the Uniform Customs and Practice for Documentary
Credits of the International Chamber of Commerce as in effect on the date of
issuance of such Letter of Credit. On the Business Day specified by such
Borrower and upon fulfillment or waiver of the
34
applicable conditions set forth in Article IV, the Bank will issue the requested
Letter of Credit for the account of such Borrower to the applicable beneficiary.
(c) Draws upon Letters of Credit; Reimbursement Obligations. In the event
of any request for drawing under any Letter of Credit by the beneficiary
thereof, the Bank shall give telephonic notice to the Borrower for whose account
the Letter of Credit was issued (x) confirming receipt of such request and (y)
of the date on or before which the Bank intends to honor such drawing, and such
Borrower shall reimburse the Bank on the day on which such drawing is honored in
an amount in Dollars in same day funds equal to the Dollar Equivalent amount of
such drawing; provided, however, that, anything contained in this Agreement to
the contrary notwithstanding, prior to the termination of the Commitment, (i)
unless a Borrower shall have notified the Bank prior to 10:00 a.m. (Chicago
time) on the Business Day of such drawing that such Borrower intends to
reimburse the Bank for the Dollar Equivalent amount of such drawing with funds
other than the proceeds of Loans, such Borrower shall be deemed to have timely
given a Notice of Borrowing to the Bank to make a Loan to such Borrower on the
date on which such drawing is honored in an amount equal to the Dollar
Equivalent amount of such drawing and (ii) subject to satisfaction or waiver of
the conditions specified in Section 4.2, the Bank shall, on the date of such
drawing, make Base Rate Loans to such Borrower in the Dollar Equivalent amount
of such drawing, the proceeds of which shall be applied to reimburse the Bank
for the amount of such drawing.
(d) Interest and Fees for Letters of Credit. Each Borrower agrees to pay
the following amount to the Bank with respect to Letters of Credit issued for
the account of such Borrower:
(A) with respect to drawings made under any Letter of
Credit, interest, payable on demand, on the amount paid by the
Bank in respect of each such drawing from the date of the drawing
through the date such amount is reimbursed by such Borrower
(including any such reimbursement out of the proceeds of Loans
pursuant to subsection 2.12(c) not made on the date of such
drawing) at a rate which is at all times equal to 2% per annum in
excess of the Base Rate;
(B) with respect to the issuance of each Standby Letter of
Credit, a fee equal to the Applicable Letter of Credit Fee in
effect from time to time of the stated amount thereof, payable at
the time of such issuance and upon each anniversary thereof; and
35
(C) such other issuance, documentary and processing charges
as are customarily charged by the Bank at the time of such
issuance, amendment, transfer or drawing, as the case may be.
(e) LC Obligations Unconditional. Subject to the last paragraph of
subsection 2.12(f), the obligation of each Borrower to reimburse the Bank for
drawings made under any Letter of Credit issued for the account of such Borrower
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances, including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement or such
Letter of Credit;
(ii) the existence of any claim, setoff, defense or other right which
such Borrower or any of its Affiliates may have at any time against a
beneficiary or any transferee of such Letter of Credit (or any Persons for which
any such beneficiary or transferee may be acting), the Bank or any other Person,
whether in connection with this Agreement, the transactions contemplated herein
or any unrelated transaction (including any underlying transaction between such
Borrower or one of its Subsidiaries and the beneficiary of such Letter of
Credit);
(iii) any draft, demand, certificate or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect (in the absence of gross negligence or willful misconduct in
connection therewith, as determined by the final judgment of a court of
competent jurisdiction, on the part of the Bank); or
(iv) the fact that an Event of Default or a Default shall have
occurred and be continuing.
(f) Indemnification. In addition to amounts payable as elsewhere provided
in this Agreement, Middleby and each Borrower, jointly and severally, hereby
agree to indemnify and hold harmless the Bank from and against any and all
actions, suits, proceedings, liabilities, damages, or other claims of any kind
or nature whatsoever which may be made by or asserted against the Bank as a
result of (i) the issuance of any Letter of Credit for the account of such
Borrower, other than as a result of the gross negligence or willful misconduct
of the Bank or (ii)
36
the failure of the Bank to honor a drawing under any such Letter of Credit as a
result of any act or omissions, whether rightful or wrongful, of any present or
future de jure or de facto government or Governmental Authority (all such acts
or omissions herein called "Government Acts"). As between each Borrower and the
Bank, each Borrower assumes all risks of the acts and omissions of, or misuse of
the Letters of Credit issued by the Bank for such Borrower's account by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Bank shall not be responsible (in the absence
of gross negligence or willful misconduct in connection therewith, as determined
by the final judgment of a court of competent jurisdiction, on the part of the
Bank): (i) for the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the application
for and issuance of or any drawing under such Letters of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such 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) for failure of the beneficiary of any such Letter of Credit to
comply duly with conditions required in order to draw upon such Letter of
Credit; (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher, (v) for errors in interpretation of technical terms;
(vi) for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) for the misapplication by the beneficiary of any such
Letter of Credit or the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of the Bank
(including any Government Acts). None of the above shall affect, impair, or
prevent the vesting of any of the Bank's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Bank under
or in connection with the Letters of Credit issued by it or the related
certificates shall not put the Bank under any resulting liability to any
Borrower. Notwithstanding anything to the contrary contained in this Agreement,
no Borrower shall have any obligation to indemnify the Bank in respect of any
liability incurred by the Bank arising solely out of the gross negligence or
willful misconduct, as determined by the final judgment of a court of competent
jurisdiction, of the Bank. The right of indemnification in the first paragraph
of this subsection 2.12(f) shall not prejudice any rights that any Borrower may
otherwise have against the Bank with respect to a Letter of Credit issued
hereunder.
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(g) Stated Amount. The Stated Amount of each Letter of Credit shall be such
amount as the applicable Borrower and the Bank have agreed to. For purposes of
calculating the Stated Amount of any Letter of Credit at any time:
(i) any increase in the Stated Amount of any Letter of Credit by
reason of any amendment to any Letter of Credit shall be deemed effective
under this Agreement as of the date the Bank actually issues an amendment
purporting to increase the Stated Amount of such Letter of Credit in
accordance with the terms hereof, whether or not the Bank receives the
consent of the Letter of Credit beneficiary or beneficiaries to the
amendment, provided that any amendment which increases or renews such
Letter of Credit shall be subject to the requirements of subsection 2.12(b)
as if it were a new issuance; and
(ii) any reduction in the Stated Amount of any Letter of Credit by
reason of any amendment to any Letter of Credit shall be deemed effective
under this Agreement as of the later of (x) the date the Bank actually
issues an amendment purporting to reduce the Stated Amount of such Letter
of Credit, whether or not the amendment provides that the reduction be
given effect as of an earlier date, or (y) the date the Bank receives the
written consent (including by facsimile transmission) of the Letter of
Credit beneficiary or beneficiaries to such reduction, which written
consent must be dated on or after the date of the amendment issued by the
Bank purporting to effect such reduction.
Section 2.13 Extension of the Commitment.
(a) "Current Commitment Termination Date" shall initially be December 31,
2003. On any Business Day that is not less than 30 days nor more than 60 days
prior to two (2) years prior to the Current Commitment Termination Date then in
effect, Middleby may, by written notice (an "Extension Request") given to the
Bank, request that the Current Commitment Termination Date be extended. Each
such Extension Request shall contemplate an extension of the Current Commitment
Termination Date to a date that is one year after the Current Commitment
Termination Date then in effect (the "Extended Termination Date").
(b) The Bank may, in its sole discretion, consent to a requested extension
by giving written notice thereof to Middleby by not later than the Business Day
that is 31 days after the
38
date of the Extension Request. Failure on the part of the Bank to respond to the
Extension Request by such date shall be deemed to be a denial of such request by
the Bank.
(c) The Current Commitment Termination Date, in the event that the Bank
shall not consent to such Extension Request, shall continue to be the existing
Current Commitment Termination Date (the "Earlier Termination Date"). The
Current Commitment Termination Date, in the event that the Bank shall consent to
such Extension Request, shall continue to be the Earlier Termination Date until
the end of the day immediately preceding the Current Commitment Termination Date
then in effect, at which time the Current Commitment Termination Date shall
become the Extended Termination Date referenced in the Extension Request.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.1 Taxes.
