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EXHIBIT 99.1
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$75,000,000
CREDIT AGREEMENT
Dated as of June 9, 1998
among
FRESH FOODS, INC.,
and
Certain of its U.S. Subsidiaries,
as Borrowers,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 14.6 HEREOF,
as Lenders,
and
FIRST UNION COMMERCIAL CORPORATION,
as Agent
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................................1
1.1 General Definitions..................................................................................1
1.2 Accounting Terms and Determinations.................................................................27
1.3 Other Definitional Terms............................................................................28
ARTICLE II REVOLVING LOANS......................................................................................28
2.1 Revolving Loans.....................................................................................28
2.2 [intentionally left blank]..........................................................................34
2.3 Optional and Mandatory Prepayments; Reduction of Commitments........................................34
2.4 Payments and Computations...........................................................................35
2.5 Maintenance of Account..............................................................................37
2.6 Statement of Account................................................................................38
2.7 Taxes...............................................................................................38
2.8 Sharing of Payments.................................................................................40
2.9 Pro Rata Treatment..................................................................................40
2.10 Extensions and Conversions.........................................................................40
ARTICLE III LETTERS OF CREDIT...................................................................................41
3.1 Issuance............................................................................................41
3.2 Notice and Reports..................................................................................41
3.3 Participation.......................................................................................42
3.4 Reimbursement.......................................................................................42
3.5 Repayment with Revolving Loans......................................................................43
3.6 Renewal, Extension..................................................................................44
3.7 Uniform Customs and Practices.......................................................................44
3.8 Indemnification; Nature of Issuing Bank's Duties....................................................44
3.9 Responsibility of Issuing Bank......................................................................46
3.10 Conflict with Letter of Credit Documents...........................................................46
ARTICLE IV INTEREST AND FEES....................................................................................46
4.1 Interest on Loans...................................................................................46
4.2 Interest After Event of Default.....................................................................46
4.3 Unused Line Fee.....................................................................................47
4.4 Lenders' Fees/Agent's Fees..........................................................................47
4.5 Letter of Credit Fees...............................................................................47
4.6 Authorization to Charge Account.....................................................................48
4.7 Indemnification in Certain Events...................................................................48
4.8 Inability To Determine Interest Rate................................................................48
4.9 Illegality..........................................................................................49
4.10 Funding Indemnity..................................................................................49
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ARTICLE V CONDITIONS PRECEDENT..................................................................................50
5.1 Closing Conditions..................................................................................50
5.2 Material Adverse Change.............................................................................50
5.3 Fees................................................................................................50
5.4 Representations and Warranties; No Default..........................................................50
5.5 Notice of Borrowing.................................................................................51
5.6 Additional Documents................................................................................51
ARTICLE VI REPRESENTATIONS AND WARRANTIES.......................................................................51
6.1 Organization and Qualification......................................................................51
6.2 Solvency............................................................................................52
6.3 Liens; Inventory....................................................................................52
6.4 No Conflict.........................................................................................52
6.5 Enforceability......................................................................................53
6.6 Financial Data......................................................................................53
6.7 Locations of Offices, Records and Inventory.........................................................54
6.8 Fictitious Business Names...........................................................................54
6.9 Subsidiaries........................................................................................54
6.10 No Judgments or Litigation.........................................................................54
6.11 No Defaults........................................................................................55
6.12 No Employee Disputes...............................................................................55
6.13 Compliance with Law................................................................................55
6.14 ERISA..............................................................................................55
6.15 Compliance with Environmental Laws.................................................................56
6.16 Use of Proceeds....................................................................................56
6.17 Intellectual Property..............................................................................57
6.18 Licenses and Permits...............................................................................57
6.19 Title to Property..................................................................................58
6.20 Labor Matters......................................................................................58
6.21 Investment Company.................................................................................59
6.22 Margin Security....................................................................................59
6.23 No Event of Default................................................................................59
6.24 Taxes and Tax Returns..............................................................................59
6.25 No Other Indebtedness..............................................................................60
6.26 Status of Accounts.................................................................................60
6.27 Representations and Warranties.....................................................................60
6.28 Material Contracts.................................................................................61
6.29 Survival of Representations........................................................................61
6.30 Affiliate Transactions.............................................................................61
6.31 Key Members of Management..........................................................................61
6.32 Accuracy and Completeness of Information...........................................................61
6.33 Farm Products, etc.................................................................................61
ARTICLE VII AFFIRMATIVE COVENANTS...............................................................................62
7.1 Financial Information...............................................................................62
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7.2 Inventory/ Equipment................................................................................64
7.3 Corporate Existence.................................................................................64
7.4 ERISA...............................................................................................65
7.5 Proceedings or Adverse Changes......................................................................66
7.6 Environmental Matters...............................................................................66
7.7 Books and Records...................................................................................67
7.8 Collateral Records..................................................................................68
7.9 Security Interests..................................................................................68
7.10 Insurance; Casualty Loss...........................................................................69
7.11 Taxes..............................................................................................70
7.12 Compliance With Laws...............................................................................70
7.13 Use of Proceeds....................................................................................70
7.14 Fiscal Year........................................................................................70
7.15 Notification of Certain Events.....................................................................71
7.16 Additional Borrowers...............................................................................71
7.17 Schedules of Accounts and Purchase Orders..........................................................72
7.18 Collection of Accounts.............................................................................72
7.19 Notice; Credit Memoranda; and Returned Goods.......................................................72
7.20 Acknowledgment Agreements..........................................................................73
7.21 Trademarks.........................................................................................73
7.22 Maintenance of Property............................................................................73
7.23 Covenants Relating to Packers and Stockyard Act....................................................73
7.24 Covenants Relating to Food Security Act............................................................73
7.25 Year 2000 Compliance...............................................................................74
7.26 Additional Eligible Real Property..................................................................74
7.27 Reorganization.....................................................................................74
7.28 Post-Closing Matters...............................................................................74
ARTICLE VIII FINANCIAL COVENANTS................................................................................75
8.1 Leverage Ratio......................................................................................75
8.2 Fixed Charge Coverage Ratio.........................................................................75
8.3 Capital Expenditures................................................................................75
8.4 Restaurant Capital Expenditures.....................................................................76
8.5 Availability........................................................................................76
ARTICLE IX NEGATIVE COVENANTS...................................................................................76
9.1 Restrictions on Liens...............................................................................76
9.2 Restrictions on Additional Indebtedness.............................................................76
9.3 Restrictions on Sale of Assets......................................................................76
9.4 No Corporate Changes................................................................................77
9.5 No Guarantees.......................................................................................77
9.6 No Restricted Payments..............................................................................77
9.7 No Investments......................................................................................77
9.8 No Affiliate Transactions...........................................................................77
9.9 No Prohibited Transactions Under ERISA..............................................................78
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9.10 No Additional Bank Accounts........................................................................79
9.11 No Excess Cash.....................................................................................79
9.12 Restrictions on the Company........................................................................79
9.13 Issuance of Stock..................................................................................79
9.14 Material Amendments of Material Contracts..........................................................79
9.15 Additional Negative Pledges........................................................................79
9.16 Senior Unsecured Debt..............................................................................80
9.17 Sale and Leaseback.................................................................................80
9.18 Licenses, Etc......................................................................................80
9.19 Limitations........................................................................................80
ARTICLE X POWERS................................................................................................81
10.1 Appointment as Attorney-in-Fact....................................................................81
10.2 Limitation on Exercise of Power....................................................................81
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES.......................................................................82
11.1 Events of Default..................................................................................82
11.2 Acceleration.......................................................................................84
ARTICLE XII TERMINATION.........................................................................................84
ARTICLE XIII THE AGENT..........................................................................................85
13.1 Appointment of Agent...............................................................................85
13.2 Nature of Duties of Agent..........................................................................85
13.3 Lack of Reliance on Agent..........................................................................86
13.4 Certain Rights of the Agent........................................................................86
13.5 Reliance by Agent..................................................................................86
13.6 Indemnification of Agent...........................................................................87
13.7 The Agent in its Individual Capacity...............................................................87
13.8 Holders of Notes...................................................................................87
13.9 Successor Agent....................................................................................88
13.10 Collateral Matters................................................................................88
13.11 Actions with Respect to Defaults..................................................................90
13.12 Delivery of Information...........................................................................90
ARTICLE XIV MISCELLANEOUS.......................................................................................90
14.1 Waivers............................................................................................90
14.2 JURY TRIAL.........................................................................................91
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE...................................................91
14.4 Arbitration........................................................................................91
14.5 Notices............................................................................................93
14.6 Assignability......................................................................................93
14.7 Information........................................................................................96
14.8 Payment of Expenses; Indemnification...............................................................97
14.9 Entire Agreement, Successors and Assigns...........................................................98
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14.10 Amendments, Etc...................................................................................98
14.11 Nonliability of Agent and Lenders.................................................................98
14.12 Independent Nature of Lenders' Rights.............................................................99
14.13 Counterparts......................................................................................99
14.14 Effectiveness.....................................................................................99
14.15 Severability......................................................................................99
14.16 Headings Descriptive..............................................................................99
14.17 Maximum Rate......................................................................................99
14.18 Right of Setoff..................................................................................100
14.19 Concerning Joint and Several Liability of the Borrowers..........................................100
14.20 Power of Attorney................................................................................103
EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Form of Acknowledgment Agreement
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Solvency Certificate
Exhibit D Form of Landlord Lien Waiver Agreement
Exhibit E Form of Pledge Agreement
Exhibit F Form of Security Agreement
Exhibit G Form of Revolving Note
Exhibit H Form of Notice of Borrowing
Exhibit I Form of Lockbox Agreement
Exhibit J Form of Notice of Extension/Conversion
Exhibit K Form of Compliance Certificate
Exhibit L Form of Borrowing Base Certificate
Exhibit M Form of Joinder Agreement
Exhibit N Form of Mortgagee Lien Waiver Agreement
SCHEDULES
Schedule 1.1A Lenders and Commitments
Schedule 1.1B Closing Conditions
Schedule 1.1C Liens
Schedule 1.1D Indebtedness
Schedule 1.1E Investments
Schedule 1.1F Corporate Structure
Schedule 1.1G Equipment Appraisals
Schedule 1.1H Unsecured Letters of Credit
Schedule 6.1 Jurisdictions of Organization
Schedule 6.7 Collateral Locations
Schedule 6.8 Fictitious Business Names
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Schedule 6.9 Subsidiaries
Schedule 6.10 Litigation
Schedule 6.14 ERISA
Schedule 6.15 Environmental Disclosures
Schedule 6.17 Intellectual Property
Schedule 6.19 Real Estate
Schedule 6.24 Taxes
Schedule 6.28 Material Contracts
Schedule 6.30 Affiliate Transactions
Schedule 6.31 Key Members of Management
Schedule 6.34 Restaurant Business
Schedule 9.3 Sales of Assets
Schedule 9.10 Bank Accounts
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of June 9, 1998 among FRESH
FOODS, INC., a North Carolina corporation (the "Company"), the Subsidiary
Borrowers (as defined herein) (hereinafter, the Company and the Subsidiary
Borrowers collectively referred to as the "Borrowers" or individually referred
to as a "Borrower"), each of those financial institutions identified as Lenders
on Schedule 1.1A hereto (together with each of their successors and assigns,
referred to individually as a "Lender" and, collectively, as the "Lenders"), and
FIRST UNION COMMERCIAL CORPORATION ("FUCC"), acting in the manner and to the
extent described in Article XIII hereof (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers wish to obtain a revolving credit facility to
provide for the acquisition by the Company of the Pierre Foods Division of
Xxxxxx Foods, Inc., a subsidiary of Tyson Foods, Inc., and to provide for the
working capital, letter of credit and general corporate needs of the Borrowers;
and
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Lenders are willing to make loans and advances to the Borrowers;
NOW, THEREFORE, the Borrowers, the Lenders and the Agent hereby agree
as follows:
ARTICLE I
DEFINITIONS.
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"Accounts" shall mean all of each Borrower's accounts, whether now
existing or existing in the future, including, without limitation, all (i)
accounts receivable (whether or not specifically listed on schedules furnished
to the Agent), including without limitation, all accounts created by or arising
from all of each Borrower's sales of goods or rendition of services made under
any of each Borrower's trade names or styles, or through any of each Borrower's
divisions; (ii) unpaid seller's rights (including rescission, replevin,
reclamation and stopping in transit) relating to the foregoing or arising
therefrom; (iii) rights to any goods represented by any of the foregoing,
including returned or repossessed goods; (iv) reserves and credit balances held
by each Borrower with respect to any such accounts receivable or account
debtors; (v) guarantees or collateral for any of the foregoing; and (vi)
insurance policies or rights relating to any of the foregoing.
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"Acknowledgment Agreements" shall mean (i) the Acknowledgment
Agreements, substantially in the form of Exhibit A hereto, between each
Borrower's warehousemen, fillers, packers and processors and the Agent, in each
case acknowledging and agreeing, among other things, (A) that such warehousemen,
fillers, packers and processors do not have any Liens on any of the property of
any Borrower or any Subsidiary, other than for customary fees and storage
charges, and (B) to the collateral assignment by each Borrower to the Agent of
each such Borrower's interest in the contracts with each of such warehousemen,
fillers, packers and processors and (ii) Landlord Agreements.
"Acquired Company" shall mean the Person (or the assets thereof) which
is acquired pursuant to an Acquisition.
"Acquisition" shall mean the purchase of (i) the Capital Stock of a
Person, (ii) the assets of such Person through merger or consolidation with such
Person or (iii) the plant, property and equipment of such Person, or a portion
thereof, together with the related current assets and intangible assets of such
Person.
"Acquisition Documents" shall mean an asset purchase agreement pursuant
to which an Acquisition is made in accordance with the terms hereof, including
the exhibits and schedules thereto, and all agreements, documents and
instruments executed and delivered pursuant thereto or in connection therewith.
"Affiliate" shall mean any entity which directly or indirectly
controls, is controlled by, or is under common control with, any Borrower or any
Subsidiary. For purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to (i) vote ten percent (10%)
or more of the securities having ordinary voting power for the election of
directors of such Person or (ii) direct or cause the direction of management and
policies of a business, whether through the ownership of voting securities, by
contract or otherwise and either alone or in conjunction with others or any
group.
"Agent" shall mean FUCC as provided in the preamble to this Credit
Agreement or any successor to FUCC.
"Agent's Fees" shall mean the fees payable by the Borrowers to the
Agent as described in the Fee Letter.
"Applicable Percentage" shall mean for Eurodollar Loans, Base Rate
Loans and Unused Line Fees, the appropriate applicable percentages corresponding
to the Leverage Ratio in effect as of the most recent Calculation Date as shown
below:
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----------- --------------------- ---------------------------- ---------------------------- --------------------------
Tier Applicable Percentage for Applicable Percentage for Applicable Percentage
Levels Leverage Ratio Eurodollar Loans Base Rate Loans for Unused Line Fee
----------- --------------------- ---------------------------- ---------------------------- --------------------------
1 > 5.5:1.0 2.625% 1.125% .50%
----------- --------------------- ---------------------------- ---------------------------- --------------------------
2 > 5.0:1.0 <= 5.5:1.0 2.375% 0.875% .50%
----------- --------------------- ---------------------------- ---------------------------- --------------------------
3 > 4.5:1.0 <= 5.0:1.0 2.125% 0.625% .375%
----------- --------------------- ---------------------------- ---------------------------- --------------------------
4 > 4.0:1.0 <= 4.5:1.0 1.875% 0.375% .375%
----------- --------------------- ---------------------------- ---------------------------- --------------------------
5 > 3.5:1.0 <= 4.0:1.0 1.625% 0.125% .25%
----------- --------------------- ---------------------------- ---------------------------- --------------------------
6 > 3.0:1.0 <= 3.5:1.0 1.375% 0.00% .25%
----------- --------------------- ---------------------------- ---------------------------- --------------------------
7 <= 3.0:1.0 1.125% 0.00% .25%
----------- --------------------- ---------------------------- ---------------------------- --------------------------
The Applicable Percentages shall be determined and adjusted quarterly on the
date (each a "Calculation Date") which is the first Business Day of the calendar
month immediately following the calendar month in which the Company provides the
quarterly officer's certificate in accordance with the provisions of Section
7.1(f); provided, however, that (i) the initial Applicable Percentages shall be
based on Tier Level 3 (as shown above) and shall remain at Tier Level 3 until
the first Calculation Date subsequent to the Closing Date, and, thereafter, the
Tier Level shall be determined by the then current Leverage Ratio, and (ii) if
the Company fails to provide the officer's certificate to the Agent for any
fiscal quarter as required by and within the time limits set forth in Section
7.1(f), the Applicable Percentages from the applicable date of such failure
shall be based on Tier Level 1 until the first Business Day of the calendar
month immediately following the calendar month in which an appropriate officer's
certificate is provided, whereupon the Tier Level shall be determined by the
then current Leverage Ratio. Except as set forth above, each Applicable
Percentage shall be effective from one Calculation Date until the next
Calculation Date.
"Approved Restaurants" shall have the meaning given to such term in the
definition of Eligible Real Property herein.
"Asset Disposition" shall mean the disposition of any or all of the
assets (including without limitation the Capital Stock of a Borrower or
Subsidiary of a Borrower) of any Borrower or its Subsidiaries whether by sale,
lease, transfer or otherwise .
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by an assigning Lender and an assignee Lender, accepted by the
Agent, in accordance with Section 14.6(f), in the form attached hereto as
Exhibit B.
"Availability" shall mean as of any date of determination, the lesser
of the Revolving Credit Committed Amount and the Borrowing Base as of such date,
minus the outstanding principal amount of the Revolving Loans then outstanding
minus the Letter of Credit Obligations then outstanding.
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"Base Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the greater of (i) the Federal Funds Rate in effect on such day plus 1/2 of 1%
or (ii) the Prime Rate in effect on such day. If for any reason the Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall be
determined without regard to clause (i) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the Prime Rate
or the Federal Funds Rate, respectively.
"Base Rate Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Benefit Plan" shall mean a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which any
Borrower, any Subsidiary or any ERISA Affiliate is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower" and "Borrowers" shall have the meaning given such terms in
the preamble of this Credit Agreement.
"Borrowing Base" shall have the meaning given to such term in Section
2.1(b)(i).
"Borrowing Base Certificate" shall have the meaning given to such term
in Section 7.1(e).
"Business Day" shall mean any day other than a Saturday, a Sunday, a
legal holiday or a day on which banking institutions are authorized or required
by law or other governmental action to close in Charlotte, North Carolina or New
York, New York; provided that in the case of Eurodollar Loans, such day is also
a day on which dealings between banks are carried on in U.S. dollar deposits in
the London interbank market.
"Capital Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
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"Cash Collateral Accounts" shall mean the FUNB NonRestaurant Cash
Collateral Account and the FUNB Claremont Restaurant Cash Collateral Account.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
one year from the date of acquisition, (ii) time deposits or certificates of
deposit of any commercial bank incorporated under the laws of the United States
or any state thereof, of recognized standing having capital and unimpaired
surplus in excess of $1,000,000,000 and whose short-term commercial paper rating
at the time of acquisition is at least A-1 or the equivalent thereof by Standard
& Poor's Corporation or at least P-1 or the equivalent thereof by Xxxxx'x
Investors Services, Inc. (any such bank, an "Approved Bank"), with such deposits
or certificates having maturities of not more than one year from the date of
acquisition, (iii) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (i) and (ii)
above entered into with any Approved Bank, (iv) commercial paper or finance
company paper issued by any Person incorporated under the laws of the United
States or any state thereof and rated at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc., and in each case maturing not more than one
year after the date of acquisition, and (v) investments in money market funds
that are registered under the Investment Company Act of 1940, which have net
assets of at least $1,000,000,000 and at least 85% of whose assets consist of
securities and other obligations of the type described in clauses (i) through
(iv) above. All such Cash Equivalents must be denominated solely for payment in
U.S. Dollars.
"Casualty Loss" shall have the meaning given to such term in Section
7.10.
"Change of Control" shall mean the occurrence of any of the following:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders, is or becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that for purposes of this clause (i) such person shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total voting power of
the Voting Stock of the Borrower; (ii) the Borrower merges with or into another
Person or sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any Person, or any Person merges with
or into the Borrower, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Borrower is converted into or exchanged for
cash, securities or other property, other than any such transaction where (x)
the outstanding Voting Stock of the Borrower is converted into or exchanged for
(1) Voting Stock of the surviving or transferee corporation and/or (2) cash,
securities or other property in an amount which could be paid by the Borrower as
a "restricted payment" under the indenture governing the Senior Unsecured Debt
and (y) immediately after such transaction no "person" or "group" (within the
meaning of Section 13(d) or 14(d) of the Exchange Act) (other than the Permitted
Holders) is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such Person has the right to acquire, whether
such
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right is exercisable immediately or only after the passage of time), directly or
indirectly, of (1) 50% or more of the voting power of the Voting Stock of the
surviving or transferee corporation on a fully diluted basis, after giving
effect to the conversion or exercise of all outstanding warrants, options and
other securities of such surviving or transferee corporation, convertible into
or exercisable for Voting Stock of such surviving or transferee corporation
(whether or not such securities are then currently convertible or exercisable)
and (2) a greater percentage of the Voting Stock of such surviving or transferee
corporation, calculated on a fully diluted basis, than the percentage
beneficially owned by the Permitted Holders; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the board of directors of the Borrower (together with any new directors whose
election by such board of directors or whose nomination for election by the
shareholders of the Borrower was approved by a vote of 66 2/3% of the directors
of the Borrower then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of the Borrower then in office.
"Closing" shall mean the consummation of the making of the initial loan
or advance by the Lenders to the Borrowers under this Credit Agreement.
"Closing Conditions" shall mean the list of Closing Conditions attached
hereto as Schedule 1.1B.
"Closing Date" shall mean the date on which the Closing occurs.
"Collateral" shall mean any and all assets and rights and interests in
or to property of the Borrowers pledged from time to time as security for the
Obligations pursuant to the Security Documents whether now owned or hereafter
acquired, including, without limitation, (i) all of the Accounts, Chattel Paper,
Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles (including
all intellectual property), Inventory, Instruments and Proceeds of each
Borrower, as defined in the Security Agreement, (ii) all Pledged Stock and all
Proceeds thereof pledged pursuant to the Pledge Agreement and (iii) all of the
real property subject to the Mortgages.
"Consolidated or consolidated" with reference to any term defined
herein, shall mean that term as applied to the accounts of the Company and all
Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Capital Expenditures" shall mean, for any applicable
period of computation, an amount equal to the consolidated aggregate
expenditures of the Company and its Subsidiaries during such fiscal period for
the acquisition (including the acquisition by capitalized lease) or improvement
of capital assets, as determined in accordance with GAAP.
"Consolidated Cash Taxes" shall mean, for any applicable period of
computation, the aggregate of all taxes of the Company and its Subsidiaries on a
consolidated basis for such period,
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as determined in accordance with GAAP, to the extent the same are paid in cash
during such period.
"Consolidated EBITDA" shall mean, for any applicable period of
computation, the sum of (i) Consolidated Net Income for such period, but
excluding therefrom all extraordinary non-cash items of income or loss, plus
(ii) the aggregate amount of depreciation, amortization and other non-cash
charges made in calculating Consolidated Net Income for such period, plus (iii)
aggregate consolidated interest expense for such period, plus (iv) the aggregate
amount of all income taxes reflected on the consolidated statements of income of
the Company and its Subsidiaries for such period plus transaction, integration
and systems related charges up to $2,000,000 related to the acquisition of the
Pierre Foods Division and taken during the four fiscal quarterly periods
subsequent to such acquisition. Consolidated EBITDA shall include gains or
losses on the sale of assets.
"Consolidated Fixed Charges" shall mean, for any applicable period of
computation, the sum of (i) all Consolidated Interest Expense for the applicable
period plus (ii) all Consolidated Cash Taxes paid during the applicable period
plus (iii) Consolidated Scheduled Funded Debt Payments for the applicable period
plus (iv) cash dividends paid by the Company pursuant to Section 9.6 in the
applicable period.
"Consolidated Funded Debt" shall mean, as of the date of determination,
all Funded Indebtedness of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any applicable period
of computation, interest expense on Consolidated Funded Debt of the Company and
its Subsidiaries for such period, as determined in accordance with GAAP.
"Consolidated Net Income" shall mean the consolidated net income (or
net deficit) of the Company and its Subsidiaries for any period, after deduction
of all expenses, taxes and other proper charges, all as determined in accordance
with GAAP.
"Consolidated Restaurant Capital Expenditures" shall mean Consolidated
Capital Expenditures incurred in connection with the opening of new, or the
conversion of existing, restaurants of the Company and its Subsidiaries.
"Consolidated Scheduled Funded Debt Payments" shall mean, as of the end
of each fiscal quarter of the Company and its Subsidiaries on a consolidated
basis, the sum of all scheduled payments of principal on Consolidated Funded
Indebtedness for the applicable period ending on such date (including the
principal component of payments due on Capital Leases during the applicable
period ending on such date); it being understood that Consolidated Scheduled
Funded Debt Payments shall not include voluntary prepayments or the mandatory
prepayments required pursuant to Section 2.4.
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15
"Contractual Obligations" shall mean, with respect to any Person, any
term or provision of any securities issued by such Person, or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement to which such Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Credit Agreement" shall mean this credit agreement, dated as of the
date hereof, as the same may be modified, amended, extended, restated or
supplemented from time to time.
"Credit Documents" shall mean, collectively, this Credit Agreement, the
Revolving Notes, the Letters of Credit, the Security Documents and all other
documents, agreements, instruments, opinions and certificates executed and
delivered in connection herewith or therewith, as the same may be modified,
amended, extended, restated or supplemented from time to time.
"Default" shall mean an event, condition or default which, with the
giving of notice, the passage of time or both would be an Event of Default.
"Defaulting Lender" shall have the meaning given to such term in
Section 2.1(d)(iii).
"DOL" shall mean the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Eligible Accounts Receivable" shall mean the aggregate face amount of
the Borrowers' Accounts that conform to the warranties contained herein and at
all times continue to be acceptable to the Agent in its reasonable discretion,
less the aggregate amount of all returns, discounts, claims, credits, charges
(including warehousemen's charges) and allowances of any nature (whether issued,
owing, granted or outstanding), and less the aggregate amount of all reserves
for slow paying accounts, foreign sales, xxxx and hold (or deferred shipment)
transactions and the Lenders' charges as set forth in this Credit Agreement.
Unless otherwise approved in writing by the Agent, no Account shall be deemed to
be an Eligible Account Receivable if:
(i) it arises out of a sale made by any Borrower to an
Affiliate; or
(ii) (A) the Account is unpaid more than 60 days after the
original invoice date, with respect to Accounts the invoice for which
provides that payment is due in 60 days or less from the date of such
invoice (for purposes hereof, a "Regular Account"), (B) the Account is
unpaid more than 30 days after the original due date, with respect to
Accounts the invoice for which provides that payment is due 90 days or
less, but more than 60 days, from the date of such invoice or (C) any
Account the invoice for which provides that payment is due more than 90
days from the date of such invoice; or
(iii) such Account is from the same account debtor (or any
affiliate thereof) and fifty percent (50%) or more, in face amount, of
other Accounts from such account
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debtor (or any affiliate thereof) are due or unpaid more than 60 days
after the original invoice date; or
(iv) the Account, when aggregated with all other Accounts of
such account debtor, exceeds twenty percent (20%) in face value of all
Accounts of the Borrowers then outstanding, to the extent of such
excess, or such Account, on an individual basis, exceeds fifteen
percent (15%) in face value of all Accounts of any one Borrower; or
(v) (A) the account debtor is also a creditor of any Borrower,
to the extent of the amount owed by the Borrower to the account debtor,
(B) the account debtor has disputed its liability on, or the account
debtor has made any claim with respect to, such Account or any other
Account due from such account debtor to such Borrower, which has not
been resolved or (C) the Account otherwise is or may become subject to
any right of setoff by the account debtor, to the extent of the amount
of such setoff; or
(vi) the account debtor has commenced a voluntary case under
the federal bankruptcy laws, as now constituted or hereafter amended,
or made an assignment for the benefit of creditors, or if a decree or
order for relief has been entered by a court having jurisdiction in the
premises in respect to the account debtor in an involuntary case under
the federal bankruptcy laws, as now constituted or hereafter amended,
or if any other petition or other application for relief under the
federal bankruptcy laws has been filed by or against the account
debtor, or if the account debtor has failed, suspended business, ceased
to be solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs; or
(vii) the sale is to an account debtor outside the continental
United States, unless the sale is (A) on letter of credit, guaranty or
acceptance terms, in each case acceptable to the Agent in its
reasonable discretion, or (B) otherwise approved by and acceptable to
the Agent in its reasonable discretion; or
(viii) the sale to the account debtor is on a xxxx-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment basis
or made pursuant to any other written agreement providing for
repurchase or return; or
(ix) Agent believes, in its commercially reasonable judgment,
that collection of such Account is insecure or that such Account may
not be paid by reason of the account debtor's financial inability to
pay; or
(x) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable
Borrower duly assigns its rights to payment of such Account to the
Agent pursuant to the Assignment of Claims Act of 1940, as amended (31
U.S.C. ss. 3727 et seq.); or
(xi) the goods giving rise to such Account have not been
shipped and delivered to and accepted by the account debtor or the
services giving rise to such Account have not
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been performed by the applicable Borrower and accepted by the account
debtor or the Account otherwise does not represent a final sale; or
(xii) the Account exceeds a credit limit determined by the
Agent, in its reasonable discretion, to the extent such Account exceeds
such limit; or
(xiii) the Agent does not have a first priority, perfected
security interest in the Account; or
(xiv) the Agent, in the exercise of its reasonable discretion,
determines it to be ineligible.
In addition to the foregoing, Eligible Accounts Receivable shall
include such Accounts as the Borrowers shall request and that the Agent approves
in advance, in writing and in its commercially reasonable judgment.
"Eligible Equipment" shall mean (A) the Orderly Liquidation Value of
the gross amount of each Borrower's Equipment (which as of the Closing Date
shall be limited to Equipment located at the Claremont, North Carolina and
Cincinnati, Ohio facilities of the Company and its Subsidiaries), which (i) is
owned solely by such Borrower and with respect to which such Borrower has good,
valid and marketable title; (ii) is located on property that is either owned or
leased by such Borrower (provided, that, with respect to Equipment located on
property leased by such Borrower, such Borrower shall have delivered in favor of
the Agent an Acknowledgment Agreement from the landlord of such leased
property); (iii) is subject to a valid, enforceable and first priority perfected
Lien (and no other Liens) in favor of the Agent; (iv) is located in the United
States; and (v) is not obsolete or slow moving, and which otherwise conforms to
the warranties contained herein; and (B) less any Equipment that the Agent
determines in its reasonable judgment to be ineligible. Notwithstanding the
foregoing, any increase in Eligible Equipment after the Closing Date shall only
constitute Eligible Equipment for purposes of calculating the Borrowing Base if
approved in writing by the Lenders in their reasonable discretion.
"Eligible Inventory" shall mean (i) the aggregate gross amount of each
Borrower's Inventory (excluding work-in-progress other than work-in-progress
consisting of smoked hams during the curing process), valued at the lower of
cost (on a FIFO basis) or market, which (A) is owned solely by such Borrower and
with respect to which such Borrower has good, valid and marketable title, (B) is
stored on property that is either (1) owned or leased by such Borrower or (2)
owned or leased by a warehouseman that has contracted with such Borrower to
store Inventory on such warehouseman's property or by a filler, processor or
packer of such Borrower (provided that, with respect to Inventory stored on
property leased by such Borrower, such Borrower shall have delivered in favor of
the Agent an Acknowledgment Agreement from the landlord of such leased location,
and, with respect to Inventory stored on property owned or leased by a
warehouseman, filler, processor or packer, such Borrower shall have delivered to
the Agent an Acknowledgment Agreement executed by such warehouseman, filler,
processor or packer); (C) is subject to a valid, enforceable and first priority
Lien in favor of Agent except,
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18
with respect to Eligible Inventory stored at sites described in clause (B)(2)
above for normal and customary warehouseman, filler, packer and processor
charges); (D) is located in the United States; and (E) is not obsolete or slow
moving and for which a markdown reserve has not been made, and which otherwise
conforms to the warranties contained herein and which at all times continues to
be acceptable to the Agent in its reasonable discretion; (ii) less Inventory
consisting of manufacturing supplies (other than raw materials), expense
supplies or shipping supplies; (iii) less markdown reserves; (iv) less any goods
returned or rejected by such Borrower's customers for which a credit has not yet
been issued and goods in transit to third parties (other than to such Borrower's
agents, warehouses, fillers, processors or packers that comply with clause
(i)(B)(2) above); (v) less damaged Inventory or any Inventory that the Agent
determines in its commercially reasonable judgment to be a no charge or sample
item; (vi) less a reserve equal to the amount of all accounts payable of such
Borrower owed or owing to any filler, packer or processor of such Borrower;
(vii) less any reserves required by the Agent in its reasonable discretion for
special order goods and market value declines; (viii) less any Inventory which
is held by a Borrower pursuant to consignment, sale or return, sale on approval
or similar arrangement; and (ix) less any Inventory that the Agent determines in
its commercially reasonable judgment to be ineligible. In addition to the
foregoing, Eligible Inventory shall include such items of such Borrower's
Inventory as such Borrower shall request and that the Agent approves in advance,
in writing and in its commercially reasonable judgment.
"Eligible Real Property" shall mean the Fair Market Value of the owned
properties noted as such on Schedule 6.19 hereto and which are subject to a
valid, enforceable and first priority Lien in favor of Agent, together with
additional properties consisting of new restaurants acquired by the Company or
any of its Subsidiaries during the first two years following the Closing Date
which have been approved by the Agent ("Approved Restaurants"), which approval
shall not be unreasonably withheld. Notwithstanding the foregoing, any additions
of Eligible Real Property, other than Approved Restaurants, after the Closing
Date shall only constitute Eligible Real Property for purposes of calculating
the Borrowing Base if approved in writing by the Lenders in their reasonable
discretion.
"Equipment" shall mean all of each Borrower's equipment and machinery,
including, without limitation, all appliances, parts, instruments,
appurtenances, accessories, furnishings, spare parts constituting part of the
equipment and machinery and other equipment or property of whatever nature which
may from time to time be incorporated or installed in or attached to any
property of any Borrower or any portion thereof, and any replacements of the
foregoing.
"Equipment Appraisals" shall mean the appraisals of Equipment listed on
Schedule 1.1G hereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is or was at any
time a member of the same controlled group of corporations (within the meaning
of Section 414(b) of the Internal Revenue Code) as the Borrowers or any
Subsidiary; (ii) partnership or other trade or
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business (whether or not incorporated) at any time under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with the Borrowers
or any Subsidiary; and (iii) member of the same affiliated service group (within
the meaning of Section 414(m) of the Internal Revenue Code) as the Borrowers or
any Subsidiary, any corporation described in clause (i) above, or any
partnership or trade or business described in clause (ii) above.
"Eurodollar Loan" shall mean a Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" shall mean, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to the
following formula:
Eurodollar Rate = London Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" shall mean for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not any Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Percentage.
"Event(s) of Default" shall have the meaning given such term in Article
XI.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Taxes" shall have the meaning given to such term in Section
2.7.
"Fair Market Value" shall mean, with respect to Real Estate, the most
probable price which a parcel of Real Estate should bring in a competitive and
open market under all conditions requisite to a fair sale assuming that buyer
and seller are each acting prudently and knowledgeably and that the price is not
affected by undue stimulus. Implicit in this definition is that the sale will be
consummated by a specified date and that the passing of the title from seller to
buyer will occur under the following conditions: (i) buyer and seller are
typically motivated, well informed, well advised and acting in their best
interests, respectively, (ii) a reasonable time is allowed for marketing of the
Real Estate in the open market, (iii) payment is made in U.S. Dollars or upon
other financial arrangements comparable thereto and (iv) the price represents
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normal consideration for the Real Estate sold, unaffected by special or creative
financing or sales concessions granted by any party associated with the sale.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal, for each day during such period, to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
"Fee Letter" shall mean the letter agreement, dated April 7, 1998, by
and between the Agent and the Borrowers regarding the fees to be paid by the
Borrowers to the Agent.
"Fees" shall mean, collectively, the Agent's Fees, the Lenders' Fees,
the Unused Line Fee, the Standby Letter of Credit Fee, Trade Letter of Credit
Fee and the Issuing Bank Fees payable hereunder.
"Financials" shall have the meaning given to such term in Section 6.6.
"First Union" shall mean First Union National Bank, having its
principal office in North Carolina, and its successors and permitted assigns.
"Fixed Charge Coverage Ratio" shall mean, (i) as of the last day of the
fiscal quarter ending November 26, 1998, the ratio of Consolidated EBITDA minus
Unfinanced Consolidated Capital Expenditures (computed for the two fiscal
quarterly periods then ending) to Consolidated Fixed Charges (computed for the
two fiscal quarterly periods then ending), (ii) as of the last day of the fiscal
quarter ending February 26, 1999, the ratio of Consolidated EBITDA minus
Unfinanced Consolidated Capital Expenditures (computed for the three fiscal
quarterly periods then ending) to Consolidated Fixed Charges (computed for the
three fiscal quarterly periods then ending) and (iii) as of the last day of the
fiscal quarter ending May 21, 1999 and as of the last day of each fiscal quarter
ending thereafter, the ratio of Consolidated EBITDA minus Unfinanced
Consolidated Capital Expenditures (computed for the four fiscal quarterly
periods then ending) to Consolidated Fixed Charges (computed for the four fiscal
quarterly periods then ending).
"Food Security Act" shall mean the Food Security Act of 1985, as
amended, and any successor statute thereto, including all rules and regulations
thereunder, all as the same may be in effect from time to time.
"Foreign Lender" shall have the meaning given to such term in Section
2.8(a).
"FUNB Claremont Restaurant Cash Collateral Account" shall mean account
number 2000000754228, established and maintained in the name of the Agent at
First Union, for the benefit of the Lenders.
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21
"FUNB Leverage Account" shall mean account number 2070482789126,
established and maintained in the name of the Agent at First Union, for the
benefit of the Lenders.
"FUNB NonRestaurant Cash Collateral Account" shall mean account number
2000000754231, established and maintained in the name of the Agent at First
Union, for the benefit of the Lenders.
"Funded Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clause (e), (f), (g), (i), (k), (l) and (m) of the
definition of "Indebtedness" set forth in this Section 1.1, (b) all Indebtedness
of another Person of the type referred to in clause (a) above secured by (or for
which the holder of such Funded Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all guaranties of such Person
with respect to Indebtedness of the type referred to in clause (a) above of
another Person and (d) Indebtedness of the type referred to in clause (a) above
of any partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with respect
thereto.
"Funding Bank" shall have the meaning given to such term in Section
4.7.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect on the date hereof and applied on a
consistent basis with the Financials.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Hedging Agreements" shall mean any Interest Rate Protection Agreement
or other interest rate protection agreement, foreign currency exchange
agreement, commodity purchase or option agreement or other interest or exchange
rate or commodity price hedging agreements
"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness under this Credit
Agreement, under the laws of the State of North Carolina (or the law of any
other jurisdiction whose laws may be mandatorily applicable notwithstanding
other provisions of this Credit Agreement and the other Credit Documents), or
under applicable federal laws which may presently or hereafter be in effect and
which allow a higher maximum nonusurious interest rate than under North Carolina
or such other jurisdiction's law, in any case after taking into account, to the
extent permitted by applicable law, any and all relevant payments or charges
under this Credit Agreement and any other Credit Documents executed in
connection herewith, and any available exemptions, exceptions and exclusions.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by
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bonds, debentures, notes or similar instruments, or upon which interest payments
are customarily made, (c) all obligations of such Person under conditional sale
or other title retention agreements relating to property purchased by such
Person (other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of business), (d)
all obligations of such Person issued or assumed as the deferred purchase price
of property or services purchased by such Person (other than trade debt incurred
in the ordinary course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such Person,
(e) all obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements, (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (g) all guaranties of such Person
with respect to Indebtedness of the type referred in this definition of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Interest Rate
Protection Agreements, (j) the maximum amount of all standby letters of credit
issued or bankers' acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due, by a fixed date, (l) with respect to the Borrower or any
of its Subsidiaries, the principal portion of all obligations of such Person
under off-balance sheet financing arrangements and (m) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer.
"Independent Accountant" shall mean a firm of independent public
accountants of nationally recognized standing selected by the Board of Directors
of the Company, which is "independent" as that term is defined in Rule 2-01 of
Regulation S-X promulgated by the Securities and Exchange Commission.
"Interest Period" shall mean, as to Eurodollar Loans, a period of one
month, two months, three months or six months, as selected by the Borrowers,
commencing on the date of the borrowing (including continuations and conversions
thereof); provided, however, (i) if any Interest Period would end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (ii) no Interest Period shall extend beyond the Maturity Date, (iii) any
Interest Period with respect to a Eurodollar 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 relevant calendar month at the end of
such Interest Period and (iv) if the Revolving Loans and Revolving Commitments
hereunder have not been fully syndicated by the Closing Date, during the 60-day
period after the Closing Date, the Borrowers shall only be permitted to select
Eurodollar Loans with Interest Periods of one month or Base Rate Loans.
"Interest Rate Protection Agreement" shall mean any interest rate
protection agreement, foreign currency exchange agreement, commodity purchase or
option agreement or other interest
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23
or exchange rate or commodity price hedging agreements between any Borrower and
any Lender, or any affiliate of a Lender.
"Internal Revenue" shall mean the Internal Revenue Service and any
successor agency.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute thereto and all rules
and regulations promulgated thereunder.
"Inventory" shall mean all of each Borrower's inventory, including
without limitation, (i) all raw materials, work in process, parts, components,
assemblies, supplies and materials used or consumed in the Borrowers' business;
(ii) all goods, wares and merchandise, finished or unfinished, held for sale or
lease or leased or furnished or to be furnished under contracts of service; and
(iii) all goods returned to or repossessed by the Borrowers.
"Investment" in any Person shall mean (i) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or otherwise,
but exclusive of the acquisition of inventory, supplies, equipment and other
assets used or consumed in the ordinary course of business of the applicable
Borrower and Consolidated Capital Expenditures not otherwise prohibited
hereunder) of assets, shares of capital stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other securities of
such Person, (ii) any deposit (other than deposits made in connection with the
purchase of equipment or other assets in the ordinary course of business) with,
or advance, loan or other extension of credit (other than sales of inventory on
credit in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms) to, such Person or (iii) any other
capital contribution to or investment in such Person, including, without
limitation, any obligation incurred for the benefit of such Person. In
determining the aggregate amount of Investments outstanding at any particular
time, (i) the amount of any Investment represented by a guaranty shall be taken
at not less than the principal amount of the obligations guaranteed and still
outstanding; (ii) there shall be deducted in respect of each such Investment any
amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (iii)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise; and
(iv) there shall not be deducted from the aggregate amount of Investments any
decrease in the market value thereof.
"Issuing Bank" shall mean First Union.
"Issuing Bank Fees" shall have the meaning given to such term in
Section 4.5(c).
"Joinder Agreement" shall mean an agreement substantially in the form
of Exhibit M hereto.
"Landlord Agreements" shall mean the Landlord Lien Waiver Agreements,
substantially in the form of Exhibit D hereto, between each of the Borrower's
landlords and the Agent, in each
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case acknowledging and agreeing, among other things, (i) that such landlords do
not have any Liens on any of the property of any Borrower or any Subsidiary and
(ii) to permit the Agent access to the property for the purposes of exercising
its remedies under the Security Agreement.
