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REVOLVING LOAN AGREEMENT
DATED AS OF MAY 10, 2000
AMONG
XXXXXXX FOODS, INC.,
THE BANKS LISTED HEREIN
AND
BANK OF AMERICA, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT
ARRANGED BY BANC OF AMERICA SECURITIES, LLC,
Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS*
Page
1. DEFINITIONS AND TERMS
1.1 Definitions.......................................................................................-1-
"Advance".....................................................................................-1-
"Affiliate"...................................................................................-1-
"Agent".......................................................................................-1-
"Agent-Related Persons".......................................................................-1-
"Aggregate Amount"............................................................................-1-
"Arranger"....................................................................................-2-
"Banking Day".................................................................................-2-
"BofA"........................................................................................-2-
"Capital Lease"...............................................................................-2-
"Capital Lease Obligation"....................................................................-2-
"Code"........................................................................................-2-
"Commitment"..................................................................................-2-
"Computation Period"..........................................................................-2-
"Consolidated Funded Indebtedness"............................................................-2-
"Consolidated Net Earnings Available for Fixed Charges" ......................................-2-
"Consolidated Net Income".....................................................................-2-
"Consolidated Net Worth"......................................................................-3-
"Credit"......................................................................................-3-
"Dollars".....................................................................................-3-
"Domestic Advance"............................................................................-3-
"Eligible Assignee"...........................................................................-3-
"ERISA".......................................................................................-3-
"ERISA Affiliate".............................................................................-3-
"Eurocurrency Reserve Percentage".............................................................-3-
"Eurodollar Advance"..........................................................................-3-
"Event of Default"............................................................................-4-
"Event Risk Occurrence".......................................................................-4-
"Federal Funds Rate"..........................................................................-4-
"Fixed Charges"...............................................................................-4-
"Governmental Authority"......................................................................-4-
"Indebtedness"................................................................................-4-
"Interbank Rate"..............................................................................-5-
"Interbank Rate (Reserve Adjusted)"...........................................................-5-
"Interest Period".............................................................................-5-
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* The Table of Contents is not a part of this Agreement.
-ii-
Page
"Investment"..................................................................................-5-
"Lien"........................................................................................-5-
"Majority Banks"..............................................................................-6-
"Margin"......................................................................................-6-
"Net Income"..................................................................................-6-
"Net Worth"...................................................................................-6-
"Note Agreement"..............................................................................-6-
"Notes".......................................................................................-6-
"Payment Date"................................................................................-6-
"PBGC"........................................................................................-6-
"Person"......................................................................................-6-
"Plan"........................................................................................-6-
"Priority Indebtedness".......................................................................-6-
"Reference Rate"..............................................................................-7-
"Related Party"...............................................................................-7-
"Reportable Event"............................................................................-7-
"Restricted Investment".......................................................................-7-
"Subsidiary"..................................................................................-8-
"Taxes".......................................................................................-8-
"Termination Date"............................................................................-8-
"Total Capitalization"........................................................................-8-
"Total Debt to Capitalization Ratio"..........................................................-8-
"Unconsolidated Subsidiary"...................................................................-8-
"Unmatured Event of Default"..................................................................-8-
1.2 Financial Terms...................................................................................-8-
2. COMMITMENTS OF THE BANKS AND CERTAIN LOAN TERMS
2.1 Advances..........................................................................................-8-
2.2 Advance Options...................................................................................-9-
2.3 Borrowing Procedures..............................................................................-9-
2.4 Continuation and/or Conversion of Advances........................................................-9-
2.5 Funding Losses...................................................................................-10-
2.6 Capital Adequacy.................................................................................-10-
2.7 Extension of Scheduled Termination Date..........................................................-10-
3. NOTES EVIDENCING BORROWINGS
4. INTEREST AND FEES
4.1 Interest.........................................................................................-11-
(a) Domestic Advances...................................................................-11-
(b) Eurodollar Advances.................................................................-11-
(c) Interest After Maturity.............................................................-11-
4.2 Facility Fee.....................................................................................-11-
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Page
4.3 Utilization Fee...................................................................................-11-
4.4 Method of Calculating Interest and Fees..........................................................-12-
5. PAYMENTS, PREPAYMENTS, REDUCTION OR TERMINATION OF THE CREDIT AND SETOFF
5.1 Place of Payment.................................................................................-12-
5.2 Prepayments......................................................................................-12-
5.3 Reduction or Termination of the Credit...........................................................-12-
5.4 Setoff...........................................................................................-13-
5.5 Proration of Payments............................................................................-13-
6. ADDITIONAL PROVISIONS RELATING TO EURODOLLAR ADVANCES
6.1 Increased Cost...................................................................................-13-
6.2 Eurodollar Deposits Unavailable or Interest Rate Unascertainable.................................-14-
6.3 Changes in Law Rendering Eurodollar Advances Unlawful............................................-14-
6.4 Indemnity........................................................................................-15-
7. WARRANTIES
7.1 Existence........................................................................................-15-
7.2 Authorization....................................................................................-15-
7.3 No Conflicts.....................................................................................-15-
7.4 Validity and Binding Effect......................................................................-15-
7.5 No Default.......................................................................................-15-
7.6 Financial Statements.............................................................................-15-
7.7 Litigation.......................................................................................-16-
7.8 Liens............................................................................................-16-
7.9 Subsidiaries.....................................................................................-16-
7.10 Purpose.........................................................................................-16-
7.11 Regulation U....................................................................................-17-
7.12 Compliance......................................................................................-17-
7.13 Pension and Welfare Plans.......................................................................-17-
7.14 Taxes...........................................................................................-17-
7.15 Investment Company Act Representation...........................................................-17-
7.16 Licenses........................................................................................-17-
7.17 No Burdensome Provisions........................................................................-18-
7.18 Trading with the Enemy Act, etc.................................................................-18-
7.19 Environmental Matters...........................................................................-18-
7.20 Disclosure......................................................................................-18-
7.21 Governmental Action.............................................................................-18-
7.22 Compliance with Other Instruments...............................................................-19-
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Page
8. COMPANY'S COVENANTS
8.1 Financial Statements and Other Reports...........................................................-19-
(a) Quarterly Financial Statements......................................................-19-
(b) Annual Audited Statements...........................................................-19-
(c) Accountants' Statements.............................................................-20-
(d) Officer's Certificates..............................................................-20-
(e) SEC and Other Reports...............................................................-20-
(f) Report of Change in Subsidiaries....................................................-20-
(g) Requested Information...............................................................-20-
8.2 Notices..........................................................................................-21-
(a) Default.............................................................................-21-
(b) Litigation..........................................................................-21-
(c) Judgment............................................................................-21-
(d) Pension and Welfare Plans...........................................................-21-
(e) Material Adverse Change.............................................................-21-
(f) Other Events........................................................................-21-
8.3 Existence........................................................................................-21-
8.4 Nature of Business...............................................................................-22-
8.5 Books, Records and Access........................................................................-22-
8.6 Insurance........................................................................................-22-
8.7 Insurance Reports................................................................................-22-
8.8 Repair...........................................................................................-22-
8.9 Taxes............................................................................................-22-
8.10 Compliance......................................................................................-22-
8.11 Pension Plans...................................................................................-23-
8.12 Indebtedness....................................................................................-23-
8.13 Liens...........................................................................................-23-
8.14 Maximum Consolidated Total Indebtedness to Capitalization Ratio.................................-24-
8.15 Maintenance of Interest Expense Coverage........................................................-24-
8.16 Restricted Payments.............................................................................-25-
8.17 Limitation on Disposition of Assets.............................................................-25-
8.18 Merger, Consolidation, Sale or Lease............................................................-25-
8.19 Restrictions on Subsidiaries....................................................................-25-
8.20 Investments.....................................................................................-26-
8.21 Other Agreements................................................................................-26-
8.22 Use of Proceeds.................................................................................-27-
8.23 Transactions with Related Parties...............................................................-27-
9. CONDITIONS PRECEDENT TO ALL ADVANCES
9.1 Default..........................................................................................-27-
9.2 Warranties.......................................................................................-27-
9.3 Certification....................................................................................-27-
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Page
10. CONDITIONS PRECEDENT TO INITIAL ADVANCE
10.1 Notes...........................................................................................-27-
10.2 Resolutions.....................................................................................-28-
10.3 Incumbency......................................................................................-28-
10.4 Opinion.........................................................................................-28-
11. EVENTS OF DEFAULT AND REMEDIES
11.1 Events of Default...............................................................................-28-
(a) Non-Payment.........................................................................-28-
(b) Non-Payment of other Indebtedness...................................................-28-
(c) Insolvency..........................................................................-28-
(d) ERISA...............................................................................-29-
(e) Agreements..........................................................................-29-
(f) Warranty............................................................................-29-
(g) Judgments...........................................................................-29-
(h) Event Risk Occurrence...............................................................-29-
(i) Material Adverse Change.............................................................-29-
11.2 Remedies........................................................................................-29-
12. THE AGENT
12.1 Appointment and Authorization...................................................................-30-
12.2 Delegation of Duties............................................................................-30-
12.3 Liability of Agent..............................................................................-30-
12.4 Reliance by Agent...............................................................................-30-
12.5 Notice of Default...............................................................................-31-
12.6 Credit Decision.................................................................................-31-
12.7 Indemnification.................................................................................-32-
12.8 Agent in Individual Capacity....................................................................-33-
12.9 Successor Agent.................................................................................-33-
12.10 Withholding Tax................................................................................-33-
13. GENERAL
13.1 Delay...........................................................................................-35-
13.2 Notice..........................................................................................-35-
13.3 Expenses........................................................................................-35-
13.4 Severability....................................................................................-35-
13.5 Counterparts....................................................................................-36-
13.6 Investment......................................................................................-36-
13.7 U.S. Withholding Tax Exemptions.................................................................-36-
13.8 Law.............................................................................................-36-
13.9 Successors......................................................................................-36-
13.10 Amendments.....................................................................................-36-
13.11 Assignments, Participations, etc...............................................................-37-
13.12 WAIVER OF JURY TRIAL...........................................................................-38-
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EXHIBIT A - Revolving Note
EXHIBIT B - Schedule of Litigation
EXHIBIT C - Schedule of Liens
EXHIBIT D - Schedule of Subsidiaries
EXHIBIT E - Schedule of Contingent Liabilities with Respect to
Post-Retirement Welfare Benefit
Plans
EXHIBIT F - Form of Opinion of Counsel
EXHIBIT G - Form of Assignment and Acceptance Agreement
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REVOLVING LOAN AGREEMENT
THIS AGREEMENT, dated as of May 10, 2000, is entered into among XXXXXXX
FOODS, INC., a Minnesota corporation (the "Company"), the banks listed on the
signature pages hereof (each called a "Bank" and collectively called the
"Banks") and BANK OF AMERICA, NATIONAL ASSOCIATION, a national banking
association, as administrative agent.
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
1. DEFINITIONS AND TERMS.
1.1 DEFINITIONS. In addition to the terms defined elsewhere in
this Agreement, the following terms shall have the meanings indicated for
purposes of this Agreement (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Advance" means an advance by a Bank to the Company under Section 2.1
and shall be a Domestic Advance or a Eurodollar Advance.
"Affiliate" means any Person (other than the Company or any Subsidiary)
which, directly or indirectly, (a) controls or is controlled by or is under
common control with the Company or any Subsidiary, or (b) beneficially owns or
holds or has the power to direct the voting power of five percent (5%) or more
of any class of voting stock of the Company or any Subsidiary or (c) has five
percent (5%) or more of its voting stock (or in the case of a Person which is
not a corporation, five percent (5%) or more of its equity interest)
beneficially owned or held, directly or indirectly, by the Company or any
Subsidiary or (d) is a director or officer of the Company or any Subsidiary. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means BofA as administrative agent for the Banks hereunder and
each successor, as provided in Section 12.8, who shall act as administrative
agent.
"Agent-Related Persons" means BofA and any successor administrative
agent arising under Section 12.9, together with their respective Affiliates
(including, in the case of BofA, the Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Amount", when used with respect to any Investment of any
Person as of the date of determination thereof, means an amount (which may be a
positive or negative figure, as the case may be) equal to (i) the greater of the
amount carried on the books of such Person as at such date with respect to such
Investment and the cost of such Investment to such Person, minus (ii) the net
proceeds (after the deduction of income taxes applicable thereto) realized from
the sale or liquidation of such Investment or any part thereof, or otherwise.
"Arranger" means Banc of America Securities, Inc., a Delaware limited
liability company.
"Banking Day" means any day on which banks are open for business in
Chicago, Illinois and San Francisco, California and, with respect to Eurodollar
Advances, on which dealings in foreign currencies and exchange may be carried on
by the Banks in the interbank eurodollar market.
"BofA" means Bank of America, National Association, a national banking
association.
"Capital Lease" means and includes at any time any lease of property,
real or personal, which in accordance with generally accepted accounting
principles would at such time be required to be capitalized on a balance sheet
of the lessee.
"Capital Lease Obligation" means at any time the capitalized amount of
the rental commitment under a Capital Lease which in accordance with generally
accepted accounting principles would at such time be required to be shown on a
balance sheet.
"Code" means the Internal Revenue Code of 1986 and any successor
statute of similar import, together with the regulations thereunder, in each
case as in effect from time to time. References to sections of the Code shall be
construed to also refer to any successor sections.
"Commitment" means the maximum amount that any Bank has agreed to lend
under Section 2.1 as set forth on the signature pages hereof as such amount may
be reduced pursuant to Section 5.3, or increased or reduced pursuant to Section
13.11.
"Computation Period" means as at the end of any fiscal quarter or
fiscal year the four fiscal quarter period then ending.
"Consolidated Funded Indebtedness" means, without duplication, all
Indebtedness of the Company and its Subsidiaries, as consolidated and determined
in accordance with generally accepted accounting principles.
"Consolidated Net Earnings Available for Fixed Charges" means, for the
period of determination, Consolidated Net Income of the Company and its
Subsidiaries, plus cash dividends received from Unconsolidated Subsidiaries,
plus income taxes, plus extraordinary items of expense or minus extraordinary
items of income which are included in the determination of Net Income, plus any
loss from discontinued operations or minus any gain from discontinued operations
which is included in the determination of Net Income, plus any charge or minus
any credit which results from the cumulative effect of a change in accounting
principle which is included in the determination of Net Income, plus all Fixed
Charges.