(a) Any and all payments by the Borrowers to the Bank under this Agreement
or any other Loan Document shall be made free and clear of, and without
deduction or withholding for any Taxes. In addition, each Borrower shall pay all
Other Taxes applicable to such Borrower.
(b) If any Borrower shall be required by law to deduct or withhold any
Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to the Bank, then:
(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) the Bank
receives and retains an amount equal to the sum it would have received and
retained had no such deductions or withholdings been made;
(ii) such Borrower shall make such deductions and withholdings;
(iii) such Borrower shall pay the full amount deducted or withheld to
the relevant taxing authority or other authority in accordance with applicable
law; and
39
(iv) such Borrower shall also pay to the Bank, at the time interest is
paid, all additional amounts which the Bank specifies are necessary to preserve
the after-tax yield the Bank would have received if such Taxes or Other Taxes
had not been imposed.
(c) Each Borrower agrees to indemnify and hold harmless the Bank for the
full amount of Taxes, Other Taxes, and Further Taxes applicable to such Borrower
in the amount that the Bank specifies as necessary to preserve the after-tax
yield the Bank would have received if such Taxes, Other Taxes or Further Taxes
had not been imposed, and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes, Other Taxes or Further Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within 30
days after the date the Bank makes written demand therefor.
(d) If any Borrower is required to pay any amount to the Bank pursuant to
subsection (b) or (c) of this Section, then the Bank shall use reasonable
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by such Borrower which may thereafter accrue, if such change in the
judgment of the Bank is not otherwise disadvantageous to the Bank.
Section 3.2 Illegality.
(a) If the Bank determines that the introduction of any Requirement of Law,
or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for the Bank or its applicable Lending Office to make Offshore Rate Loans or
issue Letters of Credit (including Offshore Rate Loans or Letters of Credit in
any Applicable Currency), then, on notice thereof by the Bank to Middleby, any
obligation of the Bank to make Offshore Rate Loans or issue Letters of Credit
shall be suspended until the Bank notifies Middleby that the circumstances
giving rise to such determination no longer exist.
(b) If the Bank determines that it is unlawful to maintain any Offshore
Rate Loan, each Borrower shall, upon receipt of notice of such fact and demand
from the Bank, prepay in full such Offshore Rate Loans to such Borrower then
outstanding, together with interest accrued thereon and amounts required under
Section 3.4, either on the last day of the Interest Period thereof, if the Bank
may lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if the Bank may not lawfully continue to maintain such Offshore
Rate Loan. If any
40
Borrower is required to so prepay any Offshore Rate Loan, then concurrently with
such prepayment, such Borrower shall borrow from the Bank, in the amount of such
repayment, a Base Rate Loan.
(c) If the obligation of the Bank to make or maintain Offshore Rate Loans
has been so terminated or suspended, any Borrower may elect, by giving notice to
the Bank that all Loans which would otherwise be made by the Bank to such
Borrower as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice under this Section, the Bank shall designate a
different Lending Office with respect to its Offshore Rate Loans or the issuance
of Letters of Credit if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
Section 3.3 Increased Costs and Reduction of Return.
(a) If the Bank determines that, due to either (i) the introduction of or
any change (other than any change by way of imposition of or increase in reserve
requirements included in the calculation of the Offshore Rate or in respect of
the assessment rate payable by the Bank to the FDIC for insuring U.S. deposits)
in or in the interpretation of any law or regulation or (ii) the compliance by
the Bank with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to the Bank of agreeing to make or making, funding or
maintaining any Offshore Rate Loans to any Borrower or issuing or maintaining
any Letter of Credit, then for the account of any Borrower such Borrower shall
be liable for, and shall from time to time, upon demand, pay to the Bank,
additional amounts as are sufficient to compensate the Bank for such increased
costs.
(b) If the Bank shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and (taking into consideration the Bank's or such corporation's policies with
respect to capital adequacy and the Bank's desired return on capital) determines
that the amount of such capital is increased as a
41
consequence of its Commitment, loans, Letters of Credit, credits or obligations
under this Agreement, then, upon demand of the Bank to Middleby, Middleby shall
pay to the Bank, from time to time as specified by the Bank, additional amounts
sufficient to compensate the Bank for such increase.
Section 3.4 Funding Losses. Each Borrower shall reimburse the Bank and hold the
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of such Borrower to make on a timely basis any payment of
principal of any Offshore Rate Loan or any Quoted Rate Loan made to such
Borrower;
(b) the failure of such Borrower to borrow, continue or convert a Loan
after such Borrower has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/ Continuation;
(c) the failure of such Borrower to make any prepayment in accordance with
any notice delivered under Section 2.6;
(d) the prepayment by such Borrower (including pursuant to Section 2.6 or
2.7) or other payment (including after acceleration thereof) of an Offshore Rate
Loan or a Quoted Rate Loan on a day that is not the last day of the relevant
Interest Period or Quoted Rate Interest Period, respectively; or
(e) the automatic conversion under Section 2.4 of any Offshore Rate Loan
made to such Borrower to a Base Rate Loan on a day that is not the last day of
the relevant Interest Period; including any such loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain its Offshore
Rate Loans to such Borrower or from fees payable to terminate the deposits from
which such funds were obtained or from charges relating to any such Offshore
Currency Loans. For purposes of calculating amounts payable by any Borrower to
the Bank under this Section and under Subsection 3.3(a), each Offshore Rate Loan
made by the Bank to such Borrower (and each related reserve, special deposit or
similar requirement) shall be conclusively deemed to have been funded at the
IBOR used in determining the Offshore Rate for such Offshore Rate Loan by a
matching deposit or other borrowing in the interbank offshore market for a
comparable amount and for a comparable period, whether or not such Offshore Rate
Loan is in fact so funded.
42
Section 3.5 Inability to Determine Rates. If the Bank determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or that the Offshore Rate applicable for any requested Interest Period
with respect to a proposed Offshore Rate Loan does not adequately and fairly
reflect the cost to the Bank of funding such Loan, the Bank will promptly so
notify Middleby and the applicable Borrower(s). Thereafter, the obligation of
the Bank to make or maintain Offshore Rate Loans, as the case may be, hereunder
shall be suspended until the Bank revokes such notice in writing. Upon receipt
of such notice, the applicable Borrower(s) may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted by it (or them). If any such
Borrower does not revoke such Notice, the Bank shall make, convert or continue
the Loans, as proposed by such Borrower, in the amount specified in the
applicable notice submitted by such Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of Offshore Rate Loans. In the
case of any Offshore Currency Loans, the Borrowing or continuation shall be in
an aggregate amount equal to the Dollar Equivalent amount of the originally
requested Borrowing or continuation in the Offshore Currency, and to that end
any outstanding Offshore Currency Loans which are the subject of any
continuation shall be redenominated and converted into Base Rate Loans in
Dollars with effect from the last day of the Interest Period with respect to any
such Offshore Currency Loans.
Section 3.6 Certificates of Bank. The Bank, if claiming reimbursement or
compensation under this Article III, shall deliver to any Borrower a certificate
setting forth in reasonable detail the amount payable to the Bank hereunder and
such certificate shall be conclusive and binding on such Borrower in the absence
of manifest error.
Section 3.7 Survival. The agreements and obligations of the Borrowers in this
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions of Initial Loans and Letters of Credit. The obligation of
the Bank to make its initial Loan or issue its initial Letter of Credit
hereunder is, in addition to satisfaction of the conditions precedent set forth
in Section 4.2 and Section 4.3, subject to the condition that the Bank shall
have received all of the following, in form and substance satisfactory to the
Bank:
43
(a) Loan Documents.
(i) this Agreement, executed and delivered by a duly authorized
officer of each Borrower;
(ii) the Note of each Guarantor conforming to the requirements hereof
and executed by a duly authorized officer of such Guarantor;
(iii) the Guaranty executed and delivered by duly authorized officers
of the Guarantors.
(b) Resolutions; Incumbency.
(i) a copy of the resolutions of the board of directors of each
Guarantor authorizing the execution, delivery and performance by it of this
Agreement and the other Loan Documents to which it is a party, certified as of
the initial Closing Date by the Secretary or an Assistant Secretary of such
Guarantor; and
(ii) a certificate of the Secretary or Assistant Secretary of each
Guarantor, dated the initial Closing Date, certifying the names and true
signatures of the officers of such Guarantor authorized to execute, deliver and
perform this Agreement, and the other Loan Documents to which it is a party.
