Exhibit 10.20
ST&B DRAFT
6/18/98
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JUNE __, 1998
AMONG
AURORA FOODS INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT,
NATIONAL WESTMINSTER BANK PLC,
AS SYNDICATION AGENT
AND
SWISS BANK CORPORATION,
AS DOCUMENTATION AGENT
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AURORA FOODS INC.
CREDIT AGREEMENT
TABLE OF CONTENTS
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SECTION 1.
DEFINITIONS.............................. 2
1.1 Certain Defined Terms................................................ 2
1.2 Accounting Terms Utilization of GAAP for Purposes of
Calculations Under Agreement................................. 38
1.3 Other Definitional Provisions................................ 39
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................. 39
2.1 Commitments; Loans........................................... 39
2.2 Interest on the Loans........................................ 46
2.3 Fees......................................................... 50
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments;
Application of Proceeds of Collateral and Payments
under Guaranties............................................. 50
2.5 Use of Proceeds.............................................. 58
2.6 Special Provisions Governing Eurodollar Rate Loans........... 59
2.7 Increased Costs; Taxes; Capital Adequacy..................... 61
2.8 Obligation of Lenders and Issuing Lenders to Mitigate........ 66
SECTION 3.
LETTERS OF CREDIT.......................................................... 66
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein....................................... 66
3.2 Letter of Credit Fees........................................ 69
3.3 Drawings and Payments and Reimbursement of Amounts Paid Under
Letters of Credit............................................ 70
3.4 Obligations Absolute......................................... 72
3.5 Indemnification; Nature of Issuing Lender's Duties........... 73
3.6 Increased Costs and Taxes Relating to Letters of Credit...... 74
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT.................................. 75
4.1 Conditions to Term Loans and Revolving Loans................. 75
4.2 Conditions to All Loans...................................... 80
4.3 Conditions to Letters of Credit.............................. 81
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SECTION 5.
REPRESENTATIONS AND WARRANTIES............................................. 81
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries.................................... 81
5.2 Authorization of Borrowing, etc.............................. 82
5.3 Financial Condition.......................................... 84
5.4 No Material Adverse Change; No Restricted Junior Payments.... 85
5.5 Title to Properties; Liens; Intellectual Property............ 85
5.6 Litigation: Adverse Facts................................... 86
5.7 Payment of Taxes............................................. 87
5.8 Performance of Agreements; Materially Adverse
Agreements; Material Contracts............................... 87
5.9 Governmental Regulation...................................... 87
5.10 Securities Activities........................................ 88
5.11 Employee Benefit Plans....................................... 88
5.12 Certain Fees................................................. 88
5.13 Environmental Protection..................................... 88
5.14 Employee Matters............................................. 90
5.15 Solvency..................................................... 90
5.17 Related Agreements........................................... 91
5.18 Disclosure................................................... 91
5.19 Subordination of Seller Notes................................ 92
5.20 Year 2000 Matters............................................ 92
SECTION 6.
AFFIRMATIVE COVENANTS...................................................... 92
6.1 Financial Statements and Other Reports....................... 92
6.2 Corporate Existence, etc..................................... 97
6.3 Payment of Taxes and Claims; Tax Consolidation............... 98
6.4 Maintenance of Properties; Insurance......................... 98
6.5 Inspection; Lender Meeting................................... 98
6.6 Compliance with Laws, etc.................................... 99
6.7 Environmental Disclosure and Inspection...................... 99
6.8 Company's Remedial Action Regarding Hazardous Materials......100
6.9 Execution of Subsidiary Guaranty and Subsidiary Security
Agreements by Subsidiaries and Future Subsidiaries...........101
6.10 Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral......... ................101
6.11 Interest Rate Protection.....................................104
6.12 Further Assurances...........................................104
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SECTION 7.
NEGATIVE COVENANTS.........................................................104
7.1 Indebtedness.................................................105
7.2 Liens and Related Matters....................................106
7.3 Investments; Joint Ventures..................................107
7.4 Contingent Obligations.......................................108
7.5 Restricted Junior Payments...................................109
7.6 Financial Covenants..........................................110
7.7 Restriction on Fundamental Changes; Asset Sales..............114
7.8 Sales and Lease-Backs........................................115
7.9 Transactions with Shareholders and Affiliates................116
7.10 Disposal of Subsidiary Stock.................................116
7.11 Conduct of Business..........................................116
7.12 Amendments or Waivers of Certain Related Agreements;
Amendments of Documents Relating to Subordinated
Indebtedness; Designation of "Designated Senior
Indebtedness"; Preferred Stock...............................117
7.13 Fiscal Year..................................................118
SECTION 8.
EVENTS OF DEFAULT..........................................................118
8.1 Failure to Make Payments When Due............................118
8.2 Default in Other Agreements..................................118
8.3 Breach of Certain Covenants..................................118
8.4 Breach of Warranty...........................................119
8.5 Other Defaults Under Loan Documents..........................119
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.........119
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc...........119
8.8 Judgments and Attachments....................................120
8.9 Dissolution..................................................120
8.10 Employee Benefit Plans.......................................120
8.11 Change in Control............................................120
8.12 Invalidity of Guaranties.....................................121
8.13 Failure of Security..........................................121
8.14 Termination or Breach of Certain Transition Agreements,
Log Cabin Transition Agreements and ▇▇▇▇▇▇ ▇▇▇▇▇
Transaction Agreements.......................................121
8.15 Conduct of Business By Company...............................121
8.16 Default Under Subordination Provisions.......................122
SECTION 9.
AGENTS.....................................................................123
9.1 Appointment..................................................123
9.2 Powers; General Immunity.....................................124
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness................................126
9.4 Right to Indemnity...........................................126
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9.5 Successor Agents and Swing Line Lender.......................126
9.6 Collateral Documents.........................................127
SECTION 10.
MISCELLANEOUS..............................................................127
10.1 Assignments and Participations in Loans, Letters of Credit...127
10.2 Expenses.....................................................131
10.3 Indemnity....................................................131
10.4 Set-Off; Security Interest in Deposit Accounts...............132
10.5 Ratable Sharing..............................................132
10.6 Amendments and Waivers.......................................133
10.7 Independence of Covenants....................................135
10.8 Notices......................................................135
10.9 Survival of Representations, Warranties and Agreements.......135
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative........136
10.11 Marshalling; Payments Set Aside..............................136
10.12 Severability.................................................136
10.13 Obligations Several; Independent Nature of Lenders' Rights...136
10.14 Headings.....................................................136
10.15 Applicable Law...............................................137
10.16 Successors and Assigns.......................................137
10.17 Consent to Jurisdiction and Service of Process...............137
10.18 Waiver of Jury Trial.........................................138
10.19 Confidentiality..............................................138
10.20 Counterparts; Effectiveness..................................139
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ANNEXES
Annex A Pricing Grid
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TRANCHE A TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF SUBSIDIARY GUARANTY
VIII FORM OF PLEDGE AGREEMENT
IX FORM OF SECURITY AGREEMENT
X FORM OF VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT
XI FORM OF COMPLIANCE CERTIFICATE
XII FORM OF OPINION OF COUNSEL TO LOAN PARTIES
XIII FORM OF OPINION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
XIV FORM OF OPINION OF LOCAL COUNSEL
XV FORM OF ASSIGNMENT AGREEMENT
XVI FORM OF PERMITTED SELLER NOTE
XVII FORM OF CERTIFICATE RE NON-BANK STATUS
XVIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIX FORM OF COLLATERAL ACCESS AGREEMENT
XX FORM OF MORTGAGE
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SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES; LENDING OFFICES
4.1C CORPORATE AND CAPITAL STRUCTURE; MANAGEMENT
5.5B OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL
CONTRACTS
5.5C OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL
CONTRACTS (LOG CABIN)
5.5D OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL
CONTRACTS (▇▇▇▇▇▇ ▇▇▇▇▇)
5.5E OTHER NECESSARY INTELLECTUAL PROPERTY RIGHTS; MATERIAL
CONTRACTS (VAN ▇▇ ▇▇▇▇'▇)
5.8 MATERIAL CONTRACTS
7.6E STIPULATED CONSOLIDATED EBITDA AND CONSOLIDATED CAPITAL
EXPENDITURES
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AURORA FOODS INC.
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED CREDIT AGREEMENT is dated as of June
__, 1998 and entered into by and among AURORA FOODS INC., a Delaware corporation
("Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each individually referred to herein as a "Lender" and collectively as
"Lenders"), THE CHASE MANHATTAN BANK, as administrative agent for Lenders (in
such capacity, "Administrative Agent"), NATIONAL WESTMINSTER BANK PLC, as
syndication agent (in such capacity, "Syndication Agent") and SWISS BANK
CORPORATION, as documentation agent (in such capacity, "Documentation Agent").
R E C I T A L S
WHEREAS, Company (capitalized terms used in these recitals without
definition shall have the respective meanings assigned in subsection 1.1
hereof), Aurora Foods Holdings Inc. ("Holdings") and certain financial
institutions (the "Existing Lenders") are parties to the Second Amended and
Restated Credit Agreement, dated as of January 16, 1997 (the "Existing Credit
Agreement"), pursuant to which the Existing Lenders made loans to, and acquired
participations in letters of credit for the account of, Company to enable
Company to consummate the transactions contemplated by the ▇▇▇▇▇▇ ▇▇▇▇▇
Acquisition Agreement;
WHEREAS, Company proposes to (i) issue equity of Company in an
initial public offering (the "Initial Public Offering"), (ii) issue in an rule
144A private placement or a public offering at least $200,000,000 principal
amount of New Subordinated Notes and (iii) refinance certain of its existing
Indebtedness (collectively, the "Transaction").
WHEREAS, as at the date of the Initial Public Offering, Company will
be the survivor of mergers involving A Foods, Holdings, Company, VDK Holdings,
and Van ▇▇ ▇▇▇▇'▇ (collectively, the "Merged Companies").
WHEREAS, Company desires that Existing Lenders and the New Lenders
amend and restate the Existing Credit Agreement to provide term loan facilities
in an aggregate principal amount of $225,000,000 (the "Term Loan Facilities")
and a revolving credit facility in an aggregate principal amount of $175,000,000
(the "Revolving Credit Facility") which, together with Equity Proceeds from the
Initial Public Offering and the proceeds from the issuance of the New
Subordinated Notes, will be used (i) to refinance existing Indebtedness under
the Existing Credit Agreement and under the VDK Credit Agreement, (ii) to reduce
the VDK Subordinated Notes, (iii) to pay Transaction Costs and (iv) to provide
financing for working capital and other general corporate purposes (including
acquisitions) of Company and its Subsidiaries;
2
WHEREAS, Company desires that all of its future Subsidiaries
guaranty all of the obligations of Company with respect to the credit facilities
provided by Lenders;
WHEREAS, Company desires to secure all of the Obligations and
desires that all of its future Subsidiaries secure their respective obligations
under the Subsidiary Guaranty, by granting to Administrative Agent, for the
benefit of Agents and Lenders, (i) a first priority Lien on substantially all of
their respective real and personal property and (ii) a first priority pledge of
all of the capital stock of their respective direct Subsidiaries;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agents agree as
follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"A Foods" means A Foods Inc., a [Delaware] corporation.
"Acquisition" means the transactions contemplated by the Acquisition
Agreement.
"Acquisition Agreement" means that certain Asset Purchase Agreement
dated as of December 18, 1996, by and between Company and Seller, as in
effect on the Closing Date and as such agreement may thereafter be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12A.
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date, the rate per annum obtained by dividing (i) the London
Interbank offered rate for deposits in U.S. Dollars for maturities
comparable to the Interest Period for which such Adjusted Eurodollar Rate
will apply as of approximately 11:00 A.M. (London time) on such Interest
Rate Determination Date as set forth on Telerate Page 3750 by (ii) a
percentage equal to 100% minus the stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in
respect of "Eurocurrency liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"Adjustment Date" means the first Business Day following receipt by
the Administrative Agent of both (i) the financial statements required to
be delivered pursuant to subsection 6.1(ii) or 6.1(iii), as the case may
be, for the most recently
3
completed fiscal period and (ii) the certificate required to be delivered
pursuant to subsection 6.1(iv) with respect to such fiscal period.
"Administrative Agent" means Chase, in its capacity as
Administrative Agent, and any successor to Chase in such capacity
appointed pursuant to subsection 9.5A.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affected Loans" has the meaning assigned to that term in subsection
2.6C.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any
Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by contract
or otherwise.
"Agent" means, individually, each of Administrative Agent, the
Syndication Agent and the Documentation Agent, and "Agents" means
Administrative Agent, the Syndication Agent and the Documentation Agent,
collectively.
"Aggregate Amounts Due" has the meaning assigned to that term in
subsection 10.5.
"Agreement" means this Third Amended and Restated Credit Agreement
dated as of June __, 1998, as it may be amended, restated, supplemented or
otherwise modified from time to time.
"Anniversary" means each of the dates that are anniversaries of the
Effective Date.
"Applicable Margin" means the Applicable Margin set forth on Annex A
hereto opposite the level for which the ratio of Consolidated Total Debt
to Consolidated EBITDA so determined satisfies the corresponding criteria
set forth under the heading "Ratio of Consolidated Total Debt to
Consolidated EBITDA"; provided that in the event that the financial
statements required to be delivered pursuant to subsection 6.1(ii) and
(iii), as applicable, and the related certificate required pursuant to
subsection 6.1(iv), are not delivered when due, then if such financial
statements are not delivered prior to the date upon which the resultant
Default shall become an Event of Default, then, effective upon such
Default becoming an Event of Default, during the period from the date upon
which such financial statements were required to be delivered until one
Business Day following the date upon which they actually are delivered,
the Applicable Margin with respect to Revolving Loan and Tranche A Term
Loans shall be 1.50%, if such Loans are Base Rate Loans and 2.50%, if such
Loans
4
are Eurodollar Rate Loans and with respect to the Commitment Fee shall be
0.50%, and provided further that for the period until September 30, 1998,
the Applicable Margin shall be no less than the Applicable Margin
corresponding to ▇▇▇▇▇ ▇, as set forth on Annex A.