"Leases" shall have the meaning given to such term in Section 6.19.
"Lender" shall have the meaning given to such term in the preamble of
this Credit Agreement.
"Lenders' Fees" shall mean the non-refundable fees payable to each of
the Lenders as set forth in each of the Lender's respective fee letter with the
Agent.
"Letter of Credit Documents" shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (i) the
rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"Letter of Credit Committed Amount" shall have the meaning given to
such term in Section 3.1.
"Letter of Credit Obligations" shall mean, at any time, the sum of (i)
the aggregate undrawn amount of all Letters of Credit outstanding at such time,
plus (ii) the aggregate amount of all drawings under Letters of Credit for which
the Issuing Bank has not at such time been reimbursed, plus (iii) without
duplication, the aggregate amount of all payments made by each Lender to the
Issuing Bank with respect to such Lender's participation in Letters of Credit as
provided in Section 3.3 for which the Borrowers have not at such time reimbursed
the Lenders, whether by way of a Revolving Loan or otherwise.
"Letters of Credit" shall mean all letters of credit (whether
documentary or stand-by and whether for the purchase of inventory, equipment or
otherwise) issued by an Issuing Bank for the account of the Borrowers pursuant
to this Credit Agreement, and all amendments, renewals, extensions or
replacements thereof.
"Leverage Ratio" shall mean (i) as of the last day of the fiscal
quarter ending August 31, 1998, the ratio of (a) Consolidated Funded Debt
(computed as of the last day of such fiscal quarter) to (b) Consolidated EBITDA
(computed for the fiscal quarterly period then ending) times four (4), (ii) as
of the last day of the fiscal quarter ending November 30, 1998, the ratio of (a)
Consolidated Funded Debt (computed as of the last day of such fiscal quarter) to
Consolidated EBITDA (computed for the two fiscal quarterly periods then ending)
times two (2), (iii) as of the last day of the fiscal quarter ending February
28, 1999, the ratio of (a) Consolidated Funded Debt (computed as of the last day
of such fiscal quarter) to Consolidated EBITDA (computed for the three fiscal
quarterly periods then ending) times one and one-third (1 1/3) and (iv) as of
the last day of the fiscal quarter ending May 31, 1999 and as of the last day of
each
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fiscal quarter ending thereafter, the ratio of (a) Consolidated Funded Debt
(computed as of the last day of such fiscal quarter) to (b) Consolidated EBITDA
(computed for the four fiscal quarterly periods then ending).
"Lien(s)" shall mean any lien, claim, charge, pledge, security
interest, deed of trust, mortgage, or other encumbrance.
"Lockbox Accounts" shall have the meaning given to such term in Section
2.4(b)(ii).
"Lockbox Agreement" shall have the meaning given to such term in
Section 2.4(b)(ii).
"Lockbox Bank" shall have the meaning given to such term in Section
2.4(b)(ii).
"Lockboxes" shall have the meaning given to such term in Section
2.4(b)(ii).
"London Interbank Offered Rate" shall mean, with respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of interest
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one rate is
specified on Telerate Page 3750, the applicable rate shall be the arithmetic
mean of all such rates. If, for any reason, such rate is not available, the term
"London Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"Management Services Agreement" shall mean the Management Services
Agreement dated as of June 23, 1995, between Herth Management, Inc. and the
Company, as amended by a certain Extension Agreement dated August 29, 1997.
"Material Adverse Change" shall mean a material adverse change in (a)
the business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Borrowers, taken as a whole, (b)
the Collateral, (c) the Borrowers' ability to perform their respective
obligations under the Credit Documents, or (d) the rights and remedies of the
Lenders hereunder, in each case as determined by the Agent in its reasonable
discretion.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Borrowers, taken as a whole, (b)
the Collateral, (c) the Borrowers' ability to perform their respective
obligations under the Credit Documents, or (d) the rights and remedies of the
Lenders hereunder, in each case as determined by the Agent in its reasonable
discretion.
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"Material Contract" shall mean any contract or other arrangement (other
than any of the Leases or the Credit Documents), whether written or oral, to
which any Borrower or any Subsidiary is a party as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto could have
a Material Adverse Effect.
"Maturity Date" shall mean June 1, 2003.
"Merchandise Returns" shall mean any of the products manufactured and
sold by the Borrowers or any of their Subsidiaries that is returned.
"Mortgages" shall mean the mortgages granted by the Borrowers to secure
the Obligations on all owned Real Estate.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and (i) which is, or within the immediately
preceding six (6) years was, contributed to by any Borrower, any Subsidiary or
any ERISA Affiliate or (ii) with respect to which any Borrower or any Subsidiary
may incur any liability.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by
the Borrowers in respect of any Asset Disposition, net of (a) direct costs
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and (b) taxes paid or payable as a result thereof; it
being understood that "Net Cash Proceeds" shall include, without limitation, any
cash received upon the collection, sale or other disposition of any non-cash
consideration received by the Borrowers in any Asset Disposition.
"NonRestaurant Business" shall mean all operations of the Company other
than the Restaurant Business.
"Notice of Borrowing" shall have the meaning given to such term in
Section 2.1(d)(i).
"Notice of Extension/Conversion" shall have the meaning given to such
term in Section 2.10.
"Obligations" shall mean the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to any Borrower, or to
others for any Borrower's account in each case pursuant to the terms and
provisions of this Credit Agreement, together with interest thereon (including
interest which would be payable as post-petition interest in connection with any
bankruptcy or similar proceeding) and, including, without limitation, any
reimbursement obligation or indemnity of the Borrowers on account of Letters of
Credit and all other Letter of Credit Obligations, and all indebtedness, fees,
liabilities and obligations which may at any time be owing by any Borrower to
any Lender in each case pursuant to this Credit Agreement or any other Credit
Document, whether now in existence or incurred by a Borrower from time to time
hereafter, whether unsecured or secured by pledge, Lien upon or security
interest in any of a Borrower's assets or property or the assets or property of
any other Person, whether such
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indebtedness is absolute or contingent, joint or several, matured or unmatured,
direct or indirect and whether such Borrower is liable to such Lender for such
indebtedness as principal, surety, endorser, guarantor or otherwise. Obligations
shall also include any other indebtedness owing to any Lender by any Borrower
under this Credit Agreement and the other Credit Documents, any Borrower's
liability to any Lender pursuant to this Credit Agreement as maker or endorser
of any promissory note or other instrument for the payment of money, any
Borrower's liability to any Lender pursuant to this Credit Agreement or any
other Credit Document under any instrument of guaranty or indemnity, or arising
under any guaranty, endorsement or undertaking which any Lender may make or
issue to others for any such Borrower's account pursuant to this Credit
Agreement, including any accommodation extended with respect to applications for
Letters of Credit, and all liabilities and obligations owing from any Borrower
to any Lender, or any affiliate of a Lender, arising under Interest Rate
Protection Agreements entered into for the purpose of hedging interest rate risk
under this Credit Agreement and the other Credit Documents.
"Operative Documents" shall mean the Credit Documents, the Security
Documents, the Acquisition Documents, the Management Services Agreement, any
employment contracts, and any documents or instruments evidencing Senior
Unsecured Debt.
"Orderly Liquidation Value" shall mean, with respect to the Equipment,
the estimated gross proceeds that could be expected to be obtained from a
"forced piecemeal" privately negotiated sale (and removal) of such Equipment.
The terms of any such sale and removal are based on the following assumptions:
(i) the seller of such Equipment would be provided a term of six to nine months
to effect such sale, (ii) all such sales would be made on an "as is" - "where
is" basis and on cash terms and (iii) the buyer of such Equipment would be
responsible for the removal of any such Equipment. In addition, attributes of
the Equipment taken into consideration to determine value would include age,
physical condition, geographical location, removal costs, quantities brought
into the marketplace and overall psychological appeal.
"Other Taxes" shall have the meaning given to such term in Section
2.7(c).
"Packers and Stockyard Act" shall mean the Packers and Stockyards Act
of 1921, as amended, and any successor statute thereto, including all rules and
regulations thereunder, all as the same may be in effect from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Permitted Acquisitions" shall mean an Acquisition by any Borrower of
an Acquired Company which Acquisition complies with the following requirements
(in each case to the satisfaction of the Agent): (i) the Acquired Company shall
be an operating company that engages in the food processing line of business,
(ii) the aggregate purchase price for all Acquired Companies (including cash,
stock and/or assumption of liabilities) shall not exceed $10,000,000, (iii) the
Agent shall have received the "Board Paper" for the Acquired Company (i.e. a
short memo prepared by the applicable Borrower with respect to the Acquired
Company), (iv) the Agent shall have received a review of the financial condition
of the Acquired Company conducted by a firm of
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independent certified public accountants of nationally recognized standing
reasonably acceptable to the Agent, (v) the Agent shall have received an
appraisal from an appraiser satisfactory to the Agent setting forth the Orderly
Liquidation Value of the Equipment of the Acquired Company and the Fair Market
Value of the owned real estate of the Acquired Company to be included in the
Borrowing Base, subject to the prior written approval of the Lenders, (vi) the
Agent shall have completed a field examination with respect to the working
capital assets of the Acquired Company to be included in the Borrowing Base,
(vii) the Agent shall have received all items required by Sections 7.9 and 7.16
in connection with the Acquired Company, (viii) in the case of an Acquisition of
the Capital Stock of another Person, the board of directors (or other comparable
governing body) of such other Person shall have duly approved such Acquisition,
(ix) the Company shall have delivered to the Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect to such Acquisition on a pro
forma Basis, the Company and its Subsidiaries shall be in compliance with all of
the covenants set forth in Article VIII, (x) no Default or Event of Default
shall exist immediately prior to or immediately after the consummation of the
Acquisition, (xi) after giving effect to any Acquisition with a purchase price
(including cash, stock and/or assumption of liabilities) of less than
$5,000,000, Availability shall be at least $10,000,000 and after giving effect
to any Acquisition with a purchase price (including cash, stock and/or
assumption of liabilities) of equal to or greater than $5,000,000, Availability
shall be at least $20,000,000 and (xii) the Company shall have delivered to the
Agent all Acquisition Documents in connection with such Permitted Acquisition
which documents shall be satisfactory to the Agent.
"Permitted Holders" shall mean any or all of Xxxxx X. Xxxxxxxxxx, Xxxxx
X. Xxxxx and Xxxxx X. Xxxxxx or any Person as to which Messrs. Xxxxxxxxxx, Xxxxx
and Xxxxxx beneficially own, in the aggregate, more than 50% of the Capital
Stock of such Person and control more than 50% of the Voting Stock of such
Person.
"Permitted Indebtedness" shall mean:
(i) Indebtedness to the Lenders with respect to the Revolving
Loans and the Letters of Credit pursuant to the Credit Documents;
(ii) trade payables incurred in the ordinary course of the
Borrowers' business;
(iii) purchase money Indebtedness (including Capital Leases)
hereafter incurred by the Borrowers or any of their Subsidiaries to
finance the purchase of fixed assets provided that (A) the total of all
such Indebtedness for all such Persons taken together shall not exceed
an aggregate principal amount of $15,000,000 at any one time
outstanding (including any such Indebtedness referred to in clause (v)
immediately below); (B) such Indebtedness when incurred shall not
exceed the purchase price of the asset(s) financed; and (C) no such
Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such
refinancing;
(iv) obligations of the Borrowers in respect of Hedging
Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;
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(v) Indebtedness described on Schedule 1.1D attached hereto
and any refinancings of such Indebtedness; provided that the aggregate
principal amount of such Indebtedness is not increased, the scheduled
maturity dates of such Indebtedness are not shortened and such
refinancing is on terms and conditions no more restrictive than the
terms and conditions of the Indebtedness being refinanced; and
provided, further, that the Unsecured Letters of Credit may only be
refinanced as Letters of Credit hereunder;
(vi) Senior Unsecured Debt;
(viii) Indebtedness incurred to finance the acquisition,
construction and development of new restaurant locations provided that
such Indebtedness does not exceed $1,500,000 for any new restaurant
location and does not exceed $4,500,000 in the aggregate for all such
new restaurant locations; and
(viii) other Indebtedness not to exceed $1,000,000 in the
aggregate at any time outstanding.
"Permitted Investments" shall mean:
(i) Cash Equivalents;
(ii) interest-bearing demand or time deposits (including
certificates of deposit) which are insured by the Federal Deposit
Insurance Corporation ("FDIC") or a similar federal insurance program;
provided, however, that the Borrowers may, in the ordinary course of
their respective businesses, maintain in their disbursement accounts
from time to time amounts in excess of then applicable FDIC or other
program insurance limits;
(iii) Investments existing on the Closing Date and set forth
on Schedule 1.1E attached hereto;
(iv) advances to officers, directors and employees for travel
or other expenses incurred or anticipated to be incurred in the
ordinary course and other loans and advances to officers, directors and
employees not to exceed $500,000 in the aggregate at any time
outstanding;
(v) Permitted Acquisitions; and
(vi) such other investments as the Required Lenders may
approve in their sole discretion.
"Permitted Liens" shall mean
(i) Liens granted to the Agent by the Borrowers pursuant to
any Credit Document;
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(ii) Liens listed on Schedule 1.1C attached hereto;
(iii) Liens on fixed assets securing purchase money
Indebtedness (including Capital Leases) to the extent permitted under
Section 9.2, provided that (A) any such Lien attaches to such assets
concurrently with or within 30 days after the acquisition thereof and
only to the assets to be acquired and (B) a description of the assets
so acquired is furnished to the Agent;
(iv) Liens for taxes, assessments or governmental charges or
claims either (A) not delinquent or (B) contested in good faith by
appropriate proceedings and as to which the Borrower shall have set
aside on its books such reserves as may be required pursuant to GAAP;
(v) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other
Liens imposed by law incurred in the ordinary course of business for
sums not yet delinquent or being contested in good faith, if such
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(vi) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, including any Lien
securing letters of credit issued in the ordinary course of business
consistent with past practice in connection therewith, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of
borrowed money);
(vii) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired;
(viii) easements, rights-of-way, zoning restrictions and other
similar charges or encumbrances in respect of real property not
interfering in any material respect with the ordinary conduct of the
business of the Borrower;
(ix) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person
to facilitate the purchase, shipment or storage of such inventory or
other goods;
(x) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other
property relating to such letters of credit and products and proceeds
thereof;
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(xi) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty
requirements of a Borrower, including rights of offset and set-off; and
(xii) Liens to secure any Indebtedness which is incurred to
refinance any Permitted Indebtedness which has been secured by a
Permitted Lien; provided that such new Liens (A) are no less favorable
to the Lenders and are not more favorable to the lienholders with
respect to such Liens than the Liens in respect of the Indebtedness
being refinanced and (B) do not extend to any property or assets other
than the property or assets securing the Indebtedness refinanced or
replaced by such refinancing Indebtedness.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the successors,
heirs and assigns of each.
"Pierre Foods Division" shall mean the assets and liabilities of the
Pierre Foods Division of Xxxxxx Foods, Inc., a wholly-owned subsidiary of Tyson
Foods, Inc., to be acquired and assumed by the Company pursuant to the Purchase
Agreement.
"Plan" shall mean any employee benefit plan, program or arrangement,
whether oral or written, maintained or contributed to by any Borrower or any
Subsidiary, or with respect to which any Borrower or any such Subsidiary may
incur liability.
"Pledge Agreement" shall mean the Pledge Agreement, of even date
herewith, between the Agent and the Borrowers, in the form attached hereto as
Exhibit E .
"Pledged Collateral" shall have the meaning given to such term in the
Pledge Agreement.
"Prime Rate" shall mean the rate which First Union announces from time
to time as its prime lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. First Union (and its affiliates) may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"Proprietary Rights" shall have the meaning given to such term in
Section 6.17.
"Purchase Agreement" shall mean the Asset Purchase Agreement dated as
of April 10, 1998 between Fresh Foods of North Carolina, LLC, a wholly-owned
subsidiary of the Company, and Xxxxxx Foods, Inc., as the same may from time to
time be amended, modified or supplemented in accordance with the terms hereof
and thereof.
"Real Estate" shall mean the real property owned or leased by the
Borrowers described in Schedule 6.19 attached hereto, together with all
Structures thereon.
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"Reorganization" shall mean the corporate reorganization of the Company
and its Subsidiaries as described on Schedule 1.1F.
"Reportable Event" shall mean any of the events described in Section
4043 of ERISA and the regulations thereunder.
"Required Lenders" shall mean, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent) and
holding in the aggregate at least 51% of (i) the Revolving Credit Commitments
(and participation interests therein) or (ii) if the Commitments have been
terminated, the outstanding Loans and participation interests (including the
participation interests of the Issuing Bank in any Letters of Credit).
"Restaurant Business" shall mean the restaurant operations of the
Company, comprised of the Sagebrush, Western Steer, Prime Sirloin and Xxxxxxx'x
Concepts.
"Restricted Payment" shall mean (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Borrower or any Subsidiary, as the case may be, now or
hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of Capital Stock of any Borrower or any Subsidiary now or
hereafter outstanding by such Borrower or any Subsidiary, as the case may be,
except for any redemption, retirement, sinking funds or similar payment payable
solely in such shares of that class of stock or in any class of stock junior to
that class, (iii) any cash payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any shares of any class of Capital Stock of any Borrower
or any Subsidiary now or hereafter outstanding, or (iv) any payment to any
Affiliate of any Borrower except to the extent expressly permitted in this
Credit Agreement.
"Retiree Health Plan" shall mean an "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA that provides benefits to persons
after termination of employment, other than as required by Section 601 of ERISA.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make its portion of the Revolving Loans in a
principal amount up to such Lender's Revolving Credit Commitment Percentage of
the Revolving Credit Committed Amount.
"Revolving Credit Commitment Percentage" shall mean, for any Lender,
the percentage identified as its Revolving Credit Commitment Percentage on
Schedule 1.1A, as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 14.6.
"Revolving Credit Committed Amount" shall mean the aggregate revolving
credit line extended by the Lenders to the Borrowers for Revolving Loans and
Letters of Credit pursuant to
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and in accordance with the terms of this Credit Agreement, in an amount up to
$75,000,000, as such revolving credit line may be reduced from time to time in
accordance with Section 2.3(c).
"Revolving Loans" shall have the meaning given to such term in Section
2.1(b) and shall include Base Rate Loans and Eurodollar Loans.
"Revolving Notes" shall have the meaning given to such term in Section
2.1(c).
"Security Agreement" shall mean the Security Agreement, of even date
herewith, between the Agent and the Borrowers, in the form attached hereto as
Exhibit F.
"Security Documents" shall mean, collectively, the Pledge Agreement,
the Mortgages, the Security Agreement, any Acknowledgment Agreements and any
Lockbox Agreement.
"Senior Unsecured Debt" shall mean the unsecured senior notes issued by
the Company on the Closing Date in an original amount no less than $110,000,000
but no greater than $125,000,000.
"Settlement Period" shall have the meaning given to such term in
Section 2.1(d)(ii).
"Standby Letter of Credit Fee" shall have the meaning given to such
term in Section 4.5(a).
"Structures" shall mean all plants, offices, manufacturing facilities,
warehouses, administration buildings and related facilities of the Borrowers
located in the Real Estate described on Schedule 6.19 attached hereto.
"Subsidiary" shall mean, as to any Person, (a) any corporation more
than 50% of whose Capital Stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries, (b) any partnership, association, limited
liability company, joint venture or other entity in which such Person directly
or indirectly through Subsidiaries has more than a 50% interest in the total
capital, total income and/or total ownership interests of such entity at any
time and (c) any partnership in which such Person is a general partner.
"Subsidiary Borrower" and "Subsidiary Borrowers" shall mean each of the
Persons identified as a "Subsidiary Borrower" on the signature pages hereto and
each additional Subsidiary of the Company which may hereafter execute a Joinder
Agreement, together with their successors and permitted assigns, and "Subsidiary
Borrower" means any one of them.
"Taxes" shall mean any federal, state, local or foreign income, sales,
use, transfer, payroll, personal, property, occupancy, franchise or other tax,
levy, impost, fee, imposition, assessment or similar charge, together with any
interest or penalties thereon.
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"Termination Event" shall mean (i) a Reportable Event with respect to
any Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower, any
Subsidiary or any ERISA Affiliate from a Benefit Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA; (iii) the providing of notice of intent to terminate a Benefit Plan
pursuant to Section 4041 of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Benefit Plan or Multiemployer Plan; (v) any event or
condition (a) which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any
Borrower, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan.
"Trade Letter of Credit Fee" shall have the meaning given to such term
in Section 4.5(b).
"Unfinanced Consolidated Capital Expenditures" shall mean, for any
period, the sum of (i) during the first two years following the Closing Date,
thirty percent (30%) of all Consolidated Capital Expenditures made in connection
with the opening of new restaurants during such period provided, that the
financed portion of all such Consolidated Capital Expenditures shall not exceed
$2,500,000 per year in each of such first two years following the Closing Date
and (ii) one hundred percent (100%) of all other Consolidated Capital
Expenditures made during such period.
"Unsecured Letters of Credit" shall mean those letters of credit listed
on Schedule 1.1H
"Unused Line Fee" shall mean the fee required to be paid to the Agent
for the benefit of the Lenders at the end of each calendar month as partial
compensation for extending the Revolving Credit Committed Amount to the
Borrowers, and shall be determined by multiplying (i) the positive difference,
if any, between (A) the Revolving Credit Committed Amount in effect at such time
and (B) the average daily Revolving Loans of the Borrowers and the Letter of
Credit Obligations outstanding during such calendar month by (ii) the Applicable
Percentage then in effect for the number of days in said calendar month.
"Voting Stock" shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
1.2 ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise defined or specified herein, all accounting terms
shall be construed herein and all accounting determinations for purposes of
determining compliance with Sections 8.1 through 8.5 hereof and otherwise to be
made under this Credit Agreement shall be made in accordance with GAAP applied
on a basis consistent in all material respects with the Financials. All
financial statements required to be delivered hereunder from and after the
Closing Date and
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all financial records shall be maintained in accordance with GAAP as in effect
as of the date of the Financials. If GAAP shall change from the basis used in
preparing the Financials, the certificates required to be delivered pursuant to
Section 7.1 demonstrating compliance with the covenants contained herein shall
include calculations setting forth the adjustments necessary to demonstrate how
the Borrowers are in compliance with the financial covenants based upon GAAP as
in effect on the Closing Date. If the Borrowers shall change their method of
inventory accounting, all calculations necessary to determine compliance with
the covenants contained herein shall be made as if such method of inventory
accounting had not been so changed.
1.3 OTHER DEFINITIONAL TERMS.
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the State of North Carolina (the "Code") shall
have the meanings given them in the Code unless the context otherwise requires.
The words "hereof", "herein" and "hereunder" and words of similar import when
used in this Credit Agreement shall refer to the Credit Agreement as a whole and
not to any particular provision of this Credit Agreement, unless otherwise
specifically provided. References in this Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Agreement unless otherwise specifically provided. Any of the terms
defined in Section 1.1 may, unless the context otherwise requires, be used in
the singular or plural depending on the reference. "Include", "includes" and
"including" shall be deemed to be followed by "without limitation" whether or
not they are in fact followed by such words or words of like import. "Writing",
"written" and comparable terms refer to printing, typing and other means of
reproducing words in a visible form. References to any agreement or contract are
to such agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof. References to any Person
include the successors and permitted assigns of such Person. References "from"
or "through" any date mean, unless otherwise specified, "from and including" or
"through and including", respectively. References to any times herein shall
refer to Charlotte, North Carolina time.
ARTICLE II
REVOLVING LOANS
2.1 REVOLVING LOANS.
(a) Revolving Credit Commitments. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each of the Lenders severally agrees to
lend to the Borrowers at any time or from time to time on or after the
Closing Date and before the Maturity Date, such Lender's Revolving
Credit Commitment Percentage of the Revolving Loans as may be requested
or deemed requested by the Borrowers.
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(b) Determination of Borrowing Base.
(i) The Lenders agree, subject to the terms and
conditions of this Credit Agreement, from time to time, to
make loans and advances to the Borrowers hereunder on a
revolving basis. Such loans and advances to the Borrowers
(each, a "Revolving Loan"; and collectively, the "Revolving
Loans"), together with the Letter of Credit Obligations
outstanding, shall not in the aggregate exceed the lesser of:
(A) the Revolving Credit Committed Amount
then in effect; or
(B) the following amount (the "Borrowing
Base") calculated as follows:
(1) an amount equal to up to 85% of
the then Eligible Accounts Receivable; plus
(2) an amount equal to the sum of
(a) up to 45% of the Eligible Inventory
consisting of Mom and Pops country hams,
plus (b) up to 55% of the Eligible Inventory
consisting of Pierre Foods/Claremont
location raw materials, plus (c) up to 65%
of the Eligible Inventory consisting of
Pierre Foods/Cincinnati location raw
materials, plus (d) up to 55% of the
Eligible Inventory consisting of Smokehouse
finished goods, plus (e) up to 50% of the
Eligible Inventory consisting of Pierre
Foods/Claremont location bakery finished
goods, plus (f) up to 65% of the Eligible
Inventory consisting of Pierre
Foods/Cincinnati location finished goods;
plus
(3) an amount equal to up to 70% of
the Eligible Equipment and Eligible Real
Property determined as of its initial
inclusion into the Borrowing Base; provided,
however, that on the last day of each
calendar quarter such initial amount shall
be reduced by an amount equal to 1/28th of
such initial amount; and provided, further,
that no more than $2,500,000 shall be
included in the Borrowing Base with respect
to Approved Restaurants during each of the
first two years following the Closing Date;
minus
(4) reserves established by the
Agent from time to time in its reasonable
discretion, including, without limitation,
reserves against the Unsecured Letters of
Credit.
Subject to the relevant terms and provisions set forth herein,
the Agent at all times shall be entitled to reduce or increase
the advance rates (but not in excess of the
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advance rates set forth in clauses (1) through (3) immediately
above) and standards of eligibility under this Credit
Agreement, in each case in its reasonable discretion.
(ii) No Lender shall be obligated at any time to make
available to the Borrowers its Revolving Credit Commitment
Percentage of any requested Revolving Loan if such amount plus
its Revolving Credit Commitment Percentage of all Revolving
Loans and its Revolving Credit Commitment Percentage of all
Letter of Credit Obligations then outstanding would exceed
such Lender's Revolving Credit Commitment at such time. The
aggregate balance of Revolving Loans and the aggregate amount
of all Letter of Credit Obligations outstanding shall not at
any time exceed the Revolving Credit Committed Amount. No
Lender shall be obligated to make available, nor shall the
Agent make available, any Revolving Loans to any of the
Borrowers to the extent such Revolving Loan when added to the
then outstanding Revolving Loans and all Letter of Credit
Obligations would cause the aggregate outstanding Revolving
Loans and all Letter of Credit Obligations to exceed the
Borrowing Base. The Borrowers shall promptly repay to the
Agent for the account of the Lenders from time to time the
full amount of the excess, if any of (A) the amount of all
Revolving Loans and Letter of Credit Obligations outstanding
over (B) the lesser of (1) the Revolving Credit Committed
Amount and (2) the Borrowing Base.
(c) Revolving Notes. The obligations to repay the Revolving
Loans and to pay interest thereon shall be evidenced by separate
promissory notes of the Borrowers to each Lender in substantially the
form of Exhibit G attached hereto (the "Revolving Notes"), with
appropriate insertions, one Revolving Note being payable to the order
of each Lender in a principal amount equal to such Lender's Revolving
Credit Commitment and representing the obligations of the Borrowers to
pay such Lender the amount of such Lender's Revolving Credit Commitment
or, if less, the aggregate unpaid principal amount of all Revolving
Loans made by such Lender hereunder, plus interest accrued thereon, as
set forth herein. The Borrowers irrevocably authorize each Lender to
make or cause to be made appropriate notations on its Revolving Note,
or on a record pertaining thereto, reflecting Revolving Loans and
repayments thereof. The outstanding amount of the Revolving Loans set
forth on such Lender's Revolving Note or record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such
Lender, but the failure to make such notation or record, or any error
in such notation or record shall not limit or otherwise affect the
obligations of the Borrowers hereunder or under any Revolving Note to
make payments of principal of or interest on any Revolving Note when
due.
(d) Borrowings under Revolving Notes.
(i) Each request for borrowings hereunder shall be made by
notice in the form attached hereto as Exhibit H from the Company on
behalf of the Borrowers to the Agent (the "Notice of Borrowing"), given
not later than 11:00 a.m. (A) on the Business Day on
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which the proposed borrowing is requested to be made for Revolving
Loans that will be Base Rate Loans and (B) three Business Days prior to
the date of the requested borrowing of Revolving Loans that will be
Eurodollar Loans. Each Notice of Borrowing shall be given by either
telephone, telecopy, telex or cable, and, if requested by the Agent,
confirmed in writing if by telephone, setting forth (1) the requested
date of such borrowing, (2) the aggregate amount of such requested
borrowing, (3) whether such Revolving Loans will be Base Rate Loans or
the Eurodollar Rate Loans, and if appropriate, the applicable Interest
Period, (4) certification by the Company on behalf of the Borrowers
that they have complied in all respects with Article V, all of which
shall be specified in such manner as is necessary to comply with all
limitations on Revolving Loans outstanding hereunder (including,
without limitation, availability under the Borrowing Base) and (5) the
account at which such requested funds should be made available. Each
Notice of Borrowing shall be irrevocable by and binding on the
Borrowers. Revolving Loans consisting of less than $1,000,000 shall be
made as Base Rate Loans. Revolving Loans of $1,000,000 or more may be
made as Base Rate Loans or Eurodollar Loans, or a combination thereof,
as the Borrowers may request; provided that no more than five (5)
Eurodollar Loans shall be outstanding hereunder at any one time; and
provided, further, that Eurodollar Loans shall be in a minimum
principal amount of at least $1,000,000 and integral multiples of
$500,000 in excess thereof. Revolving Loans may be repaid and
reborrowed in accordance with the provisions hereof.
The Agent shall give to each Lender prompt notice (but in no
event later than 1:00 p.m. on the date of the Agent's receipt of notice
from the Borrowers) of each Notice of Borrowing by telecopy, telex or
cable (other than any Notice of Borrowing which will be funded by the
Agent in accordance with subsection (d)(ii) below). No later than 3:00
p.m. on the date on which a borrowing is requested to be made pursuant
to the applicable Notice of Borrowing, each Lender will make available
to the Agent at the address of the Agent set forth on the signature
pages hereto, in immediately available funds, its Revolving Credit
Commitment Percentage of such borrowing requested to be made. Unless
the Agent shall have been notified by any Lender prior to the date of
borrowing that such Lender does not intend to make available to the
Agent its portion of the borrowing to be made on such date, the Agent
may assume that such Lender will make such amount available to the
Agent as required herein above and the Agent may, in reliance upon such
assumption, make available the amount of the borrowing to be provided
by such Lender. Upon fulfillment of the conditions set forth in Article
V for such borrowing, the Agent will make such funds available to the
Borrowers at the account specified by the Borrowers in such Notice of
Borrowing.
(ii) Because the Borrowers anticipate requesting borrowings of
Revolving Loans on a daily basis and repaying Revolving Loans on a
daily basis through the collection of Accounts and the proceeds of
other Collateral, resulting in the amount of outstanding Revolving
Loans fluctuating from day to day, in order to administer the Revolving
Loans in an efficient manner and to minimize the transfer of funds
between the Agent and the Lenders, the Lenders hereby instruct the
Agent, and the Agent may (but is not obligated to) (A) make available,
on behalf of the Lenders, the full amount of all
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Revolving Loans requested by the Borrowers not to exceed $10,000,000 in
the aggregate at any one time outstanding without requiring that the
Borrowers give the Agent a Notice of Borrowing with respect to such
borrowing and without giving each Lender prior notice of the proposed
borrowing, of such Lender's Revolving Credit Commitment Percentage
thereof and the other matters covered by the Notice of Borrowing and
(B) if the Agent has made any such amounts available as provided in
clause (A), upon repayment of Revolving Loans by the Borrowers, apply
such amounts repaid directly to the amounts made available by the Agent
in accordance with clause (A) and not yet settled as described below;
provided that the Agent shall not advance funds as described in clause
(A) above if the Agent has actually received prior to such borrowing
(1) an officers' certificate from the Company or any other Borrower
pursuant to and in accordance with Section 7.1(k) that a Default or
Event of Default is in existence or (2) a Notice of Borrowing from any
Borrower wherein the certification provided therein states that the
conditions to the making of the requested Revolving Loans have not been
satisfied or (3) a written notice from any Lender that the conditions
to such borrowing have not been satisfied, which officers' certificate,
Notice of Borrowing or notice, in each case, shall not have been
rescinded. If the Agent advances Revolving Loans on behalf of the
Lenders, as provided in the immediately preceding sentence, the amount
of outstanding Revolving Loans and each Lender's Revolving Credit
Commitment Percentage thereof shall be computed weekly rather than
daily and shall be adjusted upward or downward on the basis of the
amount of outstanding Revolving Loans as of 5:00 p.m. on the Business
Day immediately preceding the date of each computation; provided,
however, that the Agent retains the absolute right at any time or from
time to time to make the aforedescribed adjustments at intervals more
frequent than weekly. The Agent shall deliver to each of the Lenders
after the end of each week, or such lesser period or periods as the
Agent shall determine, a summary statement of the amount of outstanding
Revolving Loans for such period (such week or lesser period or periods
being hereafter referred to as a "Settlement Period"). If the summary
statement is sent by the Agent and received by the Lenders prior to
12:00 Noon on any Business Day each Lender shall make the transfers
described in the next succeeding sentence no later than 3:00 p.m. on
the day such summary statement was sent; and if such summary statement
is sent by the Agent and received by the Lenders after 12:00 Noon on
any Business Day, each Lender shall make such transfers no later than
3:00 p.m. on the next succeeding Business Day. If in any Settlement
Period, the amount of a Lender's Revolving Credit Commitment Percentage
of the Revolving Loans is in excess of the amount of Revolving Loans
actually funded by such Lender, such Lender shall forthwith (but in no
event later than the time set forth in the next preceding sentence)
transfer to the Agent by wire transfer in immediately available funds
the amount of such excess; and, on the other hand, if the amount of a
Lender's Revolving Credit Commitment Percentage of the Revolving Loans
in any Settlement Period is less than the amount of Revolving Loans
actually funded by such Lender, the Agent shall forthwith transfer to
such Lender by wire transfer in immediately available funds the amount
of such difference. The obligation of each of the Lenders to transfer
such funds shall be irrevocable and unconditional and without recourse
to or warranty by the Agent. Each of the Agent and the Lenders agree to
xxxx their respective books and records at the end of each Settlement
Period to show at all times the dollar
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amount of their respective Revolving Credit Commitment Percentages of
the outstanding Revolving Loans. Because the Agent on behalf of the
Lenders may be advancing and/or may be repaid Revolving Loans prior to
the time when the Lenders will actually advance and/or be repaid
Revolving Loans, interest with respect to Revolving Loans shall be
allocated by the Agent to each Lender (including the Agent) in
accordance with the amount of Revolving Loans actually advanced by and
repaid to each Lender (including the Agent) during each Settlement
Period and shall accrue from and including the date such Revolving
Loans are advanced by the Agent to but excluding the date such
Revolving Loans are repaid by the Borrowers in accordance with Section
2.4 or actually settled by the applicable Lender as described in this
Section 2.1(d)(ii). All such Revolving Loans shall be made as Base Rate
Loans.
(iii) If the amounts described in subsection (d)(i) or (d)(ii)
of this Section 2.1 are not in fact made available to the Agent by a
Lender (such Lender being hereinafter referred to as a "Defaulting
Lender") and the Agent has made such amount available to the Borrowers,
the Agent shall be entitled to recover such corresponding amount on
demand from such Defaulting Lender. If such Defaulting Lender does not
pay such corresponding amount forthwith upon the Agent's demand
therefor, the Agent shall promptly notify the Borrowers and the
Borrowers shall immediately (but in no event later than five Business
Days after such demand) pay such corresponding amount to the Agent. The
Agent shall also be entitled to recover from such Defaulting Lender and
the Borrowers, (A) interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by
the Agent to the Borrowers to the date such corresponding amount is
recovered by the Agent, at a rate per annum equal to either (1) if paid
by such Defaulting Lender, the overnight Federal Funds Rate or (2) if
paid by the Borrowers, the then applicable rate of interest, calculated
in accordance with Section 4.1, plus (B) in each case, an amount equal
to any costs (including legal expenses) and losses incurred as a result
of the failure of such Defaulting Lender to provide such amount as
provided in this Credit Agreement. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its commitments
hereunder or to prejudice any rights which the Borrowers may have
against any Lender as a result of any default by such Lender hereunder,
including, without limitation, the right of the Borrowers to seek
reimbursement from any Defaulting Lender for any amounts paid by the
Borrowers under clause (B) above on account of such Defaulting Lender's
default.
(iv) The failure of any Lender to make the Revolving Loan to
be made by it as part of any borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Revolving Loan
on the date of such borrowing, but no Lender shall be responsible for
the failure of any other Lender to make the Revolving Loan to be made
by such other Lender on the date of any borrowing.
(v) Each Lender shall be entitled to earn interest at the then
applicable rate of interest, calculated in accordance with Article IV,
on outstanding Revolving Loans which it has funded to the Agent from
the date such Lender funded such Revolving Loan to, but excluding, the
date on which such Lender is repaid with respect to such Revolving
Loan.
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(vi) Notwithstanding the obligation of the Borrowers to send
written confirmation of a Notice of Borrowing made by telephone if and
when requested by the Agent, in the event that the Agent agrees to
accept a Notice of Borrowing made by telephone, such telephonic Notice
of Borrowing shall be binding on the Borrowers whether or not written
confirmation is sent by the Borrowers or requested by the Agent. The
Agent may act prior to the receipt of any requested written
confirmation, without any liability whatsoever, based upon telephonic
notice believed by the Agent in good faith to be from a Borrower or its
agents. The Agent's records of the terms of any telephonic Notices of
Borrowing shall be conclusive on the Borrowers in the absence of gross
negligence or willful misconduct on the part of the Agent in connection
therewith.
2.2 [INTENTIONALLY LEFT BLANK].
2.3 OPTIONAL AND MANDATORY PREPAYMENTS; REDUCTION OF COMMITMENTS.
(a) Voluntary Prepayments. The Borrowers shall have the right
to prepay Revolving Loans in whole or in part from time to time, but
otherwise without premium or penalty; provided, however, that (i)
Revolving Loans that are Eurodollar Loans may only be prepaid on three
Business Days' prior written notice to the Agent specifying the
applicable Revolving Loans to be prepaid; (ii) any prepayment of
Revolving Loans that are Eurodollar Loans will be subject to Section
4.10; (iii) each such partial prepayment of Revolving Loans shall be in
a minimum principal amount of $1,000,000 and integral multiples of
$1,000,000. Prepayments on Revolving Loans shall be applied first to
Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. Notwithstanding the foregoing to the
contrary, this Section 2.3(a) shall not be applicable to payments on
the Revolving Loans effected pursuant to Section 2.4(b)(ii) hereof.
(b) Mandatory Prepayments.
(i) Revolving Credit Committed Amount. If at any
time, the sum of the aggregate principal amount of outstanding
Revolving Loans plus Letter of Credit Obligations outstanding
shall exceed the lesser of (A) the Revolving Credit Committed
Amount and (B) the Borrowing Base, the Borrowers immediately
shall prepay the Revolving Loans and (after all Revolving
Loans have been repaid) cash collateralize the Letter of
Credit Obligations, in an amount sufficient to eliminate such
excess.
(ii) Asset Dispositions. Promptly and in any event
within five (5) days following the occurrence of any Asset
Disposition, the Borrowers shall prepay the Revolving Loans in
an aggregate amount equal to the Net Cash Proceeds of the
related Asset Disposition. Such prepayment shall be applied as
set forth in clause (iii) below.
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(iii) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 2.3(b)
shall be applied to Revolving Loans and (after all Revolving
Loans have been repaid) to a cash collateral account in
respect of Letter of Credit Obligations. Prepayments shall be
applied first to Base Rate Loans and then to Eurodollar Loans
in direct order of Interest Period maturities. All prepayments
under this Section 2.3(b) shall be subject to Section 4.10.
(c) Voluntary Reductions. The Borrowers may from time to time
permanently reduce or terminate the Revolving Credit Committed Amount
in whole or in part (in minimum aggregate amounts of $5,000,000 or in
integral multiples of $5,000,000 in excess thereof (or, if less, the
full remaining amount of the then applicable Revolving Credit Committed
Amount)) upon three Business Days' prior written notice to the Agent;
provided, however, no such termination or reduction shall be made which
would cause the aggregate principal amount of outstanding Revolving
Loans plus Letter of Credit Obligations outstanding to exceed the
lesser of (A) the Revolving Credit Committed Amount and (B) the
Borrowing Base, unless, concurrently with such termination or
reduction, the Revolving Loans are repaid to the extent necessary to
eliminate such excess. The Agent shall promptly notify each affected
Lender of receipt by the Agent of any notice from the Borrowers
pursuant to this Section 2.3(c).
(d) Maturity Date. The Commitments of the Lenders and the
Letter of Credit Commitment of the Issuing Bank shall automatically
terminate on the Maturity Date.
(e) General. The Borrowers shall pay to the Agent for the
account of the Lenders in accordance with the terms of Section 4.3, on
the date of each termination or reduction of the Revolving Credit
Committed Amount, the Unused Line Fee accrued through the date of such
termination or reduction on the amount of the Revolving Credit
Committed Amount so terminated or reduced.
2.4 PAYMENTS AND COMPUTATIONS.
(a) The Borrowers shall make each payment hereunder and under
the Revolving Notes not later than 2:00 p.m. on the day when due or by
direct charge against the Revolving Credit Commitment, if available,
pursuant to Section 2.4(b)(ii) hereof. Payments made by the Borrowers
shall be in Dollars to the Agent at its address referred to in Section
14.5 hereof in immediately available funds. Payments made with respect
to the Revolving Loans shall be applied to repay Revolving Loans
consisting of Base Rate Loans first and then Revolving Loans consisting
of Eurodollar Loans. As soon as practicable after the Agent receives
payment from the Borrowers, but in no event later than one Business Day
after such payment has been made, subject to Section 2.1(d)(ii), the
Agent will cause to be distributed like funds relating to the payment
of principal, interest, or Fees (other than amounts payable to the
Agent to reimburse the Agent and the Issuing Bank for fees and expenses
payable solely to them pursuant to Article IV hereof) or expenses
payable to the Agent and the Lenders in accordance with Section 14.8
hereof ratably to the Lenders, and like funds relating to the payment
of any other amounts
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payable to such Lender. The Borrowers' obligations to the Lenders with
respect to such payments shall be discharged by making such payments to
the Agent pursuant to this Section 2.4(a) or if not timely paid or any
Event of Default then exists, may be added to the principal amount of
the Revolving Loans outstanding.