(c) Organization Documents; Good Standing. Each of the following
documents:
(i) the articles or certificate of incorporation and the bylaws of
each Guarantor as in effect on the initial Closing Date, certified by the
Secretary or Assistant Secretary of such Guarantor as of the initial Closing
Date; and
(ii) good standing certificates for each Guarantor from the Secretary
of State of the relevant state(s).
(d) Payment of Fees. Evidence of payment by Middleby of all accrued and
unpaid fees, including a non-refundable closing fee in an amount of $20,000 to
the Bank, costs and expenses to the extent then due and payable on the initial
Closing Date, together with Attorney Costs of the Bank to the extent invoiced
prior to or on the initial Closing Date, plus such
44
additional amounts of Attorney Costs as shall constitute the Bank's reasonable
estimate of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude final
settling of accounts between Middleby and the Bank), including any such costs,
fees and expenses arising under or referenced in Section 9.4.
(e) Legal Opinion. An opinion of counsel to the Guarantors addressed to the
Bank in form and substance acceptable to the Bank and its counsel.
(f) Other Documents. Such other approvals, opinions, documents or materials
as the Bank may request.
Section 4.2 Additional Conditions of Initial Loans and Letters of Credit. The
obligation of the Bank to make its initial Loan to any Borrower other than the
Guarantors or issue its initial Letter of Credit for the account of any Borrower
other than the Guarantors, is subject to the condition that the Bank shall have
received all of the following with respect to such Borrower, in form and
substance satisfactory to the Bank:
(a) Loan Documents. The Note of such Borrower conforming to the
requirements hereof and executed by a duly authorized officer of such Borrower.
(b) Resolutions; Incumbency.
(i) a copy of the resolutions of the board of directors of such
Borrower authorizing the execution, delivery and performance by it of this
Agreement and the Loan Documents to which it is a party, certified as of the
initial Closing Date for such Loan or Letter of Credit with respect to such
Borrower by the Secretary or an Assistant Secretary of such Borrower; and
(ii) a certificate of the Secretary or Assistant Secretary of such
Borrower, dated the initial Closing Date for such Loan or Letter of Credit with
respect to such Borrower, certifying the names and true signatures of the
officers of such Borrower authorized to execute, deliver and perform this
Agreement and the other Loan Documents to which it is a party.
(c) Organization Documents. The articles or certificate of incorporation
and the bylaws of such Borrower as in effect on the initial Closing Date for
such Loan or Letter of
45
Credit, certified by the Secretary or Assistant Secretary of such Borrower, as
of such Closing Date.
(d) Other Documents. Such other approvals, opinions, documents or materials
as the Bank may request.
Section 4.3 Conditions to All Borrowings and Letter of Credit Issuances. The
obligation of the Bank to make any Loan (including its initial Loan) and to
issue a Letter of Credit is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date or date of issuance of such
Letter of Credit:
(a) Notice of Borrowing or Issuance. The Bank shall have received a Notice
of Borrowing or in the case of any Letter of Credit issuance, a Letter of Credit
Request;
(b) Continuation of Representations and Warranties. The representations and
warranties in Article V shall be true and correct on and as of such Borrowing
Date with the same effect as if made on and as of such Borrowing Date or date of
issuance of such Letter of Credit (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall be true
and correct as of such earlier date); and
(c) No Existing Default. No Default or Event of Default shall exist or
shall result from such Borrowing or issuance of such Letter of Credit.
Each Notice of Borrowing and Letter of Credit Request submitted by a
Borrower hereunder shall constitute a representation and warranty by such
Borrower and the other Borrowers hereunder, as of the date of each such notice
and as of each Borrowing Date or date of issuance, as the case may be, that the
conditions in Section 4.2 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Middleby and, to the extent related thereto, each other Borrower represents
and warrants to the Bank that, after giving effect to the Closing Transactions:
Section 5.1 Corporate Existence and Power. Middleby and each of its
Subsidiaries:
46
(a) is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents to
which it is a party;
(c) is duly qualified as a foreign corporation and is licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license except where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect; and
(d) is in compliance with all Requirements of Law; except, in each case
referred to in clause (c) or clause (d), to the extent that the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
Section 5.2 Corporate Authorization; No Contravention. The execution, delivery
and performance by each Borrower of this Agreement and each other Loan Document
to which such Borrower is party, have been duly authorized by all necessary
corporate action, and do not and will not:
(a) contravene the terms of any of such Borrower's or its Subsidiaries'
Organization Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation,
including, without limitation, the Note Agreement, to which such Borrower or any
of its Subsidiaries is a party or any order, injunction, writ or decree of any
Governmental Authority to which such Borrower or its Subsidiaries or their
property is subject; or
(c) violate any Requirement of Law.
Section 5.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any
47
Borrower or any of its Subsidiaries of this Agreement or any other Loan Document
to which it is a party.
Section 5.4 Binding Effect. This Agreement and each other Loan Document to which
each Borrower is a party constitute the legal, valid and binding obligations of
such Borrower, enforceable against such Borrower in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
Section 5.5 Litigation. Subject to Schedule 5.5, there are no actions, suits,
proceedings, claims or disputes pending, or to the best knowledge of any
Borrower, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, against such Borrower, or its Subsidiaries or
any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to such Borrower or its Subsidiaries could
reasonably be expected to have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
Section 5.6 No Default. No Default or Event of Default exists or would
result from the incurring of any Obligations by any Borrower. As of the date
hereof and as of the initial Closing Date and after giving effect to the Closing
Transactions, neither any Borrower nor any Subsidiary of any Borrower is or will
be in default under or with respect to any Contractual Obligation in any respect
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect, or that would, if such default had
occurred after the initial Closing Date, create an Event of Default under
subsection 8.1(e).
Section 5.7 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law. Each Plan which is
intended to qualify under
48
Section 401(a) of the Code has received a favorable determination letter from
the IRS and, to the best knowledge of Middleby, nothing has occurred which would
cause the loss of such qualification. Each of Middleby and each ERISA Affiliate
has made all required contributions to any Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the best knowledge of Middleby, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither Middleby
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
Middleby nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither Middleby nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
Section 5.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 6.12
and Section 7.7. Neither any Borrower nor any Subsidiary of any Borrower is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
Section 5.9 Title to Properties. The Parent Corporation, each Borrower and each
Subsidiary of such Borrower have good record and marketable title in fee simple
to, or valid leasehold interests in, all real property necessary or used in the
ordinary conduct of their respective businesses, except for such defects in
title as could not, individually or in the aggregate, have a Material Adverse
Effect. As of the initial Closing Date, the property of Middleby and its
Subsidiaries will be subject to no Liens, other than Permitted Liens.
49
Section 5.10 Taxes. All tax returns required to be filed by each Borrower or any
of its Subsidiaries in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon each Borrower or
any its Subsidiaries or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns have been
paid. For all taxable years ending on or before December 31, 1997, the federal
income tax liability of Middleby and its Subsidiaries has been satisfied and
either the period of limitations on assessment of additional federal income tax
has expired or Middleby and its Subsidiaries have entered into an agreement with
the IRS closing conclusively the total tax liability for the taxable year.
Middleby does not know of any proposed additional tax assessment against it for
which adequate provision has not been made on its accounts, and no material
controversy in respect of additional federal or state income taxes due since
said date is pending or to the knowledge of Middleby threatened. The provisions
for taxes on the books of Middleby and its Subsidiaries are adequate for all
open years, and for its current fiscal period.
Section 5.11 Financial Condition.