"Applied Amount" has the meaning assigned to that term in subsection
2.4C(ii).
"Approved Fund" means, with respect to a Lender that is a fund that
invests in loans, any other fund that invests in loans and has the same
investment advisor as such Lender or is managed by an Affiliate of such
investment advisor.
"Asset Sale" means the sale (including in any sale-leaseback
transaction) by Company or any of its Subsidiaries to any Person (other
than Company or any of its Wholly Owned Subsidiaries) of (i) any of the
stock of any of Company's Subsidiaries, (ii) all or substantially all of
the assets of any division or line of business of Company or any of its
Subsidiaries, or (iii) any other assets other than sales of assets
(including without limitation inventory) in the ordinary course of
business and sales of obsolete equipment,[excluding any such other assets
to the extent that the aggregate value of such assets sold in any single
transaction or transactions is equal to $4,000,000 or less in any one
Fiscal Year].
"Assignment Agreement" means an assignment agreement in
substantially the form of Exhibit XV annexed hereto or in such other form
as may be approved by Administrative Agent.
"Assumption Agreement" means that certain Assignment and Assumption
Agreement dated as of December 31, 1996, by and between Seller and
Company, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"Base Rate Loans" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
"Business" means the assets and liabilities of Company relating to
the manufacture and sale of pancake syrup and pancake and waffle mix
marketed under the ▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇'▇ and Country Crock brand names, as
set forth in the Acquisition Agreement.
5
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or
required by law or other governmental action to close, and (ii) with
respect to all notices, determinations, fundings, issuances and payments
in connection with the Adjusted Eurodollar Rate or any Eurodollar Rate
Loans, any day that is a Business Day described in clause (i) above and
that is also (a) a day for trading by and between banks in Dollar deposits
in the London interbank market and (b) a day on which banking institutions
are open for business in London.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means (i) marketable securities issued or
directly and unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any
state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and, at the time of acquisition,
having the highest rating obtainable from either Standard & Poor's Rating
Service ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); (iii)
commercial paper maturing no more than one year from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1
from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having a rating of at least A-1
from S&P or at least P-1 from Moody's, issued by any Lender or any
commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia having unimpaired capital
and surplus of not less than $250,000,000 (each Lender and each such
commercial bank being herein called a "Cash Equivalent Bank"); and (v)
Eurodollar time deposits having a maturity of less than one year purchased
directly from any Cash Equivalent Bank (provided such deposit is with such
Cash Equivalent Bank or any other Cash Equivalent Bank).
"Cash Proceeds" means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received by Company or any of its Subsidiaries from such Asset
Sale.
"Certificate re Non-Bank Status" means a certificate substantially
in the form of Exhibit XVII annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(ii).
6
"Chase" means The Chase Manhattan Bank and its successors,
including, without limitation, its successors by merger.
"Closing Date" means December 31, 1996.
"Collateral" means all of the properties and assets (including
capital stock) in which Liens are purported to be granted by the
Collateral Documents.
"Collateral Access Agreement" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any
Collateral is located or any warehouseman or processor in possession of
any Inventory of any Loan Party, substantially in the form of Exhibit XIX
annexed hereto with such changes thereto as may be agreed to by
Administrative Agent in the reasonable exercise of its discretion.
"Collateral Account" has the meaning assigned to that term in the
Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account
Agreement executed and delivered by Company and Administrative Agent on
the Effective Date, substantially in the form of Exhibit XVIII annexed
hereto, pursuant to which Company may pledge cash to Administrative Agent
to secure the obligations of Company to reimburse Issuing Lenders for
payments made under one or more Letters of Credit as such Collateral
Account Agreement may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Collateral Documents" means the Pledge Agreement, the Security
Agreement, the Patent and Trademark Security Agreement, the Log Cabin
Patent and Trademark Security Agreement, the ▇▇▇▇▇▇ ▇▇▇▇▇ Patent and
Trademark Security Agreement the Van ▇▇ ▇▇▇▇'▇ Patent and Trademark
Agreement, the Collateral Account Agreement, the Mortgages and any other
documents, instruments or agreements delivered by any Loan Party pursuant
to this Agreement or any of the other Loan Documents in order to grant or
perfect liens on any assets of such Loan Party as security for the
Obligations.
"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or
services by Company or any of its Subsidiaries in the ordinary course of
business of Company or such Subsidiary.
"Commitment Fee" and "Commitment Fees" have the meanings assigned to
such terms in subsection 2.3A.
"Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
7
"Company" has the meaning assigned to that term in the introduction
to this Agreement.
"Company Common Stock" means the common stock of Company, par value
$0.01 per share.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit XI annexed hereto delivered to Administrative Agent by
Company pursuant to subsection 6.1(iv).
"Condemnation Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(d).
"Conforming Leasehold Interest" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit of
Administrative Agent (which writing has been delivered to Administrative
Agent), whether under the terms of the applicable lease, under the terms
of a Landlord Consent and Estoppel, or otherwise, to the matters described
in the definition of "Landlord Consent and Estoppel," which interest, if a
subleasehold or sub-subleasehold interest, is not subject to any contrary
restrictions contained in a superior lease or sublease.
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount paid or accrued by Company and its Subsidiaries for the
rental, lease, purchase (including by way of the acquisition of Securities
of a Person), construction or use of any property during such period, the
value or cost of which, in conformity with GAAP, would appear on the
consolidated balance sheet of Company and its Subsidiaries in the category
of "purchases of property, plant or equipment" at the end of such period,
excluding any such expenditure made to restore, replace or rebuild
property to the condition of such property immediately prior to any
damage, loss, destruction or condemnation of such property, to the extent
such expenditure is made with insurance proceeds or condemnation awards
relating to any such damage, loss, destruction or condemnation; provided,
however, that Consolidated Capital Expenditures shall not include
expenditures up to an aggregate amount equal to the portion of the
purchase price for any Permitted Acquisition made pursuant to subsection
7.7(vii) that would otherwise be treated as a Consolidated Capital
Expenditure.
"Consolidated Cash Interest Coverage Ratio" means, for any period,
the ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated
Cash Interest Expense for such period.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense payable in Cash during such period.
8
"Consolidated Current Assets" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities
in conformity with GAAP.
"Consolidated EBITDA" means; for any period, (i) the sum of the
amounts for such period of (a) Consolidated Net Income, plus (b) to the
extent deducted in determining such Consolidated Net Income, (1)
Consolidated Interest Expense, (2) depreciation, (3) depletion, (4)
amortization, (5) all federal, state, local and foreign income taxes, (6)
transaction fees paid to the MDC Entities and/or Dartford and/or Fenway in
connection with acquisitions made after the Closing Date, so long as such
transaction fees are paid in accordance with the terms of the MDC Advisory
Services Agreement, the Dartford Management Agreement and the Fenway
Agreement, [(7) non-recurring charges incurred prior to September 30, 1998
related to the Business and the Log Cabin Business, with respect to (A)
relocation of Company's assets, (B) the purchase of computers and
computer-related equipment and (C) transition related expenses in
connection with the foregoing, but only to the extent that such
non-recurring charges, together with all expenditures excluded from
Consolidated Capital Expenditures under clause (iii) (a) of the definition
of Consolidated Fixed Charges, do not exceed $6,000,000 in the aggregate,
(8) non-recurring charges incurred prior to June 30, 1999 with respect to
relocation of the Company's assets related to the ▇▇▇▇▇▇ ▇▇▇▇▇ Business
and transition related expenses in connection therewith, but only to the
extent that such non-recurring charges, together with all expenditures
excluded from Consolidated Capital Expenditures under clause (iii)(b) of
the definition of Consolidated Fixed Charges, do not exceed $15,000,000 in
the aggregate,] (9) manufacturing overhead costs related to the ▇▇▇▇▇▇
▇▇▇▇▇ Transitional Supply Agreement not to exceed $8,200,000 per year as
long as the ▇▇▇▇▇▇ ▇▇▇▇▇ Transitional Supply Agreement is in effect, (10)
all other non-cash items reducing Consolidated Net Income and (11) any
extraordinary and unusual losses, minus (ii) the sum of the amounts for
such period of (a) all other non-cash items increasing Consolidated Net
Income, plus (b) any extraordinary and unusual gains, all of the foregoing
as determined on a consolidated basis for Company and its Subsidiaries in
conformity with GAAP and calculated in accordance with subsection 7.6E, if
applicable.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for
such period of (a) Consolidated EBITDA, (b) to the extent deducted from
Consolidated EBITDA by virtue of clause (ii)(b) of the definition thereof,
extraordinary and unusual cash gains, and (c) the Consolidated Working
Capital Adjustment minus (ii) the sum, without duplication, of the amounts
for such period of (a) voluntary and scheduled cash
9
repayments of Consolidated Total Debt (excluding repayments of Revolving
Loans except to the extent the Revolving Loan Commitments are permanently
reduced in connection with such repayments), (b) Consolidated Capital
Expenditures (net of any proceeds of any related financings with respect
to such expenditures), (c) expenditures made in connection with any
Permitted Acquisition pursuant to subsection 7.7(vii) (net of any proceeds
of any related financings with respect to such acquisitions), including
without limitation transaction fees paid in cash to the MDC Entities
and/or Dartford and/or Fenway in connection with such acquisitions, so
long as such transaction fees are paid in accordance with the terms of the
MDC Advisory Services Agreement, the Dartford Management Agreement and the
Fenway Agreement, (d) Consolidated Interest Expense, (e) to the extent
added back to Consolidated EBITDA by virtue of clause (i)(b)(11) of the
definition thereof, extraordinary and unusual cash losses, (f) to the
extent added back to Consolidated EBITDA by virtue of clauses (i)(b)(7) or
(i)(b)(8) of the definition thereof, non-recurring charges paid in cash,
(g) to the extent added back to Consolidated EBITDA by virtue of clause
(i)(b)(9) of the definition thereof, manufacturing overhead costs related
to the ▇▇▇▇▇▇ ▇▇▇▇▇ Transitional Supply Agreement, and (h) the provision
for current taxes based on income of Company and its Subsidiaries and
payable in cash with respect to such period.
"Consolidated Fixed Charges" means, for any period, an amount equal
to the sum of the amounts for such period of (i) scheduled amortization of
Indebtedness of Company and its Subsidiaries (as reduced by prepayments
previously made), and discount or premium relating to any such
Indebtedness for such period, whether expensed or capitalized, (ii)
Consolidated Cash Interest Expense, [(iii) Consolidated Capital
Expenditures (excluding (a) expenditures which would otherwise be included
in Consolidated Capital Expenditures incurred prior to September 30, 1998
related to the Business and the Log Cabin Business, with respect to (1)
relocation of Company's assets, (2) the purchase of computers and
computer-related equipment and (3) transition related expenses in
connection with the foregoing, but only to the extent that such
expenditures, together with all non-recurring charges added back to
Consolidated EBITDA by virtue of clause (i)(b)(7) of the definition
thereof, do not exceed $6,000,000 in the aggregate and (b) expenditures
which would otherwise be included in Consolidated Capital Expenditures
incurred prior to June 30, 1999 with respect to relocation of the
Company's assets related to the ▇▇▇▇▇▇ ▇▇▇▇▇ Business and transition
related expenses in connection therewith, but only to the extent that such
expenditures, together with all non-recurring charges added back to
Consolidated EBITDA by virtue of clause (i)(b)(8) of the definition
thereof, do not exceed $15,000,000 in the aggregate),] and (iv) taxes
actually paid in cash by Company or any of its Subsidiaries.
"Consolidated Interest Expense" means, for any period, the net
interest expense of Company and its Subsidiaries for such period (net of
any interest income of Company and its Subsidiaries during such period) as
determined on a consolidated basis in conformity with GAAP.
10
"Consolidated Net Income" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of
any Person in which any other Person (other than Company or any of the
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid in cash to Company or any
of its Subsidiaries by such Person during such period and (ii) the income
(or loss) of any Person accrued prior to the date it becomes a Subsidiary
of Company or is merged into or consolidated with Company or any of its
Subsidiaries or the date such Person's assets are acquired by Company or
any of its Subsidiaries.
"Consolidated Total Debt" means, as at any date of determination,
all outstanding Indebtedness of Company and its Subsidiaries as determined
on a consolidated basis in conformity with GAAP.
"Consolidated Total Senior Debt" means, as at any date of
determination, all outstanding Indebtedness of Company and its
Subsidiaries other than Subordinated Indebtedness, as determined on a
consolidated basis in conformity with GAAP.
"Consolidated Working Capital" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds
(or is less than) Consolidated Working Capital as of the end of such
period.
"Contingent Obligation" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of
another if the primary purpose or intent thereof by the Person incurring
the Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (iii) under Interest
Rate Agreements. Contingent Obligations shall include, without limitation,
(a) the direct or indirect guaranty, endorsement (otherwise than for
collection or deposit in the ordinary course of business), comaking,
discounting with recourse or sale with recourse by such Person of the
obligation of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligation of another through any agreement (contingent or otherwise) (x)
to purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of
such obligation
11
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (y) to maintain the solvency or any balance
sheet item, level of income or financial condition of another if, in the
case of any agreement described under subclauses (x) or (y) of this
sentence, the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal
to the amount of the obligation so guaranteed or otherwise supported or,
if less, the amount to which such Contingent Obligation is specifically
limited.
"Continuing Director" shall mean, as of any date of determination,
any member of the Board of Directors of Company who (i) was a member of
such Board of Directors on the Closing Date or (ii) was nominated for
election or elected to such Board of Directors with the affirmative vote
of the MDC Entities and/or Dartford and/or Fenway.
"Contractual Obligation" means, as applied to any Person, any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"CSI" means Chase Securities Inc. and its successors and assigns,
including, without limitation, its successors by merger.
"Dartford" means Dartford Partnership L.L.C., a limited liability
company organized under the laws of the State of Delaware.
"Dartford Management Agreement" means that certain Management
Services Agreement dated as of December 31, 1996, by and between Company
and Dartford, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in effect.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"Documentation Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
12
"▇▇▇▇▇▇ ▇▇▇▇▇ Acquisition" has the meaning assigned to that term in
the Recitals to this Agreement.