(b) (i) The Borrowers, individually or through the Company,
shall have each established and shall maintain lockboxes (the
"Lockboxes") with financial institutions, including First
Union, selected by the Company and reasonably acceptable to
the Agent (the "Lockbox Banks") and shall instruct all account
debtors on the Accounts of each Borrower to remit all payments
to its respective Lockboxes. Separate Lockboxes shall be
maintained for the NonRestaurant Business and the Restaurant
Business of the Borrowers. All amounts received by the
Borrowers from any account debtor, in addition to all other
cash received from any other source including but not limited
to proceeds from asset sales and judgments, shall be promptly
deposited into the applicable Lockbox Account (as defined
below).
(ii) Each Borrower, individually or through the
Company, the Agent and each Lockbox Bank shall enter into
three party agreements in the form of Exhibit I hereto (the
"Lockbox Agreements"), providing, among other things, for the
following:
(A) The Borrowers, individually or through
the Company, will open and establish for the benefit
of the Agent on behalf of the Lenders an account at
each Lockbox Bank (each a "Lockbox Account").
(B) All receipts held in the Lockboxes shall
be remitted daily to the appropriate Lockbox
Account. All funds deposited into the Lockbox
Accounts pertaining to the Restaurant Business on
any Business Day shall be transferred to the FUNB
Claremont Restaurant Cash Collateral Account. All
funds deposited into the Lockbox Accounts pertaining
to the NonRestaurant Business on any Business Day
shall be transferred to the FUNB NonRestaurant Cash
Collateral Account. All funds transferred to the
Cash Collateral Accounts on any Business Day shall
be immediately credited to the FUNB Leverage
Account. All funds credited on any Business Day to
the FUNB Leverage Account shall be applied by the
Agent on such Business Day to reduce the then
outstanding balance of the Revolving Loans and to
pay accrued interest thereon and to pay any other
outstanding Obligations which are then due and
payable. All amounts received directly by the
Borrowers from any account debtor, in addition to
all other cash received from any other source
including but not limited to proceeds from asset
sales and judgments, shall be held in trust by the
Borrowers and promptly deposited into the applicable
Lockbox Account.
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(iii) All funds deposited into the Cash Collateral
Accounts shall immediately become the property of the Agent
and the Borrowers shall obtain the agreement by the Lockbox
Banks to waive any offset rights against the funds so
deposited. The Agent assumes no responsibility for the Lockbox
arrangements, including, without limitation, any claim of
accord and satisfaction or release with respect to deposits
accepted by the Lockbox Banks thereunder.
(iv) The Borrowers may close Lockboxes and/or open
new lockboxes with the prior written consent of the Agent and
subject to prior execution and delivery to the Agent of
lockbox agreements consistent with the provisions of this
Section 2.4(b) and in form and substance satisfactory to the
Agent and its counsel.
(c) The Borrowers hereby authorize each Lender to charge from
time to time against any or all of the Borrowers' accounts with such
Lender any of the Obligations which are then due and payable. Each
Lender receiving any payment as a result of charging any such account
shall promptly notify the Agent thereof and make such arrangements as
the Agent shall request to share the benefit thereof in accordance with
Section 2.8.
(d) Except as otherwise provided herein with respect to
Eurodollar Loans, any payments falling due under this Credit Agreement
on a day other than a Business Day shall be due and payable on the next
succeeding Business Day and shall accrue interest at the applicable
interest rate provided for in this Credit Agreement to but excluding
such Business Day. Except as otherwise provided herein, computation of
interest and fees hereunder shall be made on the basis of actual number
of days elapsed over a 360 day year.
2.5 MAINTENANCE OF ACCOUNT.
The Agent shall maintain an account on its books in the name of the
Borrowers in which the Borrowers will be charged with all loans and advances
made by the Lenders to the Borrowers or for the Borrowers' account, including
the Revolving Loans, the Letter of Credit Obligations and any other Obligations,
including any and all costs, expenses and attorney's fees which the Agent may
incur, including, without limitation, in connection with the exercise by or for
the Lenders of any of the rights or powers herein conferred upon the Agent
(other than in connection with any assignments or participations by any Lender)
or in the prosecution or defense of any action or proceeding by or against any
Borrower or the Lenders concerning any matter arising out of, connected with, or
relating to this Credit Agreement or the Accounts, or any Obligations owing to
the Lenders by any Borrower. The Borrowers will be credited in accordance with
Section 2.4(b)(ii)(B) above, with all amounts received by the Lenders from the
Borrowers or from others for the Borrowers' account, including, as above set
forth, all amounts received by the Agent in payment of Accounts. In no event
shall prior recourse to any Accounts or other Collateral be a prerequisite to
the Agent's right to demand payment of any Obligation upon its maturity.
Further, it is understood that the Agent shall have no obligation whatsoever to
perform in any respect any of the Borrowers' contracts or obligations relating
to the Accounts.
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2.6 STATEMENT OF ACCOUNT.
After the end of each month the Agent shall send the Borrowers a
statement showing the accounting for the charges, loans, advances and other
transactions occurring between the Lenders and the Borrowers during that month.
The monthly statements shall be deemed correct and binding upon the Borrowers
and shall constitute an account stated between the Borrowers and the Lenders
unless the Agent receives a written statement of the Borrowers' exceptions
within thirty (30) days after same is mailed to the Borrowers.
2.7 TAXES.
(a) Any and all payments by the Borrowers hereunder or under
the Revolving Notes to or for the benefit of any Lender shall be made,
in accordance with Section 2.4, free and clear of and without deduction
for any and all present or future Taxes, deductions, charges or
withholdings and all liabilities with respect thereto, excluding, in
the case of each such Lender and the Agent, Taxes imposed on or
measured by the Agent's or any Lender's net income or receipts in its
jurisdiction of organization or those jurisdictions in which it is
doing business (any such excluded Taxes, collectively, "Excluded
Taxes"). If any Borrower shall be required by law to deduct any Taxes
(other than Excluded Taxes) from or in respect of any sum payable
hereunder or under any Revolving Note to or for the benefit of any
Lender or the Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions of Taxes
(including deductions of Taxes applicable to additional sums payable
under this Section 2.7) such Lender or the Agent, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Borrower shall make such deductions and
(iii) such Borrower shall pay the full amount so deducted to the
relevant taxation authority or other authority in accordance with
applicable law; provided, however, that such Borrower shall be under no
obligation to increase the sum payable to any Lender not organized
under the laws of the United States or a state thereof (a "Foreign
Lender") by an amount equal to the amount of the United States Tax
required to be withheld under United States law from the sums paid to
such Foreign Lender, if such withholding is caused by the failure of
such Foreign Lender to be engaged in the active conduct of a trade or
business in the United States or all amounts of interest and fees to be
paid to such Foreign Lender hereunder are not effectively connected
with such trade or business within the meaning of United States
Treasury Regulation 1.1441-4(a).
(b) Each Foreign Lender agrees that it will deliver to the
Borrowers and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable
form(s), as the case may be, and (ii) an Internal Revenue Service Form
W-8 or W-9 or successor applicable form, together with any other
certificate or statement of exemption required under the Code or
regulations issued thereunder. Each such Lender also agrees to deliver
to the Borrowers and the Agent two further copies of the said Form 1001
or 4224 and Form W-8 or W-9, or successor applicable forms or other
manner of certification, as the case may be, on or before the
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date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers, and such extensions or
renewals thereof as may reasonably be requested by the Borrowers or the
Agent, unless in any such case an event (including, without limitation,
any change in treaty, law or regulation) has occurred prior to the date
on which any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and
such Lender so advises the Borrowers and the Agent. Such Lender shall
certify (A) in the case of a Form 1001 or 4224, that it is entitled to
receive payments under this Credit Agreement without deduction or
withholding of any United States federal income taxes and (B) in the
case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax.
(c) In addition, the Borrowers agree to pay any present or
future stamp, documentary, privilege, intangible or similar Taxes or
any other excise or property Taxes, charges or similar levies that
arise at any time or from time to time (other than Excluded Taxes) (i)
from any payment made under any and all Credit Documents, (ii) from the
transfer of the rights of any Lender under any Credit Documents to any
other Lender or Lenders or (iii) from the execution or delivery by any
Borrower of, or from the filing or recording or maintenance of, or
otherwise with respect to, any and all Credit Documents (hereinafter
referred to as "Other Taxes").
(d) The Borrowers will indemnify each Lender and the Agent for
the full amount of Taxes (including, without limitation and without
duplication, any Taxes imposed by any jurisdiction on amounts payable
under this Section 2.7), subject to (i) the exclusion set out in the
first sentence of Section 2.7(a), (ii) the provisions of Section
2.7(b), and (iii) the provisions of the proviso set forth in Section
2.7(a), and will indemnify each Lender and the Agent for the full
amount of Other Taxes (including, without limitation and without
duplication, any Taxes imposed by any jurisdiction on amounts payable
under this Section 2.7) paid by such Lender or the Agent (on its own
behalf or on behalf of any Lender), as the case may be, in respect of
payments made or to be made hereunder, and any liability (including
penalties, interest and expenses) arising solely therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment of this indemnification shall be
made within 30 days from the date such Lender or the Agent, as the case
may be, makes written demand therefor.
(e) Within 30 days after the date of any payment of Taxes or
Other Taxes, the applicable Borrower shall furnish to the Agent, at its
address referred to in Section 14.5, the original or certified copy of
a receipt evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the
Borrowers contained in this Section 2.7 shall survive the payment in
full of all Obligations hereunder and under the Revolving Notes.
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2.8 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) on account of the
Revolving Loans made by it or its participation in Letters of Credit in excess
of its pro rata share of such payment as provided for in this Credit Agreement,
such Lender shall forthwith purchase from the other Lenders such participations
in the Revolving Loans made by them or in their participation in Letters of
Credit as shall be necessary to cause such purchasing Lender to share the excess
payment accruing all Lenders in accordance with their respective ratable shares
as provided for in this Credit Agreement; provided, however, that if all or any
portion of such excess is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and each such Lender shall repay to
the purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) or any interest or other amount paid or
payable by the purchasing Lender in respect to the total amount so recovered.
The Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.8 may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.
2.9 PRO RATA TREATMENT.
Each Revolving Loan, each payment or prepayment of principal of any
Revolving Loan or reimbursement obligations arising from drawings under Letters
of Credit, each payment of interest on the Revolving Loans, each payment of the
Unused Line Fee, each payment of the Standby Letter of Credit Fee, each payment
of the Trade Letter of Credit Fee, each reduction of the Revolving Credit
Commitment and each conversion or extension of any Revolving Loan, shall be
allocated pro rata among the Lenders in accordance with the respective principal
amounts of their outstanding Revolving Loans and their participation interests
in the Letters of Credit; provided, however, that the foregoing fees payable
hereunder to the Lenders shall be allocated to each Lender based on such
Lender's Revolving Credit Commitment Percentage.
2.10 EXTENSIONS AND CONVERSIONS.
Subject to the terms of Article V, the Borrowers shall have the option,
on any Business Day, to extend existing Eurodollar Loans into a subsequent
permissible Interest Period, to convert Base Rate Loans into Eurodollar Loans,
or to convert Eurodollar Loans into Base Rate Loans; provided, however, that (i)
except as provided in Section 4.10, Eurodollar Loans may be converted into Base
Rate Loans only on the last day of the Interest Period applicable thereto, (ii)
Eurodollar Loans may be extended, and Base Rate Loans may be converted into
Eurodollar Loans, only if no Default or Event of Default is in existence on the
date of extension or conversion, (iii) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of "Interest
Period" and shall be in such minimum amounts as provided in
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with respect to Revolving Loans, Section 2.1(d)(i), and (iv) no more than five
(5) separate Eurodollar Loans shall be outstanding hereunder at any time. Each
such extension or conversion shall be effected by the Borrowers by giving a
written notice in the form of Exhibit J hereto (a "Notice of
Extension/Conversion") (or telephone notice promptly confirmed in writing) to
the Agent prior to 11:00 A.M. on the Business Day of, in the case of the
conversion of a Eurodollar Loan into a Base Rate Loan, and on the third Business
Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed
extension or conversion, specifying the date of the proposed extension or
conversion, the Revolving Loans to be so extended or converted, the types of
Revolving Loans into which such Revolving Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each request
for extension or conversion shall constitute a representation and warranty by
the Borrowers of the matters specified in Article 5. In the event the Borrowers
fail to request extension or conversion of any Eurodollar Loan in accordance
with this Section, or any such conversion or extension is not permitted or
required by this Section, then such Loan shall be automatically converted into a
Base Rate Loan at the end of the Interest Period applicable thereto. The Agent
shall give each Lender notice as promptly as practicable of any such proposed
extension or conversion affecting any Loan.
ARTICLE III
LETTERS OF CREDIT
3.1 ISSUANCE.
Subject to the terms and conditions hereof and of the Letter of Credit
Documents, if any, and any other terms and conditions which the Issuing Bank may
reasonably require, the Lenders will participate in the issuance by the Issuing
Bank from time to time of such Letters of Credit in Dollars from the Closing
Date until the Maturity Date as the Borrowers may request, in a form acceptable
to the Issuing Bank; provided, however, that (a) the Letter of Credit
Obligations outstanding shall not at any time exceed THREE MILLION DOLLARS
($3,000,000) (the "Letter of Credit Committed Amount") and (b) the sum of the
aggregate principal amount of outstanding Revolving Loans plus Letter of Credit
Obligations outstanding shall not at any time exceed the lesser of (i) the
Revolving Credit Committed Amount and (ii) the Borrowing Base. No Letter of
Credit shall (x) have an original expiry date or renewal date more than one year
from the date of issuance or (y) as originally issued or as extended, have an
expiry date extending beyond the Maturity Date. Each Letter of Credit shall
comply with the related Letter of Credit Documents. The issuance and expiry date
of each Letter of Credit shall comply with the related Letter of Credit
Documents. The issuance and expiry date of each Letter of Credit shall be a
Business Day.
3.2 NOTICE AND REPORTS.
The request for the issuance of a Letter of Credit shall be submitted
by the Borrowers to the Issuing Bank at least three (3) Business Days prior to
the requested date of issuance. The
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Issuing Bank will, upon request, disseminate to each of the Lenders a detailed
report specifying the Letters of Credit which are then issued and outstanding
and any activity with respect thereto which may have occurred since the date of
the prior report, and including therein, among other things, the beneficiary,
the face amount and the expiry date as well as any payment or expirations which
may have occurred.
3.3 PARTICIPATION.
Each Lender, upon issuance of a Letter of Credit, shall be deemed to
have purchased without recourse a risk participation from the Issuing Bank in
such Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its Revolving Credit Commitment Percentage of such Letter of
Credit, and shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and be obligated to pay to the Issuing Bank therefor
and discharge when due, its Revolving Credit Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the extent
that the Issuing Bank has not been reimbursed as required hereunder or under any
such Letter of Credit, each such Lender shall pay to the Issuing Bank its
Revolving Credit Commitment Percentage of such unreimbursed drawing pursuant to
the provisions of Section 3.4. The obligation of each Lender to so reimburse the
Issuing Bank shall be absolute and unconditional and shall not be affected by
the occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrowers to reimburse the Issuing Bank under any Letter of
Credit, together with interest as hereinafter provided.
3.4 REIMBURSEMENT.
In the event of any drawing under any Letter of Credit, the Issuing
Bank will promptly notify the Borrowers. Unless the Borrowers shall immediately
notify the Issuing Bank that the Borrowers intend to otherwise reimburse the
Issuing Bank for such drawing, the Borrowers shall be deemed to have requested
that the Lenders make a Revolving Loan in the amount of the drawing as provided
in Section 3.5 on the related Letter of Credit, the proceeds of which will be
used to satisfy the related reimbursement obligations. The Borrowers promise to
reimburse the Issuing Bank on the day of drawing under any Letter of Credit
(either with the proceeds of a Revolving Loan obtained hereunder or otherwise)
in same day funds. If the Borrowers shall fail to reimburse the Issuing Bank as
provided hereinabove, the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the Base Rate plus the sum of (i) the
Applicable Percentage for Base Rate Loans and (ii) two percent (2%). The
Borrowers' reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrowers may claim or have against the
Issuing Bank, the Agent, the Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation any defense based
on any failure of the Borrowers to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The Issuing
Bank will promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Agent for the account of the
Issuing Bank in Dollars and in immediately available funds, the amount of such
Lender's
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Revolving Credit Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the Business Day such notice is received by such Lender
from the Issuing Bank if such notice is received at or before 2:00 P.M.
otherwise such payment shall be made at or before 12:00 Noon on the Business Day
next succeeding the day such notice is received. If such Lender does not pay
such amount to the Issuing Bank in full upon such request, such Lender shall, on
demand, pay to the Agent for the account of the Issuing Bank interest on the
unpaid amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Bank in full at a rate per annum equal to, if
paid within two (2) Business Days of the date that such Lender is required to
make payments of such amount pursuant to the preceding sentence, the Federal
Funds Rate and thereafter at a rate equal to the Base Rate. Each Lender's
obligation to make such payment to the Issuing Bank, and the right of the
Issuing Bank to receive the same, shall be absolute and unconditional, shall not
be affected by any circumstance whatsoever and without regard to the termination
of this Credit Agreement or the Revolving Credit Commitments hereunder, the
existence of a Default or Event of Default or the acceleration of the
obligations of the Borrowers hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the making
of each such payment by a Lender to the Issuing Bank, such Lender shall,
automatically and without any further action on the part of the Issuing Bank or
such Lender, acquire a participation in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to the
Issuing Bank) in the related unreimbursed drawing portion of the Letter of
Credit Obligation and in the interest thereon and in the related Letter of
Credit Documents, and shall have a claim against the Borrowers with respect
thereto.
3.5 REPAYMENT WITH REVOLVING LOANS.
On any day on which the Borrowers shall have requested, or been deemed
to have requested, a Revolving Loan advance to reimburse a drawing under a
Letter of Credit, the Agent shall give notice to the Lenders that a Revolving
Loan has been requested or deemed requested by the Borrowers to be made in
connection with a drawing under a Letter of Credit, in which case a Revolving
Loan advance comprised of Base Rate Loans (or Eurodollar Loans to the extent the
Borrower has complied with the procedures of Section 2.1(d)(i) with respect
thereto) shall be immediately made to the Borrowers by all Lenders
(notwithstanding any termination of the Revolving Credit Commitments pursuant to
Section 11.2) pro rata based on the respective Revolving Credit Commitment
Percentages of the Lenders (determined before giving effect to any termination
of the Commitments pursuant to Section 11.2) and the proceeds thereof shall be
paid directly by the Agent to the Issuing Bank for application to the respective
Letter of Credit Obligations. Each such Lender hereby irrevocably agrees to make
its Revolving Credit Commitment Percentage of each such Revolving Loan
immediately upon any such request or deemed request in the amount, in the manner
and on the date specified in the preceding sentence notwithstanding (i) the
amount of such borrowing may not comply with the minimum amount for advances of
Revolving Loans otherwise required hereunder, (ii) whether any conditions
specified in Article V are then satisfied, (iii) whether a Default or an Event
of Default then exists, (iv) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required hereunder, (v) whether
the date of such borrowing is a date on which Revolving Loans are otherwise
permitted to be made hereunder or (vi) any termination of the
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Revolving Credit Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a bankruptcy or
insolvency proceeding with respect to any Borrower), then each such Lender
hereby agrees that it shall forthwith purchase (as of the date such borrowing
would otherwise have occurred, but adjusted for any payments received from the
Borrowers on or after such date and prior to such purchase) from the Issuing
Bank such participation in the outstanding Letter of Credit Obligations as shall
be necessary to cause each such Lender to share in such Letter of Credit
Obligations ratably (based upon the respective Revolving Credit Commitment
Percentages of the Lenders (determined before giving effect to any termination
of the Revolving Credit Commitments pursuant to Section 11.2)), provided that at
the time any purchase of participation pursuant to this sentence is actually
made, the purchasing Lender shall be required to pay to the Issuing Bank, to the
extent not paid to the Issuing Bank by the Borrowers in accordance with the
terms of Section 3.4, interest on the principal amount of participation
purchased for each day from and including the day upon which such borrowing
would otherwise have occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2) Business Days of the
date of the Revolving Loan advance, the Federal Funds Rate, and thereafter at a
rate equal to the Base Rate.
3.6 RENEWAL, EXTENSION.
The renewal or extension of any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.
3.7 UNIFORM CUSTOMS AND PRACTICES.
The Issuing Bank may have the Letters of Credit be subject to The
Uniform Customs and Practice for Documentary Credits, as published as of the
date of issue by the International Chamber of Commerce (the "UCP"), in which
case the UCP may be incorporated therein and deemed in all respects to be a part
thereof.
3.8 INDEMNIFICATION; NATURE OF ISSUING BANK'S DUTIES.
(a) In addition to its other obligations under this Article
III, the Borrowers hereby agree to protect, indemnify, pay and save the
Issuing Bank harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that the Issuing Bank may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or (B) the failure of the Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission,
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").
(b) As between the Borrowers and the Issuing Bank, the
Borrowers shall assume all risks of the acts, omissions or misuse of
any Letter of Credit by the beneficiary
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thereof. The Issuing Bank shall not be responsible: (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 any Letter 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 Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (iii) 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; (iv)
for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (v) for any consequences arising from causes
beyond the control of the Issuing Bank, including, without limitation,
any Government Acts. None of the above shall affect, impair, or prevent
the vesting of the Issuing Bank's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by the Issuing Bank, under or in connection with any Letter of Credit
or the related certificates, if taken or omitted in good faith, shall
not put such Issuing Bank under any resulting liability to any
Borrower. It is the intention of the parties that this Credit Agreement
shall be construed and applied to protect and indemnify the Issuing
Bank against any and all risks involved in the issuance of the Letters
of Credit, all of which risks are hereby assumed by the Borrowers,
including, without limitation, any and all Government Acts. The Issuing
Bank shall not, in any way, be liable for any failure by the Issuing
Bank or anyone else to pay any drawing under any Letter of Credit as a
result of any Government Acts or any other cause beyond the control of
the Issuing Bank.
(d) Nothing in this Section 3.8 is intended to limit the
reimbursement obligations of the Borrower contained in Section 3.4
above. The obligations of the Borrowers under this Section 3.8 shall
survive the termination of this Credit Agreement. No act or omission of
any current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Bank to enforce any right,
power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 3.8, the Borrowers shall have no obligation to indemnify the
Issuing Bank in respect of any liability incurred by the Issuing Bank
(i) arising solely out of the gross negligence or willful misconduct of
the Issuing Bank, as determined by a court of competent jurisdiction,
or (ii) caused by the Issuing Bank's failure to pay under any Letter of
Credit after presentation to it of a request strictly complying with
the terms and conditions of such Letter of Credit, as determined by a
court of competent jurisdiction, unless such payment is prohibited by
any law, regulation, court order or decree.
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3.9 RESPONSIBILITY OF ISSUING BANK.
It is expressly understood and agreed that the obligations of the
Issuing Bank hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Bank shall be entitled to assume that the
conditions precedent set forth in Articles III or V have been satisfied unless
it shall have acquired actual knowledge that any such condition precedent has
not been satisfied; provided, however, that nothing set forth in this Article
III shall be deemed to prejudice the right of any Lender to recover from the
Issuing Bank any amounts made available by such Lender to the Issuing Bank
pursuant to this Article III in the event that it is determined by a court of
competent jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the Issuing
Bank.
3.10 CONFLICT WITH LETTER OF CREDIT DOCUMENTS.
In the event of any conflict between this Credit Agreement and any
Letter of Credit Document (including any letter of credit application), this
Credit Agreement shall control.
ARTICLE IV
INTEREST AND FEES
4.1 INTEREST ON LOANS.
Subject to the provisions of Section 4.2, interest on the Revolving
Loans shall be payable (a) for Base Rate Loans, monthly in arrears as of the end
of each calendar month and the interest rate shall be equal to the Base Rate
plus the Applicable Percentage on the average balances of the Base Rate Loans
owing to the Lenders in the Borrowers' Revolving Loan accounts at the close of
business for each day during each calendar month and (b) for Eurodollar Loans,
on the last day of the applicable Interest Period (and with respect to any
Eurodollar Loan with an Interest Period of six (6) months, on the date three (3)
months after the making of such Eurodollar Loan) and the interest rate shall be
equal to the Eurodollar Rate plus the Applicable Percentage on the outstanding
amount of each such Eurodollar Loan. In the event of any change in the Base
Rate, the rate hereunder shall change, effective as of the day the Base Rate
changes. The interest rates hereunder shall be calculated based on a 360 day
year for the actual number of days elapsed.
4.2 INTEREST AFTER EVENT OF DEFAULT.
Interest on any amount of matured principal under the Revolving Loans,
and interest on the amount of principal under the Revolving Loans outstanding as
of the date an Event of Default occurs, and at all times thereafter until the
earlier of the date upon which (a) all Obligations have been paid and satisfied
in full or (b) such Event of Default shall have been cured or waived, shall be
payable on demand at a rate equal to the rate at which the Revolving Loans are
then bearing interest pursuant to Section 4.1 above, plus two percent (2%). In
the event of any change in said applicable interest rate, the rate hereunder
shall change, effective as of the day the applicable
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interest rate changes, so as to remain two percent (2%) above the then
applicable interest rate. Interest shall be payable on any other amount due
hereunder and shall accrue at the Base Rate, plus two percent (2%) from the date
due until paid in full. The rates hereunder shall be calculated based on a 360
day year for the actual number of days elapsed.
4.3 UNUSED LINE FEE.
At the end of each calendar month the Borrowers shall pay to the Agent
for the benefit of the Lenders the Unused Line Fee due in respect of such
calendar month.
4.4 LENDERS' FEES/AGENT'S FEES.
On the Closing Date the Agent shall pay to each Lender its respective
Lender's Fees that are required to be paid on the Closing Date pursuant to the
terms of such Lender's fee letter with the Agent. The Borrowers shall pay all
fees required to be paid to the Agent under the Fee Letter at the times and in
the amounts set forth therein.
4.5 LETTER OF CREDIT FEES.
(a) Standby Letter of Credit Fee. In consideration of the
issuance of standby Letters of Credit hereunder, the Borrowers promise
to pay to the Agent for the account of each Lender a fee (the "Standby
Letter of Credit Fee") on such Lender's Revolving Credit Commitment
Percentage of the stated amount of each such standby Letter of Credit
computed at a per annum rate for the period from and including the date
of issuance to and including the date of expiration equal to the
Applicable Percentage for Eurodollar Loans. The Standby Letter of
Credit Fee shall be due and payable in full on the date of issuance
thereof.
(b) Trade Letter of Credit Drawing Fee. In consideration of
the issuance of trade Letters of Credit hereunder, the Borrowers
promise to pay to the Agent for the account of each Lender a fee (the
"Trade Letter of Credit Fee") equal to the Applicable Percentage for
Eurodollar Loans less 0.50% on such Lender's Revolving Credit
Commitment of the amount of each drawing under any such trade Letter of
Credit. The Trade Letter of Credit Fee will be payable on each date of
drawing under the applicable trade Letter of Credit.
(c) Issuing Bank Fees. In addition to the Standby Letter of
Credit Fee payable pursuant to clause (a) above and the Trade Letter of
Credit Fee payable pursuant to clause (b) above, the Borrowers promise
to pay to the Issuing Bank for its own account without sharing by the
other Lenders (i) a letter of credit fronting fee equal to 0.125% of
the stated amount of each Letter of Credit payable in full upon
issuance of each such Letter of Credit and (ii) negotiation fees agreed
to by the Borrowers and the Issuing Bank from time to time and the
customary charges from time to time of the Issuing Bank with respect to
the amendment, transfer, administration, cancellation and conversion
of, and drawings under, such Letters of Credit (collectively, the
"Issuing Bank Fees").
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4.6 AUTHORIZATION TO CHARGE ACCOUNT.
The Borrowers hereby authorize the Agent to charge the Borrowers'
Revolving Loan accounts with the amount of all payments and fees due hereunder
to the Lenders, the Agent and the Issuing Bank as and when such payments become
due. The Borrowers confirm that any charges which the Agent may so make to the
Borrowers' Revolving Loan accounts as herein provided will be made as an
accommodation to the Borrowers and solely at the Agent's discretion.
4.7 INDEMNIFICATION IN CERTAIN EVENTS.
If after the Closing Date, either (a) any change in or in the
interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to FUCC or any
other banking or financial institution from whom any of the Lenders borrow funds
or obtain credit (a "Funding Bank") or any of the Lenders, or (b) a Funding Bank
or any of the Lenders complies with any future guideline or request from any
central bank or other Governmental Authority or (c) a Funding Bank or any of the
Lenders determines that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof has or would have the effect described below, or a Funding Bank or any
of the Lenders complies with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, and in the case of any event set forth in this clause (c),
such adoption, change or compliance has or would have the direct or indirect
effect of reducing the rate of return on any of the Lenders' capital as a
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration the Funding Bank's or Lenders' policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, and the result of
any of the foregoing events described in clauses (a), (b) or (c) is or results
in an increase in the cost to any of the Lenders of funding or maintaining the
Revolving Credit Committed Amount, the Revolving Loans or the Letters of Credit,
then the Borrowers shall from time to time upon demand by the Agent, pay to the
Agent additional amounts sufficient to indemnify the Lenders against such
increased cost. A certificate as to the amount of such increased cost shall be
submitted to the Borrowers by the Agent and shall be conclusive and binding
absent manifest error.
4.8 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, (a) the Agent shall
have determined in good faith (which determination shall be conclusive and
binding upon the Borrowers) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, (b) the Agent has received notice from
the Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining
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their Eurodollar Loans during such Interest Period, or (c) Dollar deposits in
the principal amounts of the Eurodollar Loans to which such Interest Period is
to be applicable are not generally available in the London interbank market, the
Agent shall give telecopy or telephonic notice thereof to the Borrowers and the
Lenders as soon as practicable thereafter, and will also give prompt written
notice to the Borrowers when such conditions no longer exist. If such notice is
given, (a) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (b) any Revolving Loans that
were to have been converted on the first day of such Interest Period to or
continued as Eurodollar Loans shall be converted to or continued as Base Rate
Loans and (c) each outstanding Eurodollar Loan shall be converted, on the last
day of the then-current Interest Period thereof, to Base Rate Loans. Until such
notice has been withdrawn by the Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrowers have the right to convert
Base Rate Loans to Eurodollar Loans.
4.9 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other Governmental Authority or in
the interpretation or application thereof occurring after the Closing Date shall
make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly give
written notice of such circumstances to the Borrowers and the Agent (which
notice shall be withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans shall
forthwith be canceled and, until such time as it shall no longer be unlawful for
such Lender to make or maintain Eurodollar Loans, such Lender shall then have a
commitment only to make a Base Rate Loan when a Eurodollar Loan is requested and
(c) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Revolving Loans or within
such earlier period as required by law. If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrowers shall pay to such Lender such
amounts, if any, as may be required pursuant to Section 4.10.
4.10 FUNDING INDEMNITY.
The Borrowers, jointly and severally, promise to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrowers in making a
borrowing of, conversion into or extension of Eurodollar Loans after the
Borrowers have given a notice requesting the same in accordance with the
provisions of this Credit Agreement, (b) default by the Borrowers in making any
prepayment of a Eurodollar Loan after the Borrowers have given a notice thereof
in accordance with the provisions of this Credit Agreement, and (c) the making
of a prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. With respect to Eurodollar Loans, such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest
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which would have accrued on the amount so prepaid, or not so borrowed, converted
or extended, for the period from the date of such prepayment or of such failure
to borrow, convert or extend to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or extend, the Interest Period
that would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Eurodollar Loans provided for herein over
(ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. This covenant shall survive the termination of this Credit Agreement and
the payment of the Revolving Loans and all other amounts payable hereunder.
ARTICLE V
CONDITIONS PRECEDENT
The obligation of the Lenders to make any Revolving Loan or of the
Issuing Bank to issue any Letter of Credit hereunder is subject to the
satisfaction of, or waiver of, the Required Lenders immediately prior to or
concurrently with the making of such Revolving Loan or issuance of such Letter
of Credit, the following conditions precedent:
5.1 CLOSING CONDITIONS.
On or prior to the Closing Date, the Lenders shall have received each
of the documents, opinions and certificates set forth in the list of Closing
Conditions attached hereto as Schedule 1.1B and the conditions set forth therein
shall have been satisfied or waived.
5.2 MATERIAL ADVERSE CHANGE.
(a) No Material Adverse Change, or development reasonably likely to
have a Material Adverse Effect, shall have occurred, (b) no occurrence or event
which is reasonably likely to have a Material Adverse Effect shall have occurred
and be continuing and (c) on or prior to the Closing Date, there shall not have
occurred a substantial impairment of the financial markets generally which, in
the opinion of the Lenders, has materially and adversely affected the
transactions contemplated hereby.
5.3 FEES.
On or prior to the Closing Date, the Lenders shall have received
payment in full of the fees required to be paid to the Lenders on the Closing
Date.
5.4 REPRESENTATIONS AND WARRANTIES; NO DEFAULT.
On the date of the making of any Revolving Loan or the issuance of any
Letter of Credit, both before and after giving effect thereto and to the
application of the proceeds therefrom, the
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following statements shall be true to the satisfaction of the Agent (and each
request for a Revolving Loan and request for a Letter of Credit, and the
acceptance by the Borrower of the proceeds of such Revolving Loan or issuance of
such Letter of Credit, shall constitute a representation and warranty by the
Borrowers that on the date of such Revolving Loan or issuance of such Letter of
Credit before and after giving effect thereto and to the application of the
proceeds therefrom, such statements are true): (a) the representations and
warranties contained in this Credit Agreement are true and correct in all
material respects on and as of the date of such Revolving Loan or issuance of
such Letter of Credit as though made on and as of such date, except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and complete on and as of such earlier date); (b) no event has occurred and
is continuing, or would result from such Revolving Loan or issuance of such
Letter of Credit or the application of the proceeds thereof, which would
constitute a Default or an Event of Default under this Credit Agreement; and (c)
no Material Adverse Change, or development reasonably likely to have a Material
Adverse Effect shall have occurred and be continuing.
5.5 NOTICE OF BORROWING.
On the date of the making of any Revolving Loan, the Agent shall have
received a Notice of Borrowing to the extent such Notice of Borrowing is
required to be given with respect to the making of such Revolving Loan.
5.6 ADDITIONAL DOCUMENTS.
On or prior to the Closing Date, the Borrowers shall have executed and
delivered to the Agent all documents which the Agent determines are reasonably
necessary to consummate the lending arrangements contemplated hereby.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Credit Agreement and
the Issuing Bank to issue the Letters of Credit, and to make available the
credit facilities contemplated hereby, each Borrower hereby represents and
warrants to the Lenders and the Issuing Bank as of the Closing Date, and on the
date of each extension of credit hereunder, as follows:
6.1 ORGANIZATION AND QUALIFICATION.
Such Borrower and each of its Subsidiaries (i) is duly organized,
validly existing and in good standing under the laws of the state in which it
was organized, (ii) has the power and authority to own its properties and assets
and to transact the businesses in which it is presently, or proposes to be,
engaged, and (iii) is duly qualified and is authorized to do business and is in
good standing in every jurisdiction in which the failure to be so qualified
could have a Material
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Adverse Effect. Schedule 6.1 contains a true, correct and complete list of all
jurisdictions in which such Borrower and its Subsidiaries are qualified to do
business as a foreign corporation or foreign limited liability company as of the
Closing Date.
6.2 SOLVENCY.
The fair saleable value of such Borrower's assets exceeds all probable
liabilities, including those to be incurred pursuant to this Credit Agreement.
Such Borrower (i) does not have unreasonably small capital in relation to the
business in which it is or proposes to be engaged or (ii) has not incurred, and
does not believe that it will incur after giving effect to the transactions
contemplated by this Credit Agreement, debts beyond its ability to pay such
debts as they become due.
6.3 LIENS; INVENTORY.
There are no Liens (other than Permitted Liens) in favor of third
parties with respect to any of the Collateral, including, without limitation,
with respect to the Inventory, wherever located. To the best of such Borrower's
knowledge, no lessor, warehouseman, filler, processor or packer of such Borrower
has granted any Lien with respect to the Inventory maintained by such Borrower
at the property of any such lessor, warehousemen, filler, processor or packer.
Upon the proper filing of financing statements and the proper recordation of
other applicable documents with the appropriate filing or recordation offices in
each of the necessary jurisdictions, the security interests granted pursuant to
the Credit Documents constitute and shall at all times constitute valid and
enforceable first, prior and perfected Liens on the Collateral (other than
Permitted Liens). The Borrowers are or will be at the time additional Collateral
is acquired by them, the absolute owners of the Collateral with full right to
pledge, sell, consign, transfer and create a Lien therein, free and clear of any
and all Liens in favor of third parties, except Permitted Liens. The Borrowers
and the Subsidiaries will at their expense forever warrant and, at the Agent's
request, defend the Collateral from any and all Liens (other than Permitted
Liens) of any third party. The Borrowers will not, and will not permit any of
their Subsidiaries to, grant, create or permit to exist, any Lien upon the
Collateral, or any proceeds thereof, in favor of any third party (other than
Permitted Liens).
6.4 NO CONFLICT.
The execution and delivery by such Borrower of this Credit Agreement
and each of the other Credit Documents executed and delivered in connection
herewith and the performance of the obligations of such Borrower hereunder and
thereunder and the consummation by such Borrower of the transactions
contemplated hereby and thereby: (i) are within the powers of such Borrower;
(ii) are duly authorized by the Board of Directors or members of such Borrower
and, if necessary with respect to the Company, its stockholders; (iii) are not
in contravention of the terms of the articles or certificate of incorporation or
bylaws or other organizational documents of such Borrower or of any indenture,
contract, lease, agreement instrument or other commitment to which such Borrower
is a party or by which such Borrower or any of its properties are bound; (iv) do
not require the consent, registration or approval of any governmental entity or
any other
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Person (except such as have been duly obtained, made or given, and are in full
force and effect, and except such as would not reasonably be expected to have a
Material Adverse Effect if not obtained, given or made); (v) do not contravene
any statute, law, ordinance regulation, rule, order or other governmental
restriction applicable to or binding upon such Borrower; and (vi) will not,
except as contemplated herein for the benefit of the Agent on behalf of the
Lenders, result in the imposition of any Liens upon any property of such
Borrower under any indenture, mortgage, deed of trust, loan or credit agreement
or other material agreement or instrument to which such Borrower is a party or
by which it or any of its property may be bound or affected.
6.5 ENFORCEABILITY.
The Credit Agreement and all of the other Credit Documents executed and
delivered in connection herewith are the legal, valid and binding obligations of
such Borrower, and with respect to those Credit Documents executed and delivered
by any Subsidiary, of each such Subsidiary, and are enforceable against such
Borrower and such Subsidiaries, as the case may be, in accordance with their
terms except as such enforceability may be limited by (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) general principles of equity.
6.6 FINANCIAL DATA.
The Company has furnished to the Lenders the following financial
statements (the "Financials"): (i) the consolidated balance sheets of the
Company as of February 28, 1997 and February 27, 1998, and consolidated
statements of earnings, shareholders' equity and cash flow of the Company for
the fiscal years ended February 28, 1996, February 28, 1997 and February 27,
1998, audited by Deloitte & Touche LLP, (ii) the unaudited consolidated balance
sheet of the Company as of, and consolidated statement of earnings of the
Company for the period ended, April 30, 1998, (iii) the statements of certain
assets and liabilities of the Pierre Foods Division as of September 28, 1996 and
September 27, 1997, and statements of revenues and expenses of the Pierre Foods
Division for the fiscal years ended September 30, 1995, September 28, 1996 and
September 27, 1997, audited by Deloitte & Touche LLP, and (iv) an unaudited pro
forma combined balance sheet of the Company (including the Pierre Foods
Division) as of February 27, 1998 and an unaudited pro forma combined statement
of operations of the Company (including the Pierre Foods Division) for the
twelve months ended February 27, 1998, together with the comfort letter of
Deloitte & Touche LLP relating thereto, with respect to items (iii) and (iv)
above, showing no material changes from the representations of senior management
of the Company with respect thereto. The Financials are and the historical
financial statements to be furnished to the Lenders in accordance with
subsection 7.1 below will be in accordance with the books and records of such
predecessor corporations and the Borrowers and fairly present the financial
condition of such predecessor corporations and each of the Borrowers at the
dates thereof and the results of operations for the periods indicated (subject,
in the case of unaudited financial statements, to normal year-end adjustments),
and such financial statements have been and will be prepared in conformity with
GAAP consistently applied throughout the periods involved. Since the date of the
Financials, there have been no changes in the condition, financial or otherwise,
of such predecessor corporations or any of the Borrowers as shown on the
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respective balance sheets of such predecessor corporations and each of the
Borrowers described above, except (a) as contemplated herein and (b) for changes
in the ordinary course of business (none of which individually or in the
aggregate has been materially adverse).
6.7 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
The Borrowers' principal places of business and chief executive offices
are set forth in Schedule 6.7 hereto, and the books and records of the Borrowers
and all chattel paper and all records of accounts are located at the principal
places of business and chief executive offices of the Borrowers. There is no
jurisdiction in which any Borrower or any of its Subsidiaries has any assets,
equipment or Inventory (except for vehicles, Inventory in transit for
processing, or immaterial items) other than those jurisdictions listed on
Schedule 6.7 attached hereto. Attached hereto as Schedule 6.7 is a true, correct
and complete list of (i) the legal names and addresses of each warehouseman,
filler, processor and packer at which Inventory is stored, (ii) the address of
the chief executive offices of the Borrowers and each of their Subsidiaries and
(iii) the address of all offices where records and books of account of the
Borrowers and each of their Subsidiaries are kept. None of the receipts received
by any of the Borrowers from any warehouseman, filler, processor or packer
states that the goods covered thereby are to be delivered to bearer or to the
order of a named person or to a named person and such named person's assigns.
6.8 FICTITIOUS BUSINESS NAMES.
Neither such Borrower nor any of its Subsidiaries has used any
corporate or fictitious name during the five (5) years preceding the date
hereof, other than the corporate name shown on its or such Subsidiary's Articles
or Certificate of Incorporation and as set forth on Schedule 6.8.
6.9 SUBSIDIARIES.
The only direct or indirect Subsidiaries of the Borrowers are those
listed on Schedule 6.9 attached hereto. The Borrowers are the record and
beneficial owner of all of the shares of Capital Stock of each of the
Subsidiaries listed on Schedule 6.9 as being owned by the Borrowers, there are
no proxies, irrevocable or otherwise, with respect to such shares, and no equity
securities of any of the Subsidiaries are or may become required to be issued by
reason of any options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any Capital Stock of any
Subsidiary, and there are no contracts, commitments, understandings or
arrangements by which any Subsidiary is or may become bound to issue additional
shares of its Capital Stock or securities convertible into or exchangeable for
such shares. All of such shares so owned by the Borrowers are owned by them free
and clear of any Liens other than Permitted Liens.
6.10 NO JUDGMENTS OR LITIGATION.
Except as set forth on Schedule 6.10 hereto, no judgments, orders,
writs or decrees are outstanding against such Borrower or any of its
Subsidiaries nor is there now pending or, to the best of such Borrower's
knowledge after diligent inquiry, threatened any litigation, contested
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claim, investigation, arbitration, or governmental proceeding by or against such
Borrower or any of its Subsidiaries except judgments and pending or threatened
litigation, contested claims, investigations, arbitrations and governmental
proceedings which could not reasonably be expected to have a Material Adverse
Effect.
6.11 NO DEFAULTS.
Neither such Borrower nor any of its Subsidiaries is in default under
any term of any material indenture, contract, lease, agreement, instrument or
other commitment to which any of them is a party or by which any of them is
bound. Such Borrower knows of no dispute regarding any indenture, contract,
lease, agreement, instrument or other commitment which could reasonably be
expected to have a Material Adverse Effect.