(a) The consolidated balance sheets of the Parent Corporation and its
consolidated Subsidiaries as of the last day of each of the fiscal years of
1999, 1998, and 1997 and the statements of earnings and cash flows and changes
in shareholders' equity for the fiscal years ended on said dates, each
accompanied by a report thereon containing an opinion unqualified as to scope
limitations imposed by the Parent Corporation or Middleby and otherwise without
qualification except as therein noted, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co., have been
prepared in accordance with GAAP consistently applied except as therein noted,
are correct and complete and present fairly the financial position of the Parent
Corporation and its consolidated Subsidiaries as of such dates and the results
of their operations and changes in their cash flows for such periods. The
unaudited consolidated balance sheets of the Parent Corporation and its
consolidated Subsidiaries as of September 30, 2000, and the unaudited statements
of earnings and cash flows for the nine month period ended on said date prepared
by the Parent Corporation have been prepared in accordance with GAAP
consistently applied, are correct and complete and present fairly the financial
position of the Parent Corporation and its consolidated Subsidiaries as of said
date and the results of their operations and changes in their financial position
or cash flows for such period.
(b) Subject to Schedule 5.11, since the last day of the fiscal year of
1999, there has been no change in the condition, financial or otherwise, of the
Parent Corporation and its consolidated Subsidiaries as shown on the
consolidated balance sheet as of such date except
50
changes in the ordinary course of business, none of which individually or in the
aggregate has been materially adverse.
Section 5.12 Environmental Matters. Middleby conducts in the ordinary course of
business a review of the effect of existing Environmental Laws and existing
Environmental Claims on the business, operations and properties of Middleby and
its Subsidiaries, and as a result thereof Middleby has reasonably concluded that
such Environmental Laws and Environmental Claims could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.13 Regulated Entities. No Borrower, any Person controlling any
Borrower, or any Subsidiary, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. No Borrower is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
Section 5.14 No Burdensome Restrictions. Neither any Borrower nor any Subsidiary
of any Borrower is a party to or bound by any Contractual Obligation, or subject
to any restriction in any Organization Document, or any Requirement of Law,
which could reasonably be expected to have a Material Adverse Effect.
Section 5.15 Copyrights, Patents, Trademarks and Licenses, etc. Subject to
Section 5.5, each Borrower and its Subsidiaries own or are licensed or otherwise
have the right to use all of the patents, trademarks, service marks, trade
names, copyrights, contractual franchises, authorizations and other rights that
are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of
each Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by such Borrower or any Subsidiary of such Borrower infringes upon any
rights held by any other Person. No claim or litigation regarding any of the
foregoing is pending or threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to the knowledge of any Borrower, proposed, which, in either
case, could reasonably be expected to have a Material Adverse Effect.
Section 5.16 Subsidiaries. As of the date hereof, Middleby has no Subsidiaries
other than those specifically disclosed in part (a) of Schedule 5.16 hereto and
has no equity investments in
51
any other corporation or entity other than those specifically disclosed in part
(b) of Schedule 5.16. Schedule 5.16 hereto states the name of each of Middleby's
Subsidiaries, its jurisdiction of incorporation and the percentage of its Voting
Stock owned by Middleby and/or its Subsidiaries. Middleby and each Subsidiary
has good and marketable title to all of the shares it purports to own of the
stock of each Subsidiary, free and clear in each case of any Lien, except as set
forth in Schedule 5.16. All such shares have been duly issued and are fully paid
and non-assessable.
Section 5.17 Insurance. The properties of each Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of such Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where such Borrower or such Subsidiary
operates.
Section 5.18 Full Disclosure. None of the representations or warranties made by
any Borrower in the Loan Documents to which it is a party as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of any Borrower or any Subsidiary of such Borrower in connection
with the Loan Documents, contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered.
Section 5.19 Indebtedness. Schedule 7.5 attached hereto correctly describes all
Indebtedness, capitalized leases and operating leases of the Parent Corporation,
Middleby and their Subsidiaries outstanding on the date hereof.
Section 5.20 Capital Stock. The authorized and outstanding capital stock of each
Borrower is set forth in Schedule 5.16 attached hereto. Neither any Borrower nor
any of its Subsidiaries has outstanding any warrants, options, convertible
securities or preemptive or other rights for the purchase of capital stock of
such Borrower or any of its Subsidiaries.
Section 5.21 Foreign Assets Control Regulations, etc. Neither any Borrower nor
any Affiliate of any Borrower is, by reason of being a "national" of a
"designated foreign country" or a "specially designated national" within the
meaning of the Regulations of the Office of Foreign Assets Control, United
States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or for any other
reason, subject to any restriction or prohibition under, or is in violation of,
any federal
52
statue or Presidential Executive Order, or any rules or regulations of any
department, agency or administrative body promulgated under any such statute or
order, concerning trade or other relations with any foreign country or any
citizen or national thereof or the ownership or operation of any property.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as the Commitment hereunder shall remain in effect, any Letter of
Credit shall remain outstanding or any Loan or other Obligation shall remain
unpaid or unsatisfied:
Section 6.1 Financial Statements. Middleby shall deliver, or shall cause the
Parent Corporation to deliver, to the Bank:
(a) as soon as available, but not later than 90 days after the end of each
fiscal year, a copy of the audited consolidated balance sheet of the Parent
Corporation and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
or another nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such consolidated
financial statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited in any respect, including
any reason relating to a restricted or limited examination by the Independent
Auditor of any material portion of the Parent Corporation's or any Subsidiary's
records and shall be delivered to the Bank pursuant to a reliance agreement
between the Bank and such Independent Auditor in form and substance satisfactory
to the Bank;
(b) as soon as available, but not later than 30 days after the end of each
of the first three fiscal quarters of each fiscal year, a copy of the unaudited
consolidated balance sheet of the Parent Corporation and its Subsidiaries as of
the end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting, in accordance with GAAP (subject to ordinary, good
faith year-end audit
53
adjustments), the financial position and the results of operations of the Parent
Corporation and the Subsidiaries;
(c) as soon as available, but not later than 90 days after the end of each
fiscal year, a copy of an unaudited consolidating balance sheet of the Parent
Corporation and its Subsidiaries as at the end of such year and the related
consolidating statement of income, shareholders' equity and cash flows for such
year, certified by a Responsible Officer as having been developed and used in
connection with the preparation of the financial statements referred to in
subsection 6.1(a);
(d) as soon as available, but not later than 30 days after the end of each
of the first three fiscal quarters of each fiscal year, a copy of the unaudited
consolidating balance sheets of the Parent Corporation and its Subsidiaries, and
the related consolidating statements of income, shareholders' equity and cash
flows for such quarter, all certified by a Responsible Officer as having been
developed and used in connection with the preparation of the financial
statements referred to in subsection 6.1(b); and
(e) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which the Parent Corporation sends
to its shareholders, and copies of all other regular periodic and special
reports and all registration statements, including, without limitation, Form
10-K Report and Form 10-Q Report, which the Parent Corporation files with the
SEC or any successor thereto, or with any national securities exchange.
Section 6.2 Certificates; Other Information. Middleby shall furnish to the Bank:
(a) concurrently with the delivery of the financial statements referred to
in subsections 6.1(a) and (b), a Compliance Certificate executed by a
Responsible Officer stating that no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) as soon as available, but not later than 120 days after the end of each
fiscal year, a copy of its annual business plan, in form and substance
satisfactory to the Bank;
(c) promptly, such additional information regarding the business, financial
or corporate affairs of Middleby or any Subsidiary as the Bank may from time to
time request.
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Section 6.3 Notices. Middleby shall promptly notify the Bank:
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that foreseeable will
become a Default or Event of Default;
(b) of any matter that has resulted or may result in a Material Adverse
Effect, including (i) breach or non-performance of, or any default under, a
Contractual Obligation of Middleby or any Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between Middleby or any
Subsidiary and any Governmental Authority; or (iii) the commencement of, or any
material development in, any litigation or proceeding affecting Middleby or any
Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any of the following events affecting Middleby or
any ERISA Affiliate (but in no event more than 10 days after such event), and
deliver to the Bank a copy of any notice with respect to such event that is
filed with a Governmental Authority and any notice delivered by a Governmental
Authority to Middleby or any ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of any
Pension Plan;
(iii) the adoption of, or the commencement of contributions to, any
Plan subject to Section 412 of the Code by Middleby or any ERISA Affiliate;
or
(iv) the adoption of any amendment to a Plan subject to Section 412 of
the Code, if such amendment results in a material increase in contributions
or Unfunded Pension Liability;
(d) the occurrence of a "Default" as defined in the Note Agreement, whether
or not such Default has been waived or cured; and
(e) of any material change in accounting policies or financial reporting
practices by Middleby or any of its consolidated Subsidiaries.