"▇▇▇▇▇▇ ▇▇▇▇▇ Acquisition Agreement" has the meaning assigned to
that term in the Recitals to this Agreement.
"▇▇▇▇▇▇ ▇▇▇▇▇ Assumption Agreement" means that certain Assumption
Agreement dated as of January 16, 1998, by and between P&G and Company.
"▇▇▇▇▇▇ ▇▇▇▇▇ Business" has the meaning assigned to that term in the
Recitals to this Agreement.
"▇▇▇▇▇▇ ▇▇▇▇▇ Patent License Agreement" means that certain Patent
License Agreement dated as of January 16, 1998, by and between P&G and
Company, as in effect on the Effective Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"▇▇▇▇▇▇ ▇▇▇▇▇ Related Agreements" means the ▇▇▇▇▇▇ ▇▇▇▇▇ Acquisition
Agreement, the ▇▇▇▇▇▇ ▇▇▇▇▇ Assumption Agreement and the ▇▇▇▇▇▇ ▇▇▇▇▇
Transition Agreements.
"▇▇▇▇▇▇ ▇▇▇▇▇ Technology License Agreement" means the Technology
License Agreement dated as of January 16, 1998, by and between P&G and the
Company as in effect on the Effective Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under Section 7.12A.
"▇▇▇▇▇▇ ▇▇▇▇▇ Transition Agreements" means, collectively, (i) the
▇▇▇▇▇▇ ▇▇▇▇▇ Transitional Supply Agreement, (ii) the ▇▇▇▇▇▇ ▇▇▇▇▇
Transition Services Agreement, (iii) the ▇▇▇▇▇▇ ▇▇▇▇▇ Technology License
Agreement and (iv) the ▇▇▇▇▇▇ ▇▇▇▇▇ Patent License Agreement.
"▇▇▇▇▇▇ ▇▇▇▇▇ Transition Services Agreement" means the Transitional
Services Agreement, dated as of January 16, 1998, by and between P&G and
Company as in effect on the Effective Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"▇▇▇▇▇▇ ▇▇▇▇▇ Transitional Supply Agreement" means the Transitional
Supply Agreement, dated as of January 16, 1998, by and between P&G and the
Company as in effect on the Effective Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
13
"Effective Date" means the date (on or before [June 30], 1998) on
which the conditions precedent set forth in subsection 4.1 shall be
satisfied or waived.
"Eligible Assignee" means (i) (a) a commercial bank organized under
the laws of the United States or any state thereof; (b) a commercial bank
organized under the laws of any other country or a political subdivision
thereof; provided that (x) such bank is acting through a branch or agency
located in the United States or (y) such bank is organized under the laws
of a country that is a member of the Organization for Economic Cooperation
and Development or a political subdivision of such country; (c) any other
entity which is an "accredited investor" (as defined in Regulation D under
the Securities Act) which extends credit or buys loans as one of its
businesses including, but not limited to, insurance companies, funds and
lease financing companies; and (d) any other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is
engaged in making, purchasing or otherwise investing in commercial loans
in the ordinary course of its business and has combined capital and
surplus or net assets of at least $100,000,000, in each case (under
clauses (a) through (d) above) that is reasonably acceptable to
Administrative Agent; and (ii) any Lender, any Affiliate of any Lender,
and any Approved Fund; provided that no Affiliate of Company shall be an
Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is subject to ERISA and which is maintained
or contributed to by Company or any of its ERISA Affiliates.
"Employment Agreements" means, collectively, (i) that certain
Employment Agreement dated as of December 31, 1996, by and between Company
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and (ii) that certain Employment Agreement dated as of
December 31, 1996, by and between Company and ▇▇▇▇ ▇▇▇▇▇▇▇.
"Environmental Claim" means any written accusation, allegation,
notice of violation, claim, demand, abatement order or other order or
direction (conditional or otherwise) by any governmental authority or any
Person for any damage, including, without limitation, personal injury
(including sickness, disease or death), tangible or intangible property
damage, contribution, indemnity, indirect or consequential damages, damage
to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions, in
each case relating to, resulting from or in connection with Hazardous
Materials and relating to Company, any of its Subsidiaries, any of their
respective Affiliates that are directly or indirectly controlled by
Company, or any Facility.
"Environmental Laws" means all laws, statutes, ordinances, orders,
rules, regulations, plans, policies or decrees and the like relating to
(i) environmental matters, including, without limitation, those relating
to fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release or threatened
Release of Hazardous Materials, (ii) the generation, use,
14
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, public health and safety, industrial
hygiene or protection of wetlands, in any manner applicable to Company or
any of its Subsidiaries or any of their respective properties, including,
without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. ss. 1801 et seq.,), the
Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the
Clean Air Act (42 U.S.C. ss. 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. ss. 2601 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. ss.136 et seq.), the Occupational Safety and
Health Act (29 U.S.C. ss. 651 et seq.), and the Emergency Planning and
Community Right-to-Know Act (42 U.S.C. ss. 11001 et seq.), each as amended
or supplemented, and any analogous future or present local, state and
federal statutes and regulations promulgated pursuant thereto, each as in
effect as of the date of determination.
"Equity Proceeds" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
from the issuance of any equity Securities of Company or Company after the
Effective Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within
the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that Person is a member; and (iii) solely for
purposes of obligations under Section 412 of the Internal Revenue Code or
under the applicable sections set forth in Section 414(t)(2) of the
Internal Revenue Code, any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Internal Revenue Code of which
that Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above is a member.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043(c) of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for
30-day notice to the PBGC has been waived by regulation or with respect to
which no penalty will be assessed by the PBGC for failure to satisfy such
notice requirements); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of
the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code
with respect to any Pension Plan or the failure to make any required
contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of
15
ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Company or any of its ERISA Affiliates from any Pension Plan with two or
more contributing sponsors or the termination of any such Pension Plan
resulting, in either case, in liability pursuant to Section 4063 or 4064
of ERISA, respectively; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan pursuant to Section 4042 of ERISA; (vi) the
imposition of liability on Company or any of its ERISA Affiliates pursuant
to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal by Company or any of its
ERISA Affiliates in a complete or partial withdrawal (within the meaning
of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan resulting
in withdrawal liability pursuant to Section 4201 of ERISA, or the receipt
by Company or any of its ERISA Affiliates of written notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4042 of ERISA or under Section 4041A of ERISA if
such termination would result in liability to Company or any of its ERISA
Affiliates; (viii) the imposition on Company or any of its ERISA
Affiliates of fines, penalties or taxes under Chapter 43 of the Internal
Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA
in respect of any Employee Benefit Plan; (ix) the failure of any Pension
Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section
401(a) of the Internal Revenue Code, or the failure of any trust forming
part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (x) the imposition of a
Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code
or pursuant to ERISA with respect to any Pension Plan.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Existing Credit Agreement" has the meaning assigned to that term in
the Recitals to this Agreement.
"Existing Lenders" has the meaning assigned to that term in the
Recitals to this Agreement.
"Existing Subordinated Note Documents" means the Existing
Subordinated Note Indentures, the Existing Subordinated Notes and each
other document executed in connection with the Existing Subordinated
Notes, as each such document may be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under
subsection 7.12B.
16
"Existing Subordinated Note Indentures" means the indentures
pursuant to which the Existing Subordinated Notes are issued, in a form
delivered to Agents and Lenders on or prior to the Effective Date, with
such changes thereto as are permitted under subsection 7.12B and as such
indentures may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12B.
"Existing Subordinated Notes" means (a) the 9-7/8% Series B Senior
Subordinated Notes of Company due 2007 issued on February 10, 1997 and (b)
the 9- 7/8% Series D Senior Subordinated Notes of the Company due 2007
issued on July 1, 1997 pursuant to the Existing Subordinated Note
Indentures in the form delivered to Agents and Lenders on or prior to the
Effective Date with such changes thereto as are permitted under subsection
7.12B and as such notes may thereafter be amended, restated, supplemented
or otherwise modified from time to time to the extent permitted under
subsection 7.12B.
"Facilities" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon)
now, hereafter or heretofore owned, leased, operated or used by Company or
any of its Subsidiaries (but only as to portions of buildings actually
leased or used) or any of their respective predecessors or any of their
respective Affiliates that are directly or indirectly controlled by
Company.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by
Administrative Agent from three Federal funds brokers of recognized
standing selected by Administrative Agent.
"Fenway" means Fenway Partners Capital Fund, L.P., a Delaware
limited partnership.
"Fenway Agreement" means that certain Advisory Agreement dated as of
December 31, 1996, by and between Company and Fenway, as in effect on the
Closing Date and as such agreement may thereafter be amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12A.
"FFDC Act" means the Federal Food, Drug and Cosmetic Act, as amended
from time to time, and any successor statute.
17
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral and (ii)
such Lien is the only Lien (other than Permitted Encumbrances and Liens
permitted pursuant to subsection 7.2A) to which such Collateral is
subject.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its Subsidiaries
ending on the last Saturday in December of each calendar year.
"Fixed Charge Component" has the meaning assigned to that term in
subsection 7.6E(i).
"Flavor Supply Agreement" means that certain Flavor Supply Agreement
dated as of December 31, 1996, by and between Company and Quest, as in
effect on the Closing Date and as such agreement may thereafter be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12A.
"Flood Hazard Property" means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"Funding and Payment Office" means the office of Administrative
Agent and Swing Line Lender located at One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such offices of Administrative Agent or
any successor Administrative Agent specified by Administrative Agent or
such successor Administrative Agent in a written notice to Loan Parties
and Lenders).
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set
forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a significant
segment of the accounting profession, in each case as the same are
applicable to the circumstances as of the date of determination and
specifically, terms used herein applicable to Company and its Subsidiaries
defined by reference to GAAP shall give effect to the subtraction of
minority interests.
"Governmental Acts" has the meaning assigned to that term in
subsection 3.5.
18
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from
any federal, state or local governmental authority, agency or court.
"Guaranty" means, individually, each of the Subsidiary Guaranty and
any other guaranty of the Obligations, and "Guaranties" means the
Subsidiary Guaranty and each other guaranty of the Obligations,
collectively.
"Guarantors" means the Subsidiary Guarantors.
"Hazardous Materials" means (i) any chemical, material or substance
defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", "infectious waste", "toxic substances" or
any other formulations intended to define, list or classify substances by
reason of deleterious properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity," or "EP toxicity" or words of similar import under any
applicable Environmental Laws; (ii) any oil, petroleum, petroleum fraction
or petroleum derived substance; (iii) any drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive materials; (vi)
asbestos in any form; (vii) urea formaldehyde foam insulation; (viii)
electrical equipment which contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of fifty parts per million;
(ix) pesticides; and (x) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority.
"Holdings" has the meaning assigned to that term in the Recitals to
this Agreement.
"Immaterial Subsidiaries" means, with respect to any Person, any
Subsidiary or Subsidiaries of such Person the assets of which constitute,
individually or in the aggregate, less than 5% of the total assets of such
Person and its Subsidiaries.
"Indebtedness" means, as applied to any Person, (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money (other than accounts payable incurred in the ordinary
course of business and accrued expenses incurred in the ordinary course of
business), (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations
incurred under ERISA), which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof or
(b) evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held
19
by that Person regardless of whether the indebtedness secured thereby
shall have been assumed by that Person or is nonrecourse to the credit of
that Person. Obligations under Interest Rate Agreements constitute
Contingent Obligations and not Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term in
subsection 10.3.
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Initial Public Offering" has the meaning assigned to that term in
the Recitals to this Agreement.
"Insurance Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(d).
"Intellectual Property" means collectively the MBW Intellectual
Property, the Log Cabin Intellectual Property, the ▇▇▇▇▇▇ ▇▇▇▇▇
Intellectual Property and the Van ▇▇ ▇▇▇▇'▇ Intellectual Property, each as
defined in subsections 5.5B, 5.5C, 5.5D and 5.5E, respectively.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, the last Business Day of each March, June, September and December of
each year, commencing on December 31, 1998 and (ii) with respect to any
Eurodollar Rate Loan, the last day of each Interest Period applicable to
such Loan; provided that in the case of each Interest Period of longer
than three months, "Interest Payment Date" shall also include the date
that is three months after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to hedge Company or any of its
Subsidiaries against fluctuations in interest rates.
"Interest Rate Determination Date" means each date for calculating
the Adjusted Eurodollar Rate, for purposes of determining the interest
rate in respect of an Interest Period. The Interest Rate Determination
Date in respect of calculating the Adjusted Eurodollar Rate shall be the
second Business Day prior to the first day of the related Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
20
"Inventory" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which
are then held by such Person for sale or lease, including raw materials
and work in process.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, stock or other Securities of any other Person (other than a
Person that, prior to such purchase or acquisition, was a Wholly Owned
Subsidiary of Company), or (ii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course
of business) or capital contribution by Company or any of its Subsidiaries
to any other Person other than a Wholly Owned Subsidiary of Company,
including all Indebtedness and accounts receivable acquired from that
other Person that are not current assets or did not arise from sales to
that other Person in the ordinary course of business; provided, however,
that the term "Investment" shall not include (a) current trade and
customer accounts receivable for goods furnished or services rendered in
the ordinary course of business and payable in accordance with customary
trade terms, (b) advances and prepayments to suppliers for goods and
services in the ordinary course of business, (c) stock or other securities
acquired in connection with the satisfaction or enforcement of
Indebtedness or claims due or owing to Company or any of its Subsidiaries
or as security for any such Indebtedness or claims, (d) Cash held in
Deposit Accounts with banks and trust companies (other than Lenders) not
exceeding $2,000,000 in aggregate amount, (e) Cash held in any Deposit
Account with a Lender and (f) shares in a mutual fund that invests solely
in Cash Equivalents. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"IP Collateral" means the Collateral under the Patent and Trademark
Security Agreement, the Log Cabin Patent and Trademark Security Agreement,
the ▇▇▇▇▇▇ ▇▇▇▇▇ Patent and Trademark Security Agreement and the Van ▇▇
▇▇▇▇'▇ Patent and Trademark Security Agreement.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"Kraft" means Kraft Foods, Inc., a Delaware corporation.