6.12 NO EMPLOYEE DISPUTES.
There are no controversies pending or, to the best of such Borrower's
knowledge after diligent inquiry, threatened between such Borrower or any of its
Subsidiaries and any of their respective employees, other than employee
grievances arising in the ordinary course of business which would not, in the
aggregate, have a Material Adverse Effect.
6.13 COMPLIANCE WITH LAW.
Neither such Borrower nor any of its Subsidiaries has violated or
failed to comply with any statute, law, ordinance, regulation, rule or order of
any foreign, federal, state or local government, or any other governmental
department or agency or any self regulatory organization, or any judgment,
decree or order of any court, applicable to its business or operations except
where the aggregate of all such violations or failures to comply could not
reasonably be expected to have a Material Adverse Effect. The conduct of the
business of such Borrower and each of the Subsidiaries is in conformity with all
securities, commodities, energy, public utility, zoning, building code, health,
OSHA and environmental requirements and all other foreign, federal, state and
local governmental and regulatory requirements and requirements of any self
regulatory organizations, except where the aggregate of all such
non-conformities could not reasonably be expected to have a Material Adverse
Effect. Neither such Borrower nor any of its Subsidiaries has received any
notice to the effect that, or otherwise been advised that, it is not in
compliance with, and neither such Borrower nor any of its Subsidiaries has any
reason to anticipate that any presently existing circumstances are likely to
result in the violation of any such statute, law, ordinance, regulation, rule,
judgment, decree or order which failure or violation could reasonably be
expected to have a Material Adverse Effect.
6.14 ERISA.
Neither such Borrower, any Subsidiary nor any ERISA Affiliate maintains
or contributes to any Benefit Plan other than those listed on Schedule 6.14
annexed hereto. Each Benefit Plan has been and is being maintained and funded in
accordance with its terms and in compliance in all material respects with all
provisions of ERISA and the Internal Revenue Code applicable
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thereto. Such Borrower, each of the Subsidiaries and each ERISA Affiliate have
fulfilled all obligations related to the minimum funding standards of ERISA and
the Internal Revenue Code for each Benefit Plan, are in compliance in all
material respects with the currently applicable provisions of ERISA and of the
Internal Revenue Code and have not incurred any liability (other than routine
liability for premiums) under Title IV of ERISA. No Termination Event has
occurred nor has any other event occurred that may result in such a Termination
Event. No event or events have occurred in connection with which such Borrower,
any of the Subsidiaries, any ERISA Affiliate, any fiduciary of a Benefit Plan or
any Benefit Plan, directly or indirectly, could be subject to any material
liability, individually or in the aggregate, under ERISA, the Internal Revenue
Code or any other law, regulation or governmental order or under any agreement,
instrument, statute, rule of law or regulation pursuant to or under which any
such entity has agreed to indemnify or is required to indemnify any person
against liability incurred under, or for a violation or failure to satisfy the
requirements of, any such statute, regulation or order.
6.15 COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except as disclosed on Schedule 6.15 attached hereto, (a) the
operations of such Borrower and each of its Subsidiaries comply with all
applicable federal, state or local environmental, health and safety statutes,
regulations, directions, ordinances, criteria or guidelines and (b) none of the
operations of such Borrower or any of its Subsidiaries is the subject of any
judicial or administrative proceeding alleging the violation of any federal,
state or local environmental, health or safety statute, regulation, direction,
ordinance, criteria or guidelines. Except as disclosed on Schedule 6.15, none of
the operations of such Borrower or any of its Subsidiaries is the subject of any
federal or state investigation evaluating whether such Borrower or any of its
Subsidiaries disposed any hazardous or toxic waste, substance or constituent or
other substance at any site that may require remedial action, or any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release of any hazardous or toxic waste, substance or constituent, or other
substance into the environment. Except as disclosed on Schedule 6.15, neither
such Borrower nor any of its Subsidiaries have filed any notice under any
federal or state law indicating past or present treatment, storage or disposal
of a hazardous waste or reporting a spill or release of a hazardous or toxic
waste, substance or constituent, or other substance into the environment. Except
as disclosed on Schedule 6.15, neither such Borrower nor any of its Subsidiaries
have any contingent liability of which such Borrower has knowledge or reasonably
should have knowledge in connection with any release of any hazardous or toxic
waste, substance or constituent, or other substance into the environment, nor
has such Borrower or any of its Subsidiaries received any notice, letter or
other indication of potential liability arising from the disposal of any
hazardous or toxic waste, substance or constituent or other substance into the
environment.
6.16 USE OF PROCEEDS.
All proceeds of the Loans will be used only in accordance with Section
7.13. All proceeds of the Senior Unsecured Debt shall be used to finance the
acquisition by the Company of the Pierre Foods Division and to the extent of any
surplus proceeds, to repay the Revolving Loans.
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6.17 INTELLECTUAL PROPERTY.
Such Borrower possesses adequate assets, licenses, patents, patent
applications, copyrights, service marks, trademarks and tradenames to continue
to conduct its business as heretofore conducted by it. Schedule 6.17 attached
hereto sets forth (a) all of the material federal, state and foreign
registrations of trademarks, service marks and other marks, trade names or other
trade rights of such Borrower and its Subsidiaries, and all material pending
applications for any such registrations, (b) all of the material patents and
copyrights of such Borrower and its Subsidiaries and all material pending
applications therefor and (c) all other material trademarks, service marks and
other marks, trade names and other trade rights used by such Borrower or any of
its Subsidiaries in connection with their businesses (collectively, the
"Proprietary Rights"). Such Borrower and its Subsidiaries are collectively the
owners of each of the trademarks listed on Schedule 6.17 as indicated on such
schedule, and no other Person has the right to use any of such marks in commerce
either in the identical form or in such near resemblance thereto as may be
likely to cause confusion or to cause mistake or to deceive. Each of the
trademarks listed on Schedule 6.17 is a federally registered trademark of such
Borrower or its Subsidiaries having the registration number and issue date set
forth on Schedule 6.17. The Proprietary Rights listed on Schedule 6.17 are all
those used in the businesses of such Borrower and its Subsidiaries. Except as
disclosed on Schedule 6.17, no person has a right to receive any royalty or
similar payment in respect of any Proprietary Rights pursuant to any contractual
arrangements entered into by such Borrower, or any of its Subsidiaries and no
person otherwise has a right to receive any royalty or similar payment in
respect of any such Proprietary Rights except as disclosed on Schedule 6.17.
Neither such Borrower nor any of its Subsidiaries has granted any license or
sold or otherwise transferred any interest in any of the Proprietary Rights to
any other person. The use of each of the Proprietary Rights by such Borrower and
its Subsidiaries is not infringing upon or otherwise violating the rights of any
third party in or to such Proprietary Rights, and no proceeding has been
instituted against or notice received by such Borrower or any of its
Subsidiaries that are presently outstanding alleging that the use of any of the
Proprietary Rights infringes upon or otherwise violates the rights of any third
party in or to any of the Proprietary Rights. Neither such Borrower nor any of
its Subsidiaries have given notice to any Person that it is infringing on any of
the Proprietary Rights and to the best of such Borrower's knowledge, no Person
is infringing on any of the Proprietary Rights. All of the Proprietary Rights of
such Borrower and its Subsidiaries are valid and enforceable rights of such
Borrower and its Subsidiaries and will not cease to be valid and in full force
and effect by reason of the execution and delivery of this Credit Agreement or
the Credit Documents or the consummation of the transactions contemplated hereby
or thereby.
6.18 LICENSES AND PERMITS.
Such Borrower and each of its Subsidiaries have obtained, and hold in
full force and effect, all material franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and other
rights and approvals which are necessary or appropriate for the operation of
their businesses as presently conducted and as proposed to be conducted. Neither
of such Borrower nor any of its Subsidiaries is in violation of the terms of any
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such franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, right or approval in any such case which
could reasonably be expected to have a Material Adverse Effect.
6.19 TITLE TO PROPERTY.
Such Borrower has (i) good and marketable fee simple title to or valid
leasehold interests in all of its real property, including, without limitation,
the Real Estate (all such real property and the nature of such Borrower's or any
Subsidiary's interest therein is disclosed on Schedule 6.19) and (ii) good and
marketable title to all of its other property (including without limitation, all
real and other property in each case as reflected in the Financial Statements
delivered to the Agent hereunder), other than, with respect to properties
described in clause (ii) above, properties disposed of in the ordinary course of
business or in any manner otherwise permitted under this Credit Agreement since
the date of the most recent audited consolidated balance sheet of such Borrower,
and in each case subject to no Liens other than Permitted Liens. Such Borrower
and its Subsidiaries enjoy peaceful and undisturbed possession of all its real
property, including, without limitation, the Real Estate, and there is no
pending or, to the best of their knowledge, threatened condemnation proceeding
relating to any such real property. The leases with respect to the leased
property, together with any leases of real property entered into by such
Borrower after the date hereof, are referred to collectively as the "Leases". No
material default exists under any Lease. To the best knowledge of such Borrower,
all of the Structures and other tangible assets owned, leased or used by such
Borrower or any of its Subsidiaries in the conduct of their respective
businesses are (a) insured to the extent and in a manner customary in the
industry in which such Borrower or such Subsidiaries are engaged, (b)
structurally sound with no known material defects, (c) in good operating
condition and repair, subject to ordinary wear and tear, (d) not in need of
maintenance or repair except for ordinary, routine maintenance and repair the
cost of which would not be material, (e) sufficient for the operation of the
businesses of such Borrower and its Subsidiaries as presently conducted and (f)
in conformity with all applicable laws, ordinances, orders, regulations and
other requirements (including applicable zoning, environmental, motor vehicle
safety, occupational safety and health laws and regulations) relating thereto,
except where the failure to conform could not be reasonably be expected to have
a Material Adverse Effect.
6.20 LABOR MATTERS.
Neither such Borrower nor any of its Subsidiaries is engaged in any
unfair labor practice. There is (a) no material unfair labor practice complaint
pending against such Borrower or any of its Subsidiaries or, to the best
knowledge of such Borrower, threatened against any of them, before the National
Labor Relations Board, and no material grievance or significant arbitration
proceeding arising out of or under collective bargaining agreements is so
pending against such Borrower or any of its Subsidiaries or, to the best
knowledge of such Borrower, threatened against any of them, (b) no strike, labor
dispute, slowdown or stoppage pending against either of such Borrower or any of
its Subsidiaries or, to the best knowledge of such Borrower, threatened against
any of them, and (c) no union representation questions with respect to the
employees of such Borrower or any Subsidiaries and no union organizing
activities.
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6.21 INVESTMENT COMPANY.
Neither such Borrower nor any of its Subsidiaries is (a) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or (b) a "holding company" or
a "Subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "Subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
6.22 MARGIN SECURITY.
Such Borrower does not own any margin stock., other than Permitted
Investments, and no portion of the proceeds of any Loans or Letters of Credit
shall be used by the Borrowers for the purpose of purchasing or carrying any
"margin stock" (as defined in Regulation U of the Board of Governors of the
Federal Reserve System) other than Permitted Investments or for any purpose
which violates the provisions or Regulation T, U or X of said Board of Governors
or for any purpose in violation of any other applicable statute or regulation or
of the terms and conditions of this Credit Agreement.
6.23 NO EVENT OF DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.24 TAXES AND TAX RETURNS.
(a) Except as set forth on Schedule 6.24, such Borrower and
its Subsidiaries (and any affiliated group of which such Borrower or
any of its Subsidiaries are now or have been members) has timely filed
(inclusive of any permitted extensions) with the appropriate taxing
authorities all returns (including without limitation, information
returns and other material information, in respect of Taxes required to
be filed through the date hereof and will timely file (inclusive of any
permitted extensions) any such returns required to be filed on and
after the date hereof. The information filed is complete and accurate
in all material respects. All deductions taken by such Borrower as
reflected in such income tax returns have been taken in accordance with
applicable laws and regulations. Except as specified in Schedule 6.24
hereto, neither such Borrower nor any of its Subsidiaries, nor any
group of which such Borrower or any of its Subsidiaries are now or were
members, have requested any extension of time within which to file
returns (including without limitation information returns) in respect
of any Taxes.
(b) All Taxes, in respect of periods beginning prior to the
date hereof, have been timely paid, or will be timely paid, or an
adequate reserve has been established therefor, as set forth in
Schedule 6.24 or in the Financial Statements, and neither such Borrower
nor any of its Subsidiaries has any material liability for Taxes in
excess of the amounts so paid or reserves so established.
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(c) Except as set forth in Schedule 6.24, no material
deficiencies for Taxes have been claimed, proposed or assessed by any
taxing or other Governmental Authority against such Borrower or any of
their Subsidiaries and no material tax liens have been filed. Except as
set forth in Schedule 6.24, there are no pending or, to the best of
such Borrower's knowledge, threatened audits, investigations or claims
for or relating to any material liability in respect of Taxes, and
there are no matters under discussion with any governmental authorities
with respect to Taxes which are likely to result in a material
additional liability for Taxes. Either the federal income tax returns
of such Borrower have been audited by the Internal Revenue Service and
such audits have been closed (including with respect to the Taxes of
the Borrowers' respective predecessor corporations), or the period
during which any assessments may be made by the Internal Revenue
Service has expired without waiver or extension, for all years up to
and including the fiscal year ended February 25, 1994. Except as set
forth in Schedule 6.24, no extension of a statute of limitations
relating to Taxes is in effect with respect to such Borrower or any of
their Subsidiaries (including with respect to the Taxes of the
Borrowers' respective predecessor corporations).
6.25 NO OTHER INDEBTEDNESS.
Such Borrower has no Indebtedness that is senior, pari passu or
subordinated in right of payment to their Indebtedness to the Lenders hereunder,
except for Permitted Indebtedness.
6.26 STATUS OF ACCOUNTS.
Each Account is based on an actual and bona fide sale and delivery of
goods or rendition of services to customers, made by such Borrower in the
ordinary course of its business; the goods and inventory being sold and the
Accounts created are its exclusive property and are not and shall not be subject
to any Lien, consignment arrangement, encumbrance, security interest or
financing statement whatsoever, other than the Permitted Liens; and such
Borrower's customers have accepted the goods or services, owe and are obligated
to pay the full amounts stated in the invoices according to their terms, without
any dispute, offset, defense, counterclaim or contra that could have, when
aggregated with any such other disputes, offsets, defenses, counterclaims or
contras, a Material Adverse Effect. Such Borrower confirms to the Lenders that
any and all taxes or fees relating to its business, its sales, the Accounts or
the goods relating thereto, are its sole responsibility and that same will be
paid by such Borrower when due (unless duly contested and adequately reserved
for) and that none of said taxes or fees is or will become a lien on or claim
against the Accounts.
6.27 REPRESENTATIONS AND WARRANTIES.
As of the Closing Date, each of the representations and warranties made
in the Operative Documents by each of the parties thereto is true and correct in
all material respects, and such representations and warranties are hereby
incorporated herein by reference with the same effect as though set forth in
their entirety herein, as qualified therein.
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6.28 MATERIAL CONTRACTS.
Attached hereto as Schedule 6.28 is a true, correct and complete list
of all the Material Contracts currently in effect on the date hereof. None of
the Material Contracts contains provisions which could have a Material Adverse
Effect. All of the Material Contracts are in full force and effect, and no
material defaults currently exist thereunder.
6.29 SURVIVAL OF REPRESENTATIONS.
All representations made by such Borrower in this Credit Agreement and
in any other Credit Document executed and delivered in connection herewith shall
survive the execution and delivery hereof and thereof.
6.30 AFFILIATE TRANSACTIONS.
Except as set forth on Schedule 6.30 hereto, neither such Borrower nor
any Subsidiaries is a party to or bound by any agreement or arrangement (whether
oral or written) to which any Affiliate of such Borrower or of any Subsidiary is
a party except (a) in the ordinary course of and pursuant to the reasonable
requirements of such Borrower's or such Subsidiary's business and (b) upon fair
and reasonable terms no less favorable to such Borrower and such Subsidiary than
it could obtain in a comparable arm's-length transaction with an unaffiliated
Person.
6.31 KEY MEMBERS OF MANAGEMENT.
Attached hereto as Schedule 6.31 is a true, correct and complete list
of the key members of management of such Borrower as of the date hereof.
6.32 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Borrowers or any of the Subsidiaries in writing
to the Agent, any Lender, or the Independent Accountant for purposes of or in
connection with this Credit Agreement or any Credit Documents, or any
transaction contemplated hereby or thereby is or will be true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information not misleading at such time. There is no fact now known to
any officer of any Borrower or any of its Subsidiaries which has, or would have,
a Material Adverse Effect which fact has not been set forth herein, in the
Financials, or any certificate, opinion or other written statement made or
furnished by any Borrower to the Agent.
6.33 FARM PRODUCTS, ETC.
(a) None of the Collateral constitutes farm products, or proceeds
thereof.
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(b) Neither such Borrower nor any of its Subsidiaries is a live
poultry dealer (as defined in the Packers and Stockyard Act).
6.34 RESTAURANT BUSINESS. The Restaurant Business is described on
Schedule 6.34.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until termination of this Credit Agreement and the Commitment hereunder
and payment and satisfaction of all Obligations due or to become due hereunder,
each Borrower agrees that, unless the Required Lenders shall have otherwise
consented in writing:
7.1 FINANCIAL INFORMATION.
The Company will furnish to the Lenders the following information
within the following time periods:
(a) within one hundred twenty (120) days after the close of
the fiscal year of the Company, (i) the audited consolidated and
consolidating balance sheets and statements of income and retained
earnings and of changes in cash flow of the Company and its
Subsidiaries, for such year, each in reasonable detail, each setting
forth in comparative form the corresponding figures for the preceding
year, prepared in accordance with GAAP, and accompanied by a report and
unqualified opinion of Deloitte & Touche LLP or other Independent
Accountant selected by the Company and approved by the Required Lenders
and (ii) a divisional operating income analysis for such year, in
reasonable detail, setting forth in comparative form the corresponding
analysis for the preceding year, prepared by the Company;
(b) within forty-five (45) days after the end of each fiscal
quarter of the Company other than the final fiscal quarter, unaudited
consolidated financial statements and divisional operating income
analyses similar to those required by clause (a) above as of the end of
such period and for such period then ended and for the period from the
beginning of the current fiscal year to the end of such period, setting
forth in comparative form the corresponding figures for the comparable
period in the preceding fiscal year, prepared in accordance with GAAP
(except that such quarterly statements need not include footnotes) and
certified by any two of the officers described in paragraph (d) below;
(c) within thirty (30) days after the end of each fiscal month
of the Company other than the final month of each fiscal quarter,
unaudited consolidated financial statements and divisional operating
income analyses similar to those required by clause (a) above as of the
end of such period and for such period then ended and for the period
from the beginning of the current fiscal year to the end of such period
(except that no
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statements of cash flow shall be required), setting forth in
comparative form the corresponding figures for the comparable period in
the preceding fiscal year, prepared in accordance with GAAP (except
that such monthly statements need not include footnotes) and certified
by any two of the officers described in paragraph (d) below;
(d) at the time of delivery of each monthly, quarterly and
annual statement, a certificate, executed by the Chief Financial
Officer, Controller or Treasurer of the Company, stating that such
officer has caused this Credit Agreement to be reviewed and has no
knowledge of any default by the Company in the performance or
observance of any of the provisions of this Credit Agreement, during
such month or quarter or at the end of such year, or, if such officer
has such knowledge, specifying each default and the nature thereof;
(e) not later than the 25th day of the end of the prior
four-week accounting period, a borrowing base certificate (the
"Borrowing Base Certificate") in substantially the form of Exhibit L
hereto, duly completed and certified by the Company's chief executive
officer or chief financial officer, detailing the Borrowers' Eligible
Accounts Receivable and Eligible Inventory as of the most recent date
of determination which shall be determined not less frequently than at
the end of every four-week accounting period. In addition, on the 25th
day after the end of the prior four-week accounting period, the Company
shall furnish a written report to the Lenders setting forth (i) the
accounts receivable aged trial balance for such prior accounting period
indicating which Accounts are current, up to 30, 30 to 60 and over 60
days past due and listing the names and addresses of all applicable
Account Debtors and (ii) a summary schedule of each category of
Inventory owned by each Borrower. The Agent may, but shall not be
required to, rely on each Borrowing Base Certificate delivered
hereunder as accurately setting forth the available Borrowing Base for
all purposes of this Credit Agreement until such time as a new
Borrowing Base Certificate is delivered to the Agent in accordance
herewith; Borrowing Base Certificates may be prepared and submitted to
the Lenders on a more frequent basis than each four-week accounting
period at the option of the Company and may be requested more
frequently by the Agent in its reasonable discretion, provided that
such certificate complies with the requirements set forth elsewhere
herein;
(f) within forty-five (45) days after the end of each fiscal
quarter of the Company, a certificate in substantially the form of
Exhibit K attached hereto (the "Compliance Certificate") executed by
the Chief Financial Officer, Controller or Treasurer of the Company,
demonstrating compliance with the financial covenants contained in
Article VIII by calculation thereof as of the end of each such fiscal
period and the other provisions contained in the Compliance
Certificate;
(g) promptly upon receipt thereof, copies of all management
letters and other material reports which are submitted to the Company
by its Independent Accountant in connection with any annual or interim
audit of the books of the Company made by such accountants;
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(h) as soon as practicable but, in any event, within ten (10)
Business Days after the issuance thereof, copies of such other
financial statements and reports as the Company shall send to its
stockholders as such, and copies of all regular and periodic reports
which the Company may be required to file with the Securities and
Exchange Commission or any similar or corresponding governmental
commission, department or agency substituted therefor, or any similar
or corresponding governmental commission, department, board, bureau, or
agency, federal or state;
(i) no later than the last Business Day of February during
each year when this Credit Agreement is in effect, a business plan for
such fiscal year of the Company which includes a projected consolidated
balance sheet and statement of income for such fiscal year and a
projected consolidated statement of cash flows for such fiscal year
and, no later than the last Business Day of March during each year when
this Credit Agreement is in effect, a business plan for such fiscal
year of the Company which includes projected consolidated balance
sheets and statements of income on a quarterly basis for such fiscal
year and projected consolidated statements of cash flows on a quarterly
basis for such fiscal year;
(j) promptly upon receipt thereof, copies of all notices
delivered to the Company or sent by the Company with respect to Senior
Unsecured Debt, including, without limitation, any notice of default
(the Company expressly agreeing to furnish all such notices by
telecopy);
(k) promptly and in any event within two (2) Business Days
after becoming aware of the occurrence of a Default or Event of
Default, a certificate of the chief executive officer or chief
financial officer of the Company specifying the nature thereof and the
Borrowers' proposed response thereto, each in reasonable detail; and
(l) with reasonable promptness, such other data as the Agent
or any of the Lenders may reasonably request.
7.2 INVENTORY/EQUIPMENT.
Within thirty (30) days after the end of each month, upon the request
of the Agent from time to time, the Borrowers will provide to the Agent written
statements listing items of Inventory and Equipment in reasonable detail as
requested by the Agent. The Borrowers will conduct annually a physical count of
their Inventory and a copy of such count will be promptly supplied to the Agent
accompanied by a report of the value (valued at FIFO) of such Inventory;
provided that the Borrowers will conduct such a physical count at such other
times and as of such dates as the Agent shall reasonably request.
7.3 CORPORATE EXISTENCE.
Each Borrower and each of the Subsidiaries (a) will maintain their
corporate existence, will maintain in full force and effect all material
licenses, bonds, franchise, leases, trademarks
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and qualifications to do business, (b) will obtain or maintain patents,
contracts and other rights necessary or desirable to the profitable conduct of
their businesses, (c) will continue in, and limit their operations to, the food
service business and (d) will comply with all applicable laws and regulations of
any federal, state or local Governmental Authority, except in each case when
noncompliance with the foregoing would not, in the aggregate, have a Material
Adverse Effect.
7.4 ERISA.
The Borrowers will deliver to the Agent, at the Borrowers' expense, the
following information at the times specified below:
(a) within ten (10) Business Days after any Borrower, any
Subsidiary or any ERISA Affiliate knows or has reason to know that a
Termination Event has occurred, a written statement of the chief
financial officer of the Company describing such Termination Event and
the action, if any, which the Borrowers or other such entities have
taken, are taking or propose to take with respect thereto, and when
known, any action taken or threatened by the Internal Revenue Service,
DOL or PBGC with respect thereto;
(b) within ten (10) Business Days after any Borrower, any
Subsidiary or any ERISA Affiliate knows or has reason to know that a
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of
the Internal Revenue Code) has occurred, a statement of the chief
financial officer of the Company describing such transaction and the
action which the Borrowers or other such entities have taken, are
taking or propose to take with respect thereto;
(c) within three (3) Business Days after the filing thereof
with the Internal Revenue Service, a copy of each funding waiver
request filed with respect to any Benefit Plan and all communications
received by any Borrower, any Subsidiary or any ERISA Affiliate with
respect to such request;
(d) within ten (10) Business Days upon the occurrence thereof,
notification of any increase in the benefits of any existing Plan or
the establishment of any new Plan or the commencement of contributions
to any Plan to which any Borrower, any Subsidiary or any ERISA
Affiliate was not previously contributing;
(e) within three (3) Business Days after receipt by any
Borrower, any Subsidiary or any ERISA Affiliate of the PBGC's intention
to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(f) within ten (10) Business Days after receipt by any
Borrower, any Subsidiary or any ERISA Affiliate of any unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Internal Revenue
Code, copies of each such letter;
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(g) within ten (10) Business Days after receipt by any
Borrower, any Subsidiary or any ERISA Affiliate of a notice regarding
the imposition of withdrawal liability, copies of each such notice;
(h) within ten (10) Business Days after any Borrower, any
Subsidiary or any ERISA Affiliate fail to make a required installment
or any other required payment under Section 412 of the Internal Revenue
Code on or before the due date for such installment or payment, a
notification of such failure; and
(i) within three (3) Business Days after any Borrower, any
Subsidiary or any ERISA Affiliate know (a) a Multiemployer Plan has
been terminated, (b) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or (c)
the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan, a written statement
setting forth any such event or information.
For purposes of this Section 7.4, any Borrower, any Subsidiary and any
ERISA Affiliate shall be deemed to know all facts known by the administrator of
any Plan of which such entity is the plan sponsor.
The Borrowers will establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, Internal Revenue Code,
and all other applicable laws, and the regulations and interpretations
thereunder other than to the extent that the Borrowers are in good faith
contesting by appropriate proceedings the validity or implication of any such
provision, law, rule, regulation or interpretation.
7.5 PROCEEDINGS OR ADVERSE CHANGES.
The Borrowers will as soon as possible, and in any event within five
(5) days after any Borrower learns of the following, give written notice to the
Agent of (i) any material proceeding(s) being instituted or threatened to be
instituted by or against any Borrower or any of its Subsidiaries in any federal,
state, local or foreign court or before any commission or other regulatory body
(federal, state, local or foreign), and (ii) any Material Adverse Change.
Provision of such notice by the Borrowers will not constitute a waiver or excuse
of any Default or Event of Default occurring as a result of such changes or
events.
7.6 ENVIRONMENTAL MATTERS.
Each Borrower will conduct its business and the businesses of each of
the Subsidiaries so as to comply in all material respects with all environmental
laws, regulations, directions, ordinances, criteria and guidelines in all
jurisdictions in which any of them is or may at any time be doing business
including, without limitation, environmental land use, occupational safety or
health laws, regulations, directions, ordinances, criteria, guidelines,
requirements or permits in all jurisdictions in which any of them is or may at
any time be doing business, except to the extent that any Borrower or any of its
Subsidiaries are contesting, in good faith by appropriate legal
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proceedings, any such law, regulation, direction, ordinance, criteria,
guideline, or interpretation thereof or application thereof; provided, further,
that each Borrower and each of the Subsidiaries will comply with the order of
any court or other governmental body of the applicable jurisdiction relating to
such laws unless such Borrower or the Subsidiaries shall currently be
prosecuting an appeal or proceedings for review and shall have secured a stay of
enforcement or execution or other arrangement postponing enforcement or
execution pending such appeal or proceedings for review. If any Borrower or any
of its Subsidiaries shall (a) receive notice that any violation of any federal,
state or local environmental law, regulation, direction, ordinance, criteria or
guideline may have been committed or is about to be committed by such Borrower
or any of its Subsidiaries, (b) receive notice that any administrative or
judicial complaint or order has been filed or is about to be filed against such
Borrower or any of its Subsidiaries alleging violations of any federal, state or
local environmental law, regulation, direction, ordinance, criteria or guideline
or requiring such Borrower or any of its Subsidiaries to take any action in
connection with the release of toxic or hazardous substances into the
environment or (c) receive any notice from a federal, state, or local
governmental agency or private party alleging that such Borrower or any of its
Subsidiaries may be liable or responsible for costs associated with a response
to or cleanup of a release of a toxic or hazardous substance into the
environment or any damages caused thereby, the Borrowers will provide the Agent
with a copy of such notice within fifteen (15) days after the receipt thereof by
the applicable Borrower or any of its Subsidiaries. Each Borrower will promptly
take all actions necessary to prevent the imposition of any Liens on any of its
properties arising out of or related to any environmental matters. At the
reasonable request of the Agent from time to time, but in any event not more
frequently than once in any twelve month period, and at the sole cost and
expense of the Borrowers, the Borrowers will retain an environmental consulting
firm, satisfactory to the Agent in its commercially reasonable judgment, to
conduct an environmental review and audit of the properties of the Borrowers and
the Subsidiaries located in the United States and provide to the Agent and each
Lender a copy of any reports delivered in connection therewith.
7.7 BOOKS AND RECORDS.
Each Borrower will, and will cause each of the Subsidiaries to,
maintain books and records pertaining to the Collateral in such detail, form and
scope as is consistent with good business practice. Each Borrower agrees that
the Agent or its agents may enter upon the premises of each Borrower or any of
its Subsidiaries at any time and from time to time, during normal business
hours, and at any time at all on and after the occurrence of an Event of Default
which continues beyond the expiration of any grace or cure period applicable
thereto, and which has not otherwise been waived by the Agent, for the purpose
of (a) enabling the Agent's internal auditors to conduct quarterly field
examinations at the Borrower's expense, (b) inspecting the Collateral, (c)
inspecting and/or copying (at Borrowers' expense) any and all records pertaining
thereto, (d) discussing the affairs, finances and business of any Borrower or
with any officers, employees and directors of any Borrower with the Independent
Accountant and (e) verifying Eligible Accounts Receivable and/or Eligible
Inventory. The Lenders, in the reasonable discretion of the Agent, may accompany
the Agent at their sole expense in connection with the foregoing inspections.
Each Borrower agrees to afford the Agent prior written notice of any change in
the location of any Collateral or in the location of its chief executive office
or place of
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business from the locations specified in Schedule 6.7, and to execute in advance
of such change, cause to be filed and/or delivered to the Agent any financing
statements or other documents required by the Agent, all in form and substance
satisfactory to the Agent. Each Borrower agrees to advise the Agent promptly, in
sufficient detail, of any substantial change relating to the type, quantity or
quality of the Collateral or any event which could have a material adverse
effect on the value of the Collateral or on the security interests granted to
the Lenders therein. Each Borrower agrees to furnish any Lender with such other
information regarding its business affairs and financial condition as such
Lender may reasonably request from time to time.
7.8 COLLATERAL RECORDS.
Each Borrower will, and will cause each of the Subsidiaries to, execute
and deliver to the Agent, from time to time, solely for the Agent's convenience
in maintaining a record of the Collateral, such written statements and schedules
as the Agent may reasonably require, including without limitation those
described in Section 7.1 of this Credit Agreement, designating, identifying or
describing the Collateral pledged to the Lenders hereunder. Each Borrower's or
any Subsidiary's failure, however, to promptly give the Agent such statements or
schedules shall not affect, diminish, modify or otherwise limit the Lenders'
security interests in the Collateral. Such Borrower agrees to maintain such
books and records regarding Accounts and the other Collateral as the Agent may
reasonably require, and agrees that such books and records will reflect the
Lenders' interest in the Accounts and such other Collateral.
7.9 SECURITY INTERESTS.
Each Borrower will defend the Collateral against all claims and demands
of all Persons at any time claiming the same or any interest therein. Each
Borrower agrees to comply with the requirements of all state and federal laws in
order to grant to the Lenders valid and perfected first security interest in the
Collateral. The Agent is hereby authorized by each Borrower to file any
financing statements covering the Collateral whether or not any Borrower's
signature appears thereon. Each Borrower agrees to do whatever the Agent may
reasonably request, from time to time, by way of: filing notices of liens,
financing statements, fixture filings and amendments, renewals and continuations
thereof; cooperating with the Agent's custodians; keeping stock records;
obtaining waivers from landlords and mortgagees and from warehousemen, fillers,
processors and packers and their respective landlords and mortgagees; paying
claims, which might if unpaid, become a Lien (other than a Permitted Lien) on
the Collateral; and performing such further acts as the Agent may reasonably
require in order to effect the purposes of this Credit Agreement and the other
Credit Documents. Any and all fees, costs and expenses of whatever kind and
nature (including any Taxes, reasonable attorneys' fees or costs for insurance
of any kind), which the Agent may incur with respect to the Collateral or the
Obligations: in filing public notices; in preparing or filing documents; making
title examinations or rendering opinions; in protecting, maintaining, or
preserving the Collateral or its interest therein; in enforcing or foreclosing
the Liens hereunder, whether through judicial procedures or otherwise; or in
defending or prosecuting any actions or proceedings arising out of or relating
to its transactions with any Borrower or any of its Subsidiaries under this
Credit Agreement or any other Credit Document, will be borne and paid by the
Borrowers. If same are not promptly paid
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by the Borrowers, the Agent may pay same on the Borrowers' behalf, and the
amount thereof shall be an Obligation secured hereby and due to the Agent on
demand.
7.10 INSURANCE; CASUALTY LOSS.
Each Borrower will, and will cause each of the Subsidiaries to,
maintain public liability insurance, third party property damage insurance and
replacement value insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts and covering such risks as are at
all times satisfactory to the Agent in its commercially reasonable judgment. All
policies covering the Collateral are to name the Borrowers and the Agent as
additional insureds and loss payees in case of loss, as their interests may
appear, and are to contain such other provisions as the Agent may reasonably
require to fully protect the Agent's interest in the Collateral and to any
payments to be made under such policies. True copies of all original insurance
policies are to be delivered to the Agent on or prior to the Closing Date,
premium prepaid, with the loss payable endorsement in the Agent's favor, and
shall provide for not less than ten (10) days prior written notice to the Agent,
of the exercise of any right of cancellation. In the event any Borrower or any
of its Subsidiaries fail to respond in a timely and appropriate manner (as
determined by the Agent in its sole discretion) with respect to collecting under
any insurance policies required to be maintained under this Section 7.10, the
Agent shall have the right, in the name of the Agent, any Borrower or any
Subsidiary, to file claims under such insurance policies, to receive and give
acquittance for any payments that may be payable thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies. Each Borrower will
provide written notice to the Lenders of the occurrence of any of the following
events within five (5) Business Days after the occurrence of such event: any
asset or property owned or used by any Borrower or any of its Subsidiaries is
(i) materially damaged or destroyed, or suffers any other loss or (ii) is
condemned, confiscated or otherwise taken, in whole or in part, or the use
thereof is otherwise diminished so as to render impracticable or unreasonable
the use of such asset or property for the purpose to which such asset or
property were used immediately prior to such condemnation, confiscation or
taking, by exercise of the powers of condemnation or eminent domain or
otherwise, and in either case the amount of the damage, destruction, loss or
diminution in value of the Collateral which is in excess of $500,000
(collectively, a "Casualty Loss"). Each Borrower will diligently file and
prosecute its claim or claims for any award or payment in connection with a
Casualty Loss. In the event of a Casualty Loss, the Borrowers will pay to the
Agent, promptly upon receipt thereof, any and all insurance proceeds and
payments received by any Borrower or any of its Subsidiaries on account of
damage, destruction or loss of all or any portion of the Collateral. The Agent
may, at its election and in its sole discretion, either (a) apply the proceeds
realized from Casualty Losses to payment of accrued and unpaid interest or
outstanding principal of the Revolving Loans or (b) pay such proceeds to the
Borrowers to be used to repair, replace or rebuild the asset or property or
portion thereof that was the subject of the Casualty Loss. After the occurrence
and during the continuance of an Event of Default, (i) no settlement on account
of any such Casualty Loss shall be made without the consent of the Required
Lenders and (ii) the Agent may participate in any such proceedings and the
Borrowers will deliver to the Agent such documents as may be requested by the
Agent to permit such
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participation and will consult with the Agent, its attorneys and agents in the
making and prosecution of such claim or claims. Each Borrower hereby irrevocably
authorizes and appoints the Agent its attorney-in-fact, after the occurrence and
continuance of an Event of Default, to collect and receive for any such award or
payment and to file and prosecute such claim or claims, which power of attorney
shall be irrevocable and shall be deemed to be coupled with an interest, and
each Borrower shall, upon demand of the Agent, make, execute and deliver any and
all assignments and other instruments sufficient for the purpose of assigning
any such award or payment to the Agent for the benefit of the Lenders, free and
clear of any encumbrances of any kind or nature whatsoever.
7.11 TAXES.
Each Borrower will, and will cause each of the Subsidiaries to, pay,
when due and in any event prior to delinquency, all Taxes lawfully levied or
assessed against any Borrower, any Subsidiary or any of the Collateral;
provided, however, that unless such Taxes have become a federal tax or ERISA
Lien on any of the assets of any Borrower or any Subsidiary, no such Tax need be
paid if the same is being contested in good faith, by appropriate proceedings
promptly instituted and diligently conducted and if an adequate reserve or other
appropriate provision shall have been made therefor as required in order to be
in conformity with GAAP.
7.12 COMPLIANCE WITH LAWS.
Each Borrower will, and will cause each of the Subsidiaries to, comply
with all acts, rules, regulations, orders, directions and ordinances of any
legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof, or to the operation of its business; provided
that any Borrower and any Subsidiary may contest any acts, rules, regulations,
orders, directions and ordinances of such bodies or officials in any reasonable
manner that would not be reasonably likely to have a Material Adverse Effect.
7.13 USE OF PROCEEDS.
The proceeds of any advances made hereunder shall be used by the
Borrowers solely to finance the acquisition by the Company of the Pierre Foods
Division and to finance the working capital, letter of credit and general
corporate needs of the Borrowers; provided, however, that in any event, no
portion of the proceeds of any such advances shall be used by the Borrowers for
the purpose of purchasing or carrying any "margin stock" (as defined in
Regulation U of the Board of Governors of the Federal Reserve System) other than
Permitted Investments or for any purpose which violates the provisions or
Regulation U or X of said Board of Governors or for any purpose in violation of
any applicable statute or regulation, or of the terms and conditions of this
Credit Agreement.
7.14 FISCAL YEAR.
Each Borrower agrees that it will not change its current fiscal year
unless required by law, in which case such Borrower will give the Agent at least
30 days prior written notice thereof.
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7.15 NOTIFICATION OF CERTAIN EVENTS.
Each Borrower agrees that it will promptly notify the Agent of the
occurrence of any of the following events:
(a) any Material Contract of any Borrower or any of its
Subsidiaries is terminated or amended in any material respect or any
new Material Contract is entered into (in which event each Borrower
shall provide the Agent with a copy of such Material Contract); or
(b) any of the material terms upon which suppliers to any
Borrower or any of its Subsidiaries do business with any Borrower or
any Subsidiary are changed or amended in any material respect; or
(c) any order, judgment or decree in excess of $250,000 shall
have been entered against any Borrower or any of its Subsidiaries or
any of their respective properties or assets, or
(d) any notification of violation of any law or regulation or
any material inquiry shall have been received by any Borrower or any of
its Subsidiaries from any local, state, federal or foreign Governmental
Authority or agency.
7.16 ADDITIONAL BORROWERS.
As soon as practicable and in any event within 60 days after any Person
becomes a direct or indirect U.S. Subsidiary of the Company, the Borrowers will
provide the Agent with written notice thereof setting forth information in
reasonable detail describing all of the assets of such Person and shall (a)
cause such Person to execute a Joinder Agreement in substantially the same form
as Exhibit M hereto, (b) cause such Person to pledge all of its assets to the
Agent pursuant to a security agreement in substantially the form of the Security
Agreement and otherwise in a form acceptable to the Agent, (c) cause all of its
Capital Stock to be delivered to the Agent (together with undated stock powers
signed in blank and pledged to the Agent pursuant to an appropriate pledge
agreement(s) in substantially the form of the Pledge Agreement and otherwise in
form acceptable to the Agent, (d) cause such Person to execute Revolving Notes
in favor of the Lenders and (e) deliver such other documentation as the Agent
may reasonably request in connection with the foregoing, including, without
limitation, appropriate UCC-1 financing statements, Acknowledgment Agreements,
certified resolutions and other organizational and authorizing documents of such
Person and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to above), all in form, content and scope reasonably
satisfactory to the Agent.
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7.17 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest in
the Accounts of each Borrower granted pursuant to the Security Agreement, upon
the creation of Accounts, each Borrower will execute and deliver to the Agent in
such form and manner as the Agent may require, solely for its convenience in
maintaining records of collateral, such confirmatory schedules of Accounts, and
other appropriate reports designating, identifying and describing the Accounts
as the Agent may require. In addition, upon the Agent's request, each Borrower
will provide the Agent with copies of agreements with, or purchase orders from,
the customers of each Borrower and its Subsidiaries, and copies of invoices to
customers, proof of shipment or delivery and such other documentation and
information relating to said Accounts and other collateral as the Agent may
require. Failure to provide the Agent with any of the foregoing shall in no way
affect, diminish, modify or otherwise limit the security interests granted
herein. Each Borrower hereby authorizes the Agent to regard such Borrower's or
any Subsidiary's printed name or rubber stamp signature on assignment schedules
or invoices as the equivalent of a manual signature by such Borrower's or such
Subsidiary's authorized officers or agents.
7.18 COLLECTION OF ACCOUNTS.
Unless an Event of Default has occurred which continues beyond the
expiration of the applicable grace or cure period, or has not otherwise been
waived by the Agent, each Borrower may and will enforce, collect and receive all
amounts owing on the Accounts, for the Lenders' benefit and on the Lenders'
behalf but at the Borrowers' expense in accordance with the provisions of
Section 2.4; such privilege shall terminate automatically, however, without
notice to the Borrowers which is hereby expressly waived by the Borrowers, upon
the occurrence of any Event of Default which continues beyond the expiration of
any applicable grace or cure period, or which has not otherwise been waived by
the Required Lenders. Any checks, cash, notes or other instruments or property
received by any Borrower or any of its Subsidiaries with respect to any Accounts
shall be held by such Borrower or such Subsidiary in trust for the benefit of
the Lenders, separate from such Borrower's or Subsidiary's own property and
funds, and immediately turned over to the Agent with proper assignments or
endorsements. No checks, drafts or other instruments received by the Agent shall
constitute final payment unless and until such instruments have actually been
collected.