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Each notice under this Section shall be accompanied by a written statement
by a Responsible Officer setting forth details of the occurrence referred to
therein, and stating what action Middleby or any affected Subsidiary proposes to
take with respect thereto and at what time. Each notice under subsection 6.3(a)
shall describe with particularity any and all clauses or provisions of this
Agreement or other Loan Document that have been (or foreseeably will be)
breached or violated.
Section 6.4 Preservation of Corporate Existence, Etc. Middleby shall, and shall
cause each of its Subsidiaries and the Parent Corporation to:
(a) preserve and maintain in full force and effect its corporate existence
and good standing under the laws of its state or jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all governmental rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business except in connection with
transactions permitted by Section 7.3 and sales of assets permitted by Section
7.2;
(c) use reasonable efforts, in the ordinary course of business, to preserve
its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
Section 6.5 Maintenance of Property. Middleby shall maintain, and shall cause
each of its Subsidiaries to maintain, and preserve all its equipment and
facilities which is used or useful in its business in good working order and
condition, ordinary wear and tear excepted, and make all necessary repairs
thereto and renewals and replacements thereof except where, in either case, the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, except as permitted by Section 7.2. Middleby and each Subsidiary shall
use the standard of care typical in the industry in the operation and
maintenance of its facilities.
Section 6.6 Insurance. Middleby shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by
56
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons.
Section 6.7 Payment of Obligations. Middleby shall, and shall cause each of its
Subsidiaries and the Parent Corporation to, pay and discharge as the same shall
become due and payable, all their respective obligations and liabilities,
including:
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings and adequate reserves in accordance with GAAP;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property; provided, however, that Middleby or any Subsidiary shall have the
right to contest such claims in good faith and by appropriate proceedings; and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
Section 6.8 Compliance with Laws. Middleby shall comply, and shall cause each of
its Subsidiaries and the Parent Corporation to comply, in all material respects
with all Requirements of Law of any Governmental Authority having jurisdiction
over it or its business (including the Federal Fair Labor Standards Act), except
such as may be contested in good faith or as to which a bona fide dispute may
exist.
Section 6.9 Compliance with ERISA. Middleby shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
Section 6.10 Inspection of Property and Books and Records. Middleby shall, and
shall cause each of its Subsidiaries and the Parent Corporation to, maintain
proper books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of Middleby and such
Subsidiary. Middleby shall, and shall cause each of its Subsidiaries to permit,
representatives and independent contractors of the Bank to visit and inspect any
of their
57
respective properties, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense of
Middleby and at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to Middleby;
provided, however, when an Event of Default exists the Bank may do any of the
foregoing at the expense of Middleby at any time during normal business hours
and without advance notice.
Section 6.11 Environmental Laws. Middleby shall, and shall cause each of its
Subsidiaries to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.
Section 6.12 Use of Proceeds. Each Borrower shall use the proceeds of the Loans
made to such Borrower for working capital and other general corporate purposes,
including funding for acquisitions, not in contravention of any Requirement of
Law or of any Loan Document. In addition, Middleby may use the proceeds of the
Loans made to it for redemption of the common stock of the Parent Corporation
not exceeding $12,000,000 in the aggregate (the "Parent Stock Redemption") and
refinancing of existing indebtedness of Middleby evidenced by the BA Leasing
Documents.
Section 6.13 Subsidiaries. Middleby shall, and shall cause Middleby Worldwide
to, continue to own not less than the percentage of Voting Stock of each of its
Subsidiaries set forth in Schedule 5.16, free and clear in each case of any
Lien, except as set forth in Schedule 5.16.
ARTICLE VII
NEGATIVE COVENANTS
So long as the Commitment shall remain in effect hereunder, any Letter of
Credit shall remain outstanding or any Loan or other Obligation shall remain
unpaid or unsatisfied:
Section 7.1 Limitation on Liens. On and after the initial Closing Date, Middleby
shall not, and shall not suffer or permit any of its Subsidiaries and the Parent
Corporation to, directly or indirectly, make, create, incur, assume or suffer to
exist any Lien upon or with respect to any part of its property, whether now
owned or hereafter acquired, other than the following ("Permitted Liens"):
58
(a) any Lien existing on property of Middleby or any Subsidiary on the
initial Closing Date and set forth in Schedule 7.1 securing Indebtedness
outstanding on such date;
(b) Liens for taxes, fees, assessments or other governmental charges which
are not delinquent or remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 6.7, provided that no notice of lien
has been filed or recorded under the Code;
(c) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(d) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security legislation;
(e) Liens on the property of Middleby or any Subsidiary securing (i) the
non-delinquent performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, (ii) contingent obligations on surety and
appeal bonds, and (iii) other non-delinquent obligations of a like nature; in
each case, incurred in the ordinary course of business, provided all such Liens
in the aggregate would not (even if enforced) cause a Material Adverse Effect;
(f) Liens consisting of judgment or judicial attachment liens, provided
that the enforcement of such Liens is effectively stayed and all such liens in
the aggregate at any time outstanding for Middleby and its Subsidiaries do not
exceed $1,000,000;
(g) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the businesses of Middleby and its Subsidiaries;
59
(h) Liens on assets of corporations which become Subsidiaries after the
date of this Agreement, provided, however, that such Liens existed at the time
the respective corporations became Subsidiaries and were not created in
anticipation thereof.
(i) purchase money security interests on equipment or real property
acquired or held by Middleby or its Subsidiaries in the ordinary course of
business, securing Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property; provided, that (i) any
such Lien attaches to such property concurrently with or within 20 days after
the acquisition thereof, (ii) such Lien attaches solely to the property so
acquired in such transaction, and (iii) the principal amount of the debt secured
thereby does not exceed 100% of the cost of such property;
(j) Liens securing obligations in respect of capital leases on assets
subject to such leases, provided that such capital leases are otherwise
permitted hereunder; and
(k) the Lien granted pursuant to Section 4 of the Guaranty.
Section 7.2 Disposition of Assets. Middleby shall not, and shall not suffer or
permit any of its Subsidiaries and the Parent Corporation to, directly or
indirectly, sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one or a series of transactions) any property (including accounts
and notes receivable, with or without recourse) or enter into any agreement to
do any of the foregoing, with any Person including any of its Subsidiaries,
except:
(a) dispositions of inventory, or used, worn-out or surplus equipment, all
in the ordinary course of business; and
(b) dispositions not otherwise permitted hereunder which are made for fair
market value; provided, that (i) at the time of any disposition, no Event of
Default shall exist or shall result from such disposition, and (ii) the
aggregate value of all assets so sold by Middleby and its Subsidiaries,
together, shall not exceed in any fiscal year more than 5% of the Middleby's
consolidated total assets determined as of the last day of the immediately
preceding fiscal year.
Section 7.3 Mergers, Subsidiaries, Etc. Middleby shall not, and shall not suffer
or permit any of its Subsidiaries and the Parent Corporation to:
60
(a) be a party to any merger or consolidation except (i) a Subsidiary may
merge with Middleby, provided that Middleby shall be the continuing or surviving
corporation, or with any one or more Subsidiaries, provided that if any
transaction shall be between a Subsidiary and a Wholly-Owned Subsidiary, the
Wholly-Owned Subsidiary shall be the continuing or surviving corporation and
(ii) any Subsidiary may sell all or substantially all of its assets (upon
voluntary liquidation or otherwise), to Middleby or another Subsidiary that is a
Wholly-Owned Subsidiary;
(b) purchase or otherwise acquire any assets or capital stock of any Person
without the prior written consent of the Bank except where (i) the aggregate
value of all assets so acquired by Middleby and its Subsidiaries, together, is
not greater than $15,000,000 in any fiscal year (including the value of any
stock issued, assets exchanged or transaction expenses incurred to consummate
such Acquisition), (ii) the assets so acquired shall be useful and are intended
to be used in the substantially similar line of business of Middleby and its
Subsidiaries on the initial Closing Date, (iii) it is not an unfriendly
Acquisition, and (iv) there is no Event of Default or Default after giving
effect to such Acquisition.