21
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, satisfactory in form and substance to
Administrative Agent, pursuant to which such lessor agrees, for the
benefit of Administrative Agent, (i) that without any further consent of
such lessor or any further action on the part of the Loan Party holding
such Leasehold Property, such Leasehold Property may be encumbered
pursuant to a Mortgage and may be assigned to the purchaser at a
foreclosure sale or in a transfer in lieu of such a sale (and to a
subsequent third party assignee if Administrative Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii) that such
lessor shall not terminate such lease as a result of a default by such
Loan Party thereunder without first giving Administrative Agent notice of
such default and at least 30 days (or, if such default cannot reasonably
be cured by Administrative Agent within such period, such longer period as
may reasonably be required) to cure such default, (iii) to the matters
contained in a Collateral Access Agreement, and (iv) to such other matters
relating to such Leasehold Property as Administrative Agent may reasonably
request.
"Leasehold Property" means any leasehold interest of any Loan Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its sole
discretion as not being required to be included in the Collateral.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include Swing Line Lender unless the context otherwise
requires, provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean Lenders having that Commitment.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Loans
(including any Revolving Loans made to pay Refunded Swing Line Loans or to
reimburse drawings under Letters of Credit) in accordance with subsection
2.1A(iii) or its portion of any unreimbursed drawing or payment under a
Letter of Credit in accordance with subsection 3.3C or (ii) a Lender
having notified Company and/or Administrative Agent in writing that it
does not intend to comply with its obligations under subsection 2.1 or
subsections 3.1C, 3.3B or 3.3C.
"Lending Office" means, as to any Lender, the office or offices of
such Lender specified as the "Lending Office" on Schedule 2.1, or such
other office or offices as such Lender may from time to time notify
Company and Administrative Agent.
"Letter of Credit" or "Letters of Credit" means Commercial Letters
of Credit and Standby Letters of Credit issued or to be issued by Issuing
Lenders for the account of Company pursuant to subsection 3.1.
22
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding (whether or not the conditions to drawing thereunder have been
met) plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Lenders and not theretofore reimbursed by
Company (including any such reimbursement out of the proceeds of Revolving
Loans pursuant to subsection 3.3B).
"Leverage Ratio" means, as of any date of determination, the ratio
of Consolidated Total Debt, as of the date of determination, to
Consolidated EBITDA, for the twelve-month period ending on the date of
determination, in each case calculated for Company and its Subsidiaries on
a consolidated basis in accordance with GAAP.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, fixed or floating charge or encumbrance of any kind (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" or "Loans" means, as the context requires, one or more of the
Term Loans, Revolving Loans and Swing Line Loans or any combination
thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing
Lender relating to, the Letters of Credit), the Subsidiary Guaranty, the
Collateral Documents and any Interest Rate Agreement entered into by
Company with a Lender or an Affiliate of any Lender.
"Loan Party" means, individually, each of Company and any Subsidiary
Guarantors, and "Loan Parties" means Company and each Subsidiary
Guarantor, collectively.
"Log Cabin Acquisition" means the acquisition of the Log Cabin
Business pursuant to the terms of the Log Cabin Acquisition Agreement.
"Log Cabin Acquisition Agreement" means that certain Asset Purchase
Agreement dated as of May 7, 1997 between the Company and Kraft.
"Log Cabin Assumption Agreement" means that certain Assumption
Agreement dated as of July 1, 1997, by and between Kraft and Company.
"Log Cabin Business" means the assets of the retail syrup business
marketed under the Log Cabin and Country Kitchen trademarks and the
foodservice business marketed under the Log Cabin, Log Cabin Lite and
Wigwam trademarks and under private label arrangements.
23
"Log Cabin Co-Pack Agreement" means the Transitional Co-Pack
Agreement, dated as of July 1, 1997, by and between Kraft and the Company
as in effect on the Effective Date and as such agreement may thereafter be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12A.
"Log Cabin Excluded Products Co-Pack Agreement" means the Excluded
Business Co-Pack Agreement, dated as of July 1, 1997, by and between Kraft
and the Company as in effect on the Effective Date and as such agreement
may thereafter be amended, restated, supplemented or otherwise modified
from time to time to the extent permitted under subsection 7.12A.
"Log Cabin Patent and Trademark Security Agreement" means the Log
Cabin Patent and Trademark Security Agreement entered into by and among
Company, the Subsidiary Guarantors and the Administrative Agent dated as
of July 1, 1997 as in effect on the Effective Date, as such Log Cabin
Patent and Trademark Security Agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time.
"Log Cabin Patent License Agreement" means that certain Patent and
Know-How License Agreement dated as of July 1, 1997, by and between Kraft
and Company, as in effect on the Effective Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"Log Cabin Transition Agreements" means, collectively, (i) the Log
Cabin Co-Pack Agreement, (ii) the Log Cabin Excluded Products Co-Pack
Agreement, (iii) the Log Cabin Transition Services Agreement and (iv) the
Log Cabin Patent License Agreement.
"Log Cabin Transition Services Agreement" means the Transition
Services Agreement, dated as of July 1, 1997, by and between Kraft and
Company as in effect on the Effective Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"Management Fees" means the fees payable by Company pursuant to the
MDC Advisory Services Agreement, the Dartford Management Agreement and the
Fenway Agreement.
"Management Investors" shall mean such Persons other than the MDC
Entities, Dartford and Fenway as shall hold membership interests in [MBW
LLC] on or prior to the Effective Date, which Persons shall be reasonably
acceptable to Administrative Agent and Lenders.
24
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries, taken as a whole,
(ii) the material impairment of the ability of any Loan Party to perform
the Obligations and (iii) a material adverse effect upon the legality,
validity, binding effect or enforceability against a Loan Party of a Loan
Document to which it is a party.
"Material Contract" means any of the Employment Agreements or any
other contract or other arrangement to which Company or any of its
Subsidiaries is a party (other than the Loan Documents) for which breach,
nonperformance, cancellation or failure to renew could have a Material
Adverse Effect.
"Maximum Consolidated Capital Expenditures Amount" has the meaning
assigned to that term in subsection 7.6D.
["MBW LLC" means MBW Investors LLC, a Delaware limited liability
company.]
"MDC Advisory Services Agreement" means that certain Advisory
Services Agreement dated as of December 31, 1996, by and between Company
and MDC Management Company III, L.P., as in effect on the Closing Date and
as such agreement may thereafter be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under
subsection 7.12A.
"MDC Entities" means ▇▇▇▇▇▇ De Leeuw & Co. III, L.P., a California
limited partnership, ▇▇▇▇▇▇ De Leeuw & Co. Offshore (Europe) III, L.P., a
Bermuda limited partnership, ▇▇▇▇▇▇ De Leeuw & Co. III (Asia), L.P., a
Bermuda limited partnership, Gamma Fund LLC, a California limited
liability company, ▇▇▇▇▇▇ De Leeuw & Co. IV, L.P., a California limited
partnership and Delta Fund LLC, a California limited liability company.
"Mortgage" means any mortgage or legal charge (whether designated as
a deed of trust or a mortgage or by any similar title) granted by Company
or any of its Subsidiaries (or, at Administrative Agent's option, an
amendment to an existing Mortgage, in form satisfactory to Administrative
Agent, adding such Mortgaged Property to the Real Property Assets
encumbered by an existing Mortgage) in any Real Property Asset to secure
the Obligations, as such mortgage or legal charge may be amended,
restated, supplemented or otherwise modified from time to time
substantially in the form of Exhibit XX annexed hereto, and "Mortgages"
means all such instruments collectively .
25
"Mortgage Policy" has the meaning assigned to that term in
subsection 6.10B(iv).
"Mortgaged Property" has the meaning assigned to that term in
subsection 6.10B.
"Multiemployer Plan" means a "multiemployer plan", as defined in
Section 4001(a)(3) of ERISA which is subject to Title IV of ERISA, to
which Company or any of its ERISA Affiliates is contributing or to which
Company or any of its ERISA Affiliates has an obligation to contribute.
"NatWest" means National Westminster Bank PLC and its successors,
including, without limitation, its successors by merger.
"Net Cash Proceeds" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale
including, without limitation, (i) income taxes reasonably estimated to be
actually payable as a result of such Asset Sale within one year of the
date of receipt of such Cash Proceeds, (ii) transfer, sales, use and other
taxes payable in connection with such Asset Sale, (iii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest
on any Indebtedness (other than the Loans) that is secured by a Lien on
the stock or assets in question and that is required to be repaid under
the terms thereof as a result of such Asset Sale, and (iv) broker's
commissions and reasonable fees and expenses of counsel, accountants and
other professional advisors in connection with such Asset Sale.
"New Lender" means any Lender which is a party to this Agreement on
the Effective Date which is not an Existing Lender.
"New Subordinated Note Documents" means the New Subordinated Note
Indenture, the New Subordinated Notes and each other document executed in
connection with the New Subordinated Notes, as each such document may be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12B.
"New Subordinated Note Indenture" means the indenture pursuant to
which the New Subordinated Notes are issued, in a form delivered to Agents
and Lenders on or prior to the Effective Date, with such changes thereto
as are permitted under subsection 7.12B and as such indenture may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12B.
"New Subordinated Notes" means the _____% Series E Senior
Subordinated Notes of Company due 2008 issued pursuant to the New
Subordinated Note Indenture in the form delivered to Agents and Lenders on
or prior to the Effective Date with
26
such changes thereto as are permitted under subsection 7.12B and as such
notes may thereafter be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under subsection 7.12B.
"Non-Defaulting Lender" means and includes each Lender other than a
Defaulting Lender.
"Non-US Lenders" has the meaning assigned to that term in subsection
2.7B(iii).
"Notes" means one or more of the Tranche A Term Notes, Revolving
Notes or Swing Line Note or any combination thereof.
"Notice of Borrowing" means a notice in the form of Exhibit I
annexed hereto delivered by Company to Administrative Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice in the form
of Exhibit III annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"Obligations" means all obligations of every nature of each Loan
Party from time to time owed to Agents, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts
drawn under Letters of Credit or payments for early termination of
Interest Rate Agreements, fees, expenses, indemnification or otherwise.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer), its president, its chief financial officer or a
vice president; provided that every Officer's Certificate with respect to
the compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the officer making or giving
such Officer's Certificate has read such condition and any definitions or
other provisions contained in this Agreement relating thereto, (ii) a
statement that, in the opinion of the signer he or she has made or has
caused to be made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not such
condition has been complied with, and (iii) a statement as to whether, in
the opinion of the signer, such condition has been complied with.
27
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the
lessee at any time) of any property (whether real, personal or mixed) that
is not a Capital Lease other than any such lease under which that Person
is the lessor.
"P&G" means The Procter & ▇▇▇▇▇▇ Company, an Ohio corporation.
"Patent and Trademark Security Agreement" means the Patent and
Trademark Security Agreement entered into by and among Company, the
Subsidiary Guarantors and Administrative Agent dated as of the Closing
Date, as such Patent and Trademark Security Agreement may thereafter be
amended, restated, supplemented or otherwise modified from time to time.
"Patent License Agreement" means that certain Patent License
Agreement dated as of December 31, 1996, by and among Seller, Unilever PLC
and Company, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA (or any successor thereto).
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Title IV of ERISA.
"Permitted Acquisition" means an acquisition of assets or a business
effected in accordance with the provisions of subsection 7.7(vii).
"Permitted Encumbrances" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of
carriers, warehousemen, mechanics and materialmen and other Liens
imposed by law (other than any such Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA)
incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or
other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government
28
contracts, trade contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to others not interfering in
any material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the
ordinary conduct of the business of Company or any of its
Subsidiaries;
(vii) any (a) interest or title of a lessor or sublessor under
any Capital Lease permitted by subsection 7.1(iii) or any Operating
Lease not prohibited by this Agreement, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor
may be subject to, or (c) subordination of the interest of the
lessee or sublessee under such lease to any restriction or
encumbrance referred to in the preceding clause (b);
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) deposits in the ordinary course of business to secure
liabilities to insurance carriers, lessors, utilities and other
service providers; and
(xi) bankers liens and rights of setoff with respect to
customary depository arrangements entered into in the ordinary
course of business.
"Permitted Seller Note" means a promissory note substantially in the
form of Exhibit XV annexed hereto representing any Indebtedness of Company
incurred in connection with any Permitted Acquisition payable to the
seller in connection therewith, as such note may be amended, restated,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12B; provided that no Permitted Seller Note
shall (i) be guarantied by any Subsidiary of Company or secured by any
property of Company or any of its Subsidiaries or (ii) bear cash interest
at a rate in excess of 12% per annum; and provided further, that no
Permitted Seller Note shall provide for any prepayment or repayment of all
or any portion of the principal
29
thereof prior to the date of the final scheduled installment of principal
of any of the Loans.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, joint
stock companies, Joint Ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments and agencies and political
subdivisions thereof.
"Pledge Agreement" means that certain Third Amended and Restated
Pledge Agreement by and among Company, the Subsidiary Guarantors and
Administrative Agent dated as of the Effective Date and substantially in
the form of Exhibit VIII annexed hereto, as such Pledge Agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"Pledged Collateral" means the "Pledged Collateral" as defined in
the Pledge Agreement.
"Potential Event of Default" means a condition or event that, after
notice or after any applicable grace period has lapsed, or both, would
constitute an Event of Default.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Chase as its prime commercial lending rate in effect
at its principal office in New York City. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
charged to any customer. Chase or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime
Rate.
"Proceedings" has the meaning assigned to that term in subsection
6.1(x).
"Pro Forma Calculation Period" has the meaning assigned to that term
in subsection 7.6E(i).
"Pro Rata Share" means with respect to each Lender, the Revolving
Loan Pro Rata Share and Tranche A Term Loan Pro Rata Share of such Lender;
in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata
Share of each Lender is set forth opposite the name of that Lender in
Schedule 2.1 annexed hereto.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the
opinion of Administrative Agent, desirable in order to create or perfect
Liens on any IP Collateral.
30
"Pure Food and Drug Laws" means the FFDC Act and the pure food and
drug laws of each of the states of the United States into which products
of the Business, the Log Cabin Business and the ▇▇▇▇▇▇ ▇▇▇▇▇ Business are
or have been shipped.