7.19 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
Each Borrower will notify the Agent promptly of any matters materially
affecting the value, enforceability or collectibility of any Account, and of all
material customer disputes, offsets, defenses, counterclaims, returns and
rejections, and all reclaimed or repossessed merchandise or goods, provided,
however, that such notice shall only be required as to any such matter that
affects Accounts outstanding at any one time from any account debtor having a
value greater than $250,000. Each Borrower will issue credit memoranda promptly
(with duplicates to the Agent upon its request for same) upon accepting returns
or granting allowances, and may continue to do so until the occurrence of an
Event of Default which continues beyond the expiration of the applicable grace
or cure period, or which has not otherwise been waived by the
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Required Lenders. After the occurrence and during the continuance of an Event of
Default, each Borrower agrees that all returned, reclaimed or repossessed
merchandise or goods shall be set aside by such Borrower, marked with the
Lenders' name and held by such Borrower for the Lenders' account as owner and
assignee.
7.20 ACKNOWLEDGMENT AGREEMENTS.
Each Borrower will assist the Agent in obtaining executed
Acknowledgment Agreements from each of the warehousemen, processors, packers,
fillers, landlords and mortgagees with whom such Borrower conducts business from
time to time.
7.21 TRADEMARKS.
Each Borrower will do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of material
trademarks, service marks and other marks, trade names or other trade rights.
7.22 MAINTENANCE OF PROPERTY.
Each Borrower will, and will cause each of the Subsidiaries to, keep
all property useful and necessary to its respective business in good working
order and condition (ordinary wear and tear excepted) in accordance with their
past operating practices and not to commit or suffer any waste with respect to
any of its properties, except for properties which either individually or in the
aggregate are not material.
7.23 COVENANTS RELATING TO PACKERS AND STOCKYARD ACT.
Unless the failure to do so would not have a Material Adverse Effect,
each of the Borrowers shall:
(a) Comply with all applicable provisions of the Packers and
Stockyard Act, including, without limitation, those governing bond
requirements and prompt repayment.
(b) Maintain written records pertaining to livestock and
by-products in its possession to which it does not yet have title,
including, without limitation, livestock for which payment is not yet
made.
All terms used in this Section 7.23 and defined in the Packers and Stockyard Act
shall have the meanings ascribed to such terms therein.
7.24 COVENANTS RELATING TO FOOD SECURITY ACT.
Unless the failure to do so would not have a Material Adverse Effect,
each Borrower shall:
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(a) Promptly provide the Agent with a copy of any notice
received by such Borrower with respect to a security interest created
by a seller of farm products.
(b) With respect to any farm products produced in a state with
a central filing system, register with the secretary of state of such
state prior to the purchase of such farm products.
All terms used in this Section 7.23 and defined in the Food Security Act shall
have the meanings ascribed to such terms therein.
7.25 YEAR 2000 COMPLIANCE.
The Borrowers shall take all action necessary to assure that the
Borrowers' computer based systems are able to operate and effectively process
data including dates on and after January 1, 2000. At the request of the Agent,
the Borrowers shall provide the Lenders with assurance acceptable to the Agent
of the Borrowers' Year 2000 compatibility.
7.26 ADDITIONAL ELIGIBLE REAL PROPERTY.
If the Borrowers request that any additional real property consisting
of new restaurants be included within "Eligible Real Property", the Borrowers
agree to provide the Agent with an appraisal regarding such property and
additional items reasonably requested by the Agent (including environmental
audits and the other items described in Section 7 of Schedule 1.1B hereto).
7.27 REORGANIZATION.
The Company shall cause the Reorganization to occur within sixty (60)
days following the Closing Date.
7.28 POST-CLOSING MATTERS.
(a) Claremont IRB Property. Promptly but not later than 45
days following the Closing Date, subject to the reasonable approval of
the Agent, the Company shall either (i) cause any and all Liens on its
Claremont, North Carolina facility (the "Claremont Property") in favor
the trustee for the Catawba County Industrial Facilities and Pollution
Control Financing Authority $4,000,000 1992 Industrial Revenue Bonds
(WSMP, Inc. Project) to be removed and released and shall provide
satisfactory evidence to the Agent that any such Liens have been
released and that the Mortgage Instrument securing the Claremont
Property in favor of the Agent for the benefit of the Lenders is in
full force and effect and is subject to no prior Liens or (ii) deliver
any necessary Acknowledgment Agreements to perfect the Agents security
interest in the personal property Collateral located at the Claremont
Property.
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(b) Other Real Estate Issues. Promptly but not later than 60
days following the Closing Date, the Company shall deliver, or cause to
be delivered, to the Agent (i) surveys on all Eligible Real Properties,
(ii) title exceptions on all Eligible Real Properties, (iii)
satisfactory evidence of removal of survey exceptions from all title
policies delivered in connection with the Eligible Real Properties and
(iv) satisfactory evidence of flood insurance on the Elizabeth City,
North Carolina property.
ARTICLE VIII
FINANCIAL COVENANTS
Until termination of this Credit Agreement and the Commitment hereunder
and payment and satisfaction of all Obligations due or to become due hereunder,
each Borrower agrees that, unless the Required Lenders shall have otherwise
consented in writing:
8.1 LEVERAGE RATIO.
The Borrowers shall maintain a Leverage Ratio, as of the last day of
each fiscal quarter of the Borrowers, of no greater than the following amounts
for the periods set forth below:
Leverage Ratio Period
-------------- ------
5.75 to 1.0 Closing Date through February 25, 1999
5.50 to 1.0 February 26, 1999 through February 24, 2000
5.00 to 1.0 February 25, 2000 through February 22, 2001
4.50 to 1.0 February 23, 2001 through February 21, 2002
4.00 to 1.0 February 22, 2002 and all periods ending thereafter
8.2 FIXED CHARGE COVERAGE RATIO.
The Borrowers shall, on and after November 26, 1998, maintain a Fixed
Charge Coverage Ratio of not less than (a) for any fiscal quarter ending on or
before May 21, 1999, 1.0 to 1.0 as of the last day of each such fiscal quarter
and (b) thereafter, 1.2 to 1.0 as of the last day of each such fiscal quarter.
8.3 CAPITAL EXPENDITURES.
The Borrowers shall not make Consolidated Capital Expenditures
(including Consolidated Restaurant Capital Expenditures) during any fiscal year
in excess of the following amounts (on a non-cumulative basis) for the fiscal
year periods set forth below:
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Amount Period
------ ------
$17,000,000 Closing Date through February 26, 1999
$17,000,000 February 27, 1999 through February 25, 2000
$10,000,000 February 26, 2000 through February 24, 2001
and all fiscal year periods thereafter
8.4 RESTAURANT CAPITAL EXPENDITURES.
The Borrowers shall not make Consolidated Restaurant Capital
Expenditures in excess of the following amounts (on a non-cumulative basis) for
the periods set forth below:
Amount Period
------ ------
$9,000,000 Closing Date through February 26, 1999
$9,000,000 February 27, 1999 through February 25, 2000
$2,000,000 February 26, 2000 through February 24, 2001
and all fiscal year periods thereafter
8.5 AVAILABILITY.
Availability shall at all times be at least $6,000,000.
ARTICLE IX
NEGATIVE COVENANTS
Until termination of this Credit Agreement and the Commitment hereunder
and payment and satisfaction of all Obligations due to become due hereunder,
each Borrower agrees that, unless the Required Lenders shall have otherwise
consented in writing, it will not, and will not permit any of the Subsidiaries
to:
9.1 RESTRICTIONS ON LIENS.
Mortgage, assign, pledge, transfer or otherwise permit any Lien or
judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of its
assets or goods, whether real, personal or mixed, whether now owned or hereafter
acquired, except for Permitted Liens.
9.2 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS.
Incur or create any liability or Indebtedness other than Permitted
Indebtedness.
9.3 RESTRICTIONS ON SALE OF ASSETS.
Sell, lease, assign, transfer or otherwise dispose of any assets
(including stock of any Subsidiary of the Company) other than (i) sales of
Inventory in the ordinary course of business,
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(ii) sale-leaseback transactions permitted by Section 9.17, (iii) sales in the
ordinary course of business of assets that are obsolete or that are no longer
used or useful in the conduct of such Borrower's or Subsidiary's business, (iv)
sales in the ordinary course of business of assets (other than Inventory) used
in such Borrower's or Subsidiary's business that are worn out or in need of
replacement and that are replaced with assets of reasonably equivalent value or
utility and (v) sales of the assets listed on Schedule 9.3. Any assets disposed
of pursuant to this Section 9.3 shall be excluded from the Borrowing Base.
9.4 NO CORPORATE CHANGES.
Merge, consolidate with any Person or otherwise alter or modify any
Borrower's or any Subsidiary's Articles or Certificate of Incorporation or any
operating agreement, names, mailing addresses, principal places of business,
structure, status or existence or enter into or engage in any business,
operation or activity materially different from that presently being conducted
by any Borrower or Subsidiary; provided, however, the Company and its
Subsidiaries may consummate the Reorganization so long as the Company takes any
and all steps and executes any and all documents requested by the Agent in
connection therewith and pay all costs and expenses incurred by the Agent
(including reasonable attorneys' fees) in connection therewith.
9.5 NO GUARANTEES.
Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any other Person, including, without limitation, any Subsidiary
or Affiliate of any Borrower, except (a) by the endorsement of negotiable
instruments in the ordinary course of business, (b) by the giving of indemnities
in connection with the sale of Inventory or other asset dispositions permitted
hereunder and (c) in connection with the incurrence of Permitted Indebtedness.
9.6 NO RESTRICTED PAYMENTS.
Make a Restricted Payment, other than Restricted Payments consisting of
(a) dividends from any Subsidiary to any Borrower, (b) payments pursuant to the
Management Services Agreement, (c) payments which are Permitted Investments and
(d) payments to repurchase Capital Stock of the Company provided the aggregate
amount of such payments do not exceed $2,500,000 and provided that there is
Availability of at least $10,000,000 immediately after the making of such
payment, so long as in the case of clause (b), (c) or (d) hereof, no Event of
Default then exists or would result from the making of any such Restricted
Payment.
9.7 NO INVESTMENTS.
Make any Investment other than Permitted Investments.
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9.8 NO AFFILIATE TRANSACTIONS.
Enter into any transaction with, including, without limitation, the
purchase, sale or exchange of property or the rendering of any service to any
Subsidiary or Affiliate of any Borrower except (a) in the ordinary course of and
pursuant to the reasonable requirements of such Borrower's business and upon
fair and reasonable terms no less favorable to such Borrower than could be
obtained in a comparable arm's-length transaction with an unaffiliated Person
and (b) as permitted under Section 9.6.
9.9 NO PROHIBITED TRANSACTIONS UNDER ERISA.
(a) Engage, or permit any ERISA Affiliate to engage, in any
prohibited transaction which could result in a civil penalty or excise
tax described in Sections 406 of ERISA or 4975 of the Internal Revenue
Code for which a statutory or class exemption is not available or a
private exemption has not been previously obtained from the DOL;
(b) permit to exist with respect to any Benefit Plan any
accumulated funding (as defined in Sections 302 of ERISA and 412 of the
Internal Revenue Code), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan where such event would result in any liability of the
Borrower, any Subsidiary or any ERISA Affiliate under Title IV of
ERISA;
(e) fail, or permit any ERISA Affiliate to fail to make any
required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such
installment or other payment;
(g) amend, or permit any ERISA Affiliate to amend, a Benefit
Plan resulting in an increase in current liability for the plan year
such that either of the Borrowers, any Subsidiary or any ERISA
Affiliate is required to provide security to such Benefit Plan under
Section 401(a)(29) of the Internal Revenue Code;
(h) withdraw, or permit any ERISA Affiliate to withdraw, from
any Multiemployer Plan where such withdrawal may result in any
liability of any such entity under Title IV of ERISA; or
(i) allow any representation made in Section 6.14 to be untrue
at any time during the term of this Agreement.
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9.10 NO ADDITIONAL BANK ACCOUNTS.
Open, maintain or otherwise have any checking, savings or other
accounts at any bank or other financial institution, or any other account where
money is or may be deposited or maintained with any Person, other than the
accounts set forth on Schedule 9.10 hereto.
9.11 NO EXCESS CASH.
Maintain in the aggregate in all of the checking, savings or other
accounts of the Borrowers, total cash balances and Permitted Investments in
excess of $500,000 at any time during which any Revolving Loans are outstanding
hereunder.
9.12 RESTRICTIONS ON THE COMPANY.
On and after consummation of the Reorganization, the Company may not
hold any assets other than the stock of the Borrowers and the Subsidiaries
listed on Schedule 6.9 and may not have any liabilities other than (a) the
liabilities contemplated by the Credit Documents and (b) tax and routine
administrative liabilities in the ordinary course of business. The Company may
not sell, transfer or otherwise dispose of any shares of Capital Stock of or
other ownership interests in the Borrowers or such Subsidiaries. On and after
consummation of the Reorganization, the Company may not engage in any business
other than owning the stock of the Borrowers and such Subsidiaries.
9.13 ISSUANCE OF STOCK.
Issue or distribute any Capital Stock or other securities for
consideration or otherwise if any Default or Event of Default exists immediately
before or after giving effect to such issuance or distribution.
9.14 MATERIAL AMENDMENTS OF MATERIAL CONTRACTS.
Without the prior written consent of the Agent, amend, modify, cancel
or terminate or permit the amendment, modification, cancellation or termination
of any of the Material Contracts, except in the event that such amendments,
modifications, cancellations or terminations would not reasonably be expected to
have a Material Adverse Effect.
9.15 ADDITIONAL NEGATIVE PLEDGES.
Create or otherwise cause or suffer to exist or become effective, or
permit any of the Subsidiaries to create or otherwise cause or suffer to exist
or become effective, directly or indirectly (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of the Agent and the
Lenders) on the creation or existence of any Lien upon the assets of any
Borrower or the Subsidiaries, other than Permitted Liens, or (ii) any
Contractual Obligation which may restrict or
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inhibit the Agent's rights or ability to sell or otherwise dispose of the
Collateral or any part thereof after the occurrence of an Event of Default.
9.16 SENIOR UNSECURED DEBT.
Effect or permit any change in or amendment to any document or
instrument pertaining to the terms of payment or required prepayments of any
Senior Unsecured Debt, effect or permit any change in or amendment to any
document or instrument pertaining to the covenants or events of default of any
Senior Unsecured Debt if the effect of any such change or amendment is to make
such covenants or events of default more restrictive, give any notice of
optional redemption or optional prepayment or offer to repurchase under any such
document or instrument, or, directly or indirectly, make any payment of
principal of or interest on or in redemption, retirement or repurchase of any
Senior Unsecured Debt, except for the scheduled payments required by the terms
of the documents and instruments evidencing Senior Unsecured Debt.
9.17 SALE AND LEASEBACK.
Enter into any arrangement, directly or indirectly, whereby the Company
or any Subsidiary shall sell or transfer any property owned by it to a Person
(other than the Company or any Subsidiary) in order then or thereafter to lease
such property or lease other property which the Company or any Subsidiary
intends to use for substantially the same purpose as the property being sold or
transferred. Notwithstanding the foregoing provisions of this Section 9.17, the
Company may sell or transfer any property owned by it as described in the
preceding sentence provided that the aggregate current market value of all
assets so sold or transferred (in each case determined at the time of such sale
or transfer) shall not at any time exceed $250,000.
9.18 LICENSES, ETC.
Enter into licenses of, or otherwise restrict the use of, any patents,
trademarks or copyrights which would prevent the Company or any Subsidiary from
selling, transferring, encumbering or otherwise disposing of any such patent,
trademark or copyright.
9.19 LIMITATIONS.
Create, nor will it permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Person to (a) pay dividends or make any other distribution
on any of such Person's Capital Stock, (b) pay any Indebtedness owed to the
Borrowers, (c) make loans or advances to any other Borrower or (d) transfer any
of its property to any other Borrower, except for encumbrances or restrictions
existing under or by reason of (i) customary non-assignment provisions in any
lease governing a leasehold interest, (ii) any agreement or other instrument of
a Person existing at the time it becomes a Subsidiary of a Borrower; provided
that such encumbrance or restriction is not applicable to any other Person, or
any property of any other Person, other than such Person becoming a Subsidiary
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of a Borrower and was not entered into in contemplation of such Person becoming
a Subsidiary of a Borrower and (iii) this Credit Agreement and the other Credit
Documents.
ARTICLE X
POWERS
10.1 APPOINTMENT AS ATTORNEY-IN-FACT.
Each Borrower hereby irrevocably authorizes and appoints the Agent, or
any Person or agent the Agent may designate, as such Borrower's
attorney-in-fact, at the Borrowers' cost and expense, to exercise, subject to
the limitations set forth in Section 10.2, all of the following powers, which
being coupled with an interest, shall be irrevocable until all of the
Obligations to the Lenders have been paid and satisfied in full and all of the
Commitments have been terminated:
(a) To receive, take, endorse, sign, assign and deliver, all
in the name of the Agent, the Lenders or such Borrower, any and all
checks, notes, drafts, and other documents or instruments relating to
the Collateral;
(b) To receive, open and dispose of all mail addressed to such
Borrower and to notify postal authorities to change the address for
delivery thereof to such address as the Agent may designate;
(c) To request at any time from customers indebted on
Accounts, in the name of such Borrower or a third party designee of the
Agent, information concerning the Accounts and the amounts owing
thereon;
(d) To give customers indebted on Accounts notice of the
Lenders' interest therein, and/or to instruct such customers to make
payment directly to the Agent for such Borrower's account;
(e) To take or bring, in the name of the Agent, the Lenders or
such Borrower, all steps, actions, suits or proceedings deemed by the
Agent necessary or desirable to enforce or effect collection of the
Accounts; and
(f) To file, record and register any or all of the Lenders'
security interest in intellectual property of the Borrowers with the
United States Patent and Trademark Office.
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10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers set
forth in subparagraphs (b), (d) and (e) above may only be exercised by the Agent
on and after the occurrence of an Event of Default which continues beyond the
expiration of the applicable grace or cure period, and which has not otherwise
been waived by the Agent. The powers set forth in subparagraphs (a), (c) and (f)
above may be exercised by the Agent at any time.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an Event
of Default hereunder:
(a) failure of any Borrower to pay (i) any interest or Fees
hereunder within three (3) Business Days of when due hereunder, in each
case whether at stated maturity, by acceleration, or otherwise, (ii)
any principal of the Revolving Loans or the Letter of Credit
Obligations when due, whether at stated maturity, by acceleration or
otherwise or (iii) any expenses hereunder within five (5) Business Days
after receipt by the Borrowers from the Agent or any applicable Lender
that such expenses are payable;
(b) any representation or warranty, contained in this Credit
Agreement, the other Credit Documents or any other agreement, document,
instrument or certificate among any Borrower, the Agent and the Lenders
or executed by any Borrower in favor of the Agent or the Lenders shall
prove untrue in any material respect on the date as of which it was
made or was deemed to have been made;
(c) failure of any Borrower to perform, comply with or observe
any term, covenant or agreement applicable to it contained in Section
7.1(k), Section 7.5, Section 7.7, Article VIII or Article IX;
(d) failure to comply with any other covenant, contained in
this Credit Agreement, the other Credit Documents or any other
agreement, document, instrument or certificate among any Borrower, the
Agent and the Lenders or executed by any Borrower in favor of the Agent
or the Lenders, and in the event such breach or failure to comply is
capable of cure, is not cured within thirty (30) days of its
occurrence;
(e) dissolution, liquidation, winding up or cessation of any
Borrower's or any Subsidiary's businesses, or the failure of any
Borrower or any Subsidiary to meet its debts as they mature, or the
calling of a meeting of any Borrower's or any Subsidiary's creditors
for purposes of compromising any Borrower's or any Subsidiary's debts;
(f) the commencement by or against any Borrower or any
Subsidiary of any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar proceedings under any federal or state law and,
in the event any such proceeding is commenced against any Borrower or
any Subsidiary, such proceeding is not dismissed within sixty (60)
days;
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(g) the occurrence of a Change of Control;
(h) the occurrence of a default or event of default (in each
case which shall continue beyond the expiration of any applicable grace
periods) under, or the occurrence of any event that results in or would
permit the acceleration of the maturity of, or that would require any
Borrower to purchase, acquire or redeem (or make an offer to purchase,
acquire or redeem) any note, agreement or instrument evidencing (i) any
Senior Unsecured Debt or (ii) any other Indebtedness of any Borrower or
any of its Subsidiaries and the aggregate principal amount of all such
other Indebtedness with respect to which a default or an event of
default has occurred, or the maturity of which is accelerated or
permitted to be accelerated, exceeds $1,000,000; or
(i) any covenant, agreement or obligation of any party
contained in or evidenced by any of the Credit Documents shall cease to
be enforceable in accordance with its terms, or any party (other than
the Agent or the Lenders) to any Credit Document shall deny or
disaffirm its obligations under any of the Credit Documents, or any
Credit Document shall be canceled, terminated, revoked or rescinded
without the express prior written consent of the Agent, or any action
or proceeding shall have been commenced by any Person (other than the
Agent or any Lender) seeking to cancel, revoke, rescind or disaffirm
the obligations of any party to any Credit Document, or any court or
other Governmental Authority shall issue a judgment, order, decree or
ruling to the effect that any of the obligations of any party to any
Credit Document are illegal, invalid or unenforceable;
(j) one or more judgments or decrees shall be entered against
one or more of the Borrowers or any Subsidiary involving a liability of
$1,000,000 or more in the aggregate (to the extent not paid or covered
by insurance (i) provided by a carrier who has acknowledged coverage
and has the ability to perform or (ii) as determined by the Agent in
its reasonable discretion) and any such judgments or decrees shall not
have been vacated, discharged or stayed or bonded pending appeal within
30 days from the entry thereof; or.
(k) any Termination Event with respect to a Benefit Plan shall
have occurred and be continuing thirty (30) days after notice thereof
shall have been given to the Company by the Agent or any Lender, and
the then current value of such Benefit Plan's benefits guaranteed under
Title IV of ERISA exceeds the then current value of such Benefit Plan's
assets allocable to such benefits by more than $250,000 (or in the case
of a Termination Event involving the withdrawal of a substantial
employer, the withdrawing employer's proportionate share of such excess
exceeds such amount).
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11.2 ACCELERATION.
Upon the occurrence of an Event of Default which has not been cured by
the Borrowers or waived by the Agent at the direction of the Required Lenders,
the Agent shall, upon the written, telecopied or telex request of the Required
Lenders, and by delivery of written notice to the Borrowers from the Agent, take
any or all of the following actions, without prejudice to the rights of the
Agent, any Lender or the holder of any Revolving Note to enforce its claims
against any Borrower: (a) declare all Obligations to be immediately due and
payable (except with respect to any Event of Default set forth in Section
11.1(f) in which case all Obligations shall automatically become immediately due
and payable without the necessity of any notice or other demand) without
presentment, demand, protest or any other action or obligation of the Agent or
any Lender, (b) immediately terminate this Credit Agreement and the Revolving
Commitments hereunder; and (c) enforce any and all rights and interests created
and existing under the Credit Documents or arising under applicable law,
including, without limitation, all rights and remedies existing under the
Security Documents and all rights of set-off. The enumeration of the foregoing
rights is not intended to be exhaustive and the exercise of any right shall not
preclude the exercise of any other rights, all of which shall be cumulative.
In addition, upon demand by the Agent or the Required Lenders after the
occurrence of any Event of Default, the Borrowers shall deposit with the Agent
for the benefit of the Lenders with respect to each Letter of Credit then
outstanding, promptly upon such demand, cash or Cash Equivalents in an amount
equal to the greatest amount for which such Letter of Credit may be drawn. Such
deposit shall be held by the Agent for the benefit of the Issuing Bank and the
other Lenders as security for, and to provide for the payment of, outstanding
Letters of Credit.
ARTICLE XII
TERMINATION
Except as otherwise provided in Article XI of this Credit Agreement,
the Revolving Commitments made hereunder shall terminate on the Maturity Date
and all then outstanding Revolving Loans shall be immediately due and payable in
full and all outstanding Letters of Credit shall immediately terminate. Unless
sooner demanded, all Obligations shall become due and payable as of any
termination hereunder or under Article XI and, pending a final accounting, the
Agent may withhold any balances in the Borrowers' Revolving Loan accounts,
unless supplied with a satisfactory indemnity to cover all of the Obligations,
whether absolute or contingent. All of the Agent's and the Lenders' rights,
liens and security interests shall continue after any termination until all
Obligations have been paid and satisfied in full.
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ARTICLE XIII
THE AGENT
13.1 APPOINTMENT OF AGENT.
(a) Each Lender hereby designates FUCC as Agent to act as
herein specified. Each Lender hereby irrevocably authorizes, and each
holder of any Revolving Note or participation in any Letter of Credit
by the acceptance of a Note or participation shall be deemed
irrevocably to authorize, the Agent to take such action on its behalf
under the provisions of this Credit Agreement and the Revolving Notes
and any other instruments and agreements referred to herein and to
exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Agent by
the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent shall hold all Collateral and all
payments of principal, interest, Fees, charges and expenses received
pursuant to this Credit Agreement or any other Credit Document for the
ratable benefit of the Lenders. The Agent may perform any of its duties
hereunder by or through its agents or employees.
(b) The provisions of this Article XIII are solely for the
benefit of the Agent and the Lenders, and none of the Borrowers shall
have any rights as a third party beneficiary of any of the provisions
hereof (other than Section 13.9). In performing its functions and
duties under this Credit Agreement, the Agent shall act solely as agent
of the Lenders and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with
or for any Borrower.
(c) Without limiting the generality of this Section 13.1, each
Lender expressly authorizes the Agent to determine, subject to the
terms of this Credit Agreement, on behalf of such Lender whether or not
Inventory or Accounts shall be deemed to constitute Eligible Accounts
Receivable, Eligible Equipment, Eligible Inventory and Eligible Real
Property. Such authorization may be withdrawn by the Required Lenders;
provided, however, that unless otherwise agreed by the Agent such
withdrawal of authorization shall not become effective until the
thirtieth Business Day after receipt of such notice by the Agent.
Thereafter, the Required Lenders shall jointly instruct the Agent in
writing regarding such matters with such frequency as the Required
Lenders shall jointly determine.
13.2 NATURE OF DUTIES OF AGENT.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Credit Agreement. Neither the Agent nor any of its
officers, directors, employees or agents shall be liable for any action taken or
omitted by it as such hereunder or in connection herewith, unless caused by its
or their gross negligence or willful misconduct. The duties of the Agent shall
be mechanical and administrative in nature; the Agent shall not have by reason
of this Credit Agreement a fiduciary relationship in respect of any Lender; and
nothing in this Credit Agreement, expressed or implied, is intended to or shall
be so construed as to impose upon the Agent any obligations in respect of this
Credit Agreement except as expressly set forth herein.
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13.3 LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon the Agent, each
Lender, to the extent it deems appropriate, has made and shall continue
to make (i) its own independent investigation of the financial or other
condition and affairs of each Borrower in connection with the taking or
not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of each Borrower, and, except as
expressly provided in this Credit Agreement, the Agent shall have no
duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the
Revolving Loans or at any time or times thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein
or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, priority or sufficiency of
this Credit Agreement or the Notes or the financial or other condition
of any Borrower. The Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms,
provisions or conditions of this Credit Agreement or the Notes, or the
financial condition of any Borrower, or the existence or possible
existence of any Default or Event of Default, unless specifically
requested to do so in writing by any Lender.
13.4 CERTAIN RIGHTS OF THE AGENT.
The Agent shall have the right to request instructions from the
Required Lenders or, as required, each of the Lenders. If the Agent shall
request instructions from the Required Lenders or each of the Lenders, as the
case may be, with respect to any act or action (including the failure to act) in
connection with this Credit Agreement, the Agent shall be entitled to refrain
from such act or taking such action unless and until the Agent shall have
received instructions from the Required Lenders or each of the Lenders, as the
case may be, and the Agent shall not incur liability to any Person by reason of
so refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders or each of the Lenders, as the case may be.
13.5 RELIANCE BY AGENT.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex teletype or telecopier message, cablegram, radiogram, order or other
documentary, teletransmission or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper person. The
Agent may consult with legal counsel (including counsel for the Borrowers with
respect to matters concerning the Borrowers), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
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13.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by the
Borrowers, each Lender will reimburse and indemnify the Agent, in proportion to
its respective Commitment, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder, in any way relating to or arising out
of this Credit Agreement, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct.
13.7 THE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement, the
Loans made by it and the Revolving Notes issued to it, its participation in
Letters of Credit issued hereunder, and all of its rights and obligations as a
Lender hereunder and under the other Credit Documents, the Agent shall have the
same rights and powers hereunder as any other Lender or holder of a Note or
participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders", "Required
Lenders", "holders of Notes", or any similar terms shall, unless the context
clearly otherwise indicates, include the Agent in its individual capacity. The
Agent may accept deposits from, lend money to, acquire equity interests in, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Borrowers or any Affiliate of the Borrowers as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrowers for services in connection with this Credit
Agreement and otherwise without having to account for the same with the Lenders.
13.8 HOLDERS OF NOTES.
The Agent may deem and treat the payee of any Note as the owner thereof
for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
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13.9 SUCCESSOR AGENT.
(a) The Agent may, upon five (5) Business Days' notice to the
Lenders and the Borrowers, resign at any time (effective upon the
appointment of a successor Agent pursuant to the provisions of this
Section 13.9(a)) by giving written notice thereof to the Lenders and
the Borrowers. Upon any such resignation, the Required Lenders shall
have the right, upon five (5) days' notice to the Company, to appoint a
successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within
thirty (30) days after the retiring Agent's giving of notice of
resignation, then, upon five (5) days' notice , the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent, which shall be a
bank or a trust company or other financial institution which maintains
an office in the United States, or a commercial bank organized under
the laws of the United States of America or of any State thereof, or
any affiliate of such bank or trust company or other financial
institution which is engaged in the banking business, having a combined
capital and surplus of at least $500,000,000. Notwithstanding anything
herein to the contrary, so long as no Event of Default shall have
occurred and be continuing, any successor Agent (whether appointed by
the Required Lenders or the Agent) shall have been approved in writing
by the Company (such approval not to be unreasonably withheld).
(b) Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Credit Agreement. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article
XIII shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Credit Agreement.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Agent to enter into
the Security Documents for the benefit of the Lenders. Each Lender
authorizes and directs the Agent to make such changes to the form
Acknowledgment Agreement attached hereto as Exhibit A as the Agent
deems necessary in order to obtain any Acknowledgment Agreement from
any landlord, warehouseman, filler, packer or processor of any
Borrower. Each Lender also authorizes and directs the Agent to review
and approve all agreements regarding the Lockboxes and the Lockbox
Accounts (including the Lockbox Agreements) on such terms as the Agent
deems necessary. Each Lender hereby agrees, and each holder of any
Revolving Note by the acceptance thereof will be deemed to agree, that,
except as otherwise set forth herein, any action taken by the Required
Lenders or each of the Lenders, as applicable, in accordance with the
provisions of this Credit Agreement or the Security Documents, and the
exercise by the Required Lenders or each of the Lenders, as applicable,
of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders. The Agent is hereby authorized on
behalf of all of the Lenders,
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without the necessity of any notice to or further consent from any
Lender, from time to time prior to an Event of Default, to take any
action with respect to any Collateral or Security Document which may be
necessary or appropriate to perfect and maintain perfected the security
interest in and liens upon the Collateral granted pursuant to the
Security Documents.
(b) The Lenders hereby authorize the Agent, at its option and
in its discretion, to release any Lien granted to or held by the Agent
upon any Collateral (i) upon termination of the Commitments and payment
in cash and satisfaction of all of the Obligations (including the
Letter of Credit Obligations) at any time arising under or in respect
of this Credit Agreement or the Credit Documents or the transactions
contemplated hereby or thereby, (ii) constituting property being sold
or disposed of upon receipt of the proceeds of such sale by the Agent
if the applicable Borrower certifies to the Agent that the sale or
disposition is made in compliance with Section 9.3 (and the Agent may
rely conclusively on any such certificate, without further inquiry) or
(iii) if approved, authorized or ratified in writing by the Required
Lenders, unless such release is required to be approved by all of the
Lenders hereunder. Upon request by the Agent at any time, the Lenders
will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 13.10(b).
(c) Upon any sale and transfer of Collateral which is
expressly permitted pursuant to the terms of this Credit Agreement, or
consented to in writing by the Required Lenders or all of the Lenders,
as applicable, and upon at least five (5) Business Days' prior written
request by the applicable Borrower, the Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Liens granted to the Agent
for the benefit of the Lenders herein or pursuant hereto upon the
Collateral that was sold or transferred; provided that (i) the Agent
shall not be required to execute any such document on terms which, in
the Agent's opinion, would expose the Agent to liability or create any
obligation or entail any consequence other than the release of such
Liens without recourse or warranty and (ii) such release shall not in
any manner discharge, affect or impair the Obligations or any Liens
upon (or obligations of such Borrower or any Subsidiary in respect of)
all interests retained by such Borrower or any Subsidiary, including
(without limitation) the proceeds of the sale, all of which shall
continue to constitute part of the Collateral. In the event of any sale
or transfer of Collateral, or any foreclosure with respect to any of
the Collateral, the Agent shall be authorized to deduct all of the
expenses reasonably incurred by the Agent from the proceeds of any such
sale, transfer or foreclosure.
(d) The Agent shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists or
is owned by the Borrowers or any Subsidiary or is cared for, protected
or insured or that the liens granted to the Agent herein or pursuant
hereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular
priority, or to exercise or to continue exercising at all or in any
manner or under any duty of care, disclosure or fidelity any of the
rights, authorities and powers granted or available to the Agent in
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this Section 13.10 or in any of the Security Documents, it being
understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it
may deem appropriate, in its sole discretion, given the Agent's own
interest in the Collateral as one of the Lenders and that the Agent
shall have no duty or liability whatsoever to the Lenders, except for
its gross negligence or willful misconduct.
13.11 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Agent's right to take actions on its own accord as
permitted under this Credit Agreement, the Agent shall take such action with
respect to a Default or Event of Default as shall be directed by the Required
Lenders; provided that, until the Agent shall have received such directions, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable and in the best interests of the Lenders.
13.12 DELIVERY OF INFORMATION.
The Agent shall not be required to deliver to any Lender originals or
copies of any documents, instruments, notices, communications or other
information received by the Agent from the Borrowers, any Subsidiary, the
Required Lenders, any Lender or any other Person under or in connection with
this Credit Agreement or any other Credit Document except (a) as specifically
provided in this Credit Agreement or any other Credit Document and (b) as
specifically requested from time to time in writing by any Lender with respect
to a specific document instrument, notice or other written communication
received by and in the possession of the Agent at the time of receipt of such
request and then only in accordance with such specific request.
ARTICLE XIV
MISCELLANEOUS
14.1 WAIVERS.
Each Borrower hereby waives due diligence, demand, presentment and
protest and any notices thereof as well as notice of nonpayment. No delay or
omission of the Agent or the Lenders to exercise any right or remedy hereunder,
whether before or after the happening of any Event of Default, shall impair any
such right or shall operate as a waiver thereof or as a waiver of any such Event
of Default. No single or partial exercise by the Agent or the Lenders of any
right or remedy shall preclude any other or further exercise thereof, or
preclude any other right or remedy.
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14.2 JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, THE AGENT AND
THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE CREDIT DOCUMENTS OR ANY
OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal action or proceeding
with respect to this Credit Agreement or any other Credit Document
shall be brought in the courts of the State of North Carolina in
Mecklenburg County or of the United States for the Western District of
North Carolina, and, by execution and delivery of this Credit
Agreement, each of the Borrowers hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Each of the Borrowers further
irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to
it at the address set out for notices pursuant to Section 14.5, such
service to become effective three (3) days after such mailing. Nothing
herein shall affect the right of the Agent or any Lender to serve
process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Borrower in any other
jurisdiction.
(b) Each of the Borrowers hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
14.4 ARBITRATION.
(a) Notwithstanding the provisions of Section 14.3 to the
contrary, upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Credit
Agreement and other Credit Documents ("Disputes") between or among
parties to this Credit Agreement shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by
a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to
arbitration, claims
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brought as class actions, claims arising from Credit Documents executed
in the future, or claims arising out of or connected with the
transaction reflected by this Credit Agreement.
Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration
Rules") of the American Arbitration Association (the "AAA") and Title 9
of the U.S. Code. All arbitration hearings shall be conducted in
Charlotte, North Carolina. A hearing shall begin within 90 days of
demand for arbitration and all hearings shall be concluded within 120
days of demand for arbitration. These time limitations may not be
extended unless a party shows cause for extension and then no more than
a total extension of 60 days. The expedited procedures set forth in
Rule 51 et seq. of the Arbitration Rules shall be applicable to claims
of less than $1,000,000. All applicable statutes of limitation shall
apply to any Dispute. A judgment upon the award may be entered in any
court having jurisdiction. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys selected from the
Commercial Financial Dispute Arbitration Panel of the AAA. The single
arbitrator selected for expedited procedure shall be a retired judge
from the highest court of general jurisdiction, state or federal, of
the state where the hearing will be conducted or if such person is not
available to serve, the single arbitrator may be a licensed attorney.
The parties hereto do not waive applicable Federal or state substantive
law except as provided herein. Notwithstanding the foregoing, this
arbitration provision does not apply to disputes under or related to
Hedging Agreements.
(b) Notwithstanding the preceding binding arbitration
provisions, the Agent, the Lenders and the Borrowers agree to preserve,
without diminution, certain remedies that the Agent on behalf of the
Lenders may employ or exercise freely, independently or in connection
with an arbitration proceeding or after an arbitration action is
brought. The Agent on behalf of the Lenders shall have the right to
proceed in any court of proper jurisdiction or by self-help to exercise
or prosecute the following remedies, as applicable (i) all rights to
foreclose against any real or personal property or other security by
exercising a power of sale granted under Credit Documents or under
applicable law or by judicial foreclosure and sale, including a
proceeding to confirm the sale; (ii) all rights of self-help including
peaceful occupation of real property and collection of rents, set-off,
and peaceful possession of personal property; (iii) obtaining
provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding; and (iv) when applicable,
a judgment by confession of judgment. Preservation of these remedies
does not limit the power of an arbitrator to grant similar remedies
that may be requested by a party in a Dispute.
(c) The parties hereto agree that they shall not have a remedy
of punitive or exemplary damages against the other in any Dispute and
hereby waive any right or claim to punitive or exemplary damages they
have now or which may arise in the future in connection with any
Dispute whether the Dispute is resolved by arbitration or judicially.
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(d) By execution and delivery of this Credit Agreement, each
of the parties hereto accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive
jurisdiction relating to any arbitration proceedings conducted under
the Arbitration Rules in Charlotte, North Carolina and irrevocably
agrees to be bound by any final judgment rendered thereby in connection
with this Credit Agreement from which no appeal has been taken or is
available.
14.5 NOTICES.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified or registered mail return
receipt requested, or by overnight delivery service, with all charges prepaid,
if to the Agent, then to First Union Commercial Corporation, One First Union
Center, 000 Xxxxx Xxxxxxx Xxxxxx, XX-0, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000,
Attention: Xxxxx X. Xxxx, Director; if to the Borrowers, then to Borrowers at
X.X. Xxx 000, Xxx XXXX Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxx
X. Xxxxxx, Executive Vice President and Chief Financial Officer, and to any
Lender, at the address set forth beneath the signature of such Lender contained
herein, or by facsimile transmission, promptly confirmed in writing sent by
first class mail, if to the Agent, at (000) 000-0000, and if to the Borrowers at
(000) 000-0000 and if to any Lender at the facsimile number set forth beneath
the signature of such Lender contained herein. All such notices and
correspondence shall be deemed given (i) if sent by certified or registered
mail, three (3) Business Days after being postmarked, (ii) if sent by overnight
delivery service, when received at the above stated addresses or when delivery
is refused and (iii) if sent by facsimile transmission, when receipt of such
transmission is acknowledged; provided that notices to the Agent shall not be
effective until received.
14.6 ASSIGNABILITY.
(a) No Borrower shall have the right to assign this Credit
Agreement or any interest therein except with the prior written consent
of the Agent.
(b) Notwithstanding subsection (c) of this Section 14.6,
nothing herein shall restrict, prevent or prohibit any Lender from (i)
pledging its Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank or (ii)
granting assignments or participations in such Lender's Loans and/or
Commitments hereunder to its parent company and/or to any affiliate of
such Lender or to any existing Lender or affiliate thereof. Any Lender
may make, carry or transfer Loans at, to or for the account of, any of
its branch offices or the office of an affiliate of such Lender except
to the extent such transfer would result in increased costs to the
Borrowers.
(c) Each Lender may, with the consent of the Agent (such
consent not to be unreasonably withheld or delayed) and concurrent
notice to the Borrowers, but without the consent of the Borrowers or
any other Lender, assign to one or more banks or other financial
institutions all or a portion of its rights and obligations under this
Credit Agreement and the Notes; provided that (i) for each such
assignment, the parties thereto shall execute and deliver to the Agent,
for its acceptance and recording in the Register (as
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defined below), an Assignment and Acceptance, together with any Note or
Notes subject to such assignment and a processing and recordation fee
of $3,500 to be paid by the assignee, (ii) no such assignment shall be
for less than $5,000,000, or if less the entire remaining Revolving
Credit Commitment of such Lender, (iii) if such assignee is a Foreign
Lender, all of the requirements of Section 2.7(b) shall have been
satisfied as a condition to such assignment and (iv) each such
assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of the Revolving Credit
Commitment and all Revolving Loans of such Lender. Upon such execution
and delivery of the Assignment and Acceptance to the Agent, from and
after the date specified as the effective date in the Assignment and
Acceptance (the "Acceptance Date"), (x) the assignee thereunder shall
be a party hereto, and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, such assignee shall have the rights and obligations of a
Lender hereunder and (y) the assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights (other than
any rights it may have pursuant to Section 14.8 which will survive) and
be released from its obligations under this Credit Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Credit Agreement, such Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance,
the assignee thereunder confirms and agrees as follows: (i) other than
as provided in such Assignment and Acceptance, the assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, the Revolving Notes or any other instrument or
document furnished pursuant hereto, (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrowers or the performance or
observance by the Borrowers of any of its obligations under this Credit
Agreement or any other instrument or document furnished pursuant
hereto, (iii) such assignee confirms that it has received a copy of
this Credit Agreement, together with copies of the financial statements
referred to in Section 7.1 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance, (iv) such assignee will,
independently and without reliance upon the Agent, such assigning
Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Credit
Agreement, (v) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto
and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Credit
Agreement are required to be performed by it as a Lender.
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(e) The Agent shall maintain at its address referred to in
Section 14.5 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Revolving Commitments of, and
principal amount of the Revolving Loans owing to, each Lender from time
to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lenders may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register and copies of each Assignment and
Acceptance shall be available for inspection by the Borrowers or any
Lender at any reasonable time and from time to time upon reasonable
prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender, together with the Revolving Note or Revolving
Notes subject to such assignment, the Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of
Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrowers. Within five (5) Business Days
after its receipt of such notice, the Borrowers shall execute and
deliver to the Agent in exchange for the surrendered Revolving Note or
Revolving Notes (which the assigning Lender agrees to promptly deliver
to the Company) a new Revolving Note or Revolving Notes to the order of
the assignee in an amount equal to the Revolving Commitment or
Revolving Commitments assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Revolving
Commitment or Revolving Commitments hereunder, a new Revolving Note or
Revolving Notes to the order of the assigning Lender in an amount equal
to the Revolving Commitment or Revolving Commitments retained by it
hereunder. Such new Revolving Note or Revolving Notes shall re-evidence
the indebtedness outstanding under the old Revolving Notes or Revolving
Notes and shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Revolving Note or
Revolving Notes, shall be dated the Closing Date and shall otherwise be
in substantially the form of the Revolving Note or Revolving Notes
subject to such assignments.