"Consolidated Net Income" means, for any period, the Net Income of the
Company and its Subsidiaries, as consolidated and determined in accordance with
generally accepted accounting principles.
-2-
"Consolidated Net Worth" means the Net Worth of the Company and its
Subsidiaries, as consolidated and determined in accordance with generally
accepted accounting principles.
"Credit" means the aggregate Commitments of the Banks to make Advances
under the terms of this Agreement.
"Dollars" and the sign "$" means lawful money of the United States of
America.
"Domestic Advance" means any Advance which bears interest at a rate
determined with reference to the Reference Rate.
"Eligible Assignee" means (i) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States; and (iii) a Person that is primarily engaged in the business of
commercial banking and that is (A) a Subsidiary of a Bank, (B) a Subsidiary of a
Person of which a Bank is a Subsidiary, or (C) a Person of which a Bank is a
Subsidiary; (iv) any other financial institution in good standing under the laws
of any country which is a member of the OECD and which has a combined capital
and surplus of at least $100,000,000 and (v) any other Person to which the
Company and the Agent may in their discretion consent.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.
"ERISA Affiliate" means any corporation, trade or business that is,
along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in sections 414(b) and
414(c), respectively, of the Code or section 4001 of ERISA.
"Eurocurrency Reserve Percentage" means, with respect to each
Interest Period, a percentage equal to the daily average during such Interest
Period of the percentages in effect on each day of such Interest Period, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), for determining reserve requirements applicable to "Eurocurrency
liabilities" pursuant to Regulation D or any other then applicable regulation
of the Board of Governors which prescribes reserve requirements applicable to
"Eurocurrency liabilities," as presently defined in Regulation D. For
purposes of this definition, any Eurodollar Advances hereunder shall be
deemed to be "Eurocurrency liabilities" as defined in Regulation D.
"Eurodollar Advance" means any Advance which bears interest at a
rate determined with reference to the Interbank Rate (Reserve Adjusted).
-3-
"Event of Default" means any of the events described in Section 11.1.
"Event Risk Occurrence" shall have the meaning ascribed to such terms
in the note(s) issued by the Company pursuant to the terms and provisions of the
Note Agreement.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor publication, "H.15(519)") on the preceding Banking Day opposite
the caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Banking Day, the rate for such day
will be the arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York
City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Fixed Charges" means, for any period of calculation, the sum of (i)
all interest on Indebtedness incurred by the Company and its Subsidiaries,
including interest payments partially or entirely contingent on earnings and the
portion of rents payable under Capital Leases allocable to interest, and (ii)
all debt discount or premium amortized or required to be amortized during such
period by the Company or any of its Subsidiaries.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Indebtedness" of any Person means and includes, without duplication,
(i) all indebtedness or obligations of such Person for money borrowed (and any
notes payable and drafts accepted representing extensions of credit, whether or
not representing indebtedness or obligations for money borrowed), (ii)
indebtedness or obligations of such Person owed for all or any part of the
purchase price of property or other assets or for the cost of property or other
assets constructed or of improvements thereto, other than accounts payable
included in current liabilities and incurred in respect of property purchased in
the ordinary course of business, (iii) indebtedness or obligations secured or
evidenced by any Lien existing on property owned by such Person, whether or not
the indebtedness or obligations secured or evidenced thereby shall have been
assumed by such Person, (iv) Capital Lease Obligations of such Person, (v)
guarantees and endorsements by such Person of (other than endorsements for
purposes of collection in the ordinary course of business), and obligations of
such Person to purchase goods or services for the purpose of supplying funds for
the purchase or payment of, or measured by, indebtedness, liabilities or
obligations of others (whether or not representing money borrowed) and other
contingent obligations of such Person in respect of, or to purchase or otherwise
acquire or service, indebtedness, liabilities or obligations of others (whether
or not representing money borrowed) and (vi) all indebtedness, liabilities or
obligations (whether or not representing money borrowed) in effect guaranteed by
such Person by an agreement, contingent or otherwise, to make a loan, advance or
capital contribution to or other investment in
-4-
the debtor for the purpose of assuring or maintaining a minimum equity, asset
base, working capital or other balance sheet condition for any date, or to
provide funds for the payment of any liability, dividend or stock liquidation
payment, or otherwise to supply funds to or in any manner invest in the
debtor for such purpose. A renewal or extension of any Indebtedness without
increase in the principal amount thereof shall not be deemed to be the
incurrence of the Indebtedness so renewed or extended. In case any Person
shall become a Subsidiary, such Person shall be deemed to have incurred at
the time it becomes a Subsidiary all Indebtedness of such Person outstanding
immediately thereafter.
"Interbank Rate" means, with respect to each Interest Period, the
rate per annum at which Dollar deposits in immediately available funds are
offered to the Agent two Banking Days prior to the beginning of such Interest
Period by major banks in the interbank eurodollar market as at or about 10:00
a.m., Chicago time, for delivery on the first day of such Interest Period,
for the number of days comprised therein and in an amount equal to the
aggregate amount of the Eurodollar Advance to be outstanding during such
Interest Period.
"Interbank Rate (Reserve Adjusted)" means, with respect to any
Eurodollar Advance for any Interest Period, a rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) determined pursuant to the
following formula:
Interbank Rate
Interbank Rate = --------------
(Reserve Adjusted) 1-Eurocurrency Reserve Percentage
"Interest Period" means, with respect to any Eurodollar Advance, the
seven (7) day, the one (1) month, two (2) month, three (3) month or six (6)
month period selected by the Company pursuant to Sections 2.3 or 2.4 and
commencing on the applicable borrowing date or conversion date of any
Eurodollar Advance or the last day of the prior Interest Period for such
Advance, as the case may be; PROVIDED, HOWEVER, that no Interest Period shall
extend beyond the Termination Date. Each Interest Period which would
otherwise end on a day which is not a Banking Day shall end on the next
succeeding Banking Day unless such next succeeding Banking Day is the first
Banking Day of a calendar month, in which case it shall end on the next
preceding Banking Day.
"Investment" of any Person means any investment made by such Person
in any other Person by acquisition of stock or indebtedness, loan, advance,
transfer or purchase of property, capital contribution or otherwise (other
than a direct or indirect guarantee of such other Person's indebtedness or
any agreement to pay, purchase or service such other Person's indebtedness).
"Lien" means any mortgage, pledge, hypothecation, judgment lien or
similar legal process, title retention lien, or other lien or security interest,
including, without limitation, the interest of a vendor under any conditional
sale or other title retention agreement and the interest of a lessor under any
Capital Lease.
-5-
"Majority Banks" means those Banks whose interest in the Credit
constitutes (or if the Credit has been terminated, whose share in the
aggregate Advances outstanding constitutes) at least fifty-one percent (51%).
"Margin" means 0.55% per annum.
"Net Income" means, with respect to any Person for any period, the
net income (or the net deficit, if expenses and charges exceed revenues and
other proper income credits) of such Person for such period determined in
accordance with generally accepted accounting principles as in effect from
time to time, PROVIDED, HOWEVER, that the Net Income of the Company or any
Subsidiary shall not include the Net Income of any Subsidiary prior to the
date it becomes a Subsidiary.
"Net Worth" means, with respect to any Person as of the date of
determination, the sum of redeemable preferred stock and common stockholders'
equity accounts of such Person as of such date, as determined in accordance
with generally accepted accounting principles.
"Note Agreement" means collectively the various loan agreements,
each dated as of February 26, 1997, between the Company and certain lenders
entered into in connection with the issuance of certain notes not in excess
of $125,000,000.
"Notes" means the Notes referred to in Section 3.
"Payment Date" means (a) as to any Eurodollar Advance, the last day
of each Interest Period with respect thereto and, if such Interest Period is
in excess of three (3) months, the day three (3) months after the
commencement of such Interest Period, and (b) as to any Domestic Advance, the
first day of each January, April, July and October commencing on the first of
such dates to occur hereafter.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, limited liability
company, corporation, trust, joint venture, joint stock company, association,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.
"Plan" means a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to
which the Company or any ERISA Affiliate contributes or is a member or
otherwise may have any liability.
"Priority Indebtedness" means the sum (without duplication) of the
amounts described in the following clauses (i), (ii) and (iii) and
outstanding at the time of computation: (i) the aggregate principal amount of
all Indebtedness of the Company and its Subsidiaries secured or evidenced by
Liens permitted by Section 8.13(e) outstanding at such time, (ii) the
aggregate principal amount of unsecured Indebtedness of all Subsidiaries,
other than Indebtedness owed to the Company or a
-6-
Subsidiary, and (iii) the Aggregate Amount of all outstanding capital stock
of any Subsidiary acquired pursuant to Section 8.19(c) not owned by the
Company or any Subsidiary having preference as to dividends or upon
liquidation, and all rights, options and warrants to acquire any such
preference stock.
"Reference Rate" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest in
effect for such day as publicly announced from time to time by BofA in San
Francisco, California, as its "reference rate." (The "reference rate" is a
rate set by BofA based upon various factors, including BofA's costs and
desired return, general economic conditions and other factors, and is used as
a reference point for pricing some loans, which may be priced at, above, or
below such announced rate.) Any change in the reference rate announced by
BofA shall take effect at the opening of business on the day specified in the
public announcement of such change.
"Related Party" means, for purposes of Section 8.23 only, any Person
(other than a Subsidiary) (i) which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, the Company, (ii) which beneficially owns or holds five percent (5%) or
more of the equity interest of the Company, or (iii) five percent (5%) or
more of the equity interest of which is beneficially owned or held by the
Company or a Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities,
by contract or otherwise.
"Reportable Event" has the meaning given to such term in ERISA.
"Restricted Investment" means any Investment by the Company or any
Subsidiary in any other Person other than:
(i) marketable obligations issued or guaranteed by the United
States of America or by any agency of the United States of America, and
maturing not later than twelve (12) months from the date of acquisition
thereof;
(ii) commercial paper which has the highest credit rating by
Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc., and
maturing not later than 270 days from the date of acquisition thereof;
(iii) (a) negotiable certificates of deposit or bankers'
acceptances issued by or drawn on BofA or any Affiliate thereof and
which mature not later than twelve (12) months from the date of
acquisition thereof and (b) negotiable certificates of deposit or
bankers' acceptances which have at least an A rating by Standard &
Poor's Corporation or Xxxxx'x Investors Service, Inc., are issued by or
drawn on a United States commercial bank (other than BofA or any
Affiliate thereof) or trust company which has capital and surplus of at
least $150,000,000, and which mature not later than twelve (12) months
from the date of acquisition thereof;
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(iv) any Investment in any Subsidiary or in any corporation
which by reason thereof will become a Subsidiary; and
(v) variable rate demand municipal securities rated AAA by
Standard & Poor's Corporation or Aaa by Xxxxx'x Investors Service,
Inc., PROVIDED, HOWEVER, that such securities must be redeemable at par
upon thirty (30) days or less notice.
"Subsidiary" means any corporation, voluntary association, joint
stock company, voting trust or similar organization of which the Company and
its other Subsidiaries own directly or indirectly more than 50% of the shares
of stock having general voting power under ordinary circumstances to elect a
majority of the board of directors, managers, trustees or others performing
similar functions.
"Taxes" with respect to any Person means taxes, assessments or other
governmental charges or levies imposed upon such Person, its income or any of
its properties, franchises or assets.
"Termination Date" means May 9, 2001, (the "Scheduled Termination
Date") as such date may be extended pursuant to Section 2.7, or such earlier
date as may be fixed by the Company on at least ten (10) Banking Days'
written notice to the Agent.
"Total Capitalization" means, as of any particular time, the sum of (i)
Consolidated Net Worth and (ii) Consolidated Funded Indebtedness.
"Total Debt to Capitalization Ratio" means at any time the ratio of
Consolidated Funded Indebtedness to Total Capitalization.
"Unconsolidated Subsidiary" means any corporation less than a
majority of whose outstanding stock having ordinary voting power for the
election of the members of the board of directors (or other governing body)
of such corporation (other than stock having such power only by reason of the
happening of a contingency) shall at the time be owned by the Company and/or
one or more Subsidiaries of the Company.
"Unmatured Event of Default" means an event or condition which with
the lapse of time or giving of notice to the Company, or both, would
constitute an Event of Default.
1.2 FINANCIAL TERMS. Unless otherwise defined or the
context otherwise requires, all financial and accounting terms shall be
defined under generally accepted accounting principles.
2. COMMITMENTS OF THE BANKS AND CERTAIN LOAN TERMS.
2.1 ADVANCES. Subject to the terms and conditions of this
Agreement, each Bank, severally but not jointly, agrees to make loans
(collectively called the "Advances" and individually called an "Advance") to
the Company on any Banking Day, which Advances the Company may repay and
reborrow during the period from the date hereof to, but not including, the
Termination Date, in such amounts as the Company may from time to time
request, but not exceeding in the aggregate at any one time outstanding the
amount set forth opposite each Bank's name on the
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signature pages hereof (or such reduced amount as may be fixed by the Company
pursuant to Section 5.3).
2.2 ADVANCE OPTIONS. Each Advance shall be either a Domestic
Advance or a Eurodollar Advance as shall be selected by the Company, except
as otherwise provided herein. Any combination of types of Advances may be
outstanding at the same time. As to any Eurodollar Advance, each Bank may, if
it so elects, fulfill its commitment by causing a foreign branch or affiliate
to make or continue such Advance, provided that in such event such Advance
shall be deemed for the purposes of this Agreement to have been made by such
Bank and the obligation of the Company to repay such Advance shall
nevertheless be to such Bank and shall be deemed held by the Bank, to the
extent of such Advance, for the account of such branch or affiliate.