Section 7.4 Loans and Investments. Middleby shall not purchase or acquire, or
suffer or permit any of its Subsidiaries and the Parent Corporation to purchase
or acquire, or make any commitment therefor, any capital stock, equity interest,
or any obligations or other securities of, or any interest in, any Person, or
make or commit to make any Acquisitions, or make or commit to make any advance,
loan, extension of credit or capital contribution to or any other investment in,
any Person including any Affiliate, the Parent Corporation or any Subsidiary of
Middleby (together, "Investments"), except for:
(a) Investments held by Middleby or any Subsidiary in the form of cash
equivalents or short term marketable securities;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(c) extensions of credit by Middleby to its Subsidiaries existing on the
date hereof and set forth on Schedule 7.5;
(d) the obligations of the Guarantors under the Guaranty;
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(e) other extensions of credit by Middleby to its Subsidiaries which shall
not exceed at any one time outstanding, or by any one of its Subsidiaries to
other Subsidiaries which shall not exceed, in each case at any one time
outstanding $3,000,000 for each fiscal year;
(f) investments incurred in order to consummate Acquisitions; provided,
that (i) the entity acquired shall be in the same line of business as that
carried on by Middleby and its Subsidiaries as of the date hereof, (ii) such
Acquisition is undertaken in accordance with all applicable Requirements of Law;
(iii) the prior, effective written consent or approval to such Acquisition of
the board of directors or equivalent governing body of the acquiree is obtained;
and (iv) on a pro forma basis after giving effect to such Acquisition (including
any Indebtedness to be incurred in connection therewith), no Default or Event of
Default will exist;
(g) subject to Section 7.7, Investments in publicly traded equity
securities; and
(h) additional investments by Middleby in its Subsidiaries, either by way
of the purchase of the capital stock of, or equity contributions to, such
Subsidiaries, not to exceed $2,500,000 in the aggregate.
Section 7.5 Limitation on Indebtedness. Middleby shall not, and shall not suffer
or permit any of its Subsidiaries and the Parent Corporation to, create, incur,
assume, suffer to exist, or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement or otherwise owing to
the Bank and its Affiliates;
(b) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 7.8;
(c) Indebtedness existing on the date hereof and set forth in Schedule 7.5;
(d) Indebtedness incurred in connection with capital leases;
(e) Indebtedness incurred in connection with Liens permitted under Section
7.1;
62
(f) Indebtedness incurred in connection with the Acquisitions permitted
under Section 7.3(b) only to the extent that such Indebtedness is unsecured
financing by a seller of product lines to Middleby and the payment of principal
amount of which is subordinated to the payment of the Obligations;
(g) Indebtedness permitted under Section 7.4(e); and
(h) Other Indebtedness in an aggregate principal amount at any one time
outstanding not to exceed $1,000,000.
Section 7.6 Transactions with Affiliates. Middleby shall not, and shall not
suffer or permit any of its Subsidiaries and the Parent Corporation to, enter
into any transaction with any Affiliate of Middleby or any Subsidiary except (a)
the Parent Stock Redemption or (b) upon fair and reasonable terms no less
favorable to Middleby or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of Middleby or such
Subsidiary.
Section 7.7 Use of Proceeds. Middleby shall not, and shall not suffer or permit
any of its Subsidiaries and the Parent Corporation to, use any portion of the
Loan proceeds, directly or indirectly, (a) to purchase or carry Margin Stock,
(b) to repay or otherwise refinance indebtedness of Middleby or others incurred
to purchase or carry Margin Stock, (c) to extend credit for the purpose of
purchasing or carrying any Margin Stock, (d) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Exchange Act, or (e) to
make any unfriendly Acquisition.
Section 7.8 Contingent Obligations. Middleby shall not, and shall not suffer or
permit any of its Subsidiaries and the Parent Corporation to, create, incur,
assume or suffer to exist any Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Contingent Obligations of Middleby and its Subsidiaries existing as of
the initial Closing Date (after giving effect to the Closing Transactions) and
listed in Schedule 7.8;
(c) Contingent Obligations in respect of Indebtedness owed to the Bank and
its Affiliates; and
63
(d) Contingent Obligations incurred in the ordinary course of business and
not exceeding at any time $1,000,000 in the aggregate in respect of Middleby and
its Subsidiaries together.
Section 7.9 Restricted Payments. Middleby shall not, and shall not suffer or
permit any of its Subsidiaries to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter outstanding, except:
(a) in the case of Middleby, dividends to pay Corporate Overhead Expense in
an amount not to exceed $1,000,000 in any fiscal year, unless before or after
giving effect thereto (on a pro forma basis) a Default or Event of Default has
occurred and is continuing;
(b) in the case of Middleby, dividends in an amount not to exceed an amount
equal to the lesser of (i) 50% of Net Income earned during the four (4) most
recently completed fiscal quarters determined in accordance with GAAP and (ii)
$1,500,000 per annum, unless before or after giving effect thereto (on a
proforma basis) a Default or Event of Default has occurred and is continuing;
for purposes of calculating dividends, permitted under this paragraph (b),
dividends permitted under paragraph (a) above shall not be included;
(c) Middleby may purchase, redeem or otherwise acquire or retire any class
of its stock, if before and after giving effect thereto (on a proforma basis) no
Default or Event of Default has occurred or is continuing;
(d) the Parent Stock Redemption; and
(e) in the case of the Subsidiaries of Middleby, any such payment,
distribution, purchase, redemption or other acquisition, if before and after
giving effect thereto (on a pro forma basis) no Default or Event of Default has
occurred and is continuing.
Section 7.10 ERISA. Middleby shall not, and shall not suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably expected to result in liability of such Person in an
aggregate amount in excess of $500,000; or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
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Section 7.11 Change in Business.
(a) Middleby shall not, and shall not suffer or permit any of its
Subsidiaries to, engage in any general line of business substantially different
from those lines of business carried on by Middleby and its Subsidiaries on the
initial Closing Date.
(b) Except set forth in Schedule 5.16, Middleby shall not, and shall not
suffer or permit any of its Subsidiaries and the Parent Corporation to, create
any Subsidiary or become a partner or joint venturer with any third party.
(c) Middleby shall not permit the Parent Corporation to change its business
substantially different from the business carried on by the Parent Corporation
on the initial Closing Date.
Section 7.12 Accounting Changes. Middleby shall not, and shall not suffer or
permit any of its Subsidiaries and the Parent Corporation to, make any
significant change in accounting treatment or reporting practices, except as
required by GAAP, or change the fiscal year of Middleby or of any Subsidiary.
Section 7.13 Financial Covenants.
(a) Minimum Tangible Net Worth. Middleby and its Subsidiaries on a
consolidated basis shall maintain at all times Tangible Net Worth equal to or
greater than the sum of (i) an amount equal to 90% of Tangible Net Worth as of
September 30, 2000, minus (ii) the dollar value of capital stock of the Parent
Corporation redeemed between September 30, 2000 and December 31, 2000, which
shall not exceed $12,000,000 in the aggregate, minus (iii) shareholder dividends
or distributions paid by Middleby at any time during or after its fiscal year of
2000, plus (iv) an amount equal to 50% of Net Income earned during each of its
fiscal quarters beginning with its fiscal quarter commencing October 1, 2000
(without reduction for net losses, if any). The amount of minimum Tangible Net
Worth so determined (i) shall be adjusted as necessary to avoid a double
addition or double subtraction on account of a single item or transaction and
(ii) shall not deduct any dividend payments to pay Corporate Overhead Expenses
under subsection 7.9(a) above.
(b) Ratio of Indebtedness to EBITDA. Middleby and its Subsidiaries on a
consolidated basis shall maintain a ratio of (a) Indebtedness to (b) EBITDA,
measured at the end
65
of each fiscal quarter for the four (4) immediately preceding fiscal quarters
then ended, of not more than 2.75:1.0.
For purposes of testing compliance with this covenant, the term (i)
"Indebtedness" shall include the present value of all capital lease obligations
of Middleby and the Subsidiaries, determined as of any date the ratio is to be
determined, and (ii) in the event that Middleby or any of its Subsidiaries shall
have made an Acquisition involving any Person during any such fiscal quarter,
the term "EBITDA" shall include the allocable earnings before interest, taxes,
depreciation and amortization for the four (4) most recently completed fiscal
quarters of such Person determined in accordance with GAAP, and, if GAAP is not
applicable, determined in a manner agreed to in writing by the Bank and
Middleby.