(g) Each Lender may sell participations (without the consent
of the Agent, the Borrowers or any other Lender) to one or more parties
in or to all or a portion of its rights and obligations under this
Credit Agreement (including, without limitation, all or a portion of
its Revolving Commitments, the Revolving Loans owing to it and the
Revolving Note or Revolving Notes held by it); provided that (i) such
Lender's obligations under this Credit Agreement (including, without
limitation, its Revolving Commitments to the Borrowers hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)
such Lender shall remain the holder of any such Revolving Note for all
purposes of this Credit Agreement, (iv) the Borrowers, the Agent, and
the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under
this Credit Agreement and (v) such Lender shall not transfer, grant,
assign or sell any participation under which the participant shall have
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rights to approve any amendment or waiver of this Credit Agreement
except to the extent such amendment or waiver would (A) extend the
final maturity date or the date for the payments of any installment of
fees or principal or interest of any Revolving Loans or Letter of
Credit reimbursement obligations in which such participant is
participating, (B) reduce the amount of any installment of principal of
the Revolving Loans or Letter of Credit reimbursement obligations in
which such participant is participating, (C) except as otherwise
expressly provided in this Credit Agreement, reduce the interest rate
applicable to the Revolving Loans or Letter of Credit reimbursement
obligations in which such participant is participating, or (D) except
as otherwise expressly provided in this Credit Agreement, reduce any
Fees payable hereunder.
(h) Each Lender agrees that, without the prior written consent
of the Borrowers and the Agent, it will not make any assignment or sell
a participation hereunder in any manner or under any circumstances that
would require registration or qualification of, or filings in respect
of, any Revolving Loan, Revolving Note or other Obligation under the
securities laws of the United States of America or of any jurisdiction.
(i) In connection with the efforts of any Lender to assign its
rights or obligations or to participate interests, such Lender may
disclose any information in its possession regarding the Borrowers.
14.7 INFORMATION.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by the Borrowers
pursuant to this Credit Agreement that is marked confidential; provided that
nothing herein shall prevent any Lending Party from disclosing such information
(a) to any other Lending Party or any affiliate of any Lending Party, or any
officer, director, employee, agent, or advisor of any Lending Party or affiliate
of any Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority;
provided, however, that, to the extent permitted by law, the affected Lending
Party shall provide prior written notice to the affected Borrower of any such
request or demand, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Credit Agreement, (g) in connection with
any litigation to which such Lending Party or any of its affiliates may be a
party, (h) to the extent necessary in connection with the exercise of any remedy
under this Credit Agreement or any other Credit Document, (i) subject to
provisions substantially similar to those contained in this Section 14.7, to any
actual or proposed participant or assignee and (j) to Gold Sheets and other
similar bank trade publications; such information to consist of deal terms and
other information customarily found in such publications.
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14.8 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Borrowers agree to: (a) pay all reasonable out-of-pocket costs and
expenses of (i) the Agent in connection with (A) the negotiation, preparation,
execution and delivery and administration of this Credit Agreement and the other
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses of special
counsel to the Agent and the fees and expenses of counsel for the Agent in
connection with collateral issues), and (B) any amendment, waiver or consent
relating hereto and thereto and (ii) the Agent and the Lenders after the
occurrence and during the continuation of an Event of Default or in connection
with enforcement of the Credit Documents and the documents and instruments
referred to therein, including but not limited to, any work-out, re-negotiation
or restructure relating to the performance by the Borrowers under this Credit
Agreement and any amendment, waiver or consent relating thereto and, including,
without limitation, in connection with any such enforcement, the reasonable fees
and disbursements of counsel for the Agent and each of the Lenders (including
the allocated costs of internal counsel). The Borrowers shall and hereby agree
to indemnify, defend and hold harmless the Agent, the Issuing Bank and each of
the Lenders and their respective directors, officers, agents, employees and
counsel from and against (x) any and all losses, claims, damages, liabilities,
deficiencies, judgments or expenses incurred by any of them (except to the
extent that it is finally judicially determined to have resulted from their own
gross negligence or willful misconduct) arising out of or by reason of any
litigation, investigation, claim or proceeding which arises out of or is in any
way related to (i) this Credit Agreement, any Letter of Credit or the
transactions contemplated thereby, (ii) any actual or proposed use by any
Borrower of the proceeds of the Loans or (iii) the Agent's, the Issuing Bank's
or the Lenders' entering into this Credit Agreement, the other Credit Documents
or any other agreements and documents relating hereto, including, without
limitation, amounts paid in settlement, court costs and the fees and
disbursements of counsel incurred in connection with any such litigation,
investigation, claim or proceeding or any advice rendered in connection with any
of the foregoing and (y) any such losses, claims, damages, liabilities,
deficiencies, judgments or expenses incurred in connection with any remedial or
other action taken by any Borrower or any of the Lenders in connection with
compliance by any Borrower or any of its Subsidiaries, or any of their
respective properties, with any federal, state or local environmental laws,
acts, rules, regulations, orders, directions, ordinances, criteria or
guidelines. If and to the extent that the obligations of any Borrower hereunder
are unenforceable for any reason, such Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. The Borrowers' obligations under this
Section 14.8 shall survive any termination of this Credit Agreement and the
other Credit Documents and the payment in full of the Obligations, and are in
addition to, and not in substitution of, any other of their obligations set
forth in this Credit Agreement. In addition, the Borrowers shall, upon demand,
pay to the Agent and any Lender all costs and expenses (including the reasonable
fees and disbursements of counsel and other professionals) paid or incurred by
the Agent, the Issuing Bank or such Lender in (1) enforcing or defending its
rights under or in respect of this Credit Agreement, the other Credit Documents
or any other document or instrument now or hereafter executed and delivered in
connection herewith, (2) in collecting the Loans, (3) in foreclosing or
otherwise collecting upon the Collateral or any part thereof and (4) obtaining
any legal, accounting or other advice in connection with any of the foregoing.
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14.9 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS.
This Credit Agreement along with the other Credit Documents and the Fee
Letter constitutes the entire agreement among the Borrowers, the Agent and the
Lenders, supersedes any prior agreements among them, and shall bind and benefit
the Borrowers and the Lenders and their respective successors and permitted
assigns.
14.10 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Credit Agreement or any
other Credit Document, nor consent to any departure by any Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders, or if the Lenders shall not be parties thereto, by the
parties thereto and consented to by the Required Lenders, and each such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided that no amendment, waiver
or consent shall unless in writing and signed by all the Lenders, do any of the
following: (a) increase the Revolving Credit Committed Amount, the Revolving
Commitments of the Lenders or subject the Lenders to any additional obligations,
(b) except as otherwise expressly provided in this Credit Agreement, reduce the
principal of, or interest on, any Revolving Note or any Letter of Credit
reimbursement obligations or any fees hereunder, (c) postpone any date fixed for
any payment in respect of principal of, or interest on, any Revolving Note or
any Letter of Credit reimbursement obligations or any fees hereunder, (d) change
the percentage of the Revolving Commitments, or any minimum requirement
necessary for the Lenders or the Required Lenders to take any action hereunder,
(e) amend or waive this Section 14.10, or change the definition of Required
Lenders or the definition of Borrowing Base or (f) except as otherwise expressly
provided in this Credit Agreement, and other than in connection with the
financing, refinancing, sale or other disposition of any asset of the Borrowers
permitted under this Credit Agreement, release any Liens in favor of the Lenders
on any material portion of the Collateral and, provided, further, that no
amendment, waiver or consent affecting the rights or duties of the Agent or the
Issuing Bank under any Credit Document shall in any event be effective, unless
in writing and signed by the Agent and/or the Issuing Bank, as applicable, in
addition to the Lenders required hereinabove to take such action.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrowers shall not be required for any amendment, modification or waiver of the
provisions of Article XIII (other than the provisions of Section 13.9). In
addition, the Borrowers and the Lenders hereby authorize the Agent to modify
this Credit Agreement by unilaterally amending or supplementing Schedule 1.1A
from time to time in the manner requested by the Borrowers, the Agent or any
Lender in order to reflect any assignments or transfers of the Loans as provided
for hereunder; provided, however, that the Agent shall promptly deliver a copy
of any such modification to the Borrowers and each Lender.
14.11 NONLIABILITY OF AGENT AND LENDERS.
The relationship between any Borrower on the one hand and the Lenders
and the Agent on the other hand shall be solely that of borrower and lender.
Neither the Agent nor any Lender
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shall have any fiduciary responsibilities to any Borrower. Neither the Agent nor
any Lender undertakes any responsibility to any Borrower to review or inform
such Borrower of any matter in connection with any phase of such Borrower's
business or operations.
14.12 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender under such
Lender's Revolving Note or Revolving Notes shall be a separate and independent
debt.
14.13 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts and
by the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
14.14 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which all
of the parties have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Agent pursuant to Section 14.5 or, in
the case of the Lenders, shall have given to the Agent written, telecopied or
telex notice (actually received) at such office that the same has been signed
and mailed to it.
14.15 SEVERABILITY.
In case any provision in or obligation under this Credit Agreement or
the Revolving Notes or the other Credit Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
14.16 HEADINGS DESCRIPTIVE.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Credit Agreement.
14.17 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this
Credit Agreement or in any other Credit Document, the Borrowers, the Agent and
the Lenders hereby agree that all agreements among them under this Credit
Agreement and the other Credit Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Agent or any Lender for the use, forbearance, or detention of the money
loaned to any Borrower and evidenced
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hereby or thereby or for the performance or payment of any covenant or
obligation contained herein or therein, exceed the Highest Lawful Rate. If due
to any circumstance whatsoever, fulfillment of any provisions of this Credit
Agreement or any of the other Credit Documents at the time performance of such
provision shall be due shall exceed the Highest Lawful Rate, then,
automatically, the obligation to be fulfilled shall be modified or reduced to
the extent necessary to limit such interest to the Highest Lawful Rate, and if
from any such circumstance any Lender should ever receive anything of value
deemed interest by applicable law which would exceed the Highest Lawful Rate,
such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the applicable
Borrower. All sums paid or agreed to be paid to the Agent or any Lender for the
use, forbearance, or detention of the Obligations and other indebtedness of the
Borrowers to the Agent or any Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the actual rate of
interest on account of all such indebtedness does not exceed the Highest Lawful
Rate throughout the entire term of such indebtedness. The terms and provisions
of this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrowers, the Agent and the Lenders.
14.18 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that any
Lender or other holder of a Note may have under applicable law, each Lender or
other holder of a Note shall, if any Event of Default has occurred and is
continuing and whether or not such Lender or such holder has made any demand or
the Obligations of any Borrower are matured, have the right to appropriate and
apply to the payment of the Obligations of such Borrower all deposits (general
or special, time or demand, provisional or final) then or thereafter held by and
other indebtedness or property then or thereafter owing by such Lender or other
holder, including, without limitation, any and all amounts in any Cash
Collateral Account. Any amount received as a result of the exercise of such
rights shall be reallocated among the Lenders as set forth in Section 3.8.
14.19 CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several
liability hereunder in consideration of the financial accommodation to
be provided by the Lenders under this Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of each of the Borrowers to accept
joint and several liability for the obligations of each of them.
(b) Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the
Obligations, it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each of the
Borrowers without preferences or distinction among them.
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(c) If and to the extent that any of the Borrowers shall fail
to make any payment with respect to any of the Obligations as and when
due or to perform any of the Obligations in accordance with the terms
thereof, then in each such event, the other Borrowers will make such
payment with respect to, or perform, such Obligation.
(d) The obligations of each Borrower under the provisions of
this Section 14.19 constitute full recourse obligations of such
Borrower, enforceable against it to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability
of this Credit Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided herein, each
Borrower hereby waives notice of acceptance of its joint and several
liability, notice of any Loan made under this Credit Agreement, notice
of occurrence of any Event of Default, or of any demand for any payment
under this Credit Agreement, notice of any action at any time taken or
omitted by any Lender under or in respect of any of the Obligations,
any requirement of diligence and, generally, all demands, notices and
other formalities of every kind in connection with this Credit
Agreement. Each Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by any Lender at any time or
times in respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this
Credit Agreement, any and all other indulgences whatsoever by any
Lender in respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of
any security for any of the Obligations or in part, at any time or
times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower. Without
limiting the generality of the foregoing, each Borrower assents to any
other action or delay in acting or failure to act on the part of any
Lender, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply
fully with the applicable laws or regulations thereunder which might,
but for the provisions of this Section 14.19, afford grounds for
terminating, discharging or relieving such Borrower, in whole or in
part, from any of its obligations under this Section 14.19, it being
the intention of each Borrower that, so long as any of the Obligations
remain unsatisfied, the obligations of such Borrower under this Section
14.19 shall not be discharged except by performance and then only to
the extent of such performance. The Obligations of each Borrower under
this Section 14.19 shall not be diminished or rendered unenforceable by
any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or
any Lender. The joint and several liability of the Borrowers hereunder
shall continue in full force and effect notwithstanding any absorption,
merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any Borrower or any
Lender.
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(f) The provisions of this Section 14.19 are made for the
benefit of the Lenders and their respective successors and assigns, and
may be enforced by any such Person from time to time against any of the
Borrowers as often as occasion therefor may arise and without
requirement on the part of any Lender first to marshal any of its
claims or to exercise any of its rights against any of the other
Borrowers or to exhaust any remedies available to it against any of the
other Borrowers or to resort to any other source or means of obtaining
payment of any of the Obligations or to elect any other remedy. The
provisions of this Section 14.19 shall remain in effect until all the
Obligations shall have been paid in full or otherwise fully satisfied.
If at any time, any payment, or any part thereof, made in respect of
any of the Obligations, is rescinded or must otherwise be restored or
returned by any Lender upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or otherwise, the provisions of
this Section 14.19 will forthwith be reinstated in effect, as though
such payment had not been made.
(g) Notwithstanding any provision to the contrary contained
herein or in any other of the Credit Documents, to the extent the joint
obligations of a Borrower shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of
any applicable state or federal law relating to fraudulent conveyances
or transfers) then the obligations of each Borrower hereunder shall be
limited to the maximum amount that is permissible under applicable law
(whether federal or state and including, without limitation, the
federal Bankruptcy Code).
(h) The Borrowers hereby agree, as among themselves, that if
any Borrower shall become an Excess Funding Borrower (as defined
below), each other Borrower shall, on demand of such Excess Funding
Borrower (but subject to the next sentence hereof and to subsection (B)
below), pay to such Excess Funding Borrower an amount equal to such
Borrower's Pro Rata Share (as defined below and determined, for this
purpose, without reference to the properties, assets, liabilities and
debts of such Excess Funding Borrower) of such Excess Payment (as
defined below). The payment obligation of any Borrower to any Excess
Funding Borrower under this Section 14.19(h) shall be subordinate and
subject in right of payment to the prior payment in full of the
Obligations of such Borrower under the other provisions of this Credit
Agreement, and such Excess Funding Borrower shall not exercise any
right or remedy with respect to such excess until payment and
satisfaction in full of all of such Obligations. For purposes hereof,
(i) "Excess Funding Borrower" shall mean, in respect of any Obligations
arising under the other provisions of this Credit Agreement (hereafter,
the "Joint Obligations"), a Borrower that has paid an amount in excess
of its Pro Rata Share of the Joint Obligations; (ii) "Excess Payment"
shall mean, in respect of any Joint Obligations, the amount paid by an
Excess Funding Borrower in excess of its Pro Rata Share of such Joint
Obligations; and (iii) "Pro Rata Share", for the purposes of this
Section 14.19(h), shall mean, for any Borrower, the ratio (expressed as
a percentage) of (A) the amount by which the aggregate present fair
salable value of all of its assets and properties exceeds the amount of
all debts and liabilities of such Borrower (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Borrower hereunder) to (B)
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the amount by which the aggregate present fair salable value of all
assets and other properties of such Borrower and all of the other
Borrowers exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Borrower and the
other Borrowers hereunder) of such Borrower and all of the other
Borrowers, all as of the Closing Date (if any Borrower becomes a party
hereto subsequent to the Closing Date, then for the purposes of this
Section 14.19(h) such subsequent Borrower shall be deemed to have been
a Borrower as of the Closing Date and the information pertaining to,
and only pertaining to, such Borrower as of the date such Borrower
became a Borrower shall be deemed true as of the Closing Date).
14.20 POWER OF ATTORNEY.
Each of the Subsidiary Borrowers appoints each of Xxxxx X. Xxxxx and
Xxxxx X. Xxxxxx, each senior officers of the Company, to be its attorneys ("its
Attorneys") and in its name and on its behalf and as its act and deed or
otherwise to sign all documents and carry out all such acts as are necessary or
appropriate in connection with executing any Notice of Borrowing, Notice of
Extension/Conversion or any Borrowing Base Certificate or any security documents
(the "Documents") in connection with this Credit Agreement, provided that such
Documents are in substantially the form provided therefor in the applicable
exhibits thereto. This Power of Attorney shall be valid for the duration of the
term of this Credit Agreement. Each Subsidiary Borrower hereby undertakes to
ratify everything which any of its Attorneys shall do in order to execute the
Documents mentioned herein.
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IN WITNESS WHEREOF the parties hereto have caused this Credit Agreement
to be executed and delivered by their proper and duly authorized officers as of
the date set forth above.
COMPANY: FRESH FOODS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
SUBSIDIARY BORROWERS: BRUNSWICK ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
CLAREMONT RESTAURANT GROUP, LLC
BY: FRESH FOODS, INC.,
its Sole Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
ELLOREE FOODS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
112
FRESH FOODS PROPERTIES, LLC
BY: FRESH FOODS, INC.,
its Sole Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
GEORGIA BUFFET RESTAURANTS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
KNOXVILLE FOODS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
MOM `n' POP'S COUNTRY HAM, LLC
BY: PIERRE FOODS, INC.,
its Sole Member
BY: FRESH FOODS, INC.,
its Sole Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
000
XXX XXXXX FOODS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
SAGEBRUSH, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
SAGEBRUSH OF SEVIERVILLE, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
SAGEBRUSH DTN, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
SAGEBRUSH OF TENNESSEE, L.P.
BY: SAGEBRUSH OF SOUTH CAROLINA,
LLC, General Partner
BY: SAGEBRUSH, INC.
its Sole Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
114
SEVEN STARS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
ST. AUGUSTINE FOODS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
TENNESSEE WSMP, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
VIRGINIA WSMP, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
CHARDENT, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
115
D & S FOODS, LLC
BY: GEORGIA WSMP, INC.,
its Sole Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
GEORGIA WSMP, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
KINGSPORT FOODS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
XXXXXXXX PRIME SIRLOIN, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
NAPLES FOODS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
116
PRIME SIRLOIN, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
SAGEBRUSH OF NORTH CAROLINA, LLC
BY: SAGEBRUSH, INC.
its Sole Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
SAGEBRUSH OF SOUTH CAROLINA, LLC
BY: SAGEBRUSH, INC.
its Sole Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
SPICEWOOD, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
SOUTH CAROLINA WSMP, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
117
SUNSHINE WSMP, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
TUMBLEWEED OF PIGEON FORGE, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
GREENVILLE FOODS SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
FRESH FOODS SALES, LLC
BY: FRESH FOODS, INC.,
its Sole Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
PIERRE FOODS, LLC
BY: FRESH FOODS, INC.,
its Sole Member
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
118
AGENT AND LENDERS: FIRST UNION COMMERCIAL CORPORATION,
as Agent and a Lender
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Director
Lending Office (Base Rate Loans)
Address: Charlotte Plaza Building
000 X. Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office (Eurodollar Loans)
Address: Charlotte Plaza Building
000 X. Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice Address
Address: Xxx Xxxxx Xxxxx Xxxxxx,
0xx Xxxxx
000 X. Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxx,
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
119
NATIONSBANK, N.A.,
as a Lender
By: /s/ Xxxxx X. XxXxxxx
-------------------------------
Name: Xxxxx X. XxXxxxx
-----------------------------
Title: Vice President
----------------------------
Lending Office (Base Rate Loans)
Address: 000 Xxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Buehnke
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office (Eurodollar Loans)
Address: 000 Xxxxxxxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Buehnke
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice Address
Address: 000 Xxxxxxxxx Xxxxxx, XX
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
120
NATIONAL CITY COMMERCIAL
FINANCE, INC.,
as a Lender
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
Lending Office (Base Rate Loans)
Address: 0000 X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxx, AVP
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office (Eurodollar Loans)
Address: 0000 X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxx, AVP
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice Address
Address: 00 Xxxxxxxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, SVP
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
121
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO,
as a Lender
By: /s/ Xxx XxXxxx
-------------------------------
Name: Xxx XxXxxx
-----------------------------
Title: AVP
----------------------------
Lending Office (Base Rate Loans)
Address: Xxx Xxxxx XxXxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx XxXxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office (Eurodollar Loans)
Address: Xxx Xxxxx XxXxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx XxXxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice Address
Address: Xxx Xxxxx XxXxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Senior Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
122
EXHIBIT A
FORMS OF ACKNOWLEDGMENT AGREEMENT
[Alternative A]
THIS ACKNOWLEDGMENT AGREEMENT is made by _______________________, a
_______________ (together with its successors and assigns, the "Acknowledgor"),
for the benefit of FIRST UNION COMMERCIAL CORPORATION, as Agent (together with
all successors and assigns, the "Agent") for the Lenders (as defined in the
Credit Agreement described below).
WHEREAS, the Acknowledgor holds certain property of Fresh Foods, Inc.
(the "Borrower") at the location described in Exhibit A attached hereto (the
"Premises"); and
WHEREAS, the Lenders have provided a $________________ credit facility
(the "Credit Facility") in favor of the Borrower, as evidenced and secured by,
among other things, (i) a credit agreement, dated as of June 9, 1998 (together
with all modifications, renewals or replacements, the "Credit Agreement"),
executed by Borrower, certain other borrowing entities parties thereto, the
Lenders, and the Agent; and (ii) a security agreement, dated as of June 9, 1998
(together with all modifications, renewals or replacements, the "Security
Agreement"), on all inventory now or hereafter delivered to or located or
installed at the Premises (the "Inventory;" the Credit Agreement, the Security
Agreement, UCC financing statements relating to the Security Agreement (the
"Financing Statements") and all other documents relating to, evidencing or
securing the Credit Facility being referred to herein collectively as the
"Credit Documents"); and
WHEREAS, the Lenders have requested the Acknowledgor to furnish the
Lenders certain assurances and agreements regarding the Inventory, which
assurances and agreements the Acknowledgor is willing to give as set forth
herein;
NOW, THEREFORE, for and in consideration of the sum of One Dollar
($1.00) paid by each party to the other, receipt of which is hereby
acknowledged, and other good and valuable consideration, the Acknowledgor hereby
certifies to and agrees with the Agent and the Lenders as follows:
1. The Acknowledgor consents to the extensions of credit under the
Credit Facility, the execution of the Credit Documents, the collateral
assignment of any contracts between the Acknowledgor and the Borrower and the
recordation of the Financing Statements.
2. The Acknowledgor agrees that: (a) the Borrower is the owner of the
Inventory; (b) the Agent's lien upon or security interest in the Inventory is
prior and superior to any interest, lien or claim of any nature the Acknowledgor
may now have or hereafter obtain in the Inventory whether by operation of law,
contract or otherwise; and (c) either the Borrower or the Agent may remove the
Inventory from the Premises at any time without hindrance on the part of the
Acknowledgor. The Acknowledgor hereby waives any rights it may now or hereafter
have in the Inventory, including without limitation any lien rights available
under applicable law.
3. The Acknowledgor shall send to the Agent (in the manner provided
herein) a copy of any notice or statement sent to the Borrower by the
Acknowledgor with respect to the Inventory or amounts owed in connection
therewith. Such copy shall be sent to the Agent at the same time such notice or
statement is sent to the Borrower. Notices shall be sent to the Agent by
prepaid, registered or certified mail, addressed to the Agent at the following
address, or such other address as the Agent shall designate to the Acknowledgor
in writing:
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123
FIRST UNION COMMERCIAL CORPORATION
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: [__________]
Telephone: (704) [_______]
Facsimile: (704) [_______]
The Acknowledgor shall not pursue any right or remedy against the
Borrower until the Acknowledgor shall have given thirty (30) days' prior written
notice to the Agent as provided above.
EXECUTED under seal this _____ day of _________________, 199_.
ACKNOWLEDGOR:
-------------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
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124
[Alternative B]
[Date]
[Name and address of warehouse owner]
Re: [Name of Borrower]
Dear _________:
The undersigned, First Union Commercial Corporation, as Agent for
certain lenders ("First Union") has been informed by [Name of Borrower] (the
"Borrower") that the Borrower has delivered and will, from time to time
hereafter, deliver certain goods and other inventory (the "Goods") to you for
storage in your facility located at the address set forth above.
First Union is engaged in a financing of the Borrower, which financing
is secured by a security interest in certain personal property of the Borrower,
including the Goods.
By execution of this letter, you agree that First Union's security
interest in the Goods shall be senior to all liens, claims and interests you may
now have or hereafter obtain in the Goods whether by operation of law, contract
or otherwise, other than your lien for any accrued and unpaid storage fees
charged by you for the actual storage of the Goods. To protect First Union's
security interest in the Goods, all warehouse receipts and other documents of
title, if any, which evidence any Goods now or hereafter delivered by the
Borrower to you shall be non-negotiable and issued to or for the account of
First Union. You agree to provide First Union with a copy of such warehouse
receipts and other documents upon First Union's request therefor.
Notwithstanding the issuance of such receipts or other documents to or
for the account of First Union, First Union hereby authorizes you, subject to
the conditions described below, to release any of the Goods to any authorized
agent of the Borrower upon the Borrower's request. Your authority to release the
Goods to the Borrower or the Borrower's customers is subject to the following
conditions: (i) upon the written request of First Union, within one day after
your release of the Goods, you shall mail to First Union at One First Union
Center, 000 Xxxxx Xxxxxxx Xxxxxx, XX-0, Xxxxxxxxx, XX 00000-0000, Attention:
Xxxxx Xxxx, Vice President, a copy of a receipt describing the agent to whom
such Goods were released and the quantity and description of the released Goods,
and (ii) upon the oral or written direction of First Union, you shall refuse to
release the Goods to the Borrower or the Borrower's customers and you shall only
release such Goods to First Union or the party designated by First Union in such
oral or written direction.
The Borrower agrees that you shall have no liability to the Borrower if
you comply with First Union's oral or written direction as described above. The
Borrower further agrees that it will continue to pay all storage fees and other
expenses related to the storage of the Goods and will reimburse you for all
reasonable costs or expenses incurred as a direct result of your compliance with
the terms and provisions of this letter.
-3-
125
Please confirm your agreement with the terms of this letter by signing
the enclosed copy of this letter as indicated and returning it to First Union at
First Union at One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx, XX-0,
Xxxxxxxxx, XX 00000-0000, Attention: Xxxxx Xxxx, Vice President,.
Very truly yours,
FIRST UNION COMMERCIAL CORPORATION
By:
----------------------------------
Title:
-------------------------------
ACKNOWLEDGED AND AGREED TO:
[NAME OF BORROWER]
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
ACKNOWLEDGED AND AGREED TO:
[NAME OF WAREHOUSE OWNER]
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
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EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of ________, 199_ is entered
into between ________________ ("Assignor") and ____________________
("Assignee").
Reference is made to the Credit Agreement, dated as of June 9, 1998
(together with all modifications, renewals or replacements, the "Credit
Agreement"), among Fresh Foods, Inc., certain other borrowing entities party
thereto, the financial institutions party thereto, and First Union Commercial
Corporation, as Agent. Terms defined in the Credit Agreement are used herein
with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth below, the interests
set forth below (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth below in the Revolving Credit Commitments of the Assignor on
the effective date of the assignment designated below (the "Effective Date") and
the Revolving Loans and other extensions of credit owing to the Assignor which
are outstanding on the Effective Date, together with unpaid interest accrued on
the assigned Revolving Loans and other extensions of credit to the Effective
Date and the amount, if any, set forth below of the Fees accrued to the
Effective Date for the account of the Assignor. Each of the Assignor and the
Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 14.6(d) of the Credit Agreement,
a copy of which has been received by each such party. From and after the
Effective Date (i) the Assignee, if it is not already a Lender under the Credit
Agreement, shall be a party to and be bound by the provisions of the Credit
Agreement and, to the extent of the interests assigned by this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights (other than any rights it may have pursuant to
Section 14.8 of the Credit Agreement which will survive) and be released from
its obligations under the Credit Agreement (and, in the case of an assignment of
all or the remaining portion of the Assignor's rights and obligations under the
Credit Agreement, the Assignor shall cease to be a party to the Credit
Agreement).
2. The Assignor represents and warrants to the Assignee that (i) it is
the legal and beneficial owner of the interest being assigned hereby free and
clear of any adverse claim and (ii) it is legally authorized to enter into this
Assignment and Acceptance.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of North Carolina.
4. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
(e) Revolving Credit Commitment
of Assignee after Assignment $
------
127
(f) Revolving Credit Commitment Percentage
of Assignee after Assignment %
------
(g) Revolving Loans of Assignee after Assignment $
------
(h) Revolving Credit Commitment
of Assignor after Assignment $
------
(i) Revolving Credit Commitment Percentage
of Assignor after Assignment %
------
(j) Revolving Loans of Assignor after Assignment $
------
The terms set forth above
are hereby agreed to:
, as Assignor
---------------------------
By:
----------------------------------
Title:
-------------------------------
, as Assignor
---------------------------
By:
----------------------------------
Title:
-------------------------------
CONSENTED TO:
FIRST UNION COMMERCIAL CORPORATION,
as Agent
By:
----------------------------------
Title:
-------------------------------
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EXHIBIT C
FORM OF SOLVENCY CERTIFICATE
The undersigned treasurer of [name of Borrower] ("______"), a
_________________, is familiar with the properties, businesses, assets and
liabilities of [name of Borrower] and is duly authorized to execute this
certificate on behalf of [name of Borrower].
Reference is made to that Credit Agreement dated as of June 9, 1998
among Fresh Foods, Inc. and [certain Subsidiary Borrowers] (the "Borrowers"),
First Union Commercial Corporation, as Agent (the "Agent"), and the lenders from
time to time parties thereto (the "Lenders") (as the same may be amended,
modified, extended or restated from time to time, the "Credit Agreement"). All
capitalized terms used and not defined herein have the meanings stated in the
Credit Agreement.
1. The undersigned certifies that he has made such investigation and
inquiries as to the financial condition of [name of Borrower] as he deems
necessary and prudent for the purpose of providing this Certificate. The
undersigned acknowledges that the Agent and the Lenders are relying on the truth
and accuracy of this Certificate in connection with making of the Revolving
Loans under the Credit Agreement.
2. The undersigned certifies that the financial information,
projections and assumptions which underlie and form the basis for the
representations made in this Certificate were reasonable when made and were made
in good faith and continue to be reasonable as of the date hereof.
BASED ON THE FOREGOING, the undersigned certifies that, both before and
after giving effect to the Revolving Loans:
A. [Name of Borrower] and its Subsidiaries, on a consolidated basis,
are able to pay their debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course
of business.
B. [Name of Borrower] and its Subsidiaries, on a consolidated basis, do
not intend to, and do not believe that they will, incur debts or
liabilities beyond their ability to pay as such debts and liabilities
mature in their ordinary course.
C. [Name of Borrower] and its Subsidiaries, on a consolidated basis,
are not engaged in any business or transaction, and are not about to
engage in any business or transaction, for which the assets of [name of
Borrower] and its Subsidiaries, on a consolidated basis, would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which [name of Borrower] and
its Subsidiaries are engaged or are to engage.
D. The present fair saleable value of the consolidated assets of [name
of Borrower] and its Subsidiaries, taken on a going concern basis, is
not less than the amount that will be required to pay the probable
liability on the debts of [name of Borrower] and its Subsidiaries, on a
consolidated basis, as they become absolute and matured.
129
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of June, 1998, in his capacity as the treasurer of [name of Borrower].
-------------------------------------
Name: [name of Treasurer]
Title: Treasurer of [name of Borrower]
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130
STATE OF ______________ )
)
COUNTY OF _____________ )
VERIFICATION
The undersigned, being first duly sworn, deposes and says that he is
the treasurer of [name of Borrower], a ________________, that he has read the
foregoing and to his personal knowledge the matters and statements contained
therein are true and accurate.
This the ____ day of June, 1998.
----------------------------
Sworn to and subscribed before
me this ___ day of June, 1998.
----------------------------------
Notary Public
My Commission Expires:
----------------------------------
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EXHIBIT D
FORM OF LANDLORD LIEN WAIVER AGREEMENT
Drawn by and return to:
Xxxxx & Xxx Xxxxx, PLLC (_____)
000 Xxxxx Xxxxx Xx., 00xx Xxxxx
Xxxxxxxxx, X. C. 28202-4003
THIS LANDLORD LIEN WAIVER AGREEMENT (the "Agreement") is entered as of
this <> by and between ______________________, a _________________ (the
"Landlord"), the owner of certain real property, buildings and improvements
located in _______________, and First Union Commercial Corporation, in its
capacity as agent (the "Agent") for itself and the other lenders (the "Lenders")
providing revolving credit and letter of credit facilities to Fresh Foods, Inc.
and certain other borrowing entities (collectively, the "Borrowers") pursuant to
that certain Credit Agreement dated as of June 9, 1998 (as it may be amended
from time to time, the "Credit Agreement").
RECITALS:
1. The Lenders have agreed to provide the Borrowers with credit
facilities (the "Loans") up to an aggregate amount of $75,000,000 under the
terms and conditions of the Credit Agreement. The Borrowers have secured the
repayment of the Loans inter alia by granting the Agent, for the ratable benefit
of the Lenders, a first priority security interest in all of the Borrowers'
accounts receivable, general intangibles, patents, trademarks and inventory,
whether now owned or hereafter acquired, including without limitation, all raw
materials, work-in-process, finished goods, packaging materials and all other
materials and supplies of any nature related thereto, and all proceeds of any of
the foregoing (collectively, the "Collateral").
2. ____________________ has assumed lease obligations with respect to
the Premises (as hereinafter defined) for the purpose of storing and warehousing
the Collateral.
3. As a condition to extending the Loans, the Lenders and the Agent
have requested the Borrowers to obtain, and cause Landlord to provide,
Landlord's waiver and subordination all of its rights as a lessor against any of
the Collateral for so long as the Loans remain outstanding. Landlord has agreed
to execute this Agreement upon request by the Borrowers.
NOW, THEREFORE, in consideration of the foregoing, and the mutual
benefits accruing to the Agent and Landlord as a result of the credit facilities
provided by the Lenders, the sufficiency and receipt of such consideration being
hereby acknowledged, the parties hereto agree as follows:
1. For so long as any of the Loans remain outstanding, Landlord hereby
waives, releases, and quitclaims in favor of the Agent and each and every party
now or hereafter participating as a Lender under the Credit Agreement all rights
that Landlord, or its successors and assigns, may now or hereafter have to a
lien, claim, charge or encumbrance of any kind or nature, arising by statute,
contract, common law or otherwise, relating to the storage of the Collateral at
any premises owned or controlled by Landlord (the "Premises").
2. For so long as any of the Loans remain outstanding, Landlord hereby
agrees that the liens and security interests existing in favor of the Agent, for
the ratable benefit of each and every party now or hereafter participating as a
Lender under the Credit Agreement, shall be prior and superior to (i) any and
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132
all rights of distraint, levy, and execution which Landlord may now or hereafter
have against the Collateral, (ii) any and all liens and security interests which
Landlord may now or hereafter have on and in the Collateral, and (iii) any and
all other rights, demands and claims of every nature whatsoever which Landlord
may now or hereafter have on or against the Collateral for any rent, storage
charge, or similar expense, cost or sum due or to become due Landlord by any of
the Borrowers under the provisions of any lease, storage agreement or otherwise,
and Landlord hereby subordinates all of its foregoing rights and interests in
the Collateral to the security interest of the Agent in the Collateral.
3. Upon notice from the Agent that a default or event of default has
occurred under the Credit Agreement, Landlord agrees that the Agent or its
delegates or assigns may enter upon the Premises at any time or times, during
normal business hours, to inspect or remove the Collateral, or any part thereof,
from the Premises, without charge. The Agent shall repair or pay reasonable
compensation to Landlord for damage, if any, to the Premises caused by the
removal of Collateral.
4. Landlord represents and warrants: (a) that it has not assigned its
claims for payment, if any, nor its right to perfect or assert a lien of any
kind whatsoever against the Inventory; (b) that it has the right, power and
authority to execute this Agreement; (c) that it holds legal title to the
Premises. Landlord further agrees to provide the Agent with prompt written
notice in the event that Landlord sells the Premises, or any portion thereof
where any of the Borrowers stores any Collateral; and (d) that it is not aware
of any breach or default by _____________________ of its lease obligations with
respect to the Premises.
5. This Agreement shall continue in effect during the term of the
Credit Agreement, and any extensions, renewals or modifications thereof and any
substitutions therefor, shall be binding upon the successors, assigns and
transferees of Landlord, and shall inure to the benefit of the transferees of
Landlord, and shall inure to the benefit of the Agent, each Lender, and their
respective successors and assigns. Landlord hereby waives notice of the Agent's
acceptance of and reliance on this Agreement.
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133
IN WITNESS WHEREOF, Landlord and the Agent have each caused this
Agreement to be duly executed by their respective authorized representatives as
of the date first above written.
FIRST UNION COMMERCIAL CORPORATION,
as Agent for the Lenders
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
[LANDLORD] '
---------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Acknowledged and Agreed:
, as Lessee
--------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
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EXHIBIT E
FORM OF PLEDGE AGREEMENT
135
EXHIBIT F
FORM OF SECURITY AGREEMENT
136
EXHIBIT G
FORM OF REVOLVING NOTE
$ [DATE]
----------------
FOR VALUE RECEIVED, the undersigned, FRESH FOODS, INC., a North Carolina
corporation (the "Company") and ________________________ (the "Subsidiary
Borrower") (hereinafter, the Company and the Subsidiary Borrower collectively
referred to as the "Borrowers" or individually referred to as a "Borrower"),
jointly and severally promise to pay to the order of [Payee Lender] (the
"Lender") at c/o First Union Commercial Corporation, as Agent for the Lender,
One First Union Center, 000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000 in lawful money of the United States of America and in
immediately available funds, the principal amount of _____________ Million
Dollars ($____________), or such lesser amount as may then constitute the unpaid
aggregate principal amount of all Revolving Loans made by the Lender to the
Borrowers pursuant to the Credit Agreement (as defined below), at the times set
forth in the Credit Agreement, but no later than the Maturity Date.
The Borrowers further agree to jointly and severally pay interest at said
office, in like money, on the unpaid principal amount owing hereunder from time
to time outstanding from the date of disbursement on the dates and at the rates
specified in Article 4 of the Credit Agreement.
This promissory note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of June 9, 1998 (together with all modifications, renewals
or replacements, the "Credit Agreement"), among the Borrowers, the Lender,
certain other financial institutions parties thereto, and First Union Commercial
Corporation, as agent ("Agent"), and is subject to, and entitled to, all
provisions and benefits thereof and is subject to optional and mandatory
prepayment in whole or in part as provided therein. Capitalized terms used
herein without definition shall have the meanings given to such terms in the
Credit Agreement. The Credit Agreement, among other things, provides [after
giving effect to the Assignment and Acceptance executed by the Lender and [name
of assigning Lender] as of the date hereof]1 for the making of Revolving Loans
by the Lender to the Borrowers from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above mentioned.
Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement which have not been cured by the Borrowers or waived by the
Agent at the direction of the Required Lenders, the Agent shall, upon the
written, telecopied or telex request of the Required Lenders, and by delivery of
written notice to the Borrowers from the Agent, take any or all of the following
actions, without prejudice to the rights of the Agent, the Lender or any holder
of this promissory note to enforce its claims against the Borrowers: (a) declare
all Obligations due hereunder to be immediately due and payable (except with
respect to any Event of Default set forth in Section 11.1(e) of the Credit
Agreement, in which case all Obligations due hereunder shall automatically
become immediately due and payable without the necessity of any notice or other
demand) without presentment, demand, protest or any other action or obligation
of the Lender; and (b) immediately terminate the Credit Agreement and the
Revolving Credit Commitments thereunder.
-------
(1) To be used for replacement Revolving Notes.
137
This promissory note is secured by security agreements and other collateral
documents dated as of June 9, 1998 [and re-evidences the indebtedness
outstanding on the date hereof with respect to the Revolving Loans which
indebtedness has been assigned to the Lender pursuant to Section 14.6 of the
Credit Agreement].2
The Borrowers hereby waive presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS PROMISSORY NOTE
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NORTH CAROLINA WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
FRESH FOODS, INC.
By:
---------------------------------
Title:
------------------------------
[SUBSIDIARY BORROWER]
By:
---------------------------------
Title:
------------------------------
-------
(2) To be used for replacement Revolving Notes.
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138
EXHIBIT H
FORM OF NOTICE OF BORROWING
_________, 199__
First Union Commercial Corporation
as Agent for the Lenders
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: [________________]
Ladies and Gentlemen:
The undersigned, Fresh Foods, Inc., a North Carolina corporation (the
"Company"), on behalf of itself and on behalf of the other borrowing entities
parties to the Credit Agreement, dated as of June 9, 1998, among the Company,
such other Borrowers, certain financial institutions parties thereto, and First
Union Commercial Corporation, as agent (together with all modifications,
renewals or replacements, the "Credit Agreement"; capitalized terms used herein
shall have the meanings given such terms in the Credit Agreement), hereby gives
you notice, irrevocably, pursuant to Section 2.1(d) of the Credit Agreement that
the Company hereby requests, on behalf of the Borrowers, borrowings under the
Credit Agreement, and in that connection sets forth below the information
relating to such borrowings (the "Proposed Borrowings") as required by Sections
2.1(d) of the Credit Agreement:
------------------------------------------------------------------------------------------------------------------
Interest Interest
Borrower Date of Borrowing Amount Rate Period
------------------------------------------------------------------------------------------------------------------
Company $101,616,559.03 N/A
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
The requested funds shall be made available to the following accounts
in the amounts set forth below:
The Company hereby certifies, on behalf of the Borrowers, that the
following statements are true on the date hereof, and will be true on the date
of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in each other document executed in connection therewith are true
and correct in all material respects before and after giving effect to the
Proposed Borrowings and to the application of the proceeds therefrom, as though
made on and as of such date, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date);
(B) no event has occurred and is continuing, or would result from such
Proposed Borrowings or from the application of the proceeds therefrom, which
constitutes a Default or an Event of Default;
(C) all of the other conditions to the Proposed Borrowings set forth in
Article 5 of the Credit Agreement have been fulfilled; and
(D) the Proposed Borrowings satisfy all limitations set forth in the
Credit Agreement (including, without limitation, availability under the
Borrowing Base).
139
If notice of this Proposed Borrowing has been given previously by
telephone, then this notice should be considered a written confirmation of such
telephone notice as required by Section 2.1(d) of the Credit Agreement.
FRESH FOODS, INC.