2.3 BORROWING PROCEDURES. The Company shall give the Agent prior
telephonic notice (on or before 11:30 a.m., Chicago time, in the case of a
same day borrowing), promptly confirmed in writing, of each Domestic Advance
and at least three (3) Banking Days' prior telephonic notice (on or before
11:30 a.m., Chicago time, in the case of a notice given three (3) Banking
Days prior to the proposed borrowing date), promptly confirmed in writing, of
each Eurodollar Advance, in each case specifying the date (which day shall be
a Banking Day), amount and type of Advance and, if such Advance is to be a
Eurodollar Advance, the initial Interest Period for such Advance and the
Agent shall promptly advise each Bank thereof. Not later than 12:30 p.m.,
Chicago time, on the date of a proposed borrowing, each Bank shall provide
the Agent at its principal office in Chicago with immediately available funds
covering such Bank's ratable share of the borrowing and the Agent shall pay
over such funds to the Company upon the Agent's receipt of the documents
required under Sections 9 and 10 with respect to such Advance. Each borrowing
of Advances shall be in aggregate principal amount of $500,000 or a higher
integral multiple of $100,000.
2.4 CONTINUATION AND/OR CONVERSION OF ADVANCES. The Company may
elect (a) to continue any outstanding Eurodollar Advance from the current
Interest Period of such Advance into a subsequent Interest Period to begin on
the last day of such current Interest Period, or (b) to convert any
outstanding Domestic Advance into a Eurodollar Advance or, on the last day of
the current Interest Period, vice versa, by giving (i) at least three (3)
Banking Days' prior telephonic notice (on or before 11:30 a.m., Chicago time,
in the case of a notice given three (3) Banking Days prior to the proposed
continuation or conversion date), promptly confirmed in writing, to the Agent
(which shall promptly advise each Bank) if the Advance, after such
continuation or conversion, is to be a Eurodollar Advance or (ii) prior
telephonic notice (on or before 11:30 a.m., Chicago time, in the case of a
same day conversion), promptly confirmed in writing, to the Agent (which
shall promptly advise each Bank) if the Advance, after such conversion, is to
be a Domestic Advance, in each case specifying the date, amount and the
Interest Period, if applicable. Absent notice of continuation or conversion,
each Eurodollar Advance shall automatically convert into a Domestic Advance
on the last day of the current Interest Period for such Advance, unless paid
in full on such last day. No Domestic Advance shall be converted into a
Eurodollar Advance and no Eurodollar Advance shall be continued less than
seven (7) days before the Termination Date or at any time that an Event of
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Default or an Unmatured Event of Default shall exist. Each conversion or
continuation of Advances shall be in an aggregate principal amount of
$500,000 or a higher integral multiple of $100,000.
2.5 FUNDING LOSSES. The Company will indemnify each Bank upon
demand against any loss or expense which such Bank may sustain or incur
(including, without limitation, any loss or expense sustained or incurred in
obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Advance) as a consequence of any failure of the
Company to borrow, continue or convert a Eurodollar Advance on the date
specified therefor in a notice thereof.
2.6 CAPITAL ADEQUACY. If any Bank shall reasonably determine that
the application or adoption of any law, rule, regulation, directive,
interpretation, treaty or guideline regarding capital adequacy, or any change
therein or in the interpretation or administration thereof, whether or not
having the force of law increases the amount of capital required or expected
to be maintained by such Bank or any Person controlling such Bank, and such
increase is based upon the existence of such Bank's obligations hereunder and
other commitments of this type, then from time to time, within ten (10) days
after demand from such Bank, the Company shall pay to such Bank such amount
or amounts as will compensate such Bank or such controlling Person, as the
case may be, for such increased capital requirement. The determination of any
amount to be paid by the Company under this Section 2.6 shall take into
consideration the policies of such Bank or any Person controlling such Bank
with respect to capital adequacy and shall be based upon any reasonable
averaging, attribution and allocation methods. A certificate of such Bank
setting forth the amount or amounts as shall be necessary to compensate such
Bank as specified in this Section 2.6 shall be delivered to the Company and
shall be conclusive in the absence of manifest error.
2.7 EXTENSION OF SCHEDULED TERMINATION DATE. The Company may
request an extension of the Scheduled Termination Date by submitting a
request for an extension to the Agent (an "Extension Request") no more than
60 days or less than 45 days prior to the Scheduled Termination Date. The
Extension Request must specify the new Scheduled Termination Date requested
by the Company and the date (which must be at least 30 days after the
Extension Request is delivered to the Agent) as of which the Banks must
respond to the Extension Request (the "Response Date"). The new Scheduled
Termination Date shall be no more than 364 days after the Scheduled
Termination Date in effect at the time the Extension Request is received,
including the Scheduled Termination Date as one of the days in the
calculation of the days elapsed. Promptly upon receipt of an Extension
Request, the Agent shall notify each Bank of the contents thereof and shall
request each Bank, in its sole discretion, to approve or reject the Extension
Request. Each Bank approving the Extension Request shall deliver its written
consent no later than the Response Date. If the consent of each of the Banks
is received by the Agent, the Scheduled Termination Date specified in the
Extension Request shall become effective on the existing Scheduled
Termination Date and the Agent shall promptly notify the Company and each
Bank of the new Scheduled Termination Date.
3. NOTES EVIDENCING BORROWINGS. The Advances shall be evidenced by the
Company's promissory notes (the "Notes") in the form set forth as Exhibit A
hereto, with appropriate
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insertions, each of which shall be dated the date of this Agreement, made
payable to the order of the Bank making the Advance and each of which shall
mature on the Termination Date. All Advances made by the Banks to the Company
pursuant to this Agreement and all payments of principal shall be evidenced
by each Bank in its records, or, at such Bank's option, on the schedule
attached to its respective Note, which records or schedule shall be
rebuttable presumptive evidence of the subject matter thereof.
4. INTEREST AND FEES.
4.1 INTEREST.
(a) DOMESTIC ADVANCES. The unpaid principal of the Domestic
Advances shall bear interest prior to maturity at a rate per annum equal to the
Reference Rate in effect from time to time. Interest on Domestic Advances prior
to maturity shall be payable on each Payment Date and at maturity.
(b) EURODOLLAR ADVANCES. The unpaid principal of the
Eurodollar Advances shall bear interest prior to maturity at a rate per annum
equal to the Interbank Rate (Reserve Adjusted) in effect for each Interest
Period plus the Margin. Interest on Eurodollar Advances prior to maturity shall
be payable on each Payment Date.
(c) INTEREST AFTER MATURITY. The Company shall pay to the
Banks interest on any amount of principal of any Advance which is not paid when
due, whether at the Termination Date, by acceleration or otherwise, accruing
from and including the date such amount shall have become due to (but not
including) the date of payment thereof in full at the rate per annum which is
equal to the greater of (i) one percent (1%) in excess of the rate applicable to
the unpaid amount immediately before it became due, or (ii) one percent (1%) in
excess of the Reference Rate from time to time in effect. Interest after
maturity shall be payable on demand.
4.2 FACILITY FEE. The Company agrees to pay to the Agent, for
the ratable benefit of the Banks, a facility fee at a rate per annum equal to
0.20% on the daily average amount of the Credit (whether used or unused). Such
facility fee shall be payable in arrears on (i) the first day of each January,
April, July and October and (ii) on the Termination Date or, if earlier, the
date the Credit terminates for any period then ending for which such facility
fee shall not have been theretofore paid.
4.3 UTILIZATION FEE. The Company agrees to pay to the Agent,
for the ratable benefit of the Banks, a utilization fee at a rate per annum
equal to 0.125% on the daily average amount of the outstanding Advances in
excess of 50% of the Credit. Such utilization fee shall be payable in arrears on
(i) the first day of each January, April, July and October or (ii) on the
Termination Date or, if earlier, the date the Credit terminates for any period
then ending for which the utilization fee shall not have been theretofore paid.
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4.4 METHOD OF CALCULATING INTEREST AND FEES. Interest on each
Domestic Advance shall be computed on the basis of a year consisting of 365 days
and paid for actual days elapsed. All other computations of interest and fees
shall be computed on the basis of a year consisting of 360 days and paid for
actual days elapsed. Interest and fees shall accrue for the period during which
interest or fees are computed from and including the first day thereof to but
excluding the last day thereof.
5. PAYMENTS, PREPAYMENTS, REDUCTION OR TERMINATION OF THE CREDIT AND
SETOFF.
5.1 PLACE OF PAYMENT. All payments hereunder (including
payments with respect to the Notes) shall be made without set-off or
counterclaim and shall be made in immediately available funds by the Company to
the Agent for the respective accounts of the Banks, in accordance with the
amount owed to each Bank. All such payments shall be made to the Agent, prior to
12:30 p.m., Chicago time, on the date due at the Agent's office at Agency
Administrative Services #5596, 0000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Account No. 12336-14460, Re: Xxxxxxx Foods, Inc., or at such
other place as may be designated by the Agent to the Company in writing. The
Agent shall promptly remit in immediately available funds to each Bank its share
of all payments of principal, interest and fees received by the Agent for the
account of such Bank. Any payments received after 12:30 p.m., Chicago time,
shall be deemed received on the next Banking Day. Subject to the definition of
"Interest Period", whenever any payment to be made hereunder or under any Note
shall be stated to be due on a date other than a Banking Day, such payment may
be made on the next succeeding Banking Day, and such extension of time shall be
included in the computation of payment of interest or any fees.
5.2 PREPAYMENTS. The Company may from time to time, upon prior
telephonic notice (on or before 11:30 a.m., Chicago time, in the case of a same
day prepayment) (to be confirmed in writing promptly thereafter) received by the
Agent (which shall promptly advise each Bank thereof), prepay the principal of
the Domestic Advances in whole or in part without penalty or premium and may
prepay the principal of the Eurodollar Advances on the last day of any Interest
Period with respect to such Eurodollar Advances without penalty or premium,
except as provided in Section 6.4; PROVIDED, HOWEVER, any partial prepayment of
principal shall be in a minimum amount of $500,000 or a higher integral multiple
of $100,000.
5.3 REDUCTION OR TERMINATION OF THE CREDIT. The Company may
from time to time, upon at least five (5) Banking Days' prior written notice
received by the Agent (which shall promptly advise each Bank thereof),
permanently reduce the amount of the Credit (such reduction to be made among the
Banks according to their respective pro rata share of the Credit), but only upon
payment of the outstanding principal of the Notes in excess of the then reduced
amount of the Credit, plus accrued interest to the date of such payment on the
principal amount being repaid; PROVIDED, HOWEVER, that any reduction of the
Credit which would require payment of a Eurodollar Advance may be made only on
the last day of the relevant Interest Period for such Eurodollar Advance. Any
such reduction shall be in a minimum amount of $1,000,000 or in an integral
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multiple of $1,000,000. The Company may at any time on like notice terminate the
Credit upon payment in full of the outstanding Notes and other liabilities of
the Company hereunder.
5.4 SETOFF. In addition to and not in limitation of all rights
of offset that any Bank or other holder of any Note may have under applicable
law, each Bank or other holder of any Note shall, upon the occurrence of any
Event of Default described in Section 11.1 or any Unmatured Event of Default
described in Section 11.1(c), have the right to appropriate and apply to the
payment of each Note any and all balances, credits, deposits, accounts or moneys
of the Company then or thereafter with such Bank or other holder.
5.5 PRORATION OF PAYMENTS. If any Bank or other holder of a
Note shall obtain any payment or other recovery (whether voluntary, involuntary,
by application of setoff or otherwise) on account of principal of or interest on
any Note in excess of its pro rata share of payments and other recoveries
obtained by all Banks or other holders on account of principal of and interest
on Notes then held by them, such Bank or other holder shall purchase from the
other Banks or holders such participation in the Notes held by them as shall be
necessary to cause such purchasing Bank or other holder to share the excess
payment or other recovery ratably with each of them; PROVIDED, HOWEVER, that if
all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing holder, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
The Company agrees that the Bank so purchasing a participation from the other
Banks under this Section 5.5 may exercise all its rights of payment, including
the right of set-off, with respect to such participation as fully as if such
Bank were the direct creditor of the Company in the amount of such
participation.
6. ADDITIONAL PROVISIONS RELATING TO EURODOLLAR ADVANCES.
6.1 INCREASED COST. If, as a result of any law, regulation,
treaty or directive, or any change therein, or in the interpretation or
application thereof or compliance by any Bank with any request or directive
(whether or not having the force of law) from any court, central bank,
governmental authority, agency or instrumentality or comparable agency:
(i) any tax, duty or other charge with respect to any
Eurodollar Advance, the Note of any Bank or any Bank's
obligation to make any Eurodollar Advance is imposed,
modified or deemed applicable, or the basis of taxation of
payments to any Bank of the principal of or interest on
any Eurodollar Advance (other than taxes imposed on the
overall net income of such Bank by the jurisdiction in
which such Bank has its principal office) is changed;
(ii) any reserve, special deposit, special assessment or
similar requirements against assets of, deposits with or
for the account of, or credit extended by, any Bank are
imposed, modified or deemed applicable; or
(iii) any other condition affecting this Agreement or the
Eurodollar Advances is imposed on any Bank or the
interbank eurodollar market;
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and such Bank determines that, by reason thereof, the cost to such Bank of
making or maintaining any of the Eurodollar Advances is increased, or the amount
of any sum receivable by such Bank hereunder in respect of any of the Eurodollar
Advances is reduced;
THEN, the Company shall pay to any such affected Bank upon demand such
additional amount or amounts as will compensate such Bank for such additional
cost or reduction (provided such amount has not been compensated for in the
calculation of the Eurocurrency Reserve Percentage). Determinations by such Bank
for purposes of this section of the additional amounts required to compensate
such Bank in respect of the foregoing shall be conclusive, absent manifest
error. In determining such amounts, the affected Bank may use any reasonable
averaging, attribution and allocation methods.
6.2 EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. If the Company has any Eurodollar Advance outstanding, or has
notified the Agent of its intention to borrow a Eurodollar Advance as provided
herein, then in the event that prior to any Interest Period any Bank shall have
determined (which determination shall be conclusive and binding on the parties
hereto) that deposits of the necessary amount for the relevant Interest Period
are not available to such Bank in the interbank eurodollar market or that, by
reason of circumstances affecting such market, adequate and reasonable means do
not exist for ascertaining the Interbank Rate applicable to such period or term,
as the case may be, the affected Bank shall promptly give notice of such
determination to the Company, the Agent and the other Bank, and (i) any notice
of new Eurodollar Advances previously given by the Company and not yet borrowed
or converted shall be deemed a notice to make a Domestic Advance, to the extent
of the affected Bank's ratable share of the proposed Eurodollar Advance, and
(ii) the Company shall be obligated either to prepay or to convert any
outstanding Eurodollar Advances to Domestic Advances on the last day of the then
current Interest Period with respect thereof for the affected Bank's ratable
share of the outstanding Eurodollar Advance.