"Quest" means Quest International Flavors & Food Ingredients
Company.
"Quest Agreements" means, collectively, (i) that certain Flavor
Escrow Agreement dated as of December 31, 1996, by and among Quest, the
escrow agent named therein and Company, as in effect on the Closing Date
and as such agreement may thereafter be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under
subsection 7.12A, and (ii) the Flavor Supply Agreement.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Recorded Leasehold Interest" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Administrative Agent's
reasonable judgment, to give constructive notice of such Leasehold
Property to third-party purchasers and encumbrances of the affected real
property. For purposes of this definition, the term "Record Document"
means, with respect to any Leasehold Property, (a) the lease evidencing
such Leasehold Property or a memorandum thereof, executed and acknowledged
by the owner of the affected real property, as lessor, or (b) if such
Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient
to give such constructive notice upon recordation and otherwise in form
reasonably satisfactory to Administrative Agent.
"Red Wing" means The Red Wing Company, Inc., a Delaware corporation.
"Red Wing Co-Pack Agreement" means each of the First Amended and
Restated Production Agreement, dated as of November 19, 1997, by and
between Red Wing and Company and the Production Agreement, dated as of
November 19, 1997, by and between Red Wing and the Company (collectively,
the "Red Wing Co-Pack Agreements") as in effect on the Effective Date and
as such agreement may thereafter be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under
subsection 7.12A.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iii).
"Register" has the meaning assigned to that term in subsection 2.1D.
31
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulatory Shares" means, with respect to any Person, shares of
such Person required to be issued as qualifying shares to directors or
persons similarly situated or shares issued to Persons other than Company
or a Wholly Owned Subsidiary of Company in response to regulatory
requirements of foreign jurisdictions pursuant to a resolution of the
Board of Directors of such Person, so long as such shares do not exceed
one percent of the total outstanding shares of equity such Person and any
owners of such shares irrevocably covenant with Company to remit to
Company or waive any dividends or distributions paid or payable in respect
of such shares.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means the Subordinated Note Indentures, the
Subordinated Notes, the other Subordinated Note Documents, the Acquisition
Agreement, the Log Cabin Acquisition Agreement, the ▇▇▇▇▇▇ ▇▇▇▇▇
Acquisition Agreement, the Assumption Agreement, the Log Cabin Assumption
Agreement, the ▇▇▇▇▇▇ ▇▇▇▇▇ Assumption Agreement, the MDC Advisory
Services Agreement, the Dartford Management Agreement, the Fenway
Agreement, the Transition Agreements, the Log Cabin Transition Agreements,
the Red Wing Co-Pack Agreements and the ▇▇▇▇▇▇ ▇▇▇▇▇ Transition
Agreements.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the abandonment or
disposal of any barrels, containers or other closed receptacles containing
any Hazardous Materials), or into or out of any Facility, including the
movement of any Hazardous Material through the air, soil, surface water,
groundwater or property.
"Requisite Lenders" means Non-Defaulting Lenders having or holding
not less than 51% of the sum of the aggregate Term Loan Exposure of all
Non-Defaulting Lenders plus the aggregate Revolving Loan Exposure of all
Non-Defaulting Lenders.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii)
any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any
class of stock of Company now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of Company
now or hereafter outstanding, and (iv) any payment or prepayment of
principal of, premium, if any, or
32
interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with
respect to, any Subordinated Indebtedness.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(ii) and "Revolving
Loan Commitments" means such commitments of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means June 30, 2005 or
any earlier date of termination of the Revolving Loan Commitments pursuant
to this Agreement.
"Revolving Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the termination of the Revolving
Loan Commitments, that Lender's Revolving Loan Commitment and (ii) after
the termination of the Revolving Loan Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that
Lender plus (b) in the event that Lender is an Issuing Lender, the
aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Lender (net of any participations purchased by other
Lenders in such Letters of Credit) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of
Credit or any unreimbursed drawings under any Letters of Credit plus (d)
the aggregate amount of all participations purchased by that Lender in any
outstanding Swing Line Loans plus (e) in the case of Swing Line Lender,
the sum of the aggregate outstanding principal amount of all Swing Line
Loans (in each case net of any participations therein purchased by other
Lenders).
"Revolving Loan Pro Rata Share" means with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment
or the Revolving Loans of any Lender or any Letters of Credit issued by
any Lender or any participations purchased by any Lender therein or in any
Swing Line Loans, the percentage obtained by dividing (i) the Revolving
Loan Exposure of that Lender by (ii) the aggregate Revolving Loan Exposure
of all Lenders, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to subsection 10.1.
"Revolving Loans" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(ii).
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(i)(b) on the Effective Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Revolving Loan
Commitment and Revolving Loans of any Lender, in each case substantially
in the form of Exhibit V annexed hereto, as they may be amended, restated,
supplemented or otherwise modified from time to time.
33
"S&P" means Standard & Poor's Ratings Service, or any successor
thereto.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to, purchase
or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Security Agreement" means the Third Amended and Restated Security
Agreement entered into by and among Company, the Subsidiary Guarantors and
Administrative Agent dated as of the Effective Date and substantially in
the form of Exhibit IX annexed hereto, as such Security Agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"Seller" means Conopco, Inc., a New York corporation, doing business
as Van den ▇▇▇▇▇ Foods Company.
"Senior Leverage Ratio" means, as of any date of determination, the
ratio of Consolidated Total Senior Debt, as of the date of determination,
to Consolidated EBITDA, for the twelve-month period ending on the date of
determination, in each case calculated for Company and its Subsidiaries on
a consolidated basis in accordance with GAAP.
"Shared Technology License Agreement" means that certain Shared
Technology License Agreement dated as of December 31, 1996, by and between
Seller and Company, as in effect on the Closing Date and as such agreement
may thereafter be amended, restated, supplemented or otherwise modified
from time to time to the extent permitted under subsection 7.12A
"Solvent" means, with respect to any Person, that as of the date of
determination both (i) (a) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount
that will be required to pay the probable liabilities on such Person's
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (b) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction;
and (c) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (ii) such Person is "solvent" within
the meaning given that term and similar terms under applicable laws
34
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be
computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) workers'
compensation liabilities of Company or any of its Subsidiaries, (ii) the
obligations of third party insurers of Company or any of its Subsidiaries
arising virtue of the laws of any jurisdiction requiring third party
insurers, (iii) performance, payment, deposit or surety obligations of
Company or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice
in the industry, and (iv) such other obligations of Company and its
Subsidiaries as may be reasonably acceptable to Administrative Agent;
provided that Standby Letters of Credit may not be issued for the purpose
of supporting (a) trade payables or (b) Indebtedness constituting
"antecedent debt" (as that term is used in Section 547 of the Bankruptcy
Code).
"Subordinated Note Documents" means collectively the Existing
Subordinated Note Documents, the VDK Subordinated Note Documents and the
New Subordinated Note Documents.
"Subordinated Note Indentures" means collectively the Existing
Subordinated Note Indentures, the VDK Subordinated Note Documents and the
New Subordinated Note Indenture.
"Subordinated Notes" means collectively the Existing Subordinated
Notes the VDK Subordinated Notes and the New Subordinated Notes.
"Subordinated Indebtedness" means (i) the Indebtedness of Company
under the Subordinated Note Documents, (ii) any Indebtedness permitted
under subsection 7.1(vi), (iii) the Indebtedness of Company evidenced by
any Permitted Seller Notes, and (iv) any other Indebtedness of Company or
any of its Subsidiaries subordinated in right of payment to the
Obligations pursuant to documentation containing maturities, amortization
schedules, covenants, defaults, remedies, subordination provisions and
other material terms in form and substance satisfactory to Administrative
Agent and Requisite Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which
more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the
management and policies
35
thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"Subsidiary Guarantor" means any Subsidiary of Company that becomes
party to the Subsidiary Guaranty at any time after the Effective Date
pursuant to subsection 6.9.
"Subsidiary Guaranty" means the Subsidiary Guaranty, substantially
in the form of Exhibit VII annexed hereto, executed and delivered by each
Subsidiary Guarantor from time to time after the Effective Date pursuant
to subsection 6.9, as such Subsidiary Guaranty may be amended, restated,
supplemented or otherwise modified from time to time.
"Subsidiary Security Agreements" has the meaning assigned to that
term in subsection 6.9.
"Supplemental Collateral Agent" has the meaning assigned to that
term in subsection 9.1B.
"Swing Line Lender" means Chase, or any Person serving as a
successor Administrative Agent hereunder, in its capacity as Swing Line
Lender hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection
2.1A(iii).
"Swing Line Loans" means the Loans made by Swing Line Lender
pursuant to subsection 2.1A(iii).
"Swing Line Note" means (i) the promissory note of Company issued
pursuant to subsection 2.1E(ii) on the Effective Date and (ii) any
promissory note issued by Company to any successor Administrative Agent
and Swing Line Lender pursuant to the last sentence of subsection 9.5B, in
each case substantially in the form of Exhibit VIII annexed hereto, as it
may be amended, restated, supplemented or otherwise modified from time to
time.
"Swiss Bank" means Swiss Bank Corporation and its successors,
including, without limitation, any successors by merger.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "Tax on the overall net
income" of a Person shall be construed as a reference to a
36
tax imposed by the jurisdiction in which that Person's principal office
(and/or, in the case of a Lender, its relevant Lending Office) is located
or in which that Person is deemed to be doing business on all or part of
the net income, profits or gains of that Person (whether worldwide, or
only insofar as such income, profits or gains are considered to arise in
or to relate to a particular jurisdiction, or otherwise).
"Term Loan Commitment" means the aggregate commitment of a Lender to
make a Tranche A Term Loan to Company pursuant to subsections 2.1A(i),
2.1A(ii) and 2.1A(iii), respectively, and "Term Loan Commitments" means
such commitments of all Lenders in the aggregate.
"Term Loan Exposure" means, with respect to any Lender as of any
date of determination (i) prior to the funding of the Term Loans, that
Lender's Term Loan Commitment and (ii) after the funding of the Term
Loans, the outstanding principal amount of the Term Loan of that Lender.
"Term Loans" means the Tranche A Term Loans made by Lenders to
Company pursuant to subsections 2.1A(i), 2.1A(ii) and 2.1A(iii),
respectively.
"Term Notes" means one or more of the Tranche A Term Notes.
"Title Company" means one or more title insurance companies
reasonably satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of
all outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
"Tranche A Term Loan Commitment" means the commitment of a Lender to
make a Tranche A Term Loan to Company pursuant to subsection 2.1A(i), and
"Tranche A Term Loan Commitments" means such commitments of all Lenders in
the aggregate.
"Tranche A Term Loan Exposure" means, with respect to any Lender as
of any date of determination (i) prior to the funding of the Tranche A
Term Loans, that Lender's Tranche A Term Loan Commitment and (ii) after
the funding of the Tranche A Term Loans, the outstanding principal amount
of the Tranche A Term Loan of that Lender.
"Tranche A Term Loan Pro Rata Share" means with respect to all
payments, computations and other matters relating to the Tranche A Term
Loan Commitment or
37
the Tranche A Term Loan of any Lender, the percentage obtained by dividing
(i) the Tranche A Term Loan Exposure of that Lender by (ii) the aggregate
Tranche A Term Loan Exposure of all Lenders, in any such case as the
applicable percentage may be adjusted by assignments permitted pursuant to
subsection 10.1.
"Tranche A Term Loans" means the Loans made by the Lenders to the
Company pursuant to subsection 2.1A(i).
"Tranche A Term Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(i)(a) on the Effective Date and (ii)
any promissory notes issued by Company pursuant to the last sentence of
subsection 10.1B(i) in connection with assignments of the Tranche A Term
Loan Commitments or Tranche A Term Loans of any Lenders, in each case
substantially in the form of Exhibit IV annexed hereto, as they may be
amended, restated, supplemented or otherwise modified from time to time.
"Transaction" has the meaning assigned to that term in the Recitals
to this Agreement.
"Transaction Costs" means the fees, costs and expenses payable by
Company and its Subsidiaries [on or before the Effective Date] in
connection with the Transaction.
"Transition Agreements" means, collectively, (i) that certain
License Agreement dated as of December 31, 1996, by and between Seller and
Company, as in effect on the Closing Date and as such agreement may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12A; (ii) the
Shared Technology License Agreement; (iii) the Patent License Agreement;
and (iv) the Quest Agreements.
"Unfunded Current Liability" means, with respect to any Pension
Plan, the amount, if any, by which the actuarial present value of the
accumulated plan benefits under such Pension Plan as of the close of its
most recent plan year exceeds the fair market value of the assets
allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by such Pension Plan's actuary in the most recent annual
valuation of such Pension Plan.
"Van ▇▇ ▇▇▇▇'▇" means Van ▇▇ ▇▇▇▇'▇, Inc., a Delaware corporation.
"Van ▇▇ ▇▇▇▇'▇ Patent and Trademark Security Agreement" means the
Van ▇▇ ▇▇▇▇'▇ Patent and Trademark Security Agreement entered into by and
among Company, the Subsidiary Guarantors and the Administrative Agent
dated as of the Effective Date, substantially in the form of Exhibit X
annexed hereto, as such Van de
38
▇▇▇▇'▇ Patent and Trademark Security Agreement may thereafter be amended,
restated, supplemented or otherwise modified from time to time.
"VDK Credit Agreement" means the Second Amended and Restated Credit
and Guarantee Agreement, dated as of July 9, 1996, among VDK Holdings, Van
▇▇ ▇▇▇▇'▇, the banks and other financial institutions from time to time
parties thereto, and Chase, as agent, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"VDK Holdings" means VDK Holdings, Inc., a Delaware corporation.
"VDK Subordinated Note Documents" means the VDK Subordinated Note
Indenture, the VDK Subordinated Notes and each other document executed in
connection with the VDK Subordinated Notes, as each such document may be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under subsection 7.12B.
"VDK Subordinated Note Indenture" means the indenture pursuant to
which the VDK Subordinated Notes are issued, in a form delivered to Agents
and Lenders on or prior to the Effective Date, with such changes thereto
as are permitted under subsection 7.12B and as such indenture may
thereafter be amended, restated, supplemented or otherwise modified from
time to time to the extent permitted under subsection 7.12B.