By:
---------------------------------
Title:
------------------------------
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140
EXHIBIT I
FORM OF LOCKBOX AGREEMENT
This Lock Box Agreement is made as of the ____ day of ______________,
19__, by and among [Borrower], a ________________ corporation (the "Borrower"),
First Union Commercial Corporation, as agent (the "Agent"), and [Lockbox Bank]
(the "Bank").
WHEREAS, the Agent and certain financial institutions ("Lenders") have
entered into a Credit Agreement, dated as of June 9, 1998 (together with all
modifications, renewals or replacements, the "Credit Agreement"), with the
Borrower and certain other borrowing entities; and
WHEREAS, to secure its obligations under the Credit Agreement, the
Borrower has granted the Lenders a security interest in, inter alia, its present
and future accounts receivable, and all proceeds thereof and the Borrower has
agreed that all collections and proceeds of such accounts receivable shall be
remitted in kind to the Agent; and
WHEREAS, in order to provide for a more efficient and faster collection
and deposit of said collections and proceeds the Agent and the Borrower desire
to use the lock box service of the Bank; and
WHEREAS, the Bank is willing to provide said service for the Borrower
and the Agent commencing as of ___________________,
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Post Office Box. The Bank will rent P.O. Box _______ (the "Lock
Box") of the post office located at in the name of the Borrower. Customers of
the Borrower have been, or will be, instructed to mail their remittances to the
Lock Box.
2. Access to Mail. Subject to the provisions contained elsewhere
herein, the Bank will have exclusive and unrestricted access to the Lock Box and
will have complete and exclusive authority to receive, pick up and open all
regular, registered, certified or insured mail addressed to the Lock Box. On
written demand of the Agent, the Bank shall cease its processing of said mail,
and shall release same, in kind, to the Agent, and the Agent shall thereafter
process said mail promptly in accordance with this Agreement. The Bank shall not
inquire into the Agent's right to make such a demand under any agreement among
the Agent, the Lenders and the Borrower, and shall be forever released of all
obligations with respect to said remittances upon release to the Agent. The
Borrower shall have no control whatsoever over any mail, checks, money orders,
collections or other forms of remittances received in the Lock Box except as
aforesaid. Appropriate instructions have been, or will be, given by the Bank to
the United States Post Office where the Lock Box is maintained, and such
instructions shall not be revoked without the prior written consent of the
Agent. Any instruction given to the Bank by the Borrower without the prior or
concurrent written agreement of the Agent shall be void and of no force or
effect. All mail addressed to the Lock Box will be picked up by the Bank
according to its regular collection schedule.
3. Remittance Collection. On the day received the Bank will open all
mail addressed to the Lock Box and remove and inspect the enclosures. All
checks, money orders and other forms or orders for the payment of money and
other collection remittances (hereinafter collectively referred to as "checks")
shall be processed by the Bank as follows:
-1-
141
a. Missing Date. All undated checks will be dated by the Bank
as of the postmark date and processed as hereafter provided.
b. Postdated. Checks postdated up to three days from date of
receipt shall be processed on the date indicated on the check. The Bank shall
not deposit checks postdated more than three days and which are in excess of
$______________, but shall notify the Agent by telephone of such checks and
follow the Agent's instructions for disposition of such checks.
c. Stale Date. The Bank shall notify the Agent of checks dated
six months or more prior to the date of collection and which exceed $__________.
The Agent may, in its reasonable discretion, require that any such checks be
forwarded promptly to the Agent.
d. Different Amount. Where written and numeric amounts differ,
a check will be processed by the Bank only if the correct amount can be
determined from the accompanying documents; otherwise the check will not be
deposited and, if any such check is for an amount in excess of $________, it
shall be sent to the Agent.
e. Signature Missing. Checks which do not bear the drawer's
signature and do not indicate the drawer's identity will not be deposited. If,
as determined by the Bank, the drawer can be identified from the face of the
check, the Bank will deposit and process the check by affixing a stamped
impression requesting the drawer bank to contact the drawer for authority to
pay. The Bank shall notify the Agent of any checks in excess of $____________
which cannot be deposited pursuant to this clause (e).
f. Alterations and Restrictions. Checks with alterations and
checks bearing restrictive notations such as "Payment in Full" will not be
deposited, and the Bank shall notify the Agent of such checks which exceed
$_________________ by telephone on the day of receipt and will deposit, hold or
forward such checks with accompanying written matter, if any, as requested by
the Agent.
g. Foreign Banks and Currency. Checks drawn in foreign
currency will be processed in accordance with the Bank's normal procedure for
such checks and the Agent will be notified by advice of any such checks which
exceed $_______________ on the date received by the Bank.
h. Other Items. Any items which the Agent has specifically
instructed the Bank in writing not to process will not be deposited and shall be
sent to the Agent.
Notwithstanding anything to the contrary contained in this Agreement,
the Bank shall have no obligation to perform services on a basis any different
than it performs lockbox services in the normal course of business, except with
respect to receiving instructions from the Agent rather than the Borrower.
4. Processing Acceptable Checks. All checks, except those not
acceptable for deposit under the terms of this Agreement, shall be deposited on
the day of receipt by the Bank to Account No. ______________________ (the
"Depository Account"), and all such checks shall be endorsed as follows:
credited to account number ________________: absence of
endorsement hereby supplied and guaranteed by [Lock Box Bank]
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142
Any funds in the Depository Account will be wired on a daily
basis with the following instructions:
First Union Commercial Corporation
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn:
Account No.______________
For the account of the Borrower
; provided, however, that no funds shall be required to be wired unless and
until the amount of funds in the Depository Account shall be in excess of an
aggregate of $1000, unless the Agent shall, in its sole discretion, otherwise
instruct the Bank.
All remittance advices, envelopes, and written matter (except as expressly
provided herein) received in the Lock Box together with photocopies of all
checks shall be sent to the Borrower and, if requested by the Agent, copies of
same shall be sent to the Agent. The Bank shall mail a statement of account, on
a monthly basis, to both the Agent and the Borrower. If no deposit is made on a
bank business day, a deposit advice, correctly dated, will be sent to the Agent
and the Borrower with the notation "No Deposit" appearing thereon. In addition,
the Bank shall indicate by telephone to the Agent on each Bank business day by
2:30 P.M. (Eastern time zone) the amount of each day's deposit total. The
Depository Account shall be opened and established by the Borrower for the
benefit of the Agent on behalf of the Lenders and shall be subject to the terms
and provisions of the Credit Agreement and Security Agreement (as such term is
defined in the Credit Agreement). Neither the Bank nor the Borrower shall have
the right to withdraw funds from the Depository Account, except that the Bank
may make such debits therefrom as provided in Section 5 hereof.
5. Returned Checks. Checks deposited in the Depository Account which
are returned unpaid because of "Insufficient Funds," "Uncollected Funds," etc.
will be redeposited by the Bank only once, except that if a returned check
exceeds $1,000 the Bank shall not redeposit such check but shall telephone the
Agent for further instructions on the day such check is received. If redeposit
is not warranted for reasons such as "account closed" or "payment stopped" or if
a check is returned a second time, the Bank will charge the Depository Account
and send a debit advice with the item to the Agent with copies of same to the
Borrower.
6. Remittance Received by the Borrower. Remittances which are sent
directly to or received by the Borrower shall be forwarded to the Lock Box on
the day received.
7. Record Maintenance. All deposit checks will be microfilmed (on front
and back) by the Bank and retained for five years by the Bank prior to
destruction. Photocopies of filmed items will be provided to the Agent or the
Borrower on request, within the five-year period.
8. Bank Charges. All charges of the Bank for services rendered pursuant
to this agreement shall be billed to and paid directly by the Borrower. Said
charges shall not be charged against remittances nor shall they be debited to
the Depository Account.
9. No Offset. The Bank hereby agrees that it will treat all remittances
received in the Lock Box in accordance with the terms of this agreement. The
Bank will not offset or assert any claim against the Lock Box or the Depository
Account or divert such remittances on account of any obligations owed to the
Bank by the Borrower or by the party making the remittance, except as provided
in Section 5 hereof.
10. Bank Liability. In acting under this agreement the Bank shall not
be liable to the Agent, the Lenders or the Borrower for any error of judgment,
or for any act done or step taken or omitted by it in good faith, except for
gross negligence or willful misconduct.
-3-
143
11. Term. This Agreement shall continue in full force and effect until
termination by the Bank on 60 days' prior written notice to all other parties.
The Agent may terminate this Agreement at any time which termination shall be
effective on receipt of written notice by the Bank and in the event of such
termination, the Agent shall at its option have the sole right to remove mail
from the Lock Box. The Borrower shall have no right to unilaterally terminate
this Agreement.
12. Modification. This Agreement may only be modified by a writing
signed by all of the parties hereto.
13. Addresses.
a. All notices, including phone notice, any daily deposit
advices, monthly statements of account and copies of all checks and the
documents which are to be given or sent to the Agent shall be sent to the
following address, and, where applicable, given at the following phone number:
First Union Commercial Corporation
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention:
Telephone:
Telecopier:
b. All notices to the Bank shall be sent to:
[Bank]
------------------------------
------------------------------
------------------------------
Attention:
Telephone:
Telecopier:
-4-
144
c. All notices and items which are to be sent to the Borrower
shall be sent to:
[Borrower]
------------------------------
------------------------------
------------------------------
Attention:
Telephone:
Telecopier:
14. Agent Agreement.
The Agent agrees that it will indemnify and hold the Bank harmless from
any and all loss, liability, expense or damage that the Bank may incur in
processing lockbox items in accordance with this Agreement, including, without
limitation, any loss that the Bank experiences as a result of returned items to
the extent the balances in the Depository Account referenced in paragraph 4 are
insufficient to cover such losses or in the event the balances in such
Depository Account are insufficient to cover the Bank charges referenced in
paragraph 8.
15. Limitation on Liability.
The Agent and the Borrower acknowledge that the Bank undertakes to
perform only such duties as are expressly set forth in this Agreement and those
which are normally undertaken by the Bank in connection with lockbox processing.
Notwithstanding any other provision of this Agreement, it is agreed by the
parties that the Bank shall not be liable for any action taken by the Bank or
any of its directors, officers, agents (including specifically the Borrower and
any of its directors, officers, agents or employees) or employees in accordance
with this Agreement, except for the Bank's or such natural person's gross
negligence or willful misconduct. In no event shall the Bank be liable for
losses or delays resulting from force majeure, computer malfunction,
interruption of communication facilities, labor difficulties or other causes
beyond its reasonable control or for any indirect, special or consequential
damages.
-5-
145
This Agreement shall become effective upon its receipt by the Agent,
properly executed by all of the parties hereto.
FIRST UNION COMMERCIAL CORPORATION
By:
-------------------------------
Title:
[LOCKBOX BANK]
By:
-------------------------------
Title:
[BORROWER]
By:
-------------------------------
Title:
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146
EXHIBIT J
FORM OF NOTICE OF EXTENSION/CONVERSION
___________, 199__
First Union Commercial Corporation,
as Agent for the Lenders
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: [_______________]
Ladies and Gentlemen:
The undersigned, Fresh Foods, Inc., a North Carolina corporation (the
"Company"), on behalf of itself and the other borrowing entities parties to the
Credit Agreement, dated as of June 9, 1998, among the Company, such other
Borrowers, certain financial institutions parties thereto, and First Union
Commercial Corporation, as agent (together with all modifications, renewals or
replacements, the "Credit Agreement"; capitalized terms used herein shall have
the meanings given such terms in the Credit Agreement). The Company, on behalf
of the Borrowers, hereby gives you notice, irrevocably, pursuant to Section 2.10
of the Credit Agreement that the Borrowers hereby request extensions and/or
conversions under the Credit Agreement, and in that connection set forth below
the information relating to such extensions and/or conversions (the
"Extensions/Conversions") as required by Sections 2.10 of the Credit Agreement:
------------------------------------------------------------------------------------------------------------------
Interest Interest
Borrower Date of Borrowing Amount Rate Period
------------------------------------------------------------------------------------------------------------------
Company $101,616,559.03 N/A
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
The Company, on behalf of the Borrowers, hereby certifies that the
following statements are true on the date hereof, and will be true on the date
of the Extension/Conversion:
(A) the representations and warranties contained in the Credit
Agreement and in each other document executed in connection therewith are true
and correct in all material respects before and after giving effect to the
Extensions/Conversions and to the application of the proceeds therefrom, as
though made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and accurate
on and as of such earlier date);
(B) no event has occurred and is continuing, or would result from such
Extensions/Conversions or from the application of the proceeds therefrom, which
constitutes a Default or an Event of Default;
(C) all of the other conditions to the Extensions/Conversions set forth
in Article 2 of the Credit Agreement have been fulfilled; and
(D) the Extensions/Conversions satisfy all limitations set forth in the
Credit Agreement (including, without limitation, availability under the
Borrowing Base).
If notice of these Extensions/Conversions has been given previously by
telephone, then this notice should be considered a written confirmation of such
telephone notice as required by Section 2.10 of the Credit Agreement.
147
FRESH FOODS, INC.
By:
-----------------------------------
Title:
--------------------------------
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148
EXHIBIT K
FORM OF COMPLIANCE CERTIFICATE
[Letterhead of Company]
____________, 199__
First Union Commercial Corporation,
as Agent for the Lenders
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
I hereby certify to you as follows:
(a) I am the duly elected [Title] of Fresh Foods, Inc., a North
Carolina corporation (the "Company"). Capitalized but undefined terms used in
this Certificate shall have the meanings assigned to them in the Credit
Agreement, dated as of June 9, 1998 (together with all modifications, renewals
or replacements, the "Credit Agreement"), among the Company, certain other
borrowing entities parties thereto (together with the Company, the "Borrowers"),
the financial institutions parties thereto, and you, as Agent.
(b) I have reviewed the terms of the Credit Agreement, and have made,
or have caused to be made under my supervision, a review in reasonable detail of
the transactions and the condition of the Borrowers during the immediately
preceding [month] [fiscal quarter] [fiscal year].
(c) The review described in paragraph (b) above did not disclose the
existence during or at the end of such period, and I have no knowledge of the
existence as of the date hereof, of any condition or event which constitutes a
Default or an Event of Default, except as hereinafter set forth. Described in a
separate attachment to this Certificate are (i) detailed calculations
demonstrating compliance by the Borrowers with the financial covenants contained
in Section 8 of the Credit Agreement and (ii) the exceptions, if any, to this
paragraph (c) (listing, in detail, the nature of the condition or event, the
period during which it has existed and the action which the Company or
applicable Borrower has taken, is taking, or proposes to take with respect to
such condition or event).
I further certify that, based on the review described in paragraph (b)
above, neither the Company, any other Borrower nor any of the Subsidiaries at
any time during or at the end of such period, except as specifically described
in paragraph (k) below, did any of the following:
(d) Changed its respective corporate name, or transacted business under
any trade name, style, or fictitious name, other than those previously described
to you and set forth in the Credit Agreement.
(e) Changed the location of its chief executive office, or changed the
location of or disposed of any of its assets (other than as permitted under the
Credit Agreement) or established any new inventory locations.
149
(f) Changed its capital structure (other than as permitted under the
Credit Agreement).
(g) Materially changed the terms upon which it sells goods (including
sales on consignment) or provides services, nor has any vendor or trade supplier
to any of the Borrowers during or at the end of such month decreased the terms
upon which it supplies goods to any of such Borrowers.
(h) Permitted or suffered to exist any Liens or encumbrances on any of
its properties, whether real or personal, other than as specifically permitted
in the Credit Agreement.
(i) Received any notices of any kind from any federal, state or local
agency, tribunal or other authority regulating or having responsibility for any
environmental matters.
(j) Became aware of, obtained knowledge of, or received notification
of, any breach or violation of any material covenant contained in any instrument
or agreement in respect of indebtedness for money borrowed by any of the
Borrowers or any of the Subsidiaries.
(k) [List exceptions, if any, to paragraphs (d) through (j) above].
I further certify that Herth Management, Inc. is not in default or in
arrears under any of its indebtedness which is secured by any of the Company's
capital stock.
The foregoing certifications are made and delivered this ____ day of
___________, 199__.
Very truly yours,
FRESH FOODS, INC.
By:
-----------------------------------
Title:
-------------------------------
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150
Schedule A
[set forth evidence of compliance with financial covenants showing the
calculations therefor in reasonable detail]
-3-
151
EXHIBIT L
FORM OF BORROWING BASE CERTIFICATE
152
EXHIBIT M
FORM OF BORROWER JOINDER AGREEMENT
THIS BORROWER JOINDER AGREEMENT (the "Agreement"), dated as of , 19__,
is by and between ____________ , a ____________(the "Applicant Borrower"), and
FIRST UNION COMMERCIAL CORPORATION, in its capacity as Agent (the "Agent") under
that certain Credit Agreement (as amended and modified, the "Credit Agreement")
dated as of June 9, 1998 by and among Fresh Foods, Inc., a North Carolina
corporation and certain related borrowing entities (the "Borrowers"), the
Lenders party thereto and the Agent. All of the defined terms in the Credit
Agreement are incorporated herein by reference.
The Applicant Borrower has indicated its desire to become a Borrower
pursuant to the terms of the Credit Agreement.
Accordingly the Applicant Borrower hereby agrees as follows with the
Agent, for the benefit of the Lenders:
1. The Applicant Borrower hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Applicant Borrower will be deemed
to be a party to the Credit Agreement and a "Borrower" for all purposes of the
Credit Agreement and the other Credit Documents, and shall have all of the
obligations of a Borrower thereunder as if it has executed the Credit Agreement
and the other Credit Documents. The Applicant Borrower hereby ratifies, as of
the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Credit Agreement and in the Credit Documents,
including without limitation (i) all of the representations and warranties of
the Credit Parties set forth in Section 6 of the Credit Agreement, as
supplemented from time to time in accordance with the term thereof, and (ii) all
of the affirmative and negative covenants set forth in Sections 7, 8, and 9 of
the Credit Agreement.
2. The Applicant Borrower hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Applicant Borrower will be deemed
to be a party to the Security Agreement, and shall have all the obligations of
an "Obligor" (as such term is defined in the Security Agreement) thereunder as
if it had executed the Security Agreement. The Applicant Borrower hereby
ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Security Agreement. Without limiting
generality of the foregoing terms of this paragraph 2, the Applicant Borrower
hereby grants to the Agent, for the benefit of the Lenders, a continuing
security interest in, and a right of set off against any and all right, title
and interest of the Applicant Borrower in and to the Collateral (as such term is
defined in Section 2 of the Security Agreement) of the Applicant Borrower.
3. The Applicant Borrower hereby acknowledges, agrees and confirms
that, by its execution of this Agreement, the Applicant Borrower will be deemed
to be a party to the Pledge Agreement, and shall have all the obligations of a
"Pledgor" thereunder as if it had executed the Pledge Agreement. The Applicant
Borrower hereby ratifies, as of the date hereof, and agrees to be bound by, all
the terms, provisions and conditions contained in the Pledge Agreement. Without
limiting the generality of the foregoing terms of this paragraph 3, the
Applicant Borrower hereby pledges and assigns to the Agent, for the benefit of
the Lenders, and grants to the Agent, for the benefit of the Lenders, a
continuing security interest in any and all right, title and interest of the
Applicant Borrower in and to Pledged Stock (as such term is defined in Section 1
of the Pledge Agreement) and the other Collateral (as such term is defined in
Section 1 of the Pledge Agreement).
153
4. The Applicant Borrower acknowledges and confirms that it has
received a copy of the Credit Agreement and the schedules and exhibits thereto,
the Pledge Agreement and the schedules and exhibits thereto and the Security
Agreement and the schedules and exhibits relating thereto. The information on
the Schedules to the Credit Agreement, the Pledge Agreement and the Security
Agreement are amended to provide the information shown on the attached Schedule
A.
5. Fresh Foods, Inc. confirms that all of its and its Subsidiaries'
obligations under the Credit Agreement are, and upon the Applicant Borrower
becoming a Borrower shall continue to be, in full force and effect. Fresh Foods,
Inc. further confirms that immediately upon the Applicant Borrower becoming a
Borrower the term "Obligations", as used in the Credit Agreement, shall include
all Obligations of such Applicant Borrower under the Credit Agreement and under
each other Credit Document.
6. The Applicant Borrower hereby agrees that upon becoming a Borrower
it will assume all Obligations of a Borrower as set forth in the Credit
Agreement. By its execution of this Agreement, the Applicant Borrower appoints
each of __________________, [title] and _________________, [title], of Fresh
Foods, Inc., to be its attorneys ("its Attorneys") and in its name and on its
behalf and as its act and deed or otherwise to sign all documents and carry out
all such acts as are necessary or appropriate in connection with executing any
Notice of Borrowing, Notice of Extension/Conversion or any Borrowing Base
Certificate or any security documents (the "Documents") in connection with the
Credit Agreement, provided that such Documents are in substantially the form
provided therefor in the applicable exhibits thereto. This Power of Attorney
shall be valid for the duration of the term of the Credit Agreement. The
Applicant Borrower hereby undertakes to ratify everything which either of its
Attorneys shall do in order to execute the Documents mentioned herein.
7. Each of Fresh Foods, Inc. and the Applicant Borrower agrees that at
any time and from time to time, upon the written request of the Agent, it will
execute and deliver such further documents and do such further acts and things
as the Agent may reasonably request in order to effect the purposes of this
Agreement.
8. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
9. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Applicant Borrower has caused this Borrower
Joinder Agreement to be duly executed by its authorized officers, and the Agent,
for the benefit of the Lenders, has caused the same to be accepted by its
authorized officer, as of the day and year first above written.
<>
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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FRESH FOODS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
FIRST UNION COMMERCIAL CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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SCHEDULE A
to
Borrower Joinder Agreement
Schedules to Credit Agreement
-----------------------------------
(to be updated as necessary)
Schedule 1(b) to Security Agreement
-----------------------------------
Intellectual Property
Schedule 3(a) to Security Agreement
-----------------------------------
Chief Executive Office
Schedule 3(b) to Security Agreement
-----------------------------------
Location of Collateral
Schedule 3(c) to Security Agreement
-----------------------------------
Mergers, Consolidations, Changes in
Structure or Use of Tradenames
Schedule 1 to Pledge Agreement
-----------------------------------
Pledged Stock
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EXHIBIT N
FORM OF MORTGAGEE LIEN WAIVER
MORTGAGEE WAIVER
[DEBTOR OWNED REAL ESTATE]
WHEREAS, FIRST UNION COMMERCIAL CORPORATION (the "Agent"), has or is
about to enter into certain financing agreements with FRESH FOODS, INC., a North
Carolina corporation (the "Company") and [SUBSIDIARY BORROWER] (the "Subsidiary
Borrower") pursuant to which the Agent has been or may be granted a security
interest in any or all of [Company's] [Subsidiary Borrower's] personal property
including, but not limited to, [Company's] [Subsidiary Borrower's] inventory
(hereinafter "Personal Property") and,
WHEREAS, the Personal Property has or may become affixed to or be
located on, wholly or in part, the certain real estate located at
___________________________________, the legal description of which is (include
metes and bounds, lot and block, range and section):
SEE EXHIBIT A ANNEXED HERETO AND MADE A PART HEREOF
(hereinafter "Premises") and,
WHEREAS, the undersigned has an interest in the Premises as mortgagee,
NOW, THEREFORE, in consideration of any financial accommodation
extended by the Agent to [Company] [Subsidiary Borrower], at any time, and other
good and valuable consideration, the undersigned agrees as follows:
(a) That it waives and relinquishes any lien, all rights of levy or
distraint, security interest or other interest the undersigned may now or
hereafter have in any of the Personal Property;
(b) That the Personal Property may be installed in or located on the
Premises and the undersigned agrees that the Personal Property is not and shall
not be deemed a fixture or part of the real estate but shall at all times be
considered personal property;
(c) That it disclaims any interest in the Personal Property and agrees
to assert no claim to the Personal Property while [Company] [Subsidiary
Borrower] is indebted to Lenders;
(d) That Lenders or their representatives may enter upon the Premises
at any time to inspect or remove the Personal Property, and may advertise or
conduct a public or private auction thereon;
(e) That Lenders, at their option, may enter the Premises for the
purpose of repossessing, removing, selling or otherwise dealing with said
Personal Property, and such license shall be irrevocable and shall continue
without charge from the date Lenders enter the Premises for as long as Lenders
deem necessary but not to exceed a period of 90 days after the receipt by
Lenders of written notice by the undersigned directing removal of the Personal
Property. Lenders may, subsequent to the 90 day period, remain on said Premises
for an additional period not to exceed 180 days at a rental equal to the
interest owed the undersigned by the [Company] [Subsidiary Borrower] relating to
such Premises (at the rate prior to any default by the [Company] [Subsidiary
Borrower]), prorated on a per diem basis to be
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determined on a 30 day month, without incurring any other obligations of
[Company] [Subsidiary Borrower];
(f) The undersigned agrees to give notice in writing by certified or
registered mail of any default by [Company] [Subsidiary Borrower] of any of the
provisions of the mortgage or deed of trust upon the premises held by the
undersigned, as the case may be to:
Agent: First Union Commercial Corporation
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: [__________]
Telephone: (704) [_______]
Facsimile: (704) [_______]
Upon receipt of said notice, Lenders shall thereupon have the right, but not the
obligation, to cure said default within any cure period available to [Company]
[Subsidiary Borrower], and within 10 days thereafter. Any payment made or act
done by Lenders to cure any such default shall not constitute an assumption of
any obligations of [Company] [Subsidiary Borrower].
This waiver may not be changed or terminated orally and is binding upon the
undersigned and the heirs, personal representatives, successors and assigns of
the undersigned and inures to the benefit of the Lenders and the successors and
assigns of Lenders.
Dated this ___ day of June, 1998.
WITNESSED BY: MORTGAGEE:
----------------------------------
By:
-------------------------------
Title:
----------------------------
Address:
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CORPORATE ACKNOWLEDGMENT
STATE OF
------------------------
COUNTY OF
----------------------
Personally appeared before me, the undersigned a Notary Public in and
for said State and County aforesaid, _____________________________, who
acknowledged himself to be, the __________________________________ of
_____________________, a corporation and as such officer duly authorized and
empowered to execute the above instrument for and on behalf of the said
corporation for the consideration, uses and purposes therein specified.
WITNESS my hand and Notarial Seal at office this ___ day of June, 1998.
-----------------------------------
NOTARY PUBLIC
My Commission Expires:
---------------------
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SCHEDULE 1.1A
LENDERS AND COMMITMENTS
REVOLVING
REVOLVING CREDIT LETTER OF
CREDIT COMMITMENT CREDIT
LENDER COMMITMENT PERCENTAGE COMMITMENT
------ ---------- ---------- ----------
First Union Commercial $22,500,000 30.00001% $3,000,000
Corporation
American National Bank & $17,500,000 23.33333%
Trust Company
National City Bank $17,500,000 23.33333%
NationsBank, N.A. $17,500,000 23.33333%
TOTAL $75,000,000 100.00000% $3,000,000
160
SCHEDULE 1.1B
CLOSING CONDITIONS
The obligation of each Lender to make Revolving Loans and/or of the Issuing Bank
to issue Letters of Credit shall be subject to the satisfaction, on or prior to
the Closing Date, of the following conditions precedent:
1. Executed Credit Documents. Receipt by the Agent of duly executed
copies of:
(a) this Credit Agreement;
(b) the Revolving Notes;
(c) the Security Documents; and
(d) all other Credit Documents,
each in form and substance acceptable to the Lenders in their sole
discretion.
2. Corporate Documents. Receipt by the Agent of the following:
(a) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of each Borrower certified to be true
and complete as of a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation and certified by a
secretary or assistant secretary of such Borrower to be true and correct as of
the Closing Date.
(b) Bylaws. A copy of the bylaws of each Borrower certified by a
secretary or assistant secretary of such Borrower to be true and correct as of
the Closing Date.
(c) Resolutions. Copies of resolutions of the Board of Directors of
each Borrower approving and adopting the Credit Documents to which it is a
party, the transactions contemplated therein and authorizing execution and
delivery thereof, certified by a secretary or assistant secretary of such
Borrower to be true and correct and in force and effect as of the Closing Date.
(d) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to each Borrower certified as of a
recent date by the appropriate governmental authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in which the failure
to so qualify and be in good standing could reasonably be expected to have a
Material Adverse Effect and (ii) to the extent available, a certificate
indicating payment of all corporate franchise taxes certified as of a recent
date by the appropriate governmental taxing authorities.
(e) Incumbency. An incumbency certificate of each Borrower certified
by a secretary or assistant secretary to be true and correct as of the Closing
Date.
3. Financial Statements. Receipt by the Agent and the Lenders of the
financial statements and the accountants' unqualified opinion and management
letter prepared in connection therewith described in Section 6.6 of the Credit
Agreement and such other information relating to the Borrowers as the Agent may
reasonably require in connection with the structuring and syndication of credit
facilities of the type described herein. The Borrowers shall certify as of the
Closing Date that such financial statements have been prepared in accordance
with the books and records of the Borrowers and fairly
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present in all material respects the financial condition of each of the
Borrowers (including the Pierre Foods Division) at the dates thereof and the
results of operations for the periods indicated (subject, in the case of
unaudited financial statements, to normal year-end adjustments and the absence
of footnote disclosures ), and such financial statements have been prepared in
conformity with GAAP consistently applied throughout the periods involved.
4. Opinions of Counsel. Receipt by the Agent of an opinion, or opinions
(which shall cover, among other things, authority, legality, validity, binding
effect, enforceability and attachment and perfection of liens), satisfactory to
the Agent, addressed to the Agent and the Lenders and dated the Closing Date,
from legal counsel to the Borrowers.
5. Environmental Reports. Receipt by the Agent in form and substance
satisfactory to it of the environmental assessment reports and related documents
prepared in connection with the Real Estate.
6. Personal Property Collateral. The Agent shall have received:
(a) searches of Uniform Commercial Code filings in the jurisdiction
of the chief executive office of each Borrower and each jurisdiction where any
Collateral is located or where a filing would need to be made in order to
perfect the Agent's security interest in the Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens;
(b) duly executed UCC financing statements for each appropriate
jurisdiction as is necessary, in the Agent's sole discretion, to perfect the
Agent's security interest in the Collateral;
(c) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright filings as
requested by the Agent in order to perfect the Agent's security interest in the
Collateral;
(d) all stock certificates evidencing the Capital Stock pledged to
the Agent pursuant to the Pledge Agreement, together with duly executed in blank
undated stock powers attached thereto;
(e) such patent/trademark/copyright filings as requested by the
Agent in order to perfect the Agent's security interest in the Collateral;
(f) all instruments and chattel paper in the possession of any of
the Borrowers, together with allonges or assignments as may be necessary or
appropriate to perfect the Agent's security interest in the Collateral to the
extent required under the Security Agreement; and
(g) duly executed consents as are necessary, in the Agent's sole
discretion, to perfect the Lenders' security interest in the Collateral.
7. Real Property Collateral. Receipt by Lender of the following:
a. Fully executed and notarized mortgages, deeds of trust or deeds
to secure debt (each, as the same may be amended, modified, restated or
supplemented from time to time, a and collectively the "Mortgage
Instruments") encumbering the fee interest of Borrowers in each real
property asset designated in Schedule 6.19 (each a "Mortgaged Property"
and collectively the "Mortgaged Properties".
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162
b. A title report obtained by Borrower in respect of each of the
Mortgaged Properties.
c. Lender shall have received, and the title insurance company
issuing the title policies (the "Title Insurance Company") shall have
received, maps or plats of an as-built survey of the sites of the real
property covered by the Mortgage Instruments certified to Lender and the
Title Insurance Company in a manner reasonably satisfactory to each of
Lender and the Title Insurance Company, dated a date reasonably
satisfactory to Lender and the Title Insurance Company by an independent
professional licensed land surveyor, which maps or plats and the surveys
on which they are based shall be made in accordance with standards that
enable the Title Insurance Company to issue the title policies without
exception for "Survey matters", except for matters as are reasonably
acceptable to Lender.
d. ALTA mortgagee title insurance policies issued by Chicago Title
Insurance Company (the "Mortgage Policies"), in amounts not less than the
respective amounts designated in Schedule 6.19 with respect to any
particular Mortgaged Property, assuring Lender that each of the Mortgage
Instruments creates a valid and enforceable first priority mortgage lien
on the applicable Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Liens, which Mortgage Policies shall be in
form and substance reasonably satisfactory to Lender and shall provide for
affirmative insurance and such reinsurance as Lender may reasonably
request, all of the foregoing in form and substance reasonably
satisfactory to Lender.
e. Evidence, which may be in the form of a letter from an insurance
broker or a municipal engineer, as to whether (i) any Mortgaged Property
(a "Flood Hazard Property") is in an area designated by the Federal
Emergency Management Agency as having special flood or mud slide hazards
and (ii) the community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program.
f. If there are any Flood Hazard Properties, Borrower's written
acknowledgment of receipt of written notification from Lender (i) as to
the existence of each such Flood Hazard Property and (ii) as to whether
the community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program.
g. Evidence satisfactory to Lender that each of the Mortgaged
Properties, and the uses of the Mortgaged Properties, are in compliance in
all material respects with all applicable laws, regulations and ordinances
including without limitation health and environmental protection laws,
erosion control ordinances, storm drainage control laws, doing business
and/or licensing laws, zoning laws (the evidence submitted as to zoning
should include the zoning designation made for each of the Mortgaged
Properties, the permitted uses of each such Mortgaged Property under such
zoning designation and zoning requirements as to parking, lot size,
ingress, egress and building setbacks) and laws regarding access and
facilities for disabled persons.
h. Duly executed UCC fixture financing statements for each Mortgaged
Property to be filed in the appropriate jurisdiction as is necessary, in
Lender's sole discretion, to perfect Lender's lien on such Mortgaged
Property.
i. Real estate appraisals for each Mortgaged Property satisfactory
in form and substance to the Agent.
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8. Priority of Liens. The Agent shall have received satisfactory evidence
that (a) the Agent, on behalf of the Lenders, holds a perfected, first priority
Lien on all Collateral (subject to clause (b)) and (b) none of the Collateral is
subject to any other Liens other than Permitted Liens.
9. Equipment Appraisals. The Agent shall have received and approved
appraisals of the Equipment prepared by each of the appraisers listed on
Schedule 1.1(G) to the Credit Agreement. ------
10. Opening Borrowing Base Certificate. Receipt by the Agent of a
Borrowing Base Certificate as of the Closing Date, substantially in the form of
Exhibit L, certified by the chief financial officer of the Company to be true
and correct as of the Closing Date and demonstrating availability of Loans
permitted to be borrowed under the Credit Agreement, after giving effect to the
Acquisition of the Pierre Foods Division and the Loans made on the Closing Date,
of at least $17,000,000.
11. Evidence of Insurance. Receipt by the Agent of copies of insurance
policies or certificates of insurance of the Borrowers evidencing liability and
casualty insurance meeting the requirements set forth in the Credit Documents,
including, but not limited to, naming the Agent as loss payee on behalf of the
Lenders and as additional insured.
12. Corporate Structure. The corporate capital and ownership structure of
the Company and its Subsidiaries shall be as described in Schedule 6.9.
13. Subordinated Debt. (a) the Company shall have issued the Subordinated
Debt and such which shall contain subordination provisions satisfactory to the
Agent, (b) the Agent shall have received a copy, certified by an officer of the
Company as true and complete, of the indenture governing the Subordinated Debt
as originally executed and delivered, and no amendment or modification thereof
shall have been entered into on or prior to the Closing Date which shall not
have been approved by each of the Lenders and (c) the Borrowers shall have
received gross cash proceeds from the issuance of the Subordinated Debt in an
aggregate principal amount of $100,000,000.
14. Consents. Receipt by the Agent of evidence that all governmental,
shareholder and third party consents and approvals, if any, required in
connection with the financings and other transactions contemplated by the Credit
Agreement and expiration of all applicable waiting periods without any action
being taken by any authority that could restrain, prevent or impose any material
adverse conditions on such transactions or that could seek or threaten any of
the foregoing, and no law or regulation shall be applicable which in the
judgment of the Agent could have such effect.
15. Litigation. There shall not exist any pending or threatened action,
suit, investigation or proceeding against a Borrower that could reasonably be
expected to have a Material Adverse Effect.
16. Other Indebtedness. Receipt by the Agent of evidence that, after
giving effect to the making of the Revolving Loans made on the Closing Date, the
Borrowers shall have no Funded Indebtedness other than the Indebtedness under
(a) the Credit Documents, and (b) the Subordinated Debt.
17. Solvency Certificate. Receipt by the Agent of an officer's certificate
for each Borrower prepared by the chief financial officer of each such Borrower
as to the financial condition, solvency and related matters of each such
Borrower, in each case after giving effect to the initial borrowings under the
Credit Documents, in substantially the form of Exhibit C hereto.
18. Officer's Certificates. The Agent shall have received a certificate or
certificates executed by an Executive Officer of the Company as of the Closing
Date stating that (a) each Borrower is in compliance with all existing financial
obligations, (b) all governmental, shareholder and third party
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164
consents and approvals, if any, with respect to the Credit Documents and the
transactions contemplated thereby have been obtained, (c) no action, suit,
investigation or proceeding is pending or threatened in any court or before any
arbitrator or governmental instrumentality that purports to affect any Borrower
or any transaction contemplated by the Credit Documents, if such action, suit,
investigation or proceeding could reasonably be expected to have a Material
Adverse Effect, (d) the transactions contemplated by the Separation Agreement
have been consummated in accordance with the terms thereof and (e) immediately
after giving effect to this Credit Agreement, the other Credit Documents and all
the transactions contemplated therein to occur on such date, (i) each of the
Borrowers is solvent, (ii) no Default or Event of Default exists, (iii) all
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (iv) the Borrowers
are in compliance with each of the financial covenants set forth in Section 8.
19. Fees and Expenses. Payment by the Borrowers of all fees and expenses
owed by them to the Lenders and the Agent, including, without limitation,
payment to the Agent of the fees set forth in the Fee Letter.
20. Sources and Uses; Payment Instructions. Receipt by the Agent of (a) a
statement of sources and uses of funds covering all payments reasonably expected
to be made by the Company in connection with the transactions contemplated by
the Credit Documents to be consummated on the Closing Date, including an
itemized estimate of all fees, expenses and other closing costs and (b) payment
instructions with respect to each wire transfer to be made by the Agent on
behalf of the Lenders or the Company or the Subsidiary Borrower on the Closing
Date setting forth the amount of such transfer, the purpose of such transfer,
the name and number of the account to which such transfer is to be made, the
name and ABA number of the bank or other financial institution where such
account is located and the name and telephone number of an individual that can
be contacted to confirm receipt of such transfer.
21. Purchase Agreement. There shall not have been any material
modification, amendment, supplement or waiver to the Purchase Agreement without
the prior written consent of the Agent, including, but not limited to, any
modification, amendment, supplement or waiver relating to the amount or type of
consideration to be paid in connection with the Acquisition of the Pierre Foods
Division and the contents of all disclosure schedules and exhibits, and the
Acquisition of the Pierre Foods Division shall have been consummated in
accordance with the terms of the Purchase Agreement (without waiver of any
conditions precedent to the obligations of the buyer thereunder). The Agent
shall have received the final Purchase Agreement, together with all exhibits and
schedules thereto, certified by an officer of the Company.
22. Year 2000 Compliance. Receipt by the Agent of the Company's plan to
assure that its computer-based systems will be able to operate and effectively
process data including dates on and after January 1, 2000.
23. Regulatory Compliance. Receipt by the Agent of copies of the Company's
licenses from applicable federal, state and local regulatory agencies.
24. Other. Receipt by the Lenders of such other documents, instruments,
agreements or information as reasonably requested by any Lender, including, but
not limited to, information regarding litigation, tax, accounting, labor,
insurance, pension liabilities (actual or contingent), real estate leases,
material contracts, debt agreements, property ownership and contingent
liabilities of the Borrowers.
The documents referred to in this Schedule shall be delivered to the Agent
and the Lenders no later than the Closing Date. The certificates and opinions
referred to in this Schedule shall be dated the Closing Date and shall be
satisfactory in all material respects to the Agent and the Lenders.
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SCHEDULE 1.1C
LIENS
Lienor Equipment
------ ---------
Waldorf Corporation One (1) Adco Cavity Load Cartoner
Two (2) Waldorf Hot Melt Midget Sealers
One (1) Adco Top Loading Cartoner
Refco Investments Inc. Two (2) Waldorf Xxxxxxx Cartoners
The Catawba County Industrial Facilities and Pollution Control Financing
Authority $4,000,000 1992 Industrial Revenue Bond (WSMP, Inc. Project), First
Union National Bank of North Carolina, Trustee, with a balance of $2,352,132.43,
will be paid in full at closing, but the lien will not be released for up to 30
days after payoff.
The following are liens of record which may apply to Pierre Foods, LLC assets
and which will be released post-closing by Tyson Foods, Inc. or Xxxxxx Foods,
Inc., as applicable:
Lienor Equipment
------ ---------
Shawmut Bank N.A. Automatic finished frozen xxxxx xxxxxxx
BOT Financial Corporation Rheon sandwich line
Formax xxxxx forming and shaping plates
IBM Corp. IBM equipment
In addition, all of the lessors with whom the Borrowers have capital leases have
filed security interests in the leased machinery and equipment. See
Schedule 1.1D, Indebtedness.
166
SCHEDULE 1.1D
INDEBTEDNESS
Principal Balance
as of June 9, 1998
------------------
Creditor
--------
Western Steer of North Carolina, Inc. $ 700,000
Davidson Foods, Inc. 100,000
Industrial Revenue Bonds 2,352,132
Capital Lease Lessor
--------------------
CITIF 92,881
Siemens Credit 45,420
Amplicon Financial 227,992
Xxxxxx Foods 29,702
Textron Financial #1 219,086
Textron Financial #2 28,509
Capital Associates 439,456
The Borrowers also have two unsecured letters of credit. See Schedule 1.1H,
Unsecured Letters of Credit.
167
SCHEDULE 1.1E
INVESTMENTS
Money Fund Account with X.X. Xxxxxxxx & Company. Balance as of May 31, 1998 was
$213,874.
168
SCHEDULE 1.1F
CORPORATE STRUCTURE
Fresh Foods, Inc. has begun a project to simplify its corporate
structure and to obtain state tax savings through reorganization.
The Company's structure in the past has been one with all operations in
Fresh Foods, Inc. - food processing, ham-curing and restaurant operations. A
group of 14 subsidiaries (11 of which are wholly owned) was created over the
years by acquisitions and joint ventures and to hold restaurant real estate in
other states.
The reorganization will result in four principal subsidiaries:
1) Pierre Foods, LLC ("Pierre"). Pierre will own the Company's
headquarters and manufacturing facilities and will operate
the Company's Claremont and Cincinnati-based food processing
business.
2) Mom `n' Pop's Country Ham, LLC ("MPCH"). MPCH will operate
the Company's ham-curing business. It will lease the facility
where it conducts its ham-curing operations from Pierre.
3) Claremont Restaurant Group, LLC ("CRG"). CRG will hold the
Company's restaurant properties and operate the Company's
restaurants. All 14 presently-existing subsidiaries will be
merged into CRG.
4) Fresh Foods Properties, LLC ("FFP"). FFP will hold the
Company's manufacturing-related intellectual property and
will license such intellectual property to FFNC and MPCH.