6.3 CHANGES IN LAW RENDERING EURODOLLAR ADVANCES UNLAWFUL. If
at any time due to any new law, rule, regulation, treaty or directive, or any
change therein or in the interpretation or administration thereof by any court,
central bank, governmental authority, agency or instrumentality or comparable
agency charged with the interpretation or administration thereof, or for any
other reason arising subsequent to the date hereof, it shall become unlawful for
any Bank to make or fund any Eurodollar Advance which it is committed to make
hereunder, the obligation of such Bank to provide Eurodollar Advances shall,
upon the happening of such event, forthwith be suspended for the duration of
such illegality. If any such event shall make it unlawful for any Bank to
continue Eurodollar Advances previously made by it hereunder, such Bank shall,
upon the happening of such event, notify the Agent, the Company and the other
Bank thereof in writing stating the reasons therefor, and the Company shall, on
the earlier of (i) the last day of the then current Interest Period with respect
thereto or (ii) if required by such law, rule, regulation, treaty, directive or
interpretation, on such date as shall be specified in such notice, either
convert such unlawful Eurodollar Advances
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to Domestic Advances or prepay all such Eurodollar Advances, without any
penalty or premium whatsoever (except as provided in Section 6.4), to such
Bank in full.
6.4 INDEMNITY. The Company will indemnify each Bank against
any loss or expense which such Bank may sustain due to any payment, prepayment
or conversion of any Eurodollar Advance on a date other than the last day of the
Interest Period for such Advance.
7. WARRANTIES. To induce the Banks to grant the Credit and to make the
Advances, the Company warrants that:
7.1 EXISTENCE. The Company and all of its Subsidiaries are
corporations duly organized, validly existing and in good standing under the
laws of the states of their respective incorporation. The Company and all of its
Subsidiaries are in good standing and are duly qualified to do business in each
state where, because of the nature of their respective activities or properties,
such qualification is required.
7.2 AUTHORIZATION. The Company is duly authorized to execute
and deliver this Agreement and the Notes and is and will continue to be duly
authorized to borrow monies hereunder and to perform its obligations under this
Agreement and the Notes. The execution, delivery and performance by the Company
of this Agreement and the Notes and the borrowings hereunder do not and will not
require any consent or approval of any governmental agency or authority.
7.3 NO CONFLICTS. The execution, delivery and performance by
the Company of this Agreement and the Notes do not and will not conflict with
(i) any provision of law, (ii) the charter or by-laws of the Company, (iii) any
agreement binding upon the Company, or (iv) any court or administrative order or
decree applicable to the Company, and do not and will not require, or result in,
the creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries.
7.4 VALIDITY AND BINDING EFFECT. This Agreement is, and each
of the Notes when duly executed and delivered will be, a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency or other similar laws of general application affecting the
enforcement of creditors' rights or by general principles of equity limiting the
availability of equitable remedies.
7.5 NO DEFAULT. Except as may have been waived in writing,
neither the Company nor any of its Subsidiaries is in default under any
agreement or instrument to which the Company or any Subsidiary is a party or by
which any of their respective properties or assets is bound or affected, which
default might materially and adversely affect the financial condition or
operations of the Company and its Subsidiaries taken as a whole.
7.6 FINANCIAL STATEMENTS. The Company's audited consolidated
financial statements as at December 31, 1999, copies of which have been
furnished to the Banks, have been prepared in conformity with generally accepted
accounting principles applied on a basis consistent with that of
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the preceding fiscal year and present fairly the financial condition of the
Company and its Subsidiaries as at such dates and the results of their
operations for the period then ended. Since December 31, 1999, there has been
no material adverse change in the financial condition of the Company and its
Subsidiaries taken as a whole.
7.7 LITIGATION. No claims, litigation, arbitration proceedings
or governmental proceedings are pending or, to the knowledge of the Company,
threatened against or are affecting the Company or any of its Subsidiaries, the
results of which might materially and adversely affect the financial condition
or operations of the Company and its Subsidiaries taken as a whole, except those
referred to in the schedule attached hereto as Exhibit B. Other than any
liability incident to such claims, litigation or proceedings or provided for or
disclosed in the financial statements referred to in Section 7.6 neither the
Company nor any of its Subsidiaries has any known contingent liabilities which
are material to the Company and its Subsidiaries taken as a whole.
7.8 LIENS. None of the property, revenues or assets of the Company or
any of its Subsidiaries is subject to any Lien, except:
(a) Liens for current Taxes not delinquent or Taxes being
contested in good faith and by appropriate proceedings and as to which
such reserves or other appropriate provisions as may be required by
generally accepted accounting principles are being maintained;
(b) carriers', warehousemen's, mechanics', materialmen's and
other like statutory Liens arising in the ordinary course of business
securing obligations which are not overdue for a period of more than
thirty (30) days or which are being contested in good faith and by
appropriate proceedings and as to which such reserves or other
appropriate provisions as may be required by generally accepted
accounting principles are being maintained;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, and other obligations of a
like nature incurred in the ordinary course of business;
(e) Liens disclosed in the financial statements referred to in
Section 7.6; and
(f) Liens listed on Exhibit C.
7.9 SUBSIDIARIES. The Company has no Subsidiaries except as
listed on Exhibit D. The Company and its Subsidiaries own 100% of the stock of
their Subsidiaries, except any required directors' qualifying shares.
7.10 PURPOSE. The proceeds of the Advances will be used by the
Company for general working capital purposes.
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7.11 REGULATION U. The Company is not engaged in the business
of purchasing or selling "margin stock," as such term is defined in Regulation U
of the Federal Reserve Board, or extending credit to others for the purpose of
purchasing or carrying margin stock, and no part of the proceeds of any Advance
will be used to purchase or carry any margin stock or for any other purpose
which would violate any of the margin regulations of the Federal Reserve Board.
7.12 COMPLIANCE. The Company and all of its Subsidiaries are,
to the best of the Company's knowledge, in material compliance with all statutes
and governmental rules and regulations applicable to them.
7.13 PENSION AND WELFARE PLANS. Each Plan complies in all
material respects with all applicable statutes and governmental rules and
regulations, and (i) no Reportable Event has occurred and is continuing with
respect to any Plan, (ii) neither the Company nor any ERISA Affiliate has
withdrawn from any Plan or instituted steps to do so, and (iii) no steps have
been instituted to terminate any Plan. No condition exists or event or
transaction has occurred in connection with any Plan which could result in the
incurrence by the Company or any ERISA Affiliate of any material liability, fine
or penalty. Neither the Company nor any ERISA Affiliate is a member of, or
contributes to, any multiple employer Plan as described in section 4064 of
ERISA. Neither the Company nor any of its Subsidiaries has any contingent
liability with respect to any post-retirement "welfare benefit plans," as such
term is defined in ERISA, except as listed on Exhibit E.
7.14 TAXES. Each of the Company and its Subsidiaries has filed
all tax returns which are required to have been filed and has paid, or made
adequate provisions for the payment of, all of its Taxes which are due and
payable, except such Taxes, if any, as are being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate
provisions as may be required by generally accepted accounting principles have
been maintained. The Company is not aware of any proposed assessment against the
Company or any of its Subsidiaries for additional Taxes (or any basis for any
such assessment) which might be material to the Company and its Subsidiaries
taken as a whole.
7.15 INVESTMENT COMPANY ACT REPRESENTATION. The Company is not
an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
7.16 LICENSES. The Company and its Subsidiaries possess all
trademarks, trade names, copyrights, patents, governmental licenses, franchises,
certificates, consents, permits and approvals necessary to enable them to carry
on their business in all material respects as now conducted and to own and
operate the properties material to their business as now owned and operated,
without known conflict with the rights of others. All such trademarks, trade
names, copyrights, patents, licenses, franchises, certificates, consents,
permits and approvals which are material to the Company and its Subsidiaries
taken as a whole are valid and subsisting.
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7.17 NO BURDENSOME PROVISIONS. Neither the Company nor any
Subsidiary is a party to any agreement or instrument or subject to any charter
or other corporate restriction or statute or any judgment, order, writ,
injunction, decree, award, rule or regulation which materially and adversely
affects or in the future may (so far as the Company can now foresee) materially
and adversely affect the business, operations, properties, prospects, assets or
condition, financial or other, of the Company and its Subsidiaries taken as a
whole.
7.18 TRADING WITH THE ENEMY ACT, ETC. Neither this Agreement
nor any of the transactions contemplated hereby is in violation of any of the
foreign asset control regulations of the United States Treasury Department (31
C.F.R., Subtitle B, Chapter V, as amended) or any ruling issued thereunder or
any enabling legislation or Presidential Executive Order in connection
therewith.
7.19 ENVIRONMENTAL MATTERS. To the best of the Company's
knowledge, the Company and its Subsidiaries have complied in all material
respects with all federal, state, local and other statutes, ordinances, orders,
judgments, rulings and regulations relating to environmental pollution or to
environmental regulation or control and neither the Company nor any Subsidiary
has received notice of any failure to comply which alone or together with any
other such failure could result in a material and adverse effect on the
business, operations, properties, prospects, assets or condition, financial or
other, of the Company and its Subsidiaries, taken as a whole. To the best of the
Company's knowledge, the Company's and its Subsidiaries' plants do not manage
any hazardous wastes, hazardous substances, hazardous materials, toxic
substances or toxic pollutants, as those terms are used in the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials Transportation Act, the
Toxic Substance Control Act, the Clean Air Act or the Clean Water Act, in
violation of any regulation promulgated thereunder or in any other applicable
law where such violation would result, individually or together with other
violations, in a material and adverse effect on the business, operations,
properties, prospects, assets or condition, financial or other, of the Company
and its Subsidiaries, taken as a whole.
7.20 DISCLOSURE. Neither this Agreement, nor any of the
Exhibits hereto, nor any certificate or other data furnished to the Banks in
writing by or on behalf of the Company in connection with the transactions
contemplated by this Agreement, when taken as a whole, contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained herein or therein not misleading. There is no fact now
known to the Company which materially and adversely affects or in the future may
(so far as the Company can now reasonably foresee) materially and adversely
affect the business, operations, properties, prospects, assets or condition,
financial or other, of the Company and its Subsidiaries, taken as a whole, which
has not been disclosed to the Banks.
7.21 GOVERNMENTAL ACTION. No action of, or filing with, any
governmental or public body or authority is required to authorize, or is
otherwise required in connection with, the execution, delivery and performance
of the Agreements or the Notes by the Companies.
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7.22 COMPLIANCE WITH OTHER INSTRUMENTS. Except as may have been waived
in writing, neither the Company nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any bond, debenture, note or other evidence
of indebtedness of the Company or any Subsidiary or contained in any instrument
under or pursuant to which any thereof has been issued or made and delivered,
the effect of which would materially and adversely affect the business,
operations, properties, prospects, assets or condition, financial or other, of
the Company and its Subsidiaries, taken as a whole. No consent of the
stockholders of the Company is required for the execution, delivery and
performance of this Agreement or the Notes by the Company.
8. COMPANY'S COVENANTS. From the date of this Agreement and thereafter
until the expiration or termination of the Credit and until the Notes and other
liabilities of the Company hereunder are paid in full, the Company agrees that,
unless the Majority Banks shall otherwise expressly consent in writing, it will:
8.1 FINANCIAL STATEMENTS AND OTHER REPORTS. Furnish to each
Bank and to the Agent:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as practicable,
and in any event within sixty (60) days after the end of each quarterly
period (other than the last quarterly period) in each fiscal year of
the Company, the consolidated statement of income of the Company and
its Subsidiaries for such period and for that part of the fiscal year
ended with such quarterly period and the consolidated statement of cash
flows of the Company and its Subsidiaries for that part of the fiscal
year ended with such quarterly period and the consolidated balance
sheet of the Company and its Subsidiaries as at the end of such period,
setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the preceding fiscal year (or
in the case of the consolidated balance sheet, as of the end of the
then most recent fiscal year) all in reasonable detail, prepared in
conformity with generally accepted accounting principles applied on a
basis consistent with that of the previous year (except as otherwise
stated therein or in the notes thereto and except that footnotes shall
not be required) and certified by the chief financial officer of the
Company as presenting fairly the financial condition and results of
operations of the Company and its Subsidiaries as at the end of and for
the fiscal periods to which they relate, subject to the Company's year
end adjustments;
(b) ANNUAL AUDITED STATEMENTS. As soon as practicable, and in
any event within ninety (90) days after the end of each fiscal year,
the consolidated balance sheet and related consolidated statements of
income, stockholders' equity and cash flows of the Company and its
Subsidiaries as at the end of and for such fiscal year, setting forth
in each case in comparative form the corresponding figures of the
previous fiscal year, all in reasonable detail, prepared in conformity
with generally accepted accounting principles applied on a basis
consistent with that of the previous year (except as otherwise stated
therein or in the notes thereto) and certified by the chief financial
officer of the Company as presenting fairly the financial condition,
results of operations and cash flows of the Company and its
Subsidiaries as at the end of and for the fiscal year to which such
financial statements relate,
-19-
and accompanied by a report or opinion of independent certified
public accountants of recognized national standing selected by the
Company stating that such financial statements present fairly the
consolidated financial condition, results of operations and cash
flows of the Company and its Subsidiaries in accordance with
generally accepted accounting principles consistently applied
(except for changes with which such accountants concur) and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards;
(c) ACCOUNTANTS' STATEMENTS. Concurrently with the financial
statements delivered pursuant to Section 8.1(b), the written statement
of said accountants that in making the examination necessary for their
report or opinion on said financial statements they have obtained no
knowledge of any Event of Default or Unmatured Event of Default or, if
such accountants shall have obtained knowledge of any such Event of
Default or Unmatured Event of Default, they shall disclose in such
statement the Event of Default or Unmatured Event of Default and the
nature and status thereof, but such accountants shall not be liable,
directly or indirectly, to anyone for any failure to obtain knowledge
of any such Event of Default or Unmatured Event of Default;
(d) OFFICER'S CERTIFICATES. Concurrently with the financial
statements delivered pursuant to Sections 8.1(a) and 8.1(b), a
certificate of the chief financial officer of the Company (1) stating
that a review of the activities of the Company and its Subsidiaries
during such fiscal quarter or fiscal year, as appropriate, has been
made under his supervision to determine whether the Company has
fulfilled all of its obligations under this Agreement and the Notes,
(2) stating that, to the best of his knowledge, there exists no Event
of Default or Unmatured Event of Default, or, if any such Event of
Default or Unmatured Event of Default exists, specifying such Event of
Default or Unmatured Event of Default and the nature and status thereof
and (3) (i) in the case of a financial statement delivered pursuant to
Section 8.1(a), containing a computation of, and showing compliance
with, Sections 8.14 and 8.15 and (ii) in the case of a financial
statement delivered pursuant to Section 8.1(b), containing a
computation of, and showing compliance with, each of the financial
ratios and restrictions contained in this Section 8;
(e) SEC AND OTHER REPORTS. Copies of each filing and report
made by the Company or any Subsidiary with or to any securities
exchange or the Securities and Exchange Commission and of each
communication from the Company or any Subsidiary to shareholders
generally, promptly upon the filing or making thereof;
(f) REPORT OF CHANGE IN SUBSIDIARIES. Promptly from time to
time, a written report of any change in the list of the Company's
Subsidiaries set forth on Exhibit D; and
(g) REQUESTED INFORMATION. Promptly from time to time, such
other reports or information as the Agent or any Bank may reasonably
request.