"VDK Subordinated Notes" means the 12% Series __ Senior Subordinated
Notes of Van ▇▇ ▇▇▇▇'▇ due 2005 issued on September 15, 1995 pursuant to
the VDK Subordinated Note Indenture in the form delivered to the Agents
and Lenders on or prior to the Effective Date with such changes thereto as
are permitted under subsection 7.12B and as such notes may thereafter be
amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under Subsection 7.12B.
"Wholly Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all of the outstanding capital stock or other
ownership interests of which (other than Regulatory Shares) shall at the
time be owned by such Person or by one or more Wholly Owned Subsidiaries
of such Person or by such Person and one or more Wholly Owned Subsidiaries
of such Person.
1.2 Accounting Terms Utilization of GAAP for Purposes of
Calculations Under Agreement.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in
39
accordance with GAAP (except, with respect to interim financial statements,
normal year end audit adjustments and the absence of explanatory footnotes) as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3A.
1.3 Other Definitional Provisions.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The words "includes", "including" and similar terms used in any Loan
Document shall be construed as if followed by the words "without limitation".
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Loans.
A. Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Loan
Parties set forth herein and in the other Loan Documents, each Lender hereby
severally agrees to make the applicable Loans described in subsections 2.1A(i)
and 2.1A(ii) and Swing Line Lender hereby agrees to make the Swing Line Loans as
described in subsection 2.1A(iii).
(i) Tranche A Term Loans. Each Lender with a Tranche A Term Loan
Commitment severally agrees to lend to Company on the Effective Date an amount
not exceeding its Pro Rata Share of the aggregate amount of the Tranche A Term
Loan Commitments to be used for the purposes identified in subsection 2.5A. The
amount of each Lender's Tranche A Term Loan Commitment is set forth opposite its
name on Schedule 2.1 annexed hereto and the aggregate amount of the Tranche A
Term Loan Commitments is $225,000,000; provided that the Tranche A Term Loan
Commitments of Lenders shall be adjusted to give effect to any assignments of
the Tranche A Term Loan Commitments pursuant to subsection 10.1B. Company may
make only one borrowing under the Tranche A Term Loan Commitments. Amounts
borrowed under this subsection 2.1A(i) and subsequently repaid or prepaid may
not be reborrowed.
(ii) Revolving Loans. Each Lender with a Revolving Loan Commitment
severally agrees, subject to the limitations set forth below with respect to the
maximum amount of Revolving Loans permitted to be outstanding from time to time,
to maintain such existing Revolving Loans and to lend to Company from time to
time during the period from the Effective Date to but excluding the Revolving
Loan Commitment Termination Date an aggregate amount which shall not exceed its
Pro Rata Share of the aggregate amount of the
40
Revolving Loan Commitments, to be used for the purposes identified in subsection
2.5B. The original amount of each Lender's Revolving Loan Commitment is set
forth opposite its name on Schedule 2.1 annexed hereto and the aggregate
original amount of the Revolving Loan Commitments is $175,000,000; provided that
the Revolving Loan Commitments of Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to subsection 10.1B;
provided further, that the amount of the Revolving Loan Commitments shall be
reduced from time to time by the amount of any reductions thereto made pursuant
to subsection 2.4B. Each Lender's Revolving Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the Revolving
Loan Commitments shall be paid in full no later than that date. Company may
borrow no more than $5,000,000 under the Revolving Loan Commitments on the
Effective Date. Amounts borrowed under this subsection 2.1A(ii) may be repaid
and reborrowed to but excluding the Revolving Loan Commitment Termination Date.
Notwithstanding anything contained herein to the contrary, in no
event shall the Total Utilization of Revolving Loan Commitments at any time
exceed the Revolving Loan Commitments then in effect.
(iii) Swing Line Loans. Swing Line Lender hereby agrees, subject to
the limitations set forth below with respect to the maximum aggregate amount of
all Swing Line Loans outstanding from time to time, to make a portion of the
Revolving Loan Commitments available to Company from time to time during the
period from the Effective Date to but excluding the Revolving Loan Commitment
Termination Date by making Base Rate Loans as Swing Line Loans to Company in an
aggregate amount not to exceed the amount of the Swing Line Loan Commitment, to
be used for the purposes identified in subsection 2.5B, notwithstanding the fact
that such Swing Line Loans, when aggregated with the sum of Swing Line Lender's
outstanding Revolving Loans and Swing Line Lender's Pro Rata Share of the Letter
of Credit Usage then in effect, may exceed Swing Line Lender's Revolving Loan
Commitment. The original amount of the Swing Line Loan Commitment is
$10,000,000; provided that the amounts of the Swing Line Loan Commitment are
subject to reduction as provided in clause (b) of the next paragraph. The Swing
Line Loan Commitment shall expire on the Revolving Loan Commitment Termination
Date and all Swing Line Loans and all other amounts owed hereunder with respect
to the Swing Line Loans shall be paid in full no later than that date. Amounts
borrowed under this subsection 2.1A(iii) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.
Notwithstanding anything contained herein to the contrary, the Swing
Line Loans, and the Swing Line Loan Commitment shall be subject to the following
limitations in the amounts indicated:
(a) in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in
effect;
41
(b) any reduction of the Revolving Loan Commitments made pursuant to
subsection 2.4B which reduces the aggregate Revolving Loan Commitments to
an amount less than the then current sum of the Swing Line Loan Commitment
shall result in an automatic corresponding pro rata reduction of the Swing
Line Loan Commitment such that the sum thereof equals the amount of the
Revolving Loan Commitments, as so reduced, without any further action on
the part of Company, Administrative Agent or Swing Line Lender.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4B(i), Swing Line Lender may, at any
time in its sole and absolute discretion, deliver to Administrative Agent (with
a copy to Company), no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed Funding Date, a notice (which shall be
deemed to be a Notice of Borrowing given by Company) requesting Lenders to make
Revolving Loans that are Base Rate Loans to Company on such Funding Date in an
amount equal to the amount of such Swing Line Loans (the "Refunded Swing Line
Loans") outstanding on the date such notice is given which Swing Line Lender
requests Lenders to prepay. Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Revolving Loans made by Lenders other
than Swing Line Lender shall be immediately delivered by Administrative Agent to
Swing Line Lender (and not to Company) and applied to repay a corresponding
portion of the Refunded Swing Line Loans and (ii) on the day such Revolving
Loans are made, Swing Line Lender's Pro Rata Share of the Refunded Swing Line
Loans shall be deemed to be paid with the proceeds of a Revolving Loan made by
Swing Line Lender to Company, and such portion of the Swing Line Loans deemed to
be so paid, shall no longer be outstanding as Swing Line Loans and shall no
longer be due under the Swing Line Note of Swing Line Lender but shall instead
constitute part of Swing Line Lender's outstanding Revolving Loans to Company
and shall be due under the Revolving Note issued by Company to Swing Line
Lender. Company hereby authorizes each of Administrative Agent and Swing Line
Lender to charge Company's accounts with Administrative Agent and Swing Line
Lender (up to the amount available in each such account) in order to immediately
pay Swing Line Lender the amount of the Refunded Swing Line Loans to the extent
the proceeds of such Revolving Loans made by Lenders, including the Revolving
Loan deemed to be made by Swing Line Lender, are not sufficient to repay in full
the Refunded Swing Line Loans. If any portion of any such amount paid (or deemed
to be paid) to Swing Line Lender should be recovered by or on behalf of Company
from Swing Line Lender in bankruptcy, by assignment for the benefit of creditors
or otherwise, the loss of the amount so recovered shall be ratably shared among
all Lenders in the manner contemplated by subsection 10.5.
If for any reason Revolving Loans are not made pursuant to this
subsection 2.1A(iii) in an amount sufficient to repay any amounts owed to Swing
Line Lender in respect of any outstanding Swing Line Loans on or before the
third Business Day after demand for payment thereof by Swing Line Lender, each
Lender with a Revolving Loan Commitment shall be deemed to, and hereby agrees
to, have purchased a participation in such outstanding Swing Line Loans, and in
an amount equal to its Pro Rata Share of the applicable unpaid amount together
with accrued interest thereon. Upon one Business Day's notice from Swing
42
Line Lender, each such Lender shall deliver to Swing Line Lender an amount equal
to its respective participation in the applicable unpaid amount in same day
funds at the Funding and Payment Office. In order to evidence such participation
each such Lender agrees to enter into a participation agreement at the request
of Swing Line Lender in form and substance satisfactory to Swing Line Lender. In
the event any such Lender fails to make available to Swing Line Lender the
amount of such Lender's participation as provided in this paragraph, Swing Line
Lender shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the rate customarily used by Swing Line Lender
for the correction of errors among banks for three Business Days and thereafter
at the Base Rate, as applicable.
Notwithstanding anything contained herein to the contrary, (i) the
obligation of each Lender with a Revolving Loan Commitment to make Revolving
Loans for the purpose of repaying any Refunded Swing Line Loans pursuant to the
second preceding paragraph and each such Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the immediately
preceding paragraph shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (a) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against Swing Line Lender, Company or any other Person for any reason
whatsoever; (b) the occurrence or continuation of an Event of Default or a
Potential Event of Default; (c) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any of its Subsidiaries; (d) any breach of this Agreement or any other Loan
Document by any party thereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that no
such Lender shall have any such obligation unless (x) Swing Line Lender believed
in good faith that all conditions under Section 4 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, were
satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line Loans
were made, or (y) such Lender had actual knowledge, by receipt of any notices
required to be delivered to such Lenders pursuant to subsection 6.1(ix) or
otherwise, that any such condition under Section 4 had not been satisfied and
such Lender failed to notify Swing Line Lender and Administrative Agent in
writing that it had no obligation to make Revolving Loans until such condition
was satisfied (any such notice to be effective as of the date of receipt thereof
by Swing Line Lender and Administrative Agent), or (z) the satisfaction of any
such condition under Section 4 not satisfied had been waived by Requisite
Lenders prior to or at the time such Refunded Swing Line Loans or other unpaid
Swing Line Loans were made; and (ii) Swing Line Lender shall not be obligated to
make any Swing Line Loans if it has elected not to do so after the occurrence
and during the continuation of a Potential Event of Default or Event of Default.
B. Borrowing Mechanics. Term Loans or Revolving Loans (including any
such Loans made as Eurodollar Rate Loans with a particular Interest Period) made
on any Funding Date (other than Revolving Loans made pursuant to a request by
Swing Line Lender pursuant to subsection 2.1A(iii) for the purpose of repaying
any Refunded Swing Line Loans or Revolving Loans made pursuant to subsection
3.3B for the purpose of reimbursing any Issuing Lender for the amount of a
drawing or payment under a Letter of Credit issued by it)
43
shall be in an aggregate minimum amount of $500,000 and integral multiples of
$250,000 in excess of that amount. Swing Line Loans made on any Funding Date
shall be in an aggregate minimum amount of $250,000 and integral multiples of
$100,000 in excess of that amount. Whenever Company desires that Lenders make
Term Loans or Revolving Loans it shall deliver to Administrative Agent on behalf
of Company a Notice of Borrowing no later than 12:00 Noon (New York time), at
least three Business Days in advance of the proposed Funding Date in the case of
a Eurodollar Rate Loan, or at least one Business Day in advance of the proposed
Funding Date in the case of a Base Rate Loan. Whenever Company desires that
Swing Line Lender make a Swing Line Loan, it shall deliver to Administrative
Agent a Notice of Borrowing no later than 12:00 Noon (New York time) on the
proposed Funding Date. The Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount and type of Loans
requested, (iii) in the case of Swing Line Loans, that such Loans shall be Base
Rate Loans, (iv) in the case of any Loans other than Swing Line Loans, whether
such Loans shall be Base Rate Loans or Eurodollar Rate Loans, and (v) in the
case of any Loans requested to be made as Eurodollar Rate Loans, the initial
Interest Period requested therefor. Term Loans and Revolving Loans may be
continued as or converted into Base Rate Loans and Eurodollar Rate Loans in the
manner provided in subsection 2.2D. In lieu of delivering the above-described
Notice of Borrowing, Company may give Administrative Agent telephonic notice by
the required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Borrowing to Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of
any Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing are no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. Disbursement of Funds. All Term Loans and all Revolving Loans
under this Agreement shall be made by Lenders simultaneously and proportionately
to their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any
44
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender to make the
particular type of Loan requested be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder. Promptly after receipt by Administrative Agent of a Notice
of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Administrative Agent shall notify each Lender or Swing Line Lender, as the case
may be, of the proposed borrowing and of the amount of such Lender's Pro Rata
Share of the applicable Loans.
Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York time) on the applicable
Funding Date, and Swing Line Lender shall make the amount of its Swing Line Loan
available to Administrative Agent not later than 12:00 Noon (New York time) on
the applicable Funding Date, in each case in same day funds, at the Funding and
Payment Office. Except as provided in subsection 2.1A(iii) or subsection 3.3B
with respect to Revolving Loans used to repay Refunded Swing Line Loans or to
reimburse any Issuing Lender for the amount of an honored drawing or payment
under a Letter of Credit issued by it, upon satisfaction or waiver of the
conditions precedent specified in subsections 4.1 (in the case of Loans made on
the Effective Date) and 4.2 (in the case of all Loans), Administrative Agent
shall make the proceeds of such Loans available to Company on the applicable
Funding Date by causing an amount of same day funds equal to the proceeds of all
such Loans received by Administrative Agent from Lenders or Swing Line Lender,
as the case may be, to be credited to the account of Company at the Funding and
Payment Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate applicable to such Loan. Nothing in this subsection 2.1C shall be deemed to
relieve any Lender from its obligation to fulfill its Commitments hereunder or
to prejudice any rights that Company may have against any Lender as a result of
any default by such Lender hereunder.
45
D. The Register.
(i) Administrative Agent shall maintain, at the address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from
time to time (the "Register"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Commitments and the outstanding Loans from time to time of each Lender and
each repayment or prepayment in respect of the principal amount of the
outstanding Loans of each Lender. Any such recordation shall be conclusive
and binding on Company and each Lender, absent manifest error; provided,
that failure to make any such recordation, or any error in such
recordation, shall not affect Company's Obligations in respect of the
applicable Loans.