(c) Capital Expenditures. Middleby shall not, and not permit its
Subsidiaries to, make (or commit to make) capital expenditures if, after giving
effect thereto, the aggregate amount of all such capital expenditures (excluding
Acquisitions permitted under Section 7.3(b)) made by Middleby and its
Subsidiaries on a consolidated basis would exceed in any one fiscal year the sum
of (i) $3,000,000, plus (ii) 200% of depreciation expense of the immediately
preceding fiscal year. In the event that Middleby or any of its Subsidiaries
shall have made an Acquisition during such immediately preceding fiscal year,
then for purposes of computing depreciation expense under clause (ii) of the
immediately preceding sentence, Middleby and its Subsidiaries may include a full
year's depreciation with respect to the assets acquired in such Acquisition.
(d) Maximum Indebtedness. Middleby and its Subsidiaries shall not permit
Indebtedness of Middleby and its Subsidiaries (excluding any Indebtedness
arising from the BA Leasing Documents), at any time to exceed the sum of (i)
eighty percent (80%) of their total accounts receivable derived from operations
in the United States, plus (ii) fifty-five percent (55%) of their total
inventory located in the United States, plus (iii) forty percent (40%) of their
net fixed assets located in the United States, provided, that the Bank, in its
sole discretion, may change any of the above percentages by providing notice of
such change to Middleby based on the results of any field examination of the
Borrowers' accounting records and operations.
(e) Minimum Interest Coverage Ratio. Middleby and its Subsidiaries on a
consolidated basis shall not permit a ratio of (a) EBIT to (b) Interest Expense,
measured at the end of each fiscal quarter for the four (4) immediately
preceding fiscal quarters then ended, to be less than 3.5:1.0.
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Section 7.14 Negative Pledge. Middleby shall not, and shall not suffer or permit
any of its Subsidiaries and the Parent Corporation to, directly or indirectly,
enter into any agreement with any Person that prohibits or restricts or limits
the ability of Middleby or its Subsidiaries to create, incur, pledge, or suffer
to exist any Lien upon any assets of Middleby or its Subsidiaries.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.1 Event of Default. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. Any Borrower fails to pay, (i) when and as required to be
paid herein, any amount of principal of any Loan made to such Borrower, or (ii)
within five (5) Business Days after the same becomes due, any interest, fee or
any other amount payable by such Borrower hereunder or under any other Loan
Document to which it is a party; or
(b) Representation or Warranty. Any representation or warranty by any
Borrower or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by any Borrower, any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(c) Specific Defaults. Middleby or any Subsidiary fails to perform or
observe any term, covenant or agreement contained in any of Section 6.1, 6.2,
6.3, 6.4, or 6.9 or in Article VII; or
(d) Other Defaults. Any Borrower fails to perform or observe any other term
or covenant contained in this Agreement or any other Loan Document to which it
is a party, and such default shall continue unremedied for a period of 30 days
after the date upon which written notice thereof is given to Middleby and such
Borrower by the Bank; or
(e) Cross-Default. Middleby or any Subsidiary (i) fails to make any payment
in respect of any Indebtedness or Contingent Obligation having an aggregate
principal amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $500,000 when
67
due (whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure;
(ii) fails to perform or observe any other condition or covenant, or any other
event shall occur or condition exist, under any agreement or instrument relating
to any such Indebtedness or Contingent Obligation, and such failure continues
after the applicable grace or notice period, if any, specified in the relevant
document on the date of such failure if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated maturity,
or such Contingent Obligation to become payable or cash collateral in respect
thereof to be demanded; or (iii) defaults in the payment when due, whether by
acceleration or otherwise, or in the performance or observance (subject to any
applicable grace period) of any obligation or agreement to or with the Bank or
any Affiliate (other than any obligation or agreement of any Borrower hereunder
or under its Note); or
(f) Insolvency; Voluntary Proceedings. Middleby or any Subsidiary (i)
ceases or fails to be solvent, or generally fails to pay, or admits in writing
its inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is
commenced or filed against Middleby or any Subsidiary, or any writ, judgment,
warrant of attachment, execution or similar process, is issued or levied against
a substantial part of Middleby's or any Subsidiary's properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) Middleby or
any Subsidiary admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding; or (iii) Middleby or any
Subsidiary acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its property or business;
or
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of
68
Middleby or any ERISA affiliate under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $1,000,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $5,000,000; or (iii) Middleby or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$1,000,000; or
(i) Monetary Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against
Middleby or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of transactions,
incidents or conditions, of $1,000,000 or more or in excess of $5,000,000 in the
aggregate, and the same shall remain unsatisfied, unvacated and unstayed pending
appeal for a period of the lesser of 30 days or the applicable statutory appeal
period after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or decree is
entered against Middleby or any Subsidiary which does or would reasonably be
expected to have a Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(k) Change of Control. There occurs any Change of Control; or
(l) Guarantor Defaults. Either Guarantor shall fail in any material respect
to perform or observe any term, covenant or agreement in the Guaranty; or the
Guaranty shall for any reason be partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise cease to be in full
force and effect, or either Guarantor or any other Person shall contest in any
manner the validity or enforceability thereof or deny that it has any further
liability or obligation thereunder; or
(m) Leasing Documents. Any "Event of Default" under any of the BA Leasing
Documents.
Section 8.2 Remedies. If any Event of Default occurs, the Bank may
69
(a) declare its commitment to make Loans to be terminated, whereupon such
commitment shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrowers; and
(c) exercise all rights and remedies available to it under the Loan
Documents or applicable law;
provided, however, that upon the occurrence of any event specified in
subsection (f) or (g) of Section 8.1 (in the case of clause (i) of subsection
(g) upon the expiration of the 60-day period mentioned therein), the obligation
of the Bank to make Loans shall automatically terminate and the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without further act of the Bank.
In addition to the foregoing, following the occurrence and during the
continuance of an Event of Default, so long as any Letter of Credit has not been
fully drawn and has not been canceled or expired by its terms, upon demand by
the Bank, Middleby and each applicable Borrower, jointly and severally, agree to
deposit in Dollars in an account (the "Letter of Credit Cash Collateral
Account") maintained with the Bank in the name of Middleby, cash in an amount
equal to the Dollar Equivalent of the aggregate undrawn Stated Amount of all
outstanding Letters of Credit issued for the account of such Borrower, any other
outstanding LC Obligations of such Borrower and all fees and other amounts due
or which may become due with respect thereto. Neither Middleby nor any such
Borrower shall have any control over funds in the Letter of Credit Cash
Collateral Account, which funds shall be invested by the Bank from time to time
in certificates of deposit of the Bank having a maturity not exceeding thirty
days or in other short term funds as the Bank may in its sole judgment
determine. Such funds shall be promptly applied by the Bank to reimburse it for
drafts drawn from time to time under such Letters of Credit. Such funds, if any,
remaining in the Letter of Credit Cash Collateral Account following the payment
of all LC Obligations of such Borrower in full or the earlier termination of all
Events of Default shall, unless the Bank is otherwise directed by a court of
competent jurisdiction, be promptly paid over to Middleby.
70
Section 8.3 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by any Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Bank and the Borrowers, and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 9.2 Notices.
(a) All notices, requests and other communications shall be in writing
(including, unless the context expressly otherwise provides, by facsimile
transmission, provided that any matter transmitted by a Borrower by facsimile
(i) shall be immediately confirmed by a telephone call to the recipient at the
number specified on Schedule 9.2, and (ii) shall be followed promptly by
delivery of a hard copy original thereof) and mailed, faxed or delivered, to the
address or facsimile number specified for notices on Schedule 9.2; or, to such
other address as shall be designated by such party in a written notice to the
other party.
(b) All such notices, requests and communications shall, when transmitted
by overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date deposited
into the U.S. mail, or if delivered, upon delivery; except that notices pursuant
to Article II or IX shall not be effective until actually received by the Bank.
(c) Any agreement of the Bank herein to receive certain notices by
telephone or facsimile is solely for the convenience and at the request of the
Borrowers. The Bank shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by a Borrower to give such notice and the
Bank shall not have any liability to any Borrower or any other Person on account
of any action taken or not taken by the Bank in reliance upon such
71
telephonic or facsimile notice. The obligation of each Borrower to repay the
Loans made to it and the other Obligations of such Borrower shall not be
affected in any way or to any extent by any failure by the Bank to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Bank of a confirmation which is at variance with the terms understood by the
Bank to be contained in the telephonic or facsimile notice.