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8.2 NOTICES. Notify the Agent in writing of any of the
following immediately upon learning of the occurrence thereof, describing the
same and, if applicable, the steps being taken by the Person(s) affected with
respect thereto:
(a) DEFAULT. The occurrence of an Event of Default or an
Unmatured Event of Default;
(b) LITIGATION. The institution of any litigation, arbitration
proceeding or governmental proceeding which is material to the Company
and its Subsidiaries taken as a whole;
(c) JUDGMENT. The entry of any judgment or decree against the
Company or any Subsidiary if the aggregate amount of all judgments and
decrees then outstanding against the Company and all Subsidiaries
exceeds $250,000 after deducting (i) the amount with respect to which
the Company or any Subsidiary is insured and with respect to which the
insurer has assumed responsibility in writing and (ii) the amount for
which the Company or any Subsidiary is otherwise indemnified if the
terms of such indemnification and the Person providing such
indemnification are satisfactory to the Majority Banks;
(d) PENSION AND WELFARE PLANS. The occurrence of a Reportable
Event with respect to any Plan; the institution of any steps by the
Company, any ERISA Affiliate, the PBGC or any other Person to terminate
any Plan; the institution of any steps by the Company or any ERISA
Affiliate to withdraw from any Plan; or the incurrence of any material
increase in the contingent liability of the Company or any Subsidiary
with respect to any post-retirement welfare benefits;
(e) MATERIAL ADVERSE CHANGE. The occurrence of a material
adverse change in the business, operations or financial condition of
the Company and its Subsidiaries taken as a whole; or
(f) OTHER EVENTS. The occurrence of such other events as any
Bank may from time to time reasonably specify.
The Agent will promptly notify each of the Banks of the receipt by the
Agent of any notice from the Company pursuant to this Section 8.2
8.3 EXISTENCE. Except as otherwise set forth in this
Agreement, do all things, and cause each of its Subsidiaries to do all things,
necessary to preserve and keep in full force and effect its corporate existence,
rights and franchises; PROVIDED, HOWEVER, that nothing in this Section 8.3 shall
prevent the abandonment or termination of the corporate existence, rights and
franchises of any such Subsidiary if, in the opinion of the Company, such
abandonment or termination would not have a material and adverse effect on the
business, operations, properties, prospects, assets or condition, financial or
other, of the Company and its Subsidiaries taken as a whole;
-21-
8.4 NATURE OF BUSINESS. Engage, and cause each Subsidiary to
engage, in substantially the same fields of business as it is engaged in on the
date hereof.
8.5 BOOKS, RECORDS AND ACCESS. Maintain, and cause each
Subsidiary to maintain, complete and accurate books and records in which full
and correct entries in conformity with generally accepted accounting principles
shall be made of all dealings and transactions in relation to its respective
business and activities; permit, and cause each Subsidiary to permit, access by
the Agent or any Bank to the books and records of the Company and such
Subsidiary during normal business hours; and permit, and cause each Subsidiary
to permit, any Bank to make copies of such books and records. All information
provided to any Bank that is not of public record will be kept confidential by
such Bank except as may be necessary in any litigation involving this Agreement
and any Note or as may be required by any applicable regulatory authorities or
by any court order or subpoena.
8.6 INSURANCE. Maintain, and cause each Subsidiary to
maintain, insurance to such extent and against such hazards and liabilities as
is commonly maintained by companies similarly situated or as the Majority Banks
may reasonably request from time to time; provided that the Company and its
Subsidiaries may maintain a system or systems of self-insurance which, in the
opinion of the chief financial officer of the Company, will accord with sound
practices of corporations maintaining such systems engaged in the same or a
similar business similarly situated and under which the Company or such
Subsidiaries shall maintain adequate reserves in accordance with sound actuarial
and insurance principles and practice.
8.7 INSURANCE REPORTS. Provide to the Agent and the Banks at
least annually within ninety (90) days of the end of the Company's fiscal year,
a certificate signed by its chief financial officer that attests to and
summarizes the property and casualty insurance program carried by the Company
and its Subsidiaries.
8.8 REPAIR. Maintain, preserve and keep, and cause each
Subsidiary to maintain, preserve and keep, its properties in good repair,
working order and condition; and from time to time make, and cause each
Subsidiary to make, all necessary and proper repairs, renewals, replacements,
additions, betterments and improvements thereto so that at all times the
efficiency thereof shall be fully preserved and maintained.
8.9 TAXES. Pay, and cause each Subsidiary to pay, when due,
all of its Taxes, unless and only to the extent that the Company or such
Subsidiary, as the case may be, is contesting such Taxes in good faith and by
appropriate proceedings and the Company or such Subsidiary has set aside on its
books such reserves or other appropriate provisions therefor as may be required
by generally accepted accounting principles.
8.10 COMPLIANCE. Use, and cause each of its Subsidiaries to
use, its best efforts to comply in all respects with all applicable statutes,
rules, regulations and orders of all governmental authorities with respect to
the conduct of its businesses and the ownership of properties (including,
without limitation, all applicable statutes, regulations, orders and
restrictions relating to
-22-
environmental standards and controls), except to the extent that any of the
foregoing are contested in good faith by appropriate proceedings.
8.11 PENSION PLANS. Not permit, and not permit any Subsidiary
to permit, any condition to exist in connection with any Plan which might
constitute grounds for the PBGC to institute proceedings to have such Plan
terminated or a trustee appointed to administer such Plan; and not engage in, or
permit to exist or occur, or permit any of its Subsidiaries to engage in, or
permit to exist or occur, any other condition, event or transaction with respect
to any Plan which could result in the incurrence by the Company or any of its
Subsidiaries of any material liability, fine or penalty.
8.12 INDEBTEDNESS. Not, and not permit any Subsidiary to,
create, assume, incur or otherwise become liable, in each case contingently or
otherwise, in respect of any Indebtedness, whether secured or unsecured, other
than:
(a) in the case of the Company, unsecured Indebtedness;
(b) in the case of any Subsidiary, (i) unsecured Indebtedness,
provided that at the time of the creation, assumption or incurrence
thereof and immediately after giving effect thereto, the Company would
be in compliance with SECTION 8.14 hereof and the then outstanding
aggregate principal amount of Priority Indebtedness shall not exceed
twenty-five percent (25%) of the Consolidated Net Worth of the Company
and its Subsidiaries and (ii) Indebtedness owing to the Company or a
Subsidiary; and
(c) in the case of the Company or any Subsidiary, Indebtedness
secured by Liens as and to the extent permitted by Section 8.13.
8.13 LIENS. Not, and not permit any Subsidiary to, (i) create,
assume, incur or suffer to exist any Lien upon (or, whether by transfer to any
Subsidiary or Affiliate or otherwise, subject, or permit any Subsidiary or
Affiliate to subject, to the prior payment of any Indebtedness other than that
represented by the Notes) any property or assets (real or personal, tangible or
intangible) of the Company or any Subsidiary, whether now owned or hereafter
acquired, or any income or profits therefrom, or (ii) own or acquire or agree to
acquire any property or assets (real or personal, tangible or intangible)
subject to or upon any Lien; PROVIDED; HOWEVER, that the foregoing restrictions
shall not prevent the Company or any Subsidiary from:
(a) (i) making pledges or deposits under workmen's
compensation laws, unemployment insurance laws or similar legislation
or good faith deposits in connection with bids, tenders, contracts
(other than for the repayment of money borrowed) or under leases to
which the Company or such Subsidiary is a party, (ii) making deposits
to secure public or statutory obligations of the Company or such
Subsidiary or deposits of cash or obligations of the United States of
America to secure surety and appeal bonds to which the Company or such
Subsidiary is a party or deposits in lieu of such bonds, (iii)
incurring Liens or priorities imposed by law, such as employees'
carriers', warehousemen's, mechanics',
-23-
materialmen's and vendors' liens or priorities, and Liens arising
out of judgments or awards against the Company or such Subsidiary
with respect to which the Company or such Subsidiary at the time
shall be prosecuting an appeal or proceedings for review and with
respect to which it shall have secured a stay of execution pending
such appeal or proceedings for review or (iv) entering into leases
and from incurring landlords' liens on fixtures and movable property
located on premises leased in the ordinary course of business so
long as the rent secured thereby is not in default and any
applicable grace period has not expired;
(b) creating, incurring or suffering to exist (i) Liens for
Taxes or import duties not yet subject to penalties for nonpayment or
the nonpayment of which shall be permitted by Section 7.14 or (ii)
minor survey exceptions, minor encumbrances, easements or reservations
of, or rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real properties, which Liens,
exceptions, encumbrances, easements, reservations, rights and
restrictions do not, in the opinion of the Company, in the aggregate
materially detract from the value of such properties or materially
impair their use in the operation of the business of the Company or
such Subsidiary;
(c) suffering to exist the Liens existing on the date hereof
securing Indebtedness in an aggregate principal amount outstanding on
the date hereof not in excess of $3,000,000 and extensions, renewals or
replacements of any such Lien upon the same property theretofore
subject thereto without increase in the principal amount of the
Indebtedness then secured or evidenced thereby;
(d) in case of a Subsidiary, creating, incurring, assuming or
suffering to exist any Lien solely to secure Indebtedness owing to the
Company or a Subsidiary; or
(e) creating, incurring, assuming or suffering to exist Liens
not otherwise permitted by the foregoing clauses (a) through (d),
inclusive, of this Section 8.13; PROVIDED, HOWEVER, that at the time of
the creation, incurrence or assumption thereof, and immediately after
giving effect to the Indebtedness secured or evidenced by any such
Lien, (x) the then outstanding aggregate principal amount of Priority
Indebtedness shall not exceed twenty-five percent (25%) of Consolidated
Net Worth of the Company and its Subsidiaries as of the end of the
previous fiscal year of the Company and (y) the Company would be in
compliance with SECTION 8.14 hereof.
8.14 MAXIMUM CONSOLIDATED TOTAL INDEBTEDNESS TO CAPITALIZATION
RATIO. Not permit the Total Debt to Capitalization Ratio at any time to exceed
.55 to 1.
8.15 MAINTENANCE OF INTEREST EXPENSE COVERAGE. Maintain the
ratio of Consolidated Net Earnings Available for Fixed Charges to Fixed Charges
determined as of the last day of each fiscal quarter ending on or after June 30,
2000 for the Computation Period then ending at not less than 2.0 to 1.
-24-
8.16 RESTRICTED PAYMENTS. Not, directly or indirectly, (a)
declare or pay any dividend or make any other distribution (whether by reduction
of capital or otherwise) on any shares of any class of its capital stock (other
than a dividend or distribution payable in shares of common stock of the
Company) or (b) purchase, redeem, retire or otherwise acquire, or cause or
permit any Subsidiary or Affiliate to purchase, otherwise acquire or make any
payment in respect of, any such shares, unless, immediately after giving effect
to such action no Event of Default or Unmatured Event of Default shall have
occurred and be continuing.
8.17 LIMITATION ON DISPOSITION OF ASSETS. Subject to Section
8.18, not at any time sell, transfer or otherwise dispose of, other than in the
ordinary course of business, all or any part of its assets and properties, for
less than the fair market value (as determined in good faith by the Company) of
the properties and assets so disposed of if, immediately after giving effect
thereto, the aggregate value of all such properties and assets so disposed of
(valued at the book value thereof) during the immediately preceding 365 days
exceeds twenty percent (20%) of Total Capitalization as of the end of the then
most recently ended fiscal year of the Company.
8.18 MERGER, CONSOLIDATION, SALE OR LEASE. Not consolidate
with or merge into any Person, or permit any Person to merge into it, or sell,
transfer or otherwise dispose of all or substantially all of its properties and
assets, unless:
(a) the Company shall be the surviving corporation; and
(b) immediately after giving effect to such transaction, no
Event of Default or Unmatured Event of Default shall have occurred and
be continuing.