(iii) Each Lender shall record on its internal records (including,
without limitation, the Notes held by such Lender) the amount of each Loan
made by it and each payment in respect thereof. Any such recordation shall
be prima facie evidence of the amount of such Loans; provided that failure
to make any such recordation, or any error in such recordation, shall not
affect Company's Obligations in respect of the applicable Loans; and
provided, further that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register shall
govern, absent manifest error.
(iv) Company, Agents and Lenders shall deem and treat the Persons
listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any Commitment or Loan shall be
effective, in each case unless an until an Assignment Agreement effecting
the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in
subsection 10.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving
such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(v) Company hereby designates Chase, and any financial institution
serving as a successor Administrative Agent, to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent Chase
serves in such capacity, Chase and its officers, directors, employees,
agents and affiliates shall constitute Indemnities for all purposes under
subsection 10.3.
46
E. Notes. Company shall execute and deliver on the Effective Date
(i) to each requesting Lender (or to Administrative Agent for that Lender) (a) a
Tranche A Term Note substantially in the form of Exhibit IV annexed hereto, to
evidence that Lender's Tranche A Term Loans in the principal amount of that
Lender's Tranche A Term Loans and with other appropriate insertions and (b) a
Revolving Note substantially in the form of Exhibit V annexed hereto to evidence
that Lender's Revolving Loans, in the principal amount of that Lender's
Revolving Loan Commitment and with other appropriate insertions, and (ii) to
Swing Line Lender, a Swing Line Note substantially in the form of Exhibit VI
annexed hereto to evidence Swing Line Lender's Swing Line Loans, in the
principal amount of the Swing Line Commitment and with other appropriate
insertions. The Notes and the Obligations evidenced thereby shall be governed
by, subject to and benefit from all of the terms and conditions of this
Agreement and the other Loan Documents and shall be guarantied and/or secured by
the Collateral as provided in the Loan Documents.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6
and 2.7, each Term Loan and each Revolving Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate, as the case may be, plus the Applicable Margin.
Subject to the provisions of subsection 2.7, each Swing Line Loan shall bear
interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate, plus the Applicable Margin. The applicable basis for
determining the rate of interest with respect to any Loan shall be selected by
Company initially at the time a Notice of Borrowing is given with respect to
such Loan pursuant to subsection 2.1B. The basis for determining the interest
rate with respect to any Term Loan or any Revolving Loan may be changed from
time to time pursuant to subsection 2.2D. If on any day any Term Loan or
Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate,
plus the Applicable Margin for Base Rate Loans.
Subject to the provisions of subsections 2.2E and 2.7, the Term
Loans and the Revolving Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus the
Applicable Margin for Base Rate Loans; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Margin for Eurodollar Loans.
47
Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the Base Rate plus
the Applicable Margin with respect to Base Rate Revolving Loans.
B. Interest Periods. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one-, two-, three- or six-month period;
provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a
Loan initially made as a Eurodollar Rate Loan, or on the date specified in
the applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/ Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Tranche A
Term Loans shall extend beyond June 30, 2005 and no Interest Period with
respect to any portion of the Revolving Loans shall extend beyond the
Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the Term
Loans shall extend beyond a date on which Company is required to make a
scheduled payment of principal of such Term Loans unless the sum of (a)
the aggregate principal amount of such Term Loans that are Base Rate Loans
plus (b) the aggregate principal amount of such Term Loans that are
Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Term Loans on such date;
48
(vii) no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the date on which a permanent
reduction of the Revolving Loan Commitments is scheduled to occur unless
the sum of (a) the aggregate principal amount of Revolving Loans that are
Base Rate Loans plus (b) the aggregate principal amount of Revolving Loans
that are Eurodollar Rate Loans with Interest Periods expiring on or before
such date plus (c) the excess of the Revolving Loan Commitments then in
effect over the aggregate principal amount of Revolving Loans then
outstanding equals or exceeds the permanent reduction of the Revolving
Loan Commitments that is scheduled to occur on such date;
(viii) there shall be no more than ten (10) Interest Periods
outstanding at any time; and
(ix) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice
of Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event that any Swing Line Loans, any Revolving
Loans or any Term Loans that are Base Rate Loans are prepaid pursuant to
subsection 2.4B(i), interest accrued on such Swing Line Loans, Revolving Loans
or Term Loans through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier,
at final maturity).
D. Conversion or Continuation. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Term Loans or Revolving Loans equal to $500,000 and
integral multiples of $250,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis or (ii) upon
the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $500,000 and integral
multiples of $250,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan), and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii)
49
the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.
E. Post-Default Interest. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code, or other applicable bankruptcy or
insolvency laws) payable upon demand at a rate that is 2% per annum in excess of
the interest rate otherwise payable under this Agreement with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Revolving Loans bearing interest at a rate determined by
reference to the Base Rate); provided that, in the case of Eurodollar Rate
Loans, upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate equal to 2% per annum in excess of the interest rate otherwise
payable under this Agreement for Base Rate Loans that are Term Loans or
Revolving Loans, as applicable. Payment or acceptance of the increased rates of
interest provided for in this subsection 2.2E is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of any Agent or Lender.
50
F. Computation of Interest. Interest on Loans shall be computed on
the basis of a 360-day year and for the actual number of days elapsed in the
period during which it accrues. In computing interest on any Loan, the date of
the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.
2.3 Fees.
A. Commitment Fees. Company agrees to pay to Administrative Agent,
for distribution to each Lender having a Revolving Loan Commitment, in
proportion to that Lender's Pro Rata Share of the Revolving Loan Commitments,
commitment fees ("Commitment Fees"; each, a "Commitment Fee") for the period
from and including the Effective Date to and excluding the Revolving Loan
Commitment Termination Date equal to (i) the average of the daily excess of the
Revolving Loan Commitments over the sum of (x) the aggregate principal amount of
Revolving Loans outstanding (but not any Swing Line Loans outstanding), and (y)
the Letter of Credit Usage multiplied by (ii) the Applicable Margin for
Commitment Fees. All such Commitment Fees shall be calculated on the basis of a
360-day year and the actual number of days elapsed and shall be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on September 30, 1998, and on the Revolving Loan Commitment
Termination Date.
B. Other Fees. Company agrees to pay to Agents such other fees in
the amounts and at the times separately agreed upon between Company and the
applicable Agents.
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments; Application of
Proceeds of Collateral and Payments under Guaranties.
A. Scheduled Payments of Term Loans and Scheduled Reductions of
Revolving Loan Commitments.
(i) Scheduled Payments of Term Loans. Company shall make principal
payments on the Term Loans in installments on the dates and in the amounts set
forth below:
51
-------------------------------------------------------------------
SCHEDULED REPAYMENT
DATE OF TERM LOANS
-------------------------------------------------------------------
December 31, 1998 $5,000,000
-------------------------------------------------------------------
March 31, 1999 $5,000,000
June 30, 1999 $5,000,000
September 30, 1999 $5,000,000
December 31, 1999 $5,000,000
-------------------------------------------------------------------
March 31, 2000 $5,000,000
June 30, 2000 $5,000,000
September 30, 2000 $7,500,000
December 31, 2000 $7,500,000
-------------------------------------------------------------------
March 31, 2001 $7,500,000
June 30, 2001 $7,500,000
September 30, 2001 $7,500,000
December 31, 2001 $7,500,000
-------------------------------------------------------------------
March 31, 2002 $7,500,000
June 30, 2002 $7,500,000
September 30, 2002 $10,000,000
December 31, 2002 $10,000,000
-------------------------------------------------------------------
March 31, 2003 $10,000,000
June 30, 2003 $10,000,000
September 30, 2003 $10,000,000
December 31, 2003 $10,000,000
-------------------------------------------------------------------
March 31, 2004 $10,000,000
June 30, 2004 $10,000,000
September 30, 2004 $12,500,000
December 31, 2004 $12,500,000
-------------------------------------------------------------------
March 31, 2005 $12,500,000
June 30, 2005 $12,500,000
===================================================================
provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in accordance with subsection 2.4C; and provided
further, that the final installment payable by Company in respect of the Term
Loans shall be in an amount, if such amount is different from that specified
above, sufficient to repay all amounts owing by Company under this Agreement
with respect to the Term Loans.
52
(ii) Scheduled Reductions of Revolving Loan Commitments. Except as set
forth in the following proviso, the Revolving Loan Commitments shall be
permanently reduced on the date and in the amount set forth below:
------------------------------------------------------------
SCHEDULED REDUCTION
DATE OF REVOLVING LOAN
COMMITMENTS
------------------------------------------------------------
June 30, 2005 $175,000,000
------------------------------------------------------------
; and provided further, that the scheduled reductions of the Revolving Loan
Commitments set forth above shall be reduced in connection with any voluntary or
mandatory reductions of the Revolving Loan Commitments in accordance with
subsection 2.4C.
B. Prepayments and Voluntary Reductions in
Revolving Loan Commitments.
(i) Voluntary Prepayments. Company may, upon written or telephonic notice
to Administrative Agent on or prior to 12:00 Noon (New York time) on the date of
prepayment, which notice, if telephonic, shall be promptly confirmed in writing,
at any time and from time to time prepay, without premium or penalty, any Swing
Line Loan on any Business Day in whole or in part in an aggregate minimum amount
of $250,000 and integral multiples of $100,000 in excess of that amount. In
addition, so long as no Swing Line Loans are then outstanding, Company may, upon
not less than one Business Day's prior written or telephonic notice, in the case
of Base Rate Loans, and three Business Days' prior written or telephonic notice,
in the case of Eurodollar Rate Loans, in each case confirmed in writing to
Administrative Agent (which notice Administrative Agent will promptly transmit
by telefacsimile or telephone to each Lender), at any time and from time to time
prepay, without premium or penalty, the Loans other than Swing Line Loans on any
Business Day in whole or in part in an aggregate minimum amount of $500,000 and
integral multiples of $250,000 in excess of that amount; provided, however, that
prepayment of a Eurodollar Rate Loan on any day other than the expiration of the
Interest Period applicable thereto shall be subject to compliance with
subsection 2.6D. Notice of prepayment having been given as aforesaid, the Loans
shall become due and payable on the prepayment date specified in such notice and
in the aggregate principal amount specified therein. Any voluntary prepayments
pursuant to this subsection 2.4B(i) shall be applied as specified in subsection
2.4C.
(ii) Voluntary Reductions of Revolving Loan Commitments. Company may, upon
not less than three Business Days' prior written or telephonic notice confirmed
in writing to Administrative Agent (which notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at any time and
from time to time terminate in whole or permanently reduce in part, without
premium or penalty, the Revolving Loan Commitments in an amount up to the amount
by which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed
53
termination or reduction; provided that any such partial reduction of the
Revolving Loan Commitments shall be in an aggregate minimum amount of $500,000
and integral multiples of $250,000 in excess of that amount. Company's notice to
Administrative Agent shall designate the date (which shall be a Business Day) of
such termination or reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Loan Commitments shall be effective on
the date specified in such notice and shall reduce the Revolving Loan Commitment
of each Lender proportionately to its Pro Rata Share. Any such voluntary
reduction of the Revolving Loan Commitments shall be applied as specified in
subsection 2.4C.
(iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan
Commitments.
The Loans shall be prepaid and the Revolving Loan Commitments shall
be reduced in the manner provided in subsection 2.4C upon the occurrence of the
following circumstances:
(a) Prepayments and Reductions from Asset Sales. No later than the
second Business Day following the date of receipt by Company or any of its
Subsidiaries of the Net Cash Proceeds of any Asset Sale (other than any
portion of such Net Cash Proceeds that is reinvested (or scheduled for
reinvestment) in assets of the general type used in the business of
Company and its Subsidiaries within 360 days from the date of receipt of
such Net Cash Proceeds (such Net Cash Proceeds that are reinvested or to
be reinvested not to exceed $45,000,000 in aggregate amount in any Fiscal
Year)), Company shall prepay the Loans (and/or the Revolving Loan
Commitments shall be reduced) in an aggregate amount equal to such Net
Cash Proceeds; provided, however, that Company may not reinvest (or
schedule for reinvestment) Net Cash Proceeds upon the occurrence and
during the continuation of an Event of Default. Company shall, no later
than 360 days after receipt of any such Net Cash Proceeds that have not
theretofore been applied to the Obligations, make an additional prepayment
of the Loans (and/or the Revolving Loan Commitments shall be reduced) in
the full amount of all such proceeds that have not therefore been so
reinvested. Concurrently with any prepayment of the Loans and/or reduction
of the Commitments pursuant to this subsection 2.4B(iii)(a), Company shall
deliver to Administrative Agent an Officer's Certificate demonstrating the
derivation of the Net Cash Proceeds of the correlative Asset Sale from the
gross sales price thereof. In the event that Company shall, at any time
after receipt of Net Cash Proceeds of any Asset Sale requiring a
prepayment or a reduction of the Revolving Loan Commitments pursuant to
this subsection 2.4B(iii)(a), determine that the prepayments and/or
reductions of the Revolving Loan Commitments previously made in respect of
such Asset Sale were in an aggregate amount less than that required by the
terms of this subsection 2.4B(iii)(a), Company shall promptly cause to be
made an additional prepayment of the Loans (and/or reduction in the
Revolving Loan Commitments) in an amount equal to the amount of any such
deficit, and Company shall concurrently
54
therewith deliver to Administrative Agent an Officer's Certificate
demonstrating the derivation of the additional Net Cash Proceeds resulting
in such deficit.
(b) Prepayments and Reductions Due to Issuance of Debt. On or prior
to the first Business Day after receipt by Company or any of its
Subsidiaries of any proceeds of any Indebtedness (other than the Loans and
any other Indebtedness permitted under subsection 7.1(i), (ii), (iii),
(iv), (v), (vii), (viii) or (ix)), Company shall prepay the Loans (and/or
the Revolving Loan Commitments shall be reduced) in an amount equal to the
amount of such proceeds; provided, however, that such proceeds from
Indebtedness permitted under subsection 7.1(vi) shall not be applied to
prepay Loans pursuant to this subsection if and to the extent such
proceeds are applied by Company to repay the Indebtedness with respect to
the Subordinated Notes; and provided further, that payment or acceptance
of the amounts provided for in this subsection 2.4B(iii)(b) shall not
constitute a waiver of any Event of Default resulting from the incurrence
of such Indebtedness or otherwise prejudice any rights or remedies of
Agents or Lenders.