Section 9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Bank, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.
Section 9.4 Costs and Expenses. Middleby shall:
(a) whether or not the transactions contemplated hereby are consummated,
pay or reimburse the Bank within ten Business Days after demand (subject to
subsection 4.1(e)) for all costs and expenses incurred by the Bank in connection
with the development, preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case, whether
or not consummated), this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including reasonable Attorney
Costs incurred by the Bank with respect thereto; and
(b) pay or reimburse the Bank within five Business Days after demand
(subject to subsection 4.1(e)) for all costs and expenses (including Attorney
Costs) incurred by the Bank in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding).
Section 9.5 Borrowers' Indemnification. Whether or not the transactions
contemplated hereby are consummated, each Borrower, joint and severally, shall
indemnify, defend and hold the Bank-Related Persons, the Bank and each of its
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges,
72
expenses and disbursements (including Attorney Costs) of any kind or nature
whatsoever which may at any time (including at any time following repayment of
the Loans or replacement of the Bank) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement or the Loans
or the use of the proceeds thereof, or related to any Offshore Currency
transactions entered into in connection herewith, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that no Borrower shall have any obligation hereunder to
any Indemnified Person with respect to Indemnified Liabilities resulting solely
from the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.
Section 9.6 Payments Set Aside. To the extent that any Borrower makes a payment
to the Bank, or the Bank exercises its right of set-off, and such payment or the
proceeds of such set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Bank in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
Insolvency Proceeding or otherwise, then to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred.
Section 9.7 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that no Borrower may assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of the Bank.
Section 9.8 Assignments, Participations, etc.
(a) The Bank may, with the written consent of Middleby at all times other
than during the existence of an Event of Default, which consent shall not be
unreasonably withheld, at any time assign and delegate to one or more Eligible
Assignees (provided that no written consent of Middleby shall be required in
connection with any assignment and delegation by the Bank to an Eligible
Assignee that is an Affiliate of the Bank) (each an "Assignee") all, or any
ratable part
73
of all, of the Loans, the LC Obligations, the Commitment and the other rights
and obligations of the Bank hereunder; provided, however, that the Borrowers may
continue to deal solely and directly with the Bank in connection with the
interest so assigned to an Assignee until written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Borrowers by the Bank.
(b) The Bank may at any time sell to one or more commercial banks or other
Persons not Affiliates of any Borrower (a "Participant") participating interests
in any Loans, the Commitment of the Bank and the other interests of the Bank
(the "originating Bank") hereunder and under the other Loan Documents; provided,
however, that (i) the originating Bank's obligations under this Agreement shall
remain unchanged, (ii) the originating Bank shall remain solely responsible for
the performance of such obligations, and (iii) the Borrowers shall continue to
deal solely and directly with the originating Bank in connection with the
originating Bank's rights and obligations under this Agreement and the other
Loan Documents. In the case of any such participation, the Participant shall be
entitled to the benefit of Sections 3.1, 3.3 and 9.5 as though it were also the
Bank hereunder, and if amounts outstanding under this Agreement are due and
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as the Bank under this Agreement.
(c) Notwithstanding any other provision in this Agreement, the Bank may at
any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement and the Notes held by it in favor of
any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
Section 9.9 Set-off. In addition to any rights and remedies of the Bank provided
by law, if an Event of Default exists or the Loans have been accelerated, the
Bank is authorized at any time and from time to time, without prior notice to
any Borrower, any such notice being waived by each Borrower to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, the Bank to or for the credit or the account
of the Borrowers against any and all Obligations owing to the Bank, now or
hereafter existing, irrespective of whether or not the Bank shall have made
demand under this Agreement or any Loan Document
74
and although such Obligations may be contingent or unmatured. The Bank agrees
promptly to notify Middleby after any such set-off and application made by the
Bank; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.
Section 9.10 Automatic Debits of Fees. With respect to any fee or other cost or
expense due and payable by any Borrower to the Bank under the Loan Documents,
each Borrower hereby irrevocably authorizes the Bank to debit any deposit
account of such Borrower with the Bank in an amount such that the aggregate
amount debited from all such deposit accounts does not exceed such fee or other
cost or expense. If there are insufficient funds in such deposit accounts to
cover the amount of the fee or other cost or expense then due, such debits will
be reversed (in whole or in part, in the Bank's sole discretion) and such amount
not debited shall be deemed to be unpaid. No such debit under this Section shall
be deemed a set-off.
Section 9.11 Termination of Support Agreement. In the event that the Bank
receives evidence satisfactory to it that the Notes as defined in and issued
under the Note Agreement have been paid in full, together with all other amounts
owing by Middleby under the Note Agreement, the Bank agrees to review the
financial condition and prospects of Borrower and its Subsidiaries, and based
upon such review, but in its sole discretion, the Bank may agree to the
termination of the Support Agreement.
Section 9.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
Section 9.13 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
Section 9.14 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Borrowers, the Bank and the
Bank-Related Persons, and their permitted successors and assigns, and no other
Person shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents.
Section 9.15 Governing Law and Jurisdiction.
75
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS (WITHOUT REGARD TO
CONFLICTS OF LAW PROVISIONS THEREOF); PROVIDED THAT THE BANK SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR OF
THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWERS AND THE BANK EACH CONSENT, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. EACH OF THE BORROWERS AND THE BANK IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE BORROWERS AND THE BANK EACH WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY ILLINOIS LAW.
Section 9.16 Waiver of Jury Trial. THE BORROWERS AND THE BANK EACH WAIVE ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY BANK-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWERS AND THE BANK EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS,
76
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
Section 9.17 Judgment. If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due hereunder or any other Loan Document in one
currency into another currency, the rate of exchange used shall be that at which
in accordance with normal banking procedures the Bank could purchase the first
currency with such other currency on the Business Day preceding that on which
final judgment is given. The obligation of any Borrower in respect of any such
sum due from it to the Bank hereunder or under the other Loan Documents shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
that in which such sum is denominated in accordance with the applicable
provisions of this Agreement (the "Agreement Currency"), be discharged only to
the extent that on the Business Day following receipt by the Bank of any sum
adjudged to be so due in the Judgment Currency, the Bank may in accordance with
normal banking procedures purchase the Agreement Currency with the Judgment
Currency. If the amount of the Agreement Currency so purchased is less than the
sum originally due to the Bank in the Agreement Currency, each Borrower agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify the
Bank or the Person to whom such obligation was owing against such loss. If the
amount of the Agreement currency so purchased is greater than the sum originally
due to the Bank in such currency, the Bank agrees to return the amount of any
excess to the applicable Borrower (or to any other Person who may be entitled
thereto under applicable law).
Section 9.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding between the Borrowers
and the Bank, and supersedes all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
[signature page to follow]
77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by its proper and duly
authorized officers as of the day and year first above written.
MIDDLEBY MARSHALL INC., as Borrower
and Guarantor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and Secretary
MIDDLEBY PHILIPPINES CORPORATION,
as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and Secretary
MIDDLEBY JAPAN CORPORATION, as Borrower
By: : /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and Secretary
MIDDLEBY TAIWAN CORPORATION
(f/k/a ▇▇▇▇▇▇ Worldwide (Taiwan) Co., Ltd.),
as Borrower
By: : /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and Secretary
78
MIDDLEBY WORLDWIDE, INC. (f/k/a ▇▇▇▇▇▇
Associates, Inc.), as Borrower and Guarantor
By: : /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and ▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ CORPORATION (f/k/a ▇▇▇▇▇▇
Worldwide Korea Co., Ltd.), as Borrower
By: : /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and Secretary
MIDDLEBY MEXICO, S.A. DE C.V. (f/k/a ▇▇▇▇▇▇
Mexico, S.A. DE C.V.), as Borrower
By: : /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and Secretary
MIDDLEBY WORLDWIDE SPAIN, S.L. (f/k/a ▇▇▇▇▇▇,
▇.▇.), as Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and Secretary
BANK OF AMERICA, N.A. (successor to Bank
of America National Trust and Savings
Association), as Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
80