8.19 RESTRICTIONS ON SUBSIDIARIES.
(a) Not cause, suffer or permit any Subsidiary to:
(i) issue or dispose of any shares of such
Subsidiary's capital stock to any Person other than the
Company or a Subsidiary, except to the extent that any such
shares are required to qualify directors under any applicable
law or required to be issued to other stockholders of such
Subsidiary by virtue of their exercise of preemptive rights or
as their pro rata share of any stock dividend;
(ii) sell, assign, pledge, transfer, dispose of, or
in any way part with control of, any shares of capital stock
of another Subsidiary, or any Indebtedness owing to such
Subsidiary from another Subsidiary, to any Person other than
the Company or a Subsidiary, except in connection with a
transaction which complies with Section 8.19(b); and, in the
case of shares of capital stock, to the extent, if any,
required to qualify directors of such other Subsidiary under
any applicable law; or
(iii) sell, assign, lease, pledge, transfer or
otherwise dispose of any substantial part of such Subsidiary's
properties and assets to any Person or
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consolidate with or merge into any other Person or permit any
other Person to merge into it; PROVIDED, HOWEVER, that
(x) any Subsidiary may sell all or substantially all
of its properties and assets for cash in an amount not less
than their fair market value (as determined in good faith by
the Company) if (1) such Subsidiary does not own any capital
stock or any Indebtedness of the Company or any other
Subsidiary not simultaneously being disposed of, (2) such sale
is not prohibited by the provisions of Section 8.17, and (3)
at the time of such transaction and immediately after giving
effect thereto, no Event of Default or Unmatured Event of
Default shall have occurred and be continuing; and
(y) any Subsidiary may sell, lease, transfer or
otherwise dispose of all or any part of its properties and
assets to, or consolidate with or merge into, the Company
(subject to the provisions of Section 8.18) or a Subsidiary.
(b) Not sell, assign, pledge, transfer, dispose of, or in any
way part with control of, any shares of capital stock of any Subsidiary or any
Indebtedness owing from any Subsidiary to the Company, except, in the case of
shares of capital stock, to the extent, if any, required to qualify directors of
such Subsidiary under any applicable law; PROVIDED, HOWEVER, that all shares of
capital stock of all classes, together with all Indebtedness, of any Subsidiary
owned by the Company and/or one or more Subsidiaries may be sold if such sale,
if deemed a sale of properties and assets by such Subsidiary, would not be
prohibited by the provisions of Section 8.19(a)(iii)(x).
(c) Not, and not cause, suffer or permit any Subsidiary to,
acquire, directly or indirectly, any stock of any other corporation which
immediately after such acquisition would become a Subsidiary, unless immediately
after giving effect to such acquisition:
(i) no Event of Default or Unmatured Event of Default
shall have occurred and be continuing; and
(ii) the Company could incur at least $1 of
additional Indebtedness secured or evidenced by Liens in
compliance with the provisions of Section 8.13(e).
8.20 INVESTMENTS. Not, and not permit any Subsidiary to, make
any Restricted Investment if, after giving effect thereto, the Aggregate Amount
of all Restricted Investments of the Company and its Subsidiaries exceeds thirty
percent (30%) of Consolidated Net Worth as of the end of the Company's most
recently completed fiscal year; PROVIDED, HOWEVER, that the Aggregate Amount of
all Restricted Investments of the Company and its Subsidiaries in businesses not
related to the food industry shall not exceed five percent (5%) of Consolidated
Net Worth for such fiscal year.
8.21 OTHER AGREEMENTS. Not, and not permit any Subsidiary to,
enter into any agreement containing any provision which would be violated or
breached by the Company's
-26-
performance of its obligations hereunder or under any instrument or document
delivered or to be delivered by the Company hereunder or in connection
herewith.
8.22 USE OF PROCEEDS. Not permit any proceeds of the Advances
to be used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of (i) "purchasing or carrying any margin stock" within
the meaning of Regulation U of the Federal Reserve Board, as amended from time
to time or (ii) acquiring any of the outstanding shares of capital stock of any
corporation unless, at the time such proceeds are so used, the Board of
Directors (or persons exercising similar functions) of the issuer of the shares
to be acquired shall have approved such acquisition and recommended it to its
shareholders. The Company will furnish to any Bank, upon its request, a
statement in conformity with the requirements of Federal Reserve Form U1
referred to in Regulation U.
8.23 TRANSACTIONS WITH RELATED PARTIES. Not, and not permit
any Subsidiary to, enter into or be a party to any transaction or arrangement
with any Affiliate including, without limitation, the purchase, sale, lease or
exchange of property or the rendering of any service, with any Related Party
(except those transactions or arrangements existing on the date hereof,
including any renewals or extensions thereof), except in the ordinary course of
and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not a Related Party.
9. CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of the Banks to
make any Advance is subject to the satisfaction of each of the following
conditions precedent:
9.1 DEFAULT. Before and after giving effect to such Advance,
no Event of Default or Unmatured Event of Default shall have occurred and be
continuing.
9.2 WARRANTIES. Before and after giving effect to such
Advance, the warranties in Section 7 shall be true and correct as though made on
the date of such Advance, except for such changes as are specifically permitted
hereunder.
9.3 CERTIFICATION. The Company shall have delivered to the
Agent and each Bank a certificate of the Company's chief financial officer as to
the matters set out in Sections 9.1 and 9.2.
10. CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation of the
Banks to make the initial Advance hereunder is subject to the satisfaction of
the condition precedent, in addition to the applicable conditions precedent set
forth in Section 9 above, that the Company shall have delivered to each Bank:
10.1 NOTES. Its duly executed Note, payable to such Bank's
order in the amount of such Bank's share of the Credit.
-27-
10.2 RESOLUTIONS. A copy, duly certified as of the date of
this Agreement by the Company's secretary or vice president - finance, of (a)
the resolutions of the Company's Board of Directors authorizing the borrowings
hereunder and the execution and delivery of this Agreement and the Notes, (b)
all documents evidencing other necessary corporate action and (c) all approvals
or consents, if any, with respect to this Agreement and the Notes.
10.3 INCUMBENCY. A certificate of the Company's secretary or
vice president - finance, dated the date of this Agreement, certifying the names
of the Company's officers authorized to sign this Agreement, the Notes and all
other documents or certificates to be delivered hereunder, together with the
true signatures of such officers.
10.4 OPINION. An opinion of Maun & Simon, PLC counsel to the
Company, addressed to the Agent and the Banks and dated the date of this
Agreement, in substantially the form of Exhibit F.
11. EVENTS OF DEFAULT AND REMEDIES.
11.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default under this Agreement.
(a) NON-PAYMENT. Default, and the continuance thereof for five
(5) days, in the payment of principal of, or interest on, the Note when
due, or any fee hereunder.
(b) NON-PAYMENT OF OTHER INDEBTEDNESS. Default in the payment
when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any other Indebtedness of, or guaranteed
by, the Company or any Subsidiary (except any such Indebtedness of any
Subsidiary to the Company or to any other Subsidiary) in an amount
equal to or greater than $2,500,000 or default in the performance or
observance of any obligation or condition with respect to any such
other Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or to permit the holder or holders
thereof, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its expressed maturity.
(c) INSOLVENCY. The Company or any of its Subsidiaries becomes
insolvent or generally fails to pay, or admits in writing its inability
to pay, its debts as they mature, or applies for, consents to, or
acquiesces in the appointment of a trustee, receiver or other custodian
for the Company, such Subsidiary or any other property thereof; or, in
the absence of such application, consent or acquiescence, a trustee,
receiver or other custodian is appointed for the Company, any of its
Subsidiaries or for a substantial part of the property of the Company
or any of its Subsidiaries and is not discharged within thirty (30)
days; or any bankruptcy, reorganization, debt arrangement, or other
proceeding under any bankruptcy or insolvency law, or any dissolution
or liquidation proceeding is instituted by or against the Company or
any of its Subsidiaries and if instituted against the Company or any of
its Subsidiaries is consented to or acquiesced in by the Company or
such Subsidiaries or
-28-
remains for thirty (30) days undismissed; or any warrant of
attachment is issued against any substantial portion of the property
of the Company or any of its Subsidiaries which is not released
within thirty (30) days of service.
(d) ERISA. The PBGC applies to a United States District Court
for the appointment of a trustee to administer any Plan or for a decree
adjudicating that any such Plan must be terminated; a trustee is
appointed pursuant to ERISA to administer any such Plan; any action is
taken to terminate any such Plan or any such Plan is permitted or
caused to be terminated if, at the time such action is taken or such
termination of any such Plan occurs, the Plan's "vested liabilities",
as defined in Section 3(25) of ERISA, exceed the then value of its
assets at the time of such termination.
(e) AGREEMENTS. Default in the performance of any of the
Company's agreements herein set forth (and not constituting an Event of
Default under any of the preceding subsections of this Section 11.1)
and continuance of such default for thirty (30) days after the earlier
of (i) written notice thereof to the Company from the Agent and (ii) a
responsible officer of the Company's obtaining knowledge of the
occurrence of such default.
(f) WARRANTY. Any warranty made by the Company herein is
untrue in any material respect, or any schedule, statement, report,
notice, writing or certification furnished by the Company to any Bank
is untrue in any material respect on the date as of which the facts set
forth are stated or certified.
(g) JUDGMENTS. Any final judgment for the payment of money in
excess of $250,000 shall be rendered against the Company or any
Subsidiary and the same shall remain undischarged for a period of not
less than thirty (30) days during which execution shall not be
effectively stayed.
(h) EVENT RISK OCCURRENCE. Any Event Risk Occurrence shall
have occurred.
(i) MATERIAL ADVERSE CHANGE. The Banks shall have determined
in good faith that (i) a material adverse change has occurred in the
business, operations or financial condition of the Company or (ii) the
prospect of payment or performance of any obligation or agreement of
the Company hereunder or under the Notes is materially impaired, and
the condition giving rise to such determination (which does not
constitute an Event of Default under any of the other subsections of
this Section 11.1) continues for at least thirty (30) days after notice
to the Company from the Agent.
11.2 REMEDIES. If any Event of Default described in Section
11.1 shall be continuing, the Agent, upon request of the Majority Banks, may
declare the Credit to be terminated and all Notes to be due and payable,
whereupon the Credit shall immediately terminate and any outstanding Note shall
become immediately due and payable, all without notice of any kind (except that
if an event described in Section 11.1(c) occurs, the Credit shall immediately
terminate and any outstanding Note shall become immediately due and payable
without declaration or notice of any
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kind). The Agent shall promptly advise the Company of any such declaration, but
failure to do so shall not impair the effect of such declaration.
12. THE AGENT
12.1 APPOINTMENT AND AUTHORIZATION. Each Bank hereby
irrevocably (subject to Section 12.9) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other document executed in connection with this Agreement (herein, a
"Loan Document") and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
12.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys in fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney in fact
that it selects with reasonable care.
12.3 LIABILITY OF AGENT. None of the Agent Related Persons
shall (i) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Banks for any
recital, statement, representation or warranty made by the Company or any
Subsidiary or Affiliate of the Company, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Company or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent Related Person shall be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Company or any
of the Company's Subsidiaries or Affiliates.
12.4 RELIANCE BY AGENT. (a) The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Company), independent accountants and other experts selected by
the Agent. The Agent shall be fully justified
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in failing or refusing to take any action under this Agreement or any other
Loan Document unless it shall first receive such advice or concurrence of the
Majority Banks as it deems appropriate and, if it so requests, confirmation
from the Banks of their obligation to indemnify the Agent against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the
Majority Banks and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 10, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
12.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default or Unmatured Event
of Default, except with respect to defaults in the payment of principal,
interest and fees required to be paid to the Agent for the account of the Banks,
unless the Agent shall have received written notice from a Bank or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The Agent will
notify the Banks of its receipt of any such notice. The Agent shall take such
action with respect to such Event of Default or Unmatured Event of Default as
may be requested by the Majority Banks in accordance with Section 11; PROVIDED,
HOWEVER, that unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default or Unmatured Event of
Default as it shall deem advisable or in the best interest of the Banks.
12.6 CREDIT DECISION. Each Bank acknowledges that none of the
Agent Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any Agent
Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly herein required to be furnished
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to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the
possession of any of the Agent Related Persons.
12.7 INDEMNIFICATION. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; PROVIDED, HOWEVER, that no
Bank shall be liable for the payment to the Agent Related Persons of any portion
of such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each Bank
shall reimburse the Agent upon demand for its ratable share of any costs or out
of pocket expenses (including reasonable fees of attorneys for the Agent
(including the allocable costs of internal legal services and all disbursements
of internal counsel)) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein, to the
extent that the Agent is not reimbursed for such expenses by or on behalf of the
Company. The undertaking in this Section shall survive the expiration or
termination of the Credit and payment of the Notes and other liabilities of the
Company hereunder and the resignation or replacement of the Agent.
For the purposes of this Section 12.7, "Indemnified
Liabilities" shall mean: "any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including reasonable fees of attorneys for the Agent (including the allocable
costs of internal legal services and all disbursements of internal counsel)) of
any kind or nature whatsoever which may at any time (including at any time
following repayment of the Advances and the termination, resignation or
replacement of the Agent or replacement of any Bank) be imposed on, incurred by
or asserted against any such Person in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including (a) any case, action
or proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code or appellate proceeding) related to or arising out
of this Agreement or the Advances or the use of the proceeds thereof, whether or
not any Agent-Related Person, any Bank or any of their respective officers,
directors, employees, counsel, agents or attorneys-in-fact is a party thereto."
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12.8 AGENT IN INDIVIDUAL CAPACITY. BofA and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to their Loans, BofA and its Affiliates shall
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though BofA were not the Agent, and the terms "Bank" and
"Banks" include BofA and its Affiliates, to the extent applicable, in their
individual capacities.
12.9 SUCCESSOR AGENT. The Agent may, and at the request of the
Majority Banks shall, resign as Agent upon 30 days' notice to the Banks. If the
Agent resigns under this Agreement, the Majority Banks shall appoint from among
the Banks a successor agent for the Banks. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Banks and the Company, a successor agent from
among the Banks. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 12 and Section 13.3 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Banks appoint a successor agent as provided for
above.
12.10 WITHHOLDING TAX.
(a) If any Bank is a "foreign corporation, partnership or
trust" within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, properly completed IRS Forms 1001 and W 8 before the
payment of any interest in the first calendar year and before
the payment of any interest in each third succeeding calendar
year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax
because it is effectively connected with a United
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States trade or business of such Bank, two properly
completed and executed copies of IRS Form 4224 before the
payment of any interest is due in the first taxable year of
such Bank and in each succeeding taxable year of such Bank
during which interest may be paid under this Agreement, and
IRS Form W 9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, together with all costs and
expenses (including reasonable fees of attorneys for the Agent (including the
allocable costs of internal legal services and all disbursements of internal
counsel)). The obligation of the Banks under this subsection shall survive the
expiration or termination of the Credit and payment of the Notes and other
liabilities of the Company hereunder and the resignation or replacement of the
Agent.