Fresh Foods, Inc. acquired Sagebrush, Inc. and its subsidiaries in
January, 1998. Sagebrush, Inc. has its own state tax-planned corporate
structure. Sagebrush, Inc. owns Virginia restaurant properties and has three
principal restaurant subsidiaries: (1) Sagebrush of South Carolina, LLC, which
owns all South Carolina restaurant properties, (2) Sagebrush of North Carolina,
LLC, which owns all North Carolina restaurant properties, and (3) Sagebrush of
Tennessee, LP, which owns all Tennessee restaurant properties. Sagebrush also
owns Chardent, Inc., a Delaware captive finance corporation, and Spicewood,
Inc., a Delaware corporation which serves as the limited partner of Sagebrush of
Tennessee, LP.
The Company plans to merge Sagebrush, Inc. into CRG, which will result
in its restaurant properties being held as follows:
169
North Carolina Sagebrush restaurants: Sagebrush of North Carolina, LLC
South Carolina Sagebrush restaurants: Sagebrush of South Carolina, LLC
Tennessee Sagebrush restaurants: Sagebrush of Tennessee, LP
Virginia Sagebrush restaurants: CRG
Florida real estate: Fresh Foods, Inc.
Other restaurants and restaurant properties: CRG
The Company anticipates that (i) FFNC and MPCH will issue promissory
notes to Fresh Foods, Inc. as dividends, (ii) upon merger into CRG, the 14
original subsidiaries will issue promissory notes to Fresh Foods, Inc. as
dividends, (iii) the Sagebrush subsidiaries will issue promissory notes to CRG
as dividends, and (iv) Fresh Foods, Inc. and CRG will contribute these
promissory notes as capital to the captive finance company, Chardent, Inc. All
promissory notes will secured by the assets of the entity issuing the notes.
At present, all four proposed subsidiaries of Fresh Foods, Inc. (plus a
fifth, Fresh Foods Sales, LLC) have been formed. The mergers discussed above
have not yet been consummated.
170
[ORGANIZATIONAL CHART OF
FRESH FOODS, INC. AND
SUBSIDIARIES -- OMITTED]
171
SCHEDULE 1.1G
EQUIPMENT APPRAISALS
Machinery and equipment located at Cincinnati facility $6,413,025
Machinery and equipment located at Claremont facility 3,407,615
172
SCHEDULE 1.1H
UNSECURED LETTERS OF CREDIT
1. People's Bank for $450,000
2. People's Bank for $700,000
173
SCHEDULE 6.1
JURISDICTIONS OF ORGANIZATION
States where Qualified to do
State of Business as a Foreign
Entity Organization Corporation or LLC
Brunswick Associates, Inc. Georgia North Carolina
Claremont Restaurant Group, LLC North Carolina None
Elloree Foods, Inc. South Carolina North Carolina
Fresh Foods, Inc. North Carolina None
Fresh Foods Properties, LLC North Carolina None
Georgia Buffet Restaurants, Inc. Georgia North Carolina
Knoxville Foods, Inc. Tennessee North Carolina
Mom `n' Pop's Country Ham, LLC North Carolina None
Oak Ridge Foods, Inc. Tennessee North Carolina
Sagebrush, Inc. North Carolina Virginia, Tennessee
Sagebrush of Sevierville, Inc. Tennessee North Carolina
Sagebrush of Tennessee, LP Tennessee North Carolina
Seven Stars, Inc. Maryland North Carolina
St. Augustine Foods, Inc. Florida North Carolina
Tennessee WSMP, Inc. Tennessee North Carolina
Virginia WSMP, Inc. Virginia North Carolina
Chardent, Inc. Delaware North Carolina
D & S Food Systems, LLC Georgia North Carolina
Pierre Foods, LLC Xxxxx Xxxxxxxx Xxxx, Xxx Xxxxxxxxx
Xxxxxxx WSMP, Inc. Georgia North Carolina
Kingsport Foods, Inc. Tennessee North Carolina
Matthews Prime Sirloin, Inc. North Carolina None
174
Naples Foods, Inc. Florida North Carolina, Georgia
Prime Sirloin, Inc. Tennessee North Carolina
Sagebrush of North Carolina, LLC North Carolina None
Sagebrush of South Carolina, LLC South Carolina North Carolina
Spicewood, Inc. Delaware North Carolina
South Carolina WSMP, Inc. South Carolina North Carolina
Sunshine WSMP, Inc. Florida North Carolina
Tumbleweed of Pigeon Forge, Inc. Tennessee North Carolina
Fresh Foods Sales, LLC North Carolina None
Greenville Foods Systems, North Carolina None
Incorporated
Sagebrush DTN, Inc. Tennessee North Carolina
175
SCHEDULE 6.7
COLLATERAL LOCATIONS
(i) The name and address of each warehouseman, filler, processor and packer
at which Pierre Foods, LLC stores Inventory is as follows:
Name Address
---- -------
Cincinnati Freezer 0000 X. Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Buckles Warehouse Ohio 00000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Cicom/Cincinnati Commercial CS Unknown
Cloverleaf Cold Storage 0000 Xxxxxxxx Xxx
Xxxxxxxxx, XX 00000-0000
CS Integrated LLC 0000 Xxxxxxx Xxxxx
Xxxx, XX 00000
CS Integrated LLC 000 Xxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000-0000
XX Cold Storage Xxxxxxxx 0000 Xxxxx 00xx Xxxxxx
Xxxxx, XX 00000
CS Integrated LLC 0 Xxx Xxxxxxxxx
Xxxxxxx, XX 00000
Wash. Whslrs 000 Xxxxxxxx Xxxxxxxxxx
Xxxxxxxx, XX 00000
Costco Whlsle Consignment Center 0000 Xxxx. Xxxxxxxxxx Xxxxx, #00
Xxxxxxx Xxxxx, XX 00000
XX Cold Storage/Xxxxxx Xxxx 0000 Xxxx Xxxx Xxx
Xxxxxxxxx, XX 00000
United Refrig. (Westgate)/Xxxx 0000 X. Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Xxxxxxxxx X.X./Xxxx Las Vegas 000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 80-14
176
Trenton Cold Storage Limited X.X. Xxx 000
Xxxxxxx Xxxxxxx XX X0X 0X0
K & N Distribution/Price Costco 000 X. X. 0xx
Xxxxxx, XX 00000
Polar Cold Storage 0000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
United Refrigerated/Xxxx Indy 0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Wiscold, Inc./Xxxx Xxxxxxxx 000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Columbia Farms/Price Costco 00 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxx Maryland/Price Costco Rte 000 X. Xxxxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Xxx D.C.S./Oregon Commodity 0000 Xxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Nordic C.S./Price Costco 000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Mirlo/Washington Wholesales 00000 Xxxxxxxxx Xx. xX'
Xxxx Xxxx, XX 00000
C & S Wholesale Grocers/BJ's Xxx Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Commodity/Surplus District 00 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
United Refrig./Xxxx Xxxxxxxx XX #0 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
PFS Miami/Cost-U-Less 000 XX 000xx Xxxxxx
Xxxxx, XX 00000
Interstate Distribution 000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
000
XXX Xxxx Xxxxxxxxxx X.X. Xxx 0000
Xxxx Xxxxxxxxxx, XX 00000
Security Capital Industrial Trust 0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
The name and address of each warehouseman, filler, processor and
packer at which Fresh Foods, Inc. stores Inventory is as follows:
Polar Cold Storage 0000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
(ii) The chief executive offices of all Borrowers and Subsidiaries are
located at Xxx XXXX Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000.
(iii) The books and accounts of the Borrowers and each of their Subsidiaries
are kept at Xxx XXXX Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000. Pierre
Foods, LLC also maintains books and accounts at 0000 Xxxxxxxxx Xxxx,
Xxxxxxxxxx, XX 00000.
Also see Schedule 6.19, Real Estate for a listing of additional
jurisdictions in which the Borrowers and its Subsidiaries have assets, equipment
and inventory.
178
SCHEDULE 6.8
FICTITIOUS BUSINESS NAMES
Mom `n' Pop's
Mom `n' Pop's Smokehouse
Mom `n' Pop's Buffet & Bakery
Mom `n' Pop's Country Biscuits
Mom `n' Pop's Retail Outlets
Mom `n' Pop's Country Collections
Mom `n' Pop's Racing
Mom `n' Pop's Ham House
Mom `n' Pop's Bakery
Mom `n' Pop's Bakery - WSMP, Inc.
Mom `n' Pop's Bakery #18
Mom `n' Pop's Country Ham
Western Steer Family Steakhouse
Western Steer Steaks, Buffet & Bakery
WSMP, Inc.
WSMP, Inc. #9
WSMP, Inc. #18
WSMP, Inc. - Manufacturing
WSMP/Mom `n' Pop's
WSMP - Smokehouse Division
WSMP, Inc. DBA - Mom `n' Pop's Smokehouse
Xxxxxxx'x Smokehouse & Saloon
Xxxxxxx'x Barbeque
Xxxxxxx'x Pit Bar-B-Que
Xxxxxxx'x
Xxxxxxx'x Catering
Prime Sirloin Steak & Buffet
Prime Sirloin Steaks, Buffet & Bakery
Prime Sirloin
Prime Sirloin of (location)
Western Steer Mom `n' Pop's
Mom's Kitchen
WSMP Real Estate
Sagebrush
Sagebrush Steakhouse & Saloon
179
Pierre Foods, LLC used the following names prior to its acquisition by Fresh
Foods, Inc:
Xxxxxx Foods
Pierre Frozen Foods, a division of Xxxxxx Foods
Xxxxxx Specialty Foods
Xxxxxx
Xxxxxx
Pierre Foods
180
SCHEDULE 6.9
SUBSIDIARIES
Brunswick Associates, Inc.
Claremont Restaurant Group, LLC
Elloree Foods, Inc.
Fresh Foods Properties, LLC
Georgia Buffet Restaurants, Inc.
Knoxville Foods, Inc.
Mom `n' Pop's Country Ham, LLC
Oak Ridge Foods, Inc.
Sagebrush, Inc.
Sagebrush of Sevierville, Inc.
Sagebrush of Tennessee, LP
Seven Stars, Inc.
St. Augustine Foods, Inc.
Tennessee WSMP, Inc.
Virginia WSMP, Inc.
Chardent, Inc.
D & S Food Systems, LLC
Pierre Foods, LLC
Georgia WSMP, Inc.
Kingsport Foods, Inc.
Xxxxxxxx Prime Sirloin, Inc.
Naples Foods, Inc.
Prime Sirloin, Inc.
Sagebrush of North Carolina, LLC
Sagebrush of South Carolina, LLC
Spicewood, Inc.
South Carolina WSMP, Inc.
Sunshine WSMP, Inc.
Tumbleweed of Pigeon Forge, Inc.
Fresh Foods Sales, LLC
Greenville Food Systems, Incorporated
Sagebrush DTN, Inc.
181
SCHEDULE 6.10
LITIGATION
None
182
SCHEDULE 6.14
ERISA
Fresh Foods Employee Health Plan
WSMP Flexible Benefits Plan
Fresh Foods Employee Stock Purchase Plan
WSMP 401(k) Profit Sharing Plan
Pierre Foods 401(k) Profit Sharing Plan
Pierre Foods Life Insurance AD&D Plan
Pierre Foods Short and Long-Term Disability Plan
Pierre Foods Business Travel Insurance Plan
Xxxxxx Foods Employee Health, Medical and Dental Plan
183
SCHEDULE 6.15
ENVIRONMENTAL DISCLOSURES
1. Prior to 1996, the Claremont facility was subject to surcharges for its
level of BODs in discharges to a municipal sewer. The facility
installed sewage pretreatment equipment to prevent such discharges.
2. The Pierre facility, in accordance with its county-issued industrial
pretreatment permit, is currently paying a surcharge of approximately
$67,000 per year for its level of BODs in discharge of waste water to a
municipal sewer.
184
SCHEDULE 6.17
INTELLECTUAL PROPERTY
Registration Issue
Trademark Type No. Date
--------- ------- ------------- --------
Breakfast on the Go! federal 2,005,805 10/08/96
Cafe Pierre federal 1,876,055 01/24/95
Cafeteria Adventures federal 1,797,362 10/05/93
Commodity Magic federal 1,331,238 04/16/85
Dine `n With federal 1,912,699 08/15/95
Fast Choice federal 2,052,455 04/15/97
French Toast Boat federal 1,554,935 09/05/89
French Toast Boat & Design federal 1,626,155 12/04/90
Global Grill federal 2,112,383 11/11/97
GoldDiggers federal 1,121,101 06/26/79
Hot Diggity Subs federal 1,388,435 04/01/86
Hot Diggity Subs & Design federal 1,387,648 03/25/86
Lean Magic federal 1,677,773 03/03/92
Like Mom's & Design federal 1,517,327 12/20/88
Link-N-Dog federal 1,917,400 09/05/95
Micro-Wiches federal 1,505,035 09/20/88
Pierre & Design state (Ohio) TM7315 05/22/86
Pierre Classics federal 2,052,456 04/15/97
Pierre Main Street Diner federal 2,016,292 11/12/96
Pizza Parlor Sandwich federal 1,270,140 03/13/84
Pizza Parlor Sandwich federal 1,642,199 04/23/91
Pizza Parlor Sub federal 1,926,623 10/10/95
Quick-Wiches federal 1,784,320 07/27/93
Rib-B-Q federal 1,257,730 11/15/83
Rib-B-Q federal 1,270,954 03/20/84
Rib-B-Q federal 1,598,832 05/29/90
Rib-B-Q & Design federal 1,276,424 05/01/84
Rib-B-Q & Design federal 1,275,419 04/24/84
Rib-B-Q & Design foreign (Canada) 305,056 07/19/85
Rib-B-Q foreign (Canada) 305,055 07/19/85
Saus-A-Rage federal 1,928,706 10/17/95
Tastes of the World Logo (copyright) VA613-418 12/16/93
Two-Fers federal 1,505,013 09/20/88
Two-Fers federal 1,599,764 06/05/90
Villa Cinti federal 1,772,497 05/18/93
Wonderbites federal 1,781,595 07/13/98
185
Registration Issue
Trademark Type No. Date
--------- ------- ------------- --------
Mom `n' Pop's Buffet & Bakery and Design federal 1,802,454 11/02/93
Western Steer Steaks Buffet Bakery
and Design federal 1,773,290 05/25/93
Western Steer Family Retaurant
and Design federal 1,674,648 02/04/92
Western Steer and Design federal 1,626,425 12/04/90
Mom `n' Pop's Country Store and
Restaurant federal 1,460,268 10/06/87
Mom `n' Pop's Country Store and
Restaurant federal 1,460,250 10/06/87
All-American Food Bar federal 1,436,858 04/14/87
For an All-American Family Meal federal 1,428,857 02/10/87
Western Steer Family Steakhouse federal 1,403,394 07/29/86
Western Steer federal 1,391,171 04/22/86
Mom `n' Pop's and Design federal 1,346,951 07/02/85
Mom `n' Pop's and Design federal 1,346,950 07/02/85
Steer and Design federal 1,384,755 02/25/86
Design Only federal 1,333,815 04/30/85
Steerburger federal 1,343,067 06/18/85
Super Stuffed federal 1,364,706 10/08/85
Western Steer Family Steakhouse and
Design federal 1,322,741 02/26/85
Mom `n' Pop's and Design federal 1,341,238 06/11/85
Mom `n' Pop's and Design federal 1,335,749 05/14/85
Mom `n' Pop's federal 1,341,236 06/11/85
`Fluffy' and Design federal 1,272,996 04/03/84
Xxxxxx Xxxxxxx the Western Steer
WS and Design federal 1,179,634 11/24/81
Design Only federal 1,214,411 10/26/82
Waltzing Matilda federal 1,165,051 08/11/81
Mom's Kitchen federal 1,146,516 01/27/81
Mom `n' Pop's and Design federal 1,095,528 07/04/78
Mom `n' Pop's and Design federal 1,095,364 07/04/78
Mom `n' Pop's federal 1,065,988 05/17/77
Mom `n' Pop's federal 1,071,065 08/09/77
Western Steer Family Steakhouse federal 1,068,735 06/28/77
Fast Choice federal 2,152,895 [need date]
Rib-B-Q and Design federal 2,132,710 [need date]
Sagebrush Steakhouse & Saloon federal 1,743,755 12/29/92
[Others from Xxxx Xxxxxxxxx]
186
Application Serial
Pending Trademark Applications Type Date No.
------------------------------ ---- ----------- -------
H.E.L.P.S. Healthcare Entree
Low Prep Selections federal 11/19/97 75/392520
Pierre & Design foreign (Mexico)
Pierre foreign (Mexico)
Rib-B-Q & Design foreign (Japan) 34095/89
Rib-B-Q & Design foreign (Mexico)
Rib-B-Q foreign (Japan) 34094/89
Rib-B-Q foreign (Mexico)
Boomerang federal 06/14/90 75-119,119
Quick Classics federal 02/26/90 74-032,512
Patents:
--------
Exclusive, royalty-free, worldwide and perpetual patent license to be granted by
Xxxxxx Foods, Inc. on June 9, 1998 in the invention entitled "Process for
Preparing Pureed Meat Products" set forth in an application for United States
Letters Patent, Serial No. 08/959,485 recorded in the U.S. Patent and Trademark
Office on October 10, 1997, and which was assigned to Xxxxxx Foods, Inc. by
Assignment dated October 16, 1997 recorded in the U.S. Patent and Trademark
Office on October 28, 1997 at Reel/Frame: 8806/0691.
Copyrights:
-----------
Registration Registration
Title Type No. Date
----- ---- ------------ ------------
Western Steer Steaks, Buffet,
Bakery: Operations Manual federal Txu618984 08/11/94
Cafeteria Adventures Tastes of
the World Logo federal VA613418 12/16/93
Tastes of the World Promotion
Program: Manager's Kit federal TX3738877 12/27/93
Cafeteria Adventures Radical
Chicken federal VA528350 10/08/92
Cafeteria Adventures Stars &
Stripes General federal VA528349 10/08/92
Cafeteria Adventures Hamburger Man federal VA528348 10/08/92
Cafeteria Adventures Stars & Stripes
Promotion Program federal TX3421700 10/08/92
Cafeteria Adventures Rock `n Roll
Promotion Program federal TX3421699 10/08/92
Cafeteria Adventures Radical
Promotion Program federal TX3421698 10/08/92
187
Barnyard Basics of Good
Nutrition Questions and Answers federal XX0000000 08/07/92
Barnyard Basics of Good
Nutrition Hunch-Out Toys federal VA524973 08/07/92
Today's Nutritious Lunch:
It's Barnyard Bonus Day! federal VA519990 08/07/92
Barnyard Scene Bulletin Board
Display: Barnyard Basics of
Good Nutrition federal VA519989 08/07/92
Barnyard Basics of Good
Nutrition: For Grades 1 & 2:
Educator's Guide federal TX3380555 08/07/92
Barnyard Basics of Good
Nutrition: For Grades 1 & 2:
Educator's Guide federal XX0000000 04/02/92
188
SCHEDULE 6.19
REAL ESTATE
Owned Properties:
-----------------
Property Address City State Zip
-------- ------- ---- ----- ---
Claremont manufacturing facility Xxx XXXX Xxxxx Xxxxxxxxx XX 00000
Cincinnati manufacturing facility 0000 Xxxxxxxxx Xxxx Xxxxxxxxxx XX 00000
Western Steer #22 0000 Xxxxxx Xxxxx Xxxx., XX Xxxxxxx XX 00000
Western Steer #51 0000 Xxxxxxx Xxxx. Xxxxxx XX 00000
Western Steer #111 000 Xxxxxx Xxxxx Xx. Xxxxxxxxx Xxxx XX 00000
Western Steer #292 000 Xxxx Xxxx Xxxxxxxxx XX 00000
Western Steer #329 000 Xxxxxxx Xxxx Xxxx. Xxxxxx XX 00000
Xxxxxxx'x #345 0000 Xxxxxxxxx Xxxxxx Xxxx Xxxxxxx XX 00000
Prime Sirloin #376 0000 X. X-00 Xxxxxxx Xxxx Xxxxxxxxx XX 00000
Prime Sirloin #382 00000 X. Xxxxxxxxxxxx Xxxx. Xxxxxxxx XX 00000
Sagebrush #000 000 Xxxxx Xxxx Xxxxxxxxx XX 00000
Sagebrush #000 000 Xxxxx Xxxx Xxxx Xxxxxxxxxxxx XX 00000
Sagebrush #000 0000 Xxxxx Xxxxxxx Xxxxx XX 00000
Sagebrush #000 000 Xx-Xxxx 00 XX Xxxxxxxxx XX 00000
Sagebrush #535 0000 Xxxxxxxx Xxxxx Xx. Xxxx XX 00000
Sagebrush #000 000 Xxxx Xxxxxxxxx Xxxx. X. Xxxxxxxxx XX 00000
Sagebrush #537 0000 Xxxxxx Xxxx Xxxx., XX Xxxxxxx XX 00000
Sagebrush #538 000 Xxxxxxx Xxxx Xxxx., XX Xxxxxx XX 00000
Sagebrush #539 0000 Xxxxx XX 00 Xxxxxxx Xxxxxx XX 00000
Sagebrush #000 000 Xxxxx Xxxx Xxxxx Xxxxx XX 00000
000
Xxxxxxxxx #000 0000 Xxxxxxxxx Xxxxxx Xxxxxxx XX 00000
Sagebrush #000 000 XX 00-00 Xx-Xxxx Xxxx Xxxxxxxxx XX 00000
Sagebrush #547 0000 Xxxxxxx Xxxxx Xxxxxxxxxx XX 00000
Closed Restaurant 0000 00xx Xxxxxx XX Xxxxxxx XX
Closed Restaurant 0000 XX-0 Xx. Xxxxxx XX
Closed Restaurant 0000 XX-0 X Xx. Xxxxxxxxx XX
Closed Restaurant 000 Xxxxxx Xxxx. Xxxxxx XX
Closed Restaurant 0000 Xxxxxx Xxxxxxx Xxxxxxx Xxxxxxxxxx XX
Closed Restaurant 0000 Xxxxxxx Xxxx Xxxx Xxxxxxxxx XX
190
Leased Properties:
------------------
Property Address City State Zip
-------- ------- ---- ----- ---
Western Steer #52 000 XX Xxxx. Xxxxxx XX 00000
Prime Sirloin #377 00000 Xxxxxxxxxxx Xxxx Xxxxxxxxx XX 00000
Prime Sirloin #379 0000 Xxxxxxxxxxxx Xxxx Xxxxxxxxxxx XX 00000
Western Steer #420 00 Xxxxx Xxxx Xxxxxxxxx XX 00000
Western Steer #425 0000 Xxxxxxxx Xxxxxx Xx. Xxxx XX 00000
Western Steer #426 0000 Xxxxxxxxxxx Xxxx Xxxxxxxxxx XX 00000
Western Steer #427 000 X. Xxxx Xxxxxx Xxxxxxxxx XX 00000
Western Steer #000 Xxxxxx 000 & 000 Xxxxxxxxxxx XX 00000
Western Steer #431 000 Xxxxxx Xxxxx Xxxxx XX 00000
Western Steer #433 000 X. Xxxxxxxx Xxxx. Xxxxxxxxxx XX 00000
Western Steer #434 0000 Xxxxxxx Xxxx Xxxx Xxxxx XX 00000
Western Steer #435 0000 X. Xxxxxxxxx Xxxx Xxxxxxx-Xxxxx XX 00000
Sagebrush #507 0000 Xxxxxxx 00, XX Xxxxxxx XX 00000
Sagebrush #000 0000 Xxxxxxx Xxxxxx Xxxxx XX 00000
Sagebrush #000 000 Xxxxxxxxxxx Xxxx Xxxxxxxxxxx XX 00000
Sagebrush #510 000 Xxxxx Xxxxxxxx Xxxxxx Xxx Xxxxx XX 00000
Sagebrush #513 0000 Xxxxxx Xxxxxx, XX Xxxxxxx XX 00000
Sagebrush #514 0000 Xxxxxxx 000 Xxxxx XX 00000
Sagebrush #515 0000 Xxxxxx Xxxx Xxxx Xxxx XX 00000
Sagebrush #516 0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx XX 00000
Sagebrush #000 000 Xxxxxxxxxx Xxxx Xxxxxxxxx XX 00000
Sagebrush #518 0000 Xxxxxxxx Xxxx Xxxxxxx-Xxxxx XX 00000
Sagebrush #519 0000 Xxxxxxxxxx-Xxxxxxxx Xxxx Xxxxxxxx XX 00000
Sagebrush #000 000 Xxxx Xxxxxx Xxxxxxxxxxx XX 00000
000
Xxxxxxxxx #000 000 Xxxx Xxxxxxxxx Xxxxxxx Xxxxxxx XX 00000
Sagebrush #000 000 Xxxxxxx Xxxxxxxxxxx XX 00000
Sagebrush #523 0000 Xxxxxxxxxxxxxx Xxxx Xxxxx XX 00000
Sagebrush #524 0000 Xxxxxxxxxx Xxxxx Xxxxxxxxxx XX 00000
Sagebrush #000 000 X Xxxx Xxxxxxxxx Xxxx. Xxxxxx XX 00000
Sagebrush #526 000 Xxxxxxx Xxxx Xxxxxxxxxx XX 00000
Sagebrush #528 0000 Xxxx Xxxxx Xxxxx Xxxx. Xxxxxxx XX 00000
Sagebrush #000 0000 Xxxxx Xxxx Xxxxxxx Xxxx XX 00000
Sagebrush #530 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx XX 00000
Sagebrush #533 000 Xxxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx Xxxxxxxx Xxxxxxx XX 00000
Sagebrush #534 0000 Xxxx Xxxxxx Xxxx. Xxxxxxxxxx XX 00000
Sagebrush #000 000 X. Xxxx Xxxxx Xxxxxxxxx XX 00000
Sagebrush #000 000 Xxxxxxxx Xxxx. Xxxxxxx XX 00000
Sagebrush #544 000 Xxxxx Xxxx Xxxxxx Xxxxxx XX 00000
Sagebrush #545 0000 Xxxxxxxxxx Xxxxxxx Xxxxxxxxxxxx XX 00000
Sagebrush #000 000 Xxx Xxxx Xxxxxxxxxx XX 00000
Sagebrush #000 000 Xxxxxxxx Xxxx Xxxxxxxx XX 00000
Sagebrush #550 0000 X. Xxxxxx Xxxxxx Xxxxx XX 00000
Sagebrush #551 0000 Xxxx Xxxxxxxxxx Xxxxxx Xxxx XX 00000
Closed restaurant 000 Xxxxxx Xxxxx Xxxxxxxxx XX
Closed restaurant 000 Xxxxxxx 00-00 Xxxxxxx XX
Closed restaurant 0000 X. Xxxxx Xx. Xxxxxxx XX
Closed restaurant 000 X. Xxxx Xx. Xxxxxxxxxxxx XX
Closed restaurant Xxxxx 0 Xxxxxxxxxxxxx XX
Closed restaurant 000 X. Xxx Xxx. Xxxxxxxxxxxx XX
192
SCHEDULE 6.24
TAXES
(a) The Borrowers and Subsidiaries routinely file permitted requests for
extensions for their federal and state tax returns.
(b) The state of North Carolina is currently auditing WSMP, Inc. in
connection with its state income tax returns for the 1992, 1993, 1994
and 1995 tax years. No material liability is expected to result from
such audits.
193
SCHEDULE 6.28
MATERIAL CONTRACTS
1. License Agreement between WSMP, Inc. and Xxxxxx'x Food Systems, Inc.
dated January 30, 1998.
2. License Agreement between WSMP, Inc. and Checkers Drive-In Restaurants,
Inc. dated January 30, 1998.
3. License Agreement between WSMP, Inc. and Rally' Hamburgers, Inc. dated
January 30, 1998.
4. License Agreement between WSMP, Inc. and GB Foods Corp. dated January
30, 1998.
5. Production/Pricing Agreement between WSMP, Inc. and Hormel Company.
6. Procurement Agreement between Fresh Foods, Inc. and Institutional Food
House, Inc. dated May 28, 1998.
7. Management Contract between WSMP, Inc. and HERTH Management, Inc. dated
June 23, 1995, extended by an Extension Agreement dated August 29,
1997.
8. Employment Agreement between WSMP, Inc. and Xxxxx X. Xxxxx dated June
30, 1996 and subsequently amended on February 23, 1998.
9. Employment Agreement between WSMP, Inc. and X. Xxxx Xxxxxx dated
January 29, 1998.
10. Consulting and Noncompetition Agreement between WSMP, Inc. and Xxxxxxx
X. Xxxxxx, Xx. dated January 29, 1998.
11. Employment Agreement between WSMP, Inc. and Xxxxxxx X. Xxxxxxxx dated
February 1998.
The following Material Contracts are to be assigned to Pierre Foods, LLC by
Xxxxxx Foods, Inc. on June 9, 1998:
1. Trademark License Agreement between Xxxxxx Foods, Inc. and Nathan's
Famous dated October 14, 1997.
2. Trademark Agreement between Xxxxxx Foods, Inc. and Sysco Corporation.
3. Custom Manufacturing Agreement between Xxxxxx Foods, Inc. and X.X.
Xxxxx Company dated July 7, 1997.
4. Custom Manufacturing Agreement between Xxxxxx Foods, Inc. and Fairmont
Foods of Minnesota dated March 25, 1997.
5. Custom Manufacturing Agreement between Xxxxxx Foods, Inc. and Suzanna's
Kitchen, Inc. dated August 6, 1997.
6. Master Processing Agreements for the period from July 1, 1998 through
June 30, 1999 between Xxxxxx Foods, Inc. (and variations of such name)
and the following state agencies:
Arkansas Department of Human Services
California Department of Education
Colorado State Department of Human Services
Connecticut DAS Food Distribution Program
Florida Department of Agriculture
Georgia State Board of Education
Idaho Department of Education
Illinois State Board of Education
Kentucky Division of Food Distribution
Louisiana Department of Agriculture and Forestry
Maryland Department of Education
Massachusetts Department of Education
Michigan Department of Education
Missouri Department of Education
Nebraska Health and Human Services
Nevada Department of Administration
New Hampshire Surplus Distribution Section
New Jersey Department of Agriculture
New Mexico Human Services Department
194
New York Office of General Services
Ohio Department of Education
North Carolina Department of Agriculture
Oklahoma Department of Human Services
Oregon Department of Education
Pennsylvania Department of Agriculture
Rhode Island Food Distribution Program
South Carolina Department of Agriculture
Texas Department of Human Services
Wyoming Department of Education
Wisconsin Department of Public Information
Virginia Department of Agriculture
Utah State Office of Education
195
SCHEDULE 6.30
AFFILIATE TRANSACTIONS
None.
196
SCHEDULE 6.31
KEY MEMBERS OF MANAGEMENT
The key members of management of the Borrowers and Subsidiaries are as follows:
Name Position(s) with the Company
---- ----------------------------
Xxxxxxx X. Xxxxxx Chairman of the Board, Fresh Foods, Inc.
Xxxxx X. Xxxxxxxxxx, Xx. Vice Chairman of the Board and Chief Executive Officer,
Fresh Foods, Inc.
Xxxxx X. Xxxxx President and Chief Operating Officer, Fresh Foods, Inc.
Xxxxx X. Xxxxxx Executive Vice President, Chief Financial Officer,
Treasurer and Secretary, Fresh Foods, Inc.
Xxxxxxx X. Xxxxxxxx President, Pierre Foods, LLC
X. Xxxx Xxxxxx President, Claremont Restaurant Group, LLC
Xxxxx X. Xxxxxx President, Mom `n' Pop's Country Ham, LLC
Xxxxxx X. Xxxxxxx Vice President of Finance, Fresh Foods, Inc.
197
SCHEDULE 6.34
RESTAURANT BUSINESS
The Company's restaurant operations are located primarily in smaller
cities and suburban areas in the southeastern United States, a market niche
where the primary competitors are economy steakhouses. At May 1, 1998, the
Company owned and operated 38 Sagebrush steakhouse restaurants, which provide
family-oriented, full-service, casual dining in an atmosphere suggestive of a
Texas roadhouse. The Company also owned and operated 17 Western Steer and five
Prime Sirloin restaurants, which are more mature family steakhouses using the
"buffet and bakery" format, and one Xxxxxxx'x barbecue-style restaurant.
Sagebrush restaurants are the only causal dining steakhouses in a majority of
the local markets in which they operate. The Company intends to convert all but
seven of its family steakhouse restaurants to the Sagebrush concept within two
years based on the historically attractive unit economics of the Sagebrush
format. A typical Sagebrush restaurant generates 44% more revenue and 99% more
EBITDA than a typical Western Steer restaurant. The Company has extensive
experience in converting restaurants to the Sagebrush format as 27 of the
Company's 38 Sagebrush restaurants were originally converted from other
restaurant concepts. Since Fresh Foods acquired Sagebrush, Inc. in January 1998,
the Company has converted three Western Steer restaurants to the Sagebrush
concept and has realized a significant increase in weekly sales volume at these
locations. Other than the restaurants currently being converted and three new
Sagebrush restaurants in development, the company has no plans to build other
Sagebrush restaurants.
198
SCHEDULE 9.3
SALES OF ASSETS
None.
199
SCHEDULE 9.10
BANK ACCOUNTS
WSMP, Inc.
Bank Confirmation Control
For the Year Ended Feb. 27, 1998
===================================================================================================================================
Bank
Corporation Store Name Account
Name # & Address #
-----------------------------------------------------------------------------------------------------------------------------------
WSMP, Inc. 1 HOME OFFICE NationsBank 511242489
X.X. Xxx 00000
000-00
Xxxxxxxxx, XX 00000
WSMP, Inc. Sinking Fund 1 HOME OFFICE NationsBank 510086325
X.X. Xxx 00000
000-00
Xxxxxxxxx, XX 00000
WSMP, Inc. 1 HOME OFFICE Xxxxx Xxx 5800003289
NationsBank
XXX Xxxx X000-0
X X Xxx 00000
Xxxxx,XX 00000
WSMP, Inc. 1 HOME OFFICE Xxxxx Xxx 5800003297
NationsBank
XXX Xxxx X000-0
X X Xxx 00000
Xxxxx,XX 00000
WSMP, Inc. Certificate Deposit 1 HOME OFFICE Bank of Granite 142580
Xx Xxxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
WSMP, Inc. Payroll Acct. 1 HOME OFFICE Peoples Bank 534828745
P O Xxx 000
Xxxxx, XX 00000
200
WSMP, INC. 1 HOME OFFICE Xxxxx Xxx 5800003262
NationsBank
XXX Xxxx X000-0
X X Xxx 00000
Xxxxx,XX 00000
WSMP, INC. 1 HOME OFFICE Xxxxx Xxx 5800003270
NationsBank
XXX Xxxx X000-0
X X Xxx 00000
Xxxxx,XX 00000
WSMP, Inc. 1 HOME OFFICE Peoples Bank 558053356
X X Xxx 000
Xxxxx, XX 00000
WSMP, Inc. 1 HOME OFFICE Peoples Bank 350180751
X X Xxx 000
Xxxxx, XX 00000
WSMP, Inc. 1 HOME OFFICE Peoples Bank 534822052
P O Xxx 000
Xxxxx, XX 00000
WSMP, Inc. Deposit Acct. 1 HOME OFFICE South Trust 60929918
P O Xxx 000000
Xxxxxxxxx, XX 00000
WSMP, Inc. Investment Acct. 1 HOME OFFICE South Trust 60929929
P O Xxx 000000
Xxxxxxxxx, XX 00000
WSMP, Inc. Disbursement Acct 1 HOME OFFICE South Trust 64007168
P O Box 2425
Ft. Xxxxx, XX 00000
201
WSMP, Inc. CD 1 HOME OFFICE Lincoln Bank 0000
X X Xxx 000
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WSMP, Inc. CD 1 HOME OFFICE First Century 6001520
X X Xxx 000
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WSMP, Inc. 1 HOME OFFICE X.X. Xxxxxxxx & Co. 139-84421-
(Western Steer Gift Cert. Acct.) X.X. Xxx 0000 0-0-000
Xxxxxxx, XX 00000
WSMP,Inc. Money Market 1 HOME OFFICE Peoples Bank 534800645
P O Xxx 000
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WSMP, Inc. 1 FRANCHISE PAYROLL Carolina First 1010058546
X X Xxx 0000
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WSMP, Inc. 6 ACCOUNTING SERVICE Carolina First 1010055740
X X Xxx 0000
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WSMP, Inc. 6 ACCOUNTING SERVICE Carolina First 0000000000
X X Xxx 0000
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WSMP, Inc. 17-292- MOM'S KITCH-MORG First Union National Bank 2000000437079
329 W/S MORGANTON X.X. Xxx 000
X/X XXXXXX Xxxxxxx, XX 00000
22 L R BLVD- HICKORY Peoples Bank 53-480076-9
X.X. Xxx 000
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WSMP, Inc. 51 W/S XXXXXX Bank of Granite 1606549
Xx Xxxxxxx
X X Xxx 000
Xxxxxx, XX 00000
202
WSMP, Inc. 51 W/S XXXXXX Centura Bank 0430006525
X X Xxx 0000
Xxxxx Xxxxx, XX 00000
WSMP, Inc. 52 W/S NEWTON Peoples Bank 53-480089-2
X.X. Xxx 000
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WSMP, Inc. 111 W/S XXXXXXXXX CITY First Citizens Bank 000-00-00-000
X.X. Xxx 0000
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WSMP, Inc. 111 W/S XXXXXXXXX CITY B B & T 5115548893
X X Xxx 000
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WSMP, Inc. 000 X/X XXXXXXX XXXX Peoples Bank 534800777
X.X. Xxx 000
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WSMP, Inc. 329 W/S LENOIR Bank of Granite 000-000-0
Xx Xxxxxxx
X.X. Xxx 000
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WSMP, Inc. 331 WSMP SPORTS Peoples Bank 53-482159-1
AFFILIATION X.X. Xxx 000
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WSMP, Inc. 345 XXXXXXX'X CONOVER Peoples Bank 53-481939-7
X.X. Xxx 000
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203
WSMP, Inc. 345 XXXXXXX'X CONOVER Peoples Bank 534826699
BEVERAGE ACCT. X.X. Xxx 000
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WSMP, Inc. 376 PRIME- XXXXX XXXXXX Lincoln Bank 0034185
X X Xxx 000
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WSMP, Inc. 377 PRIME-XXXXXXXXX Xxxxxxx Bank 0034193
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WSMP, Inc. 378 PRIME-ASHEBORO First National Bank & Trust 0000000
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WSMP, Inc. 000 XXXXX - XXXXXXXXXXX Peoples Bank 534822094
X.X. Xxx 000
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WSMP, Inc 379 PRIME - STATESVLLE Centura Bank 097000-317-3
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WSMP, Inc. 420 W/S-LEXINGTON First Union National Bank 2000000581624
X.X. Xxx 000
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WSMP, Inc. 421 W/S-STANLEYVILLE First Citizen's Bank 4851435102
X X Xxx 00000
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WSMP, Inc. 422 W/S-KERNERSVILLE Centura Bank 0402064250
X X Xxx 0000
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204
WSMP, Inc. 000 X/X-XXXXXX Wachovia 1447035020
000 X. Xxxx Xx.
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WSMP, Inc. 424 W/S-ELKIN First Union National Bank 2000000261436
X.X. Xxx 000
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WSMP, Inc. 425 W/S-MT. AIRY First Union National Bank 2000000824763
X.X. Xxx 000
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WSMP, Inc. 000 X/X-XXXXXXXXXX X B & T 0000000000
X X Xxx 0000
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WSMP, Inc. 427 W/S-JEFFERSON First Union National Bank 2000000796325
X.X. Xxx 000
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WSMP, Inc. 428 W/S-YADKINVILLE Central Carolina Bank 00-0000000
X X Xxx 000
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WSMP, Inc. 429 W/S-TOBACCOVILLE First Union National Bank 2000000382085
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WSMP, Inc. 430 W/S-ELIZABETHTON Xxxxxx County Bank 00000
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WSMP, Inc. 431 W/S-GALAX Mountain National Bank 090221130000
X X Xxx 000
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205
WSMP, Inc. 431 W/S-GALAX Bank of Xxxxxxx 160154701
X X Xxx 000
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WSMP, Inc. 432 W/S-WYTHEVILLE First Century Bank 83000283
X X Xxx 000
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WSMP, Inc. 433 W/S-LINCOLNTON Lincoln Bank 00000
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WSMP, Inc. 434 W/S-BOONE First Union National Bank 2000000988159
X.X. Xxx 000
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WSMP, Inc. 435 W/S-WINSTON SALEM First Citizen's Bank 4851435209
X X Xxx 00000
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OPERATING ACCOUNTS - CONSOLIDATED SUBS.
South Carolina WSMP, Inc. 58 S. C. WSMP, INC.-HO Peoples Bank 534830444
X.X. Xxx 000
Xxxxxx, XX 00000
Sunshine WSMP, Inc. 95 SUNSHINE WSMP-H.O. Peoples Bank 534827085
X.X. Xxx 000
Xxxxxx, XX 00000
Georgia WSMP, Inc. 141 GEORGIA WSMP, INC Peoples Bank 534827028
HOME XXXXXX X.X. Xxx 000
Xxxxxx, XX 00000
Elloree Foods, Inc. 000 XXXXXXXXX, XX Carolina First Bank 1040057770
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
206
Tennessee WSMP, Inc. 233 TENN. WSMP - H. O. Peoples Bank 534828869
X.X. Xxx 000
Xxxxxx, XX 00000
Tennessee WSMP, Inc. 000 XXXXXXX, XX Union Planters Bank 0590001173
X X Xxx 0000
Xxxxxxxxxx, XX 00000-0000
Naples Food, Inc. 267 NAPLES FOODS, INC. Peoples Bank 534826954
HOME XXXXXX X.X. Xxx 000
Xxxxxx, XX 00000
Seven Stars, Inc. 000 XXXXXXX, XX NationsBank 2593006042
X X Xxx 00000
Xxxxxxxx, XX 00000-0000
Prime Sirloin, Inc. 360 PRIME SIRLOIN, INC. Peoples Bank 558537908
X.X. Xxx 000
Xxxxxx, XX 00000
Xxxxxxxx Prime Sirloin, Inc. 000 XXXXX-XXXXXXXX XX & T 5110423901
X.X. Xxx 0000
Xxxxxx, XX 00000
St. Augustine Foods, Inc. 000 XX. XXXXXXXXX, XX First Union National Bank 2090000394135
X X Xxx 000
Xxxxxxx, XX 00000
D & S Food Systems, L L C 417 JESUP, GA SunTrust Bank 9800273360
X X Xxx 000
Xxxxx, XX 00000-0000
Brunswick Associates, Inc. 465 BRUNSWICK ASSOC. First Union National Bank 2074380537421
X X Xxx 000
Xxxxxxx, XX 00000
207
OPERATING ACCOUNTS - UNCONSOLIDATED SUBS.
Georgia Buffet Restaurants, Inc. 000 XXXXXX, XX SouthTrust Bank 68-960-083
0000 Xxx 00
Xxxxxx, Xx. 00000
Georgia Buffet Restaurants, Inc. 000 XXXXXX, XX Security State Bank 105502
X.X. Xxx 000
Xxxxxx, XX 00000
BANK ACCOUNTS: PIERRE FOODS
----------------------------
Pierre Foods Depository Star Bank 48079-7117
Account Checking Business
Pierre Foods Payroll Star Bank 48079-7125
Account Checking Business