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13. GENERAL.
13.1 DELAY. No delay on the part of any Bank or the holder of
any Note in the exercise of any power or right shall operate as a waiver
thereof, nor shall any single or partial exercise of any power or right preclude
other or further exercise thereof, or the exercise of any other power or right.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
13.2 NOTICE. Any notice between the parties hereto or notices
provided herein to be given shall be in writing (unless otherwise provided
herein) and, if mailed, shall be deemed to be given when sent by registered or
certified mail, postage prepaid, and addressed to the Company, the Agent or the
Banks at the respective address set forth on the signature pages hereof.
13.3 EXPENSES. The Company agrees, whether or not any Advance
is made hereunder, to pay the Agent and the Banks upon demand for all reasonable
expenses, including reasonable fees of attorneys for the Agent and the Banks
(who may be employees of the Agent and the Banks), incurred by (i) the Agent in
connection with the preparation, negotiation and execution of this Agreement,
the Notes and any document required to be furnished therewith, (ii) the Agent in
connection with the preparation of any and all amendments to this Agreement or
the Notes and all other instruments or documents provided for herein or
delivered or to be delivered hereunder or in connection herewith, and (iii) the
Agent and the Banks in connection with the enforcement of the Company's
obligations hereunder or under any Note. The Company also agrees (iv) to
indemnify and hold the Agent harmless from any loss or expense which may arise
or be created by the acceptance of telephonic or other instructions for making
Advances and (v) to pay, and save the Agent and the Banks harmless from all
liability for, any stamp or other taxes which may be payable with respect to the
execution or delivery of this Agreement or the issuance of the Notes or of any
other instruments or documents provided for herein or to be delivered hereunder
or in connection herewith. The Company further agrees to indemnify, defend,
reimburse and hold harmless the Agent, each Bank and all directors, officers,
employees, agents and advisors of the Agent and the Banks (each, an "Indemnified
Party") from and against all claims, actions, proceedings, suits, damages,
losses, liabilities, costs and expenses, including the reasonable fees and
expenses of counsel (who may be employees of the Agent and the Banks), which may
be incurred by or asserted against any Indemnified Party in connection with, or
arising out of, or relating to, any transaction or proposed transaction (whether
or not consummated) financed or to be financed, in whole or in part, directly or
indirectly with the proceeds of any Advance(s), provided such Indemnified Party
has acted in good faith and is not in breach of this Agreement. The Company's
obligations as set forth in this section shall survive any termination of this
Agreement.
13.4 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
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13.5 COUNTERPARTS. This Agreement may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original but all such counterparts shall constitute but one and the
same instrument.
13.6 INVESTMENT. Each Bank represents and warrants that: (i)
it is acquiring any Note to be issued to it hereunder for its own account as a
result of making loans in the ordinary course of its commercial banking business
and not with a view to the public distribution or sale thereof, nor with any
present intention of selling or distributing such Note, but subject,
nevertheless, to any legal or administrative requirement that the disposition of
such Bank's property at all times be within its control and (ii) in good faith
it has not and will not rely upon any margin stock (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System) as
collateral in the making and maintaining of the Advances.
13.7 U.S. WITHHOLDING TAX EXEMPTIONS. Each Bank represents
that, on the date of this Agreement, either (a) it is a bank organized under the
laws of the United States or any state thereof or (b) if it is not a bank
organized under the laws of the United States or any state thereof, it is
entitled to complete exemption from United States withholding tax imposed on or
with respect to payment of principal, interest and fees under this Agreement and
the Notes under an applicable provision of a tax convention to which the United
States is a party and either (i) it is entitled to complete exemption from
United States withholding tax imposed on or with respect to payments of
principal, interest and fees under this Agreement and the Notes under an
applicable provision of a tax convention to which the United States is a party
or (ii) it is acting through a branch, agency or office in the United States
(including only the states and the District of Columbia) and any payment
received or to be received by it with respect to payments of principal, interest
and fees under this Agreement and the Notes is effectively connected with the
conduct of a trade or business in the United States.
13.8 LAW. This Agreement and each Note shall be contracts made
under and governed by the laws of the State of Illinois.
13.9 SUCCESSORS. This Agreement shall be binding upon the
Company, the Banks and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Banks and the Agent and the
successors and assigns of the Banks and the Agent. The Company shall not assign
its rights or duties hereunder without the consent of the Banks.
13.10 AMENDMENTS. No amendment or waiver of any provision of
this Agreement or the Notes, nor consent to any departure therefrom by the
Company shall be effective unless the same shall be in writing and signed by the
Company and the Majority Banks, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; PROVIDED, HOWEVER, that no amendment, waiver or consent shall, unless in
writing and signed by all the Banks, do any of the following: (a) waive any of
the conditions specified in Sections 9 and 10, (b) increase the amounts or
extend the terms of the Banks' Commitments or subject the Banks to any
additional obligations, (c) reduce the principal of, or interest on, the Notes
or any fees
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hereunder, (d) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees hereunder, (e) change the percentage of
the Commitments or of the aggregate unpaid principal amount of the Notes, or
the number of Banks which shall be required to take action hereunder, or (f)
change any provisions of this Section 13.10; PROVIDED, FURTHER, that no
amendment, waiver or consent to Section 12 shall be effective unless signed
by the Agent.
13.11 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Bank may, with the written consent of the Company at
all times other than during the existence of an Event of Default and the Agent,
which consents shall not be unreasonably withheld, at any time assign and
delegate to one or more Eligible Assignees (provided that no written consent of
the Company or the Agent shall be required in connection with any assignment and
delegation by a Bank to an Eligible Assignee that is an affiliate of such Bank)
(each an "ASSIGNEE") all, or any ratable part of all, of the Advances, its
Commitment hereunder and the other rights and obligations of such Bank
hereunder, in a minimum amount of $5,000,000; PROVIDED, HOWEVER, that the
Company and the Agent may continue to deal solely and directly with such Bank in
connection with the interest so assigned to an Assignee until (i) written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Bank and the Assignee; (ii) such Bank and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of EXHIBIT G ("ASSIGNMENT AND ACCEPTANCE") and (iii) the assignor
Bank or Assignee has paid to the Agent a processing fee in the amount of $2,500.
The Company shall not be responsible for reimbursing any costs related to any
assignment hereunder.
(b) From and after the date that the Agent notifies the
assignor Bank that it has received (and provided its consent with respect to) an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) 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, shall have the rights and obligations of a
Bank under this Agreement and the Notes, and (ii) the assignor Bank shall, to
the extent that rights and obligations hereunder and under the Notes have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement and the Notes.
(c) Within five Banking Days after its receipt of notice by
the Agent that it has received an executed Assignment and Acceptance and payment
of the processing fee, (and provided that it consents to such assignment in
accordance with subsection 13.11), the Company shall execute and deliver to the
Agent, new Notes evidencing such Assignee's assigned Advances and Commitment
and, if the assignor Bank has retained a portion of its Advances and its
commitment, replacement Notes in the principal amount of the Advances retained
by the assignor Bank (such Notes to be in exchange for, but not in payment of,
the Notes held by such Bank). Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance, this Agreement shall
be deemed to be amended to the extent, but only to the extent, necessary to
reflect the addition of the Assignee and the resulting adjustment of the
Commitments arising therefrom.
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The Commitment allocated to each Assignee shall reduce the Commitment of the
assigning Bank by the amount of the Commitment assigned.
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "PARTICIPANT")
participating interests in any Advances, the Commitment of that Bank and the
other interests of that Bank (the "Originating Bank") hereunder and under the
Notes; PROVIDED, HOWEVER, that (i) the Originating Bank's obligations under this
Agreement shall remain unchanged, (ii) the Originating Bank shall remain solely
responsible for the performance of such obligations, (iii) the Company and the
Agent shall continue to deal solely and directly with the Originating Bank in
connection with the Originating Bank's rights and obligations under this
Agreement and the Notes, and (iv) no Bank shall transfer or grant any
participating interest under which the Participant has rights to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
Note, except to the extent such amendment, consent or waiver would require
unanimous consent of the Banks. In the case of any such participation, the
Participant shall be entitled to the benefit of Sections 6 and 13.3 as though it
were also a Bank hereunder, but shall not have any rights under this Agreement,
or any of the Notes, and all amounts payable by the Company hereunder shall be
determined as if such Bank had not sold such participation; except that, if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank may
at any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement and any Note held by it in favor of
any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
13.12 WAIVER OF JURY TRIAL. THE COMPANY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (i)
UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (ii)
ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed at Chicago, Illinois by their respective officers thereunto duly
authorized as of the date first written above.
XXXXXXX FOODS, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Title: Assistant Treasurer
-----------------------------------
Address: 324 Park National Bank Building
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
S-1
BANK OF AMERICA, NATIONAL
ASSOCIATION, as administrative agent
By: /s/ J. Xxxxx Xxxxxxxx
--------------------------------------
Title: Vice President
-----------------------------------
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
S-2
Amount of
Commitment Share
---------- -----
$7,000,000 35%
BANK OF AMERICA,
NATIONAL ASSOCIATION
By: /s/ J. Xxxxx Xxxxxxxx
--------------------------------------
Title: Vice President
-----------------------------------
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
S-3
Amount of
Commitment Share
---------- -----
$6,500,000 32.5%
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND"
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
-----------------------------------
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
S-4
Amount of
Commitment Share
---------- -----
$6,500,000 32.5%
NORWEST BANK MINNESOTA, N.A.
By: /s/ Xxx Xxxxxx
--------------------------------------
Title: Vice President
-----------------------------------
Address: Xxxxxxx Xxxxxx
Xxxxx xxx Xxxxxxxxx Xxx.
Xxxxxxxxxxx, XX 00000-0000
S-5
EXHIBIT A
REVOLVING NOTE
$_______________
Chicago, Illinois:________2000
FOR VALUE RECEIVED, the undersigned XXXXXXX FOODS, INC. (the
"Company") hereby promises to pay to the order of _________(the "Bank") on
the Termination Date (as such term is defined in the Revolving Loan Agreement
hereinafter referred to), the principal sum of _______ DOLLARS ($________),
or if less, the then aggregate unpaid principal amount of all Domestic
Advances and Eurodollar Advances (as such terms are defined in the Revolving
Loan Agreement) as may be borrowed by the Company under the Revolving Loan
Agreement. The Company may borrow, repay and reborrow hereunder in accordance
with the provisions of the Revolving Loan Agreement.
The Company promises to pay interest on the unpaid principal amount of
the Advances from time to time outstanding from the date hereof until payment in
full at the rates per annum which shall be determined in accordance with the
provisions of the Revolving Loan Agreement. Said interest shall be payable on
each date provided for in the Revolving Loan Agreement; PROVIDED, HOWEVER, that
interest on any principal portion which is not paid when due shall be payable on
demand.
The portions of the principal sum hereof from time to time representing
Domestic Advances or Eurodollar Advances, and payments of principal thereof,
shall be noted by the holder of this Note on the grid schedule attached hereto.
All payments of principal and interest under this Note shall be made in
immediately available funds at the office of Bank of America, National
Association ("BofA") at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 or at
such other address as BofA shall notify the Company in writing.
This Note is one of the Notes referred to in, and is subject to the
terms and provisions of, the Revolving Loan Agreement dated as of May 10, 2000
(as the same may be amended, modified or supplemented from time to time, herein
called the "Revolving Loan Agreement") among the Company, certain banks
(including the Bank) and BofA, as administrative agent, to which Revolving Loan
Agreement reference is hereby made for a statement of said terms and provisions.
The Company expressly waives any presentment, demand, protest or notice in
connection with this Note.
This Note is made under and governed by the internal laws of the State
of Illinois.
Address: 324 Park National Bank Building XXXXXXX FOODS, INC.
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000 By:
---------------------------
Title:
------------------------
A-2
Schedule attached to Note dated as of ________, 2000 of XXXXXXX FOODS, INC.,
payable to the order of____________________.
ADVANCES AND PRINCIPAL PAYMENTS
Date Amount of Type of Amount of Unpaid Principal Notation
Advance Made Advance & Principal Balance Made by
Applicable Repaid
Interest Rate
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
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------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
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================================================================================================
The aggregate unpaid principal amount shown on this schedule shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on this Note. The
failure to record the date and amount of any advance on this schedule shall not,
however, limit or otherwise affect the obligations of the Company under the
Revolving Loan Agreement or under this Note to repay the principal amount of the
advances together with all interest accruing thereon.
A-3
EXHIBIT B
1. Patent litigation between the Company and SunnyFresh Foods, Inc.
involving certain patents owned by North Carolina State University and licensed
to the Company was dismissed without prejudice and similar litigation between
the Company and NuLaid Foods, Inc. has been stayed pending the outcome of
certain U S Patent and Trademark Office actions. According to patent counsel for
the Company, Xxxxx Bigel Sibley and Sajovec, L.L.P., the patents that are the
subject of the referenced litigation have been reaffirmed by the U S Patent and
Trademark Office. The patents are expected to issue shortly. The Company has
petitioned the U S. District Court of California to lift the stay in the NuLaid
Foods, Inc. matter.
2. During 1999 Kohler Mix Specialties, Inc., a wholly-owned subsidiary
of the Company, recalled certain cartoned milk products sold primarily to Land
O"Lakes, Inc. and Marigold Foods, Inc. Claims arising out of the product recall
have not been finally resolved, although it is expected that substantially all
losses will be covered by insurance.
3. 1248671 ONTARIO, INC., D/B/A MACARTNEY FARMS V. XXXXXXX FOODS, INC.,
TRILOGY EGG PRODUCTS, INC., AND XXXXX XXXXXXXX, ONTARIO SUPERIOR
COURT OF JUSTICE FILE NO. 00-CV-13453
From 1991 through 1999, plaintiff Macartney Farms purchased
truckloads of Easy Eggs manufactured by the Company"s subsidiary, X.X.
Xxxxxxxx Co., and resold the product in Canada, primarily to the restaurant
industry. Macartney Farms picked up truckloads of Easy Eggs at Xxxxxxxx"s
Gaylord, Minnesota plant, and hauled them to Canada for resale. Loads were
individually invoiced to Macartney Farms.
In 1999, the Company formed a joint venture with two Canadian
entities to manufacture and sell Easy Eggs throughout Canada. The joint
venture was incorporated as Trilogy Egg Products, Inc., whose president is
Xxxxx Xxxxxxxx. Plaintiff Macartney Farms negotiated with Trilogy and
Xxxxxxxx to obtain territorial distribution rights for Easy Eggs, but the
parties were unable to conclude an agreement. Macartney Farms had never sold
Easy Eggs for the Company/Xxxxxxxx under a written agreement previously;
rather all dealings were oral and all truckload purchases were individually
invoiced.
Macartney Farms commenced the above-captioned case in early April
2000. It claims that its "exclusive marketing and distribution rights for
Easy Eggs" were wrongfully terminated, that the Company and Trilogy have
intentionally interfered with its economic relations with others, that they
owed and breached fiduciary duties to Macartney Farms, and that Macartney
Farms is entitled to recover its investment in Easy Eggs that it made for the
benefit of the Company. It also seeks an injunction preventing the Company
and Trilogy from soliciting or dealing with any of its customers and an
accounting. Macartney Farms seeks damages of up to $17 million.
The Company, Trilogy, and Xxxxxxxx intend to deny all liability and
vigorously defend this claim.
EXHIBIT C
LIENS SECURING INDEBTEDNESS OF THE COMPANY AND ITS SUBSIDIARIES
Amount of
Nature of Indebtedness
Obligor Obligee Security Secured
---------------------------- -------------------- ------------------- ------------
Kohler Mix Specialties, Inc. City of White Utility Assessments $1,642
Bear Lake
X.X. Xxxxxxxx Company Xxxxx and Xxxxxxx Real Estate $15,528
Xxxxxxxxx
X.X. Xxxxxxxx Company Bloomfield Community Real Estate $154,092
Development
Casa Trucking, Inc. First Union Leasing Tractor/Trailers $493,998
Group
EXHIBIT D
COMPANY SUBSIDIARIES
SUBSIDIARY NAME JURISDICTION
Crystal Farms Refrigerated
Distribution Company Minnesota
Northern Star Co. Minnesota
Kohler Mix Specialties, Inc. Minnesota
Kohler Mix Specialties of
Connecticut, Inc. Connecticut
X. X. Xxxxxxxx Company Nebraska
Papetti's Hygrade Egg
Products, Inc. Minnesota
Casa Trucking, Inc. Minnesota
Wisco Farm Cooperative Wisconsin
WFC, Inc. Wisconsin
Farm Fresh Foods, Inc. California
Xxxxxxx Foods of Delaware, Inc. Delaware
Midwest Mix, Inc. Minnesota
Minnesota Products, Inc. Minnesota
MFI Food Canada, Ltd. Canada
MIKLFS Corporation Virgin Islands
R & P Liquid Egg Technology
Limited Partnership New Jersey
Papetti Electroheating Corporation New Jersey
EXHIBIT E
NONE
EXHIBIT F
FORM OF OPINION OF COUNSEL
_______________, 2000
Bank of America National Association, as administrative agent
and the Banks referred to below
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: XXXXXXX FOODS, INC.
Ladies and Gentlemen:
We have acted as counsel to Xxxxxxx Foods, Inc. (the "Company"), and we
are delivering to you this opinion of counsel upon which you may rely, in
connection with a Revolving Loan Agreement, dated as of May 10, 2000, entered
into between the Company, Bank of America, National Association, as
administrative agent and certain banks (the "Banks") (the "Revolving Loan
Agreement"), and the transactions and other documents and instruments described
therein. Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings assigned to such terms in the Revolving Loan
Agreement.
In so acting, we, as counsel to the Company have made such factual
inquiries, and we have examined or caused to be examined such questions or law,
as we have considered necessary or appropriate for the purposes of this opinion
and, upon the basis of such inquiries and examinations, advise you that, in our
opinion:
1. The Company, and each of its Subsidiaries are corporations duly
organized, validly existing and in good standing under the laws of the state
of their respective incorporation, and each is duly qualified and in good
standing as a foreign corporation in all other jurisdictions in which its
respective present operations or properties require such qualification.
2. The Company has full corporate power and authority to own and
operate their properties and assets, carry on its business as presently
conducted, and enter into and perform its obligations under the Revolving Loan
Agreement and the Notes.
3. The execution and delivery of the Revolving Loan Agreement and the
Notes, the performance by the Company of its obligations thereunder, and the
borrowings under the Revolving Loan Agreement, have been duly authorized by all
necessary corporate action, and all of said documents and instruments have been
duly executed and delivered on behalf of the Company and constitute valid and
binding obligations of the Company, enforceable in accordance with its
respective terms, except as enforceability may be limited by bankruptcy,
insolvency or other similar laws of general application affecting the
enforcement of creditors' rights or by general principles of equity limiting the
availability of equitable remedies.
4. There is no provision in the Company's articles of incorporation or
by-laws, nor any provision in any indenture, mortgage, contract or agreement
known to us to which the Company is a party or by which it or its properties may
be bound, nor any law, statute, rule or regulation, nor any writ, order or
decision of any court or governmental instrumentality binding on the Company,
which would be contravened by the execution and delivery of the Revolving Loan
Agreement or the Notes, nor do any of the foregoing prohibit the Company's
performance of any term, provision, condition, covenant or any other obligation
of the Company contained therein.
5. There are no actions, suits or proceedings pending or, to the best
of our knowledge after due inquiry, threatened against or affecting the Company
before any court or arbitrator or by or before any administrative agency or
governmental authority, which, if adversely determined, would have a material
adverse effect on the Company's financial condition or business or the Company's
ability to perform or otherwise comply with its obligations set forth in the
Revolving Loan Agreement or the Notes.
6. Neither the making nor performance of the Revolving Loan Agreement
or the Notes, nor the borrowings under the Revolving Loan Agreement or the
Notes, requires the consent or approval of any governmental instrumentality.
7. The Company is not an "investment company" or a company "controlled"
by an "investment company" within the meanings of the Investment Company Act of
1940, as amended.
8. The Company is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock within the meaning of
Regulation U of the Federal Reserve Board.
Very truly yours,
F-2
EXHIBIT G
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "ASSIGNMENT AND
ACCEPTANCE") dated as of __________, 200__ is made between
______________________________ (the "ASSIGNOR") and __________________________
(the "ASSIGNEE").
RECITALS
WHEREAS, the Assignor is party to that certain
Revolving Loan Agreement dated as of May 10, 2000 (as amended, amended and
restated, modified, supplemented or renewed, the "CREDIT AGREEMENT") among
Xxxxxxx Foods, Inc., a Minnesota corporation (the "COMPANY"), the several
financial institutions from time to time party thereto (including the Assignor,
the "BANKS"), and Bank of America, National Association, as administrative agent
for the Banks (the "AGENT"). Any terms defined in the Credit Agreement and not
defined in this Assignment and Acceptance are used herein as defined in the
Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor
has committed to making Loans (the "COMMITTED LOANS") to the Company in an
aggregate amount not to exceed $__________ (the "COMMITMENT");
WHEREAS, [the Assignor has made Committed Loans in the
aggregate principal amount of $__________ to the Company] [no Committed Loans
are outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part
of the] [all] rights and obligations of the Assignor under the Credit Agreement
in respect of its Commitment, in an amount equal to $__________ (the "ASSIGNED
AMOUNT") on the terms and subject to the conditions set forth herein and the
Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) __% (the "ASSIGNEE'S PERCENTAGE
SHARE") of (A) the Commitment [and the Committed Loans] of the Assignor and (B)
all related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Credit Agreement and the Loan
Documents.
[IF APPROPRIATE, ADD PARAGRAPH SPECIFYING PAYMENT TO ASSIGNOR
BY ASSIGNEE OF OUTSTANDING PRINCIPAL OF, ACCRUED INTEREST ON, AND FEES WITH
RESPECT TO, COMMITTED LOANS ASSIGNED.]
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Bank under the Credit Agreement, including the payment of indemnification,
with a commitment in an amount equal to the Assigned Amount. The Assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Credit Agreement are required to be performed by it as a
Bank. It is the intent of the parties hereto that the Commitment of the Assignor
shall, as of the Effective Date, be reduced by an amount equal to the Assigned
Amount and the Assignor shall relinquish its rights and be released from its
obligations under the Credit Agreement to the extent such obligations have been
assumed by the Assignee; provided, however, the Assignor shall not relinquish
its rights under Section 14.13 of the Credit Agreement to the extent such rights
relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignee's commitment will be
$__________.
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignor's commitment will be
$__________.
2. PAYMENTS.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's pro rata share of the principal amount of all
Committed Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the
Agent a processing fee in the amount specified in Section 13.11(a) of the Credit
Agreement.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Commitment and Committed Loans shall be for the account of
the Assignor. Any interest, fees and other payments accrued on and after the
Effective Date with respect to the Assigned Amount shall be for the account of
the Assignee. Each of the Assignor and the Assignee agrees that it will hold in
trust for the other party any interest, fees and other amounts which it may
receive to
G-2
which the other party is entitled pursuant to the preceding sentence and pay
to the other party any such amounts which it may receive promptly upon
receipt.
4. INDEPENDENT CREDIT DECISION.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to in Section 8.1 of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between the Assignor and the Assignee, the effective
date for this Assignment and Acceptance shall be __________, 200__ (the
"EFFECTIVE DATE"); PROVIDED that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed
and delivered by the Assignor and the Assignee;
(ii) the consent of the Company and the Agent
required for an effective assignment of the Assigned Amount by
the Assignor to the Assignee under Section 13.11(a) of the
Credit Agreement shall have been duly obtained and shall be in
full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all
amounts due to the Assignor under this Assignment and
Acceptance; and
(iv) the processing fee referred to in Section 2(b)
hereof and in Section 13.11(a) of the Credit Agreement shall
have been paid to the Agent.
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Company and the Agent for
acknowledgement by the Agent, a Notice of Assignment substantially in the form
attached hereto as SCHEDULE 1.
[6. AGENT. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor
to take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the Banks pursuant to the
terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by
the Assignor in its capacity as Agent under the Credit Agreement.]
7. WITHHOLDING TAX.
The Assignee (a) represents and warrants to the Bank, the Agent and the
Company that under applicable law and treaties no tax will be required to be
withheld by the Bank with respect
G-3
to any payments to be made to the Assignee hereunder, (b) agrees to furnish
(if it is organized under the laws of any jurisdiction other than the United
States or any State thereof) to the Agent and the Company prior to the time
that the Agent or Company is required to make any payment of principal,
interest or fees hereunder, duplicate executed originals of either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001
(wherein the Assignee claims entitlement to the benefits of a tax treaty that
provides for a complete exemption from U.S. federal income withholding tax on
all payments hereunder) and agrees to provide new Forms 4224 or 1001 upon the
expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto,
duly executed and completed by the Assignee, and (c) agrees to comply with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
8. REPRESENTATIONS AND WARRANTIES.
(a) The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any Lien or other adverse claim; (ii) it
is duly organized and existing and it has the full power and authority to take,
and has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document furnished pursuant
thereto. The Assignor makes no representation or warranty in connection with,
and assumes no responsibility with respect to, the solvency, financial condition
or statements of the Company, or the performance or observance by the Company,
of any of its respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the
G-4
terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to
or affecting creditors' rights and to general equitable principles; and (iv)
it is an Eligible Assignee.
9. FURTHER ASSURANCES.
The Assignor and the Assignee each hereby agree to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Company or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs
and expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS. The Assignor and
the Assignee each irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in Illinois over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such Illinois State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
[OTHER PROVISIONS TO BE ADDED AS MAY BE NEGOTIATED BETWEEN THE
ASSIGNOR AND THE ASSIGNEE, PROVIDED THAT SUCH PROVISIONS ARE NOT INCONSISTENT
WITH THE CREDIT AGREEMENT.]
G-5
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
------------------------------
Title:
---------------------------
G-6
[ASSIGNEE]
By:
------------------------------
Title:
---------------------------
G-7
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 200__
Bank of America, National Association, as administrative agent
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Global Agency #5596
Xxxxxxx Foods, Inc.
000 Xxxx Xxxxxxxx Xxxx Xxxxxxxx
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
We refer to the Revolving Credit Agreement dated as of ________, 2000
(as amended, amended and restated, modified, supplemented or renewed from time
to time the "CREDIT AGREEMENT") among Xxxxxxx Foods, Inc., (the "COMPANY"), the
Banks referred to therein and Bank of America, National Association as agent for
the Banks (the "AGENT"). Terms defined in the Credit Agreement are used herein
as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "ASSIGNOR") to _______________ (the
"ASSIGNEE") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor[,] [and] all
outstanding Loans made by the Assignor pursuant to the Assignment and Acceptance
Agreement attached hereto (the "ASSIGNMENT AND ACCEPTANCE"). Before giving
effect to such assignment the Assignor's Commitment is $ ___________[,] [and]
the aggregate amount of its outstanding Loans is $_____________.
2. The Assignee agrees that, upon receiving the consent of the Agent,
and, if applicable, Xxxxxxx Foods, Inc. to such assignment, the Assignee will be
bound by the terms of the Credit Agreement as fully and to the same extent as if
the Assignee were the Bank originally holding such interest in the Credit
Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name: ______________________________
Address: _______________________________
_______________________________
Attention: _____________________________
Telephone: (___) _______________________
Telecopier: (___) ______________________
Telex (Answerback): ____________________
(B) Payment Instructions:
Account No.: ___________________________
At: ___________________________
___________________________
___________________________
Reference: ___________________________
Attention: ___________________________
4. You are entitled to rely upon the representations,
warranties and covenants of each of the Assignor and Assignee contained in
the Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
--------------------------------
Title:
-----------------------------
-2-
[NAME OF ASSIGNEE]
By:
--------------------------------
Title:
-----------------------------
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
XXXXXXX FOODS, INC.
By:
----------------------------------
Title:
-------------------------------
By:
----------------------------------
Title:
-------------------------------
BANK OF AMERICA, NATIONAL ASSOCIATION,
as administrative agent
By:
----------------------------------
Its:
-------------------------------
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