(c) Prepayments and Reductions Due to Issuance of Equity Securities.
At any time the Leverage Ratio is greater than 3.25:1.00, on or prior to
the first Business Day after receipt by Company or any of its Subsidiaries
of any Equity Proceeds after the Effective Date, Company shall prepay the
Loans (and/or the Revolving Loan Commitments shall be reduced) in an
amount equal to 50% of such Equity Proceeds; provided, however, that such
Equity Proceeds shall not be applied to prepay Loans pursuant to this
subsection if and to the extent such Equity Proceeds were derived (x)
directly or indirectly from a sale of Securities to any of the MDC
Entities, Dartford, Fenway, the Management Investors and their respective
Affiliates, or to employees or directors of Company and its Subsidiaries
pursuant to any employee stock option or stock purchase plan or other
employee benefit plan, and (y) from sales of Securities to management
officers and directors after the Effective Date to the extent the
consideration paid therefor does not exceed $1,000,000.
(d) Prepayments and Reductions from Insurance and Condemnation
Proceeds. No later than the second Business Day following the date of
receipt by Company or any of its Subsidiaries of any cash payments under
any of the casualty insurance policies covering damage to or loss of
property maintained pursuant to subsection 6.4 resulting from damage to or
loss of all or any portion of the Collateral or any other tangible asset
(net of actual and documented reasonable costs incurred by Company or any
of its Subsidiaries in connection with adjustment and settlement thereof,
"Insurance Proceeds") or any proceeds resulting from the taking of assets
by the power of eminent domain, condemnation or otherwise (net of actual
and documented reasonable costs incurred by Company or any of its
Subsidiaries in connection with adjustment and settlement thereof,
"Condemnation Proceeds") (other than, if no Event of Default shall have
occurred and be continuing or shall be caused thereby, any portion of any
such proceeds that is reinvested (or scheduled for reinvestment) in assets
of the general type used in the business of Company and its
55
Subsidiaries within 360 days from the date of receipt of such proceeds),
Company shall prepay the Loans (and/or the Revolving Loan Commitments
shall be reduced) in the amount of such proceeds not so reinvested (or
scheduled for such reinvestment). Company shall, no later than 360 days
after receipt of any such Insurance Proceeds or Condemnation Proceeds that
have not theretofore been applied to the Obligations, make an additional
prepayment of the Loans (and/or the Revolving Loan Commitments shall be
reduced) in the full amount of all such proceeds that have not therefore
been reinvested in such assets.
(e) Prepayments and Reductions from Consolidated Excess Cash Flow.
In the event that there shall be Consolidated Excess Cash Flow for any
Fiscal Year (commencing with the Fiscal Year ending in December 1998),
Company shall, no later than 100 days after the end of such Fiscal Year,
prepay the Loans (and/or the Revolving Loan Commitments shall be reduced)
in an aggregate amount equal to 50% of such Consolidated Excess Cash Flow
for such Fiscal Year; provided however, that if the Leverage Ratio is less
than or equal to 4.00:1.00, then such prepayment of the Loans and/or
reduction of the Revolving Loan Commitments shall be in an aggregate
amount equal to 25% of such Consolidated Excess Cash Flow for such Fiscal
Year.
(f) Prepayments Due to Reductions or Restrictions of Revolving Loan
Commitments. Company shall prepay the Swing Line Loans and/or the
Revolving Loans from time to time to the extent necessary so that (y) the
Total Utilization of Revolving Loan Commitments shall not at any time
exceed the Revolving Loan Commitments then in effect, and (z) the
aggregate principal amount of all outstanding Swing Line Loans shall not
at any time exceed the Swing Line Loan Commitment then in effect. All
Swing Line Loans shall be prepaid in full prior to the prepayment of any
Revolving Loans pursuant to this subsection 2.4B(iii)(f).
C. Application of Prepayments and Unscheduled
Reductions of Revolving Loan Commitments.
(i) Application of Voluntary Prepayments by Type of Loans. Any voluntary
prepayments pursuant to subsection 2.4B(i) shall be applied: first to repay
outstanding Swing Line Loans to the full extent thereof, second to repay
outstanding Revolving Loans to the full extent thereof, and third, to repay
outstanding Term Loans pro rata and shall be applied to the remaining
installments thereof on a pro rata basis to the full extent thereof.
(ii) Application of Mandatory Prepayments by Type of Loans. Any amount
(the "Applied Amount") required to be applied as a mandatory prepayment of the
Loans and/or a reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(e) shall be applied: first to prepay the Term Loans
pro rata and shall be applied to the remaining installments thereof on a pro
rata basis to the full extent thereof, second, to the extent of any remaining
portion of the Applied Amount, to prepay the Swing Line Loans to the full extent
thereof and to permanently reduce the Revolving Loan Commitments by the amount
of such prepayment, third, to the extent of any remaining portion of the Applied
Amount, to prepay
56
the Revolving Loans to the full extent thereof and to further permanently reduce
the Revolving Loan Commitments by the amount of such prepayment, and fourth, to
the extent of any remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full extent thereof.
Notwithstanding the foregoing or anything herein to the contrary, no portion of
the proceeds of Indebtedness permitted under subsection 7.1(vi) which are
applied to prepay the Loans shall be applied to permanently reduce the Revolving
Loan Commitments.
(iii) Application of Prepayments of Term Loans to the Scheduled
Installments of Principal Thereof. Any prepayments of the Term Loans pursuant to
subsection 2.4B(i) or 2.4B(iii) shall be applied to prepay the Term Loans on a
pro rata basis in accordance with the outstanding principal amounts thereof. Any
mandatory prepayments applied to the Term Loans pursuant to this subsection
shall be applied on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) to each scheduled installment of
principal of the Term Loans set forth in subsection 2.4A(i) that is unpaid at
the time of such prepayment.
(iv) Application of Prepayments to Base Rate Loans and Eurodollar Rate
Loans. Considering Term Loans and Revolving Loans being prepaid separately, any
prepayment thereof shall be applied first to Base Rate Loans to the full extent
thereof before application to Eurodollar Rate Loans, in each case in a manner
which minimizes the amount of any payments required to be made by Company
pursuant to subsection 2.6D.
(v) Application of Unscheduled Reductions of Revolving Loan Commitments.
Any voluntary or mandatory reduction of the Revolving Loan Commitments pursuant
to subsection 2.4B(ii) or 2.4B(iii) shall be applied to reduce the scheduled
reductions of the Revolving Loan Commitments set forth in subsection 2.4A(ii) in
reverse chronological order.
D. Application of Proceeds of
Collateral and Payments Under Guaranties.
(i) Application of Proceeds of Collateral. Except as provided in
subsection 2.4B(iii)(a) with respect to prepayments from Net Cash Proceeds of
Asset Sales, all proceeds received by Administrative Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document may, in the discretion of
Administrative Agent, be held by Administrative Agent as Collateral for, and/or
(then or at any time thereafter) applied in full or in part by Administrative
Agent against, the applicable Secured Obligations (as defined in such Collateral
Document) in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including without limitation reasonable
compensation to Administrative Agent and its agents and counsel, and all
other reasonable expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such Collateral
Document and all advances made by
57
Administrative Agent thereunder for the account of the applicable Loan
Party, and to the payment of all reasonable costs and expenses paid or
incurred by Administrative Agent in connection with the exercise of any
right or remedy under such Collateral Document, all in accordance with the
terms of this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to the
payment of all other such Secured Obligations for the ratable benefit of
the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Loan Party or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments received by
Administrative Agent under any Guaranty shall be applied promptly from time to
time by Administrative Agent in the following order of priority:
(a) To the payment of the reasonable costs and expenses of any
collection or other realization under such Guaranty, including without
limitation reasonable compensation to Administrative Agent and its agents
and counsel, and all expenses, liabilities and advances made or incurred
by Administrative Agent in connection therewith, all in accordance with
the terms of this Agreement and such Guaranty;
(b) thereafter, to the extent of any excess of such payments, to the
payment of all other Guarantied Obligations (as defined in such Guaranty)
for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess of such payments, to the
payment the applicable Subsidiary Guarantor or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
E. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of principal,
interest, fees and other Obligations hereunder and under the Notes shall be made
in same day funds and without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to Administrative Agent not later than
12:00 Noon (New York time) on the date due at the Funding and Payment Office for
the account of Lenders; funds received by Administrative Agent after that time
on such due date shall be deemed to have been paid by Company on the next
succeeding Business Day. Company hereby authorizes Administrative Agent to
charge its accounts with such Administrative Agent in order to cause timely
payment to be made to Administrative Agent of all principal, interest, fees and
expenses due hereunder (subject to sufficient funds being available in its
accounts for that purpose).
58
(ii) Application of Payments to Principal and Interest. Except as provided
in subsection 2.2C, all payments in respect of the principal amount of any Loan
shall include payment of accrued interest on the principal amount being repaid
or prepaid, and all such payments (and in any event any payments made in respect
of any Loan on a date when interest is due and payable with respect to such
Loan) shall be applied to the payment of interest before application to
principal.
(iii) Apportionment of Payments. Aggregate principal and interest payments
shall be apportioned among all outstanding Loans to which such payments relate,
in each case proportionately to Lenders' respective Pro Rata Shares.
Administrative Agent shall promptly distribute to each Lender, at its applicable
Lending Office specified on Schedule 2.1 or at such other address as such Lender
may request, its Pro Rata Share of all such payments received by Administrative
Agent and the commitment fees of such Lender when received by Administrative
Agent pursuant to subsection 2.3. Notwithstanding the foregoing provisions of
this subsection 2.4E(iii) if, pursuant to the provisions of subsection 2.6C, any
Notice of Conversion/Continuation is withdrawn as to any Affected Lender or if
any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made hereunder
shall be stated to be due on a day that is not a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time
shall be included in the computation of the payment of interest hereunder or of
the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing of any
Note held by it, or any part thereof (other than by granting participations
therein), that Lender will make a notation thereon of all Loans evidenced by
that Note and all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure to make (or any
error in the making of) a notation of any Loan made under such Note shall not
limit or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest on such
Note.
2.5 Use of Proceeds.
A. Term Loans. The proceeds of the Term Loans, together with the
proceeds of the Revolving Loans made on the Effective Date, the Equity Proceeds
from the Initial Public Offering described in subsection 4.1C and the proceeds
from the New Subordinated Notes, shall be applied to (i) refinance indebtedness
under the Existing Credit Agreement and the VDK Credit Agreement and (ii) pay
Transaction Costs.
B. Revolving Loans; Swing Line Loans. The proceeds of the Revolving
Loans and any Swing Line Loans shall be applied by Company (i) as provided in
subsection 2.5A and to finance expenditures which are included in the definition
of Consolidated Capital Expenditures and for working capital and general
corporate purposes, including acquisitions in
59
accordance with subsection 7.7(vii), and which may include the making of
intercompany loans to any of Company's Wholly Owned Subsidiaries, in accordance
with subsection 7.1(iv), for their own working capital and general corporate
purposes and (ii) to the payment of premiums and related costs and expenses to
repay the VDK Subordinated Notes.
C. Compliance With Laws. Company hereby undertakes that no portion
of the proceeds of any Loans or other extensions of credit under this Agreement
shall be used by any Loan Party in any manner which would be illegal under, or
which would cause the invalidity or unenforceability (in each case in whole or
in part) of any Loan Document under, any applicable law.
D. Margin Regulations. Without limiting the generality of subsection
2.5C, no portion of the proceeds of any borrowing under this Agreement shall be
used by Company or any of its Subsidiaries in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation G,
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing
and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
after 11:00 A. M. (New York time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event
that Administrative Agent shall have reasonably determined (which determination
shall be final and conclusive and binding upon all parties hereto), on any
Interest Rate Determination Date with respect to any Eurodollar Rate Loans, that
by reason of circumstances arising after the date of this Agreement affecting
the London interbank market, adequate and fair means do not exist for
ascertaining the interest rate applicable to such Loans on the basis provided
for in the definition of Adjusted Eurodollar Rate, Administrative Agent shall on
such date give notice (by telecopy or by telephone confirmed in writing) to
Company and each Lender of such determination, whereupon (i) no Loans may be
made as, or converted to, Eurodollar Rate Loans, until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist (such notification not to be unreasonably
withheld or delayed) and (ii) any Notice of Borrowing or Notice of
60
Conversion/Continuation given by Company with respect to the Loans in respect of
which such determination was made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have reasonably determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative Agent)
that the making, maintaining or continuation of its Eurodollar Rate Loans (i)
has become unlawful as a result of compliance by such Lender in good faith with
any law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order
not having the force of law even though the failure to comply therewith would
not be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the London interbank market,
then, and in any such event, such Lender shall be an "Affected Lender" and it
shall on that day give notice (by telecopy or by telephone confirmed in writing)
to Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(a) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans, shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans, as the case may be
(the "Affected Loans"), shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by
giving notice (by telecopy or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest
Periods. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including, without
limitation, any interest paid by that Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense or liability
sustained by that Lender in connection with the liquidation or reemployment of
such funds)
61
which that Lender may sustain: (i) if for any reason (other than a default by
that Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request for conversion or continuation, (ii) if any prepayment
(including without limitation any prepayment pursuant to subsection 2.4B(i)) or
conversion of any of its Eurodollar Rate Loans occurs on a date that is not the
last day of an Interest Period applicable to that Loan, (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Company, or (iv) as a consequence of any other
default by Company in the repayment of its Eurodollar Rate Loans when required
by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/ Continuation given by Company with
respect to a requested borrowing or conversion/ continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any law, treaty or governmental
rule, regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or
directive issued or made after the
62
date hereof by any central bank or other governmental or quasigovernmental
authority (whether or not having the force of law):
(i) results in a change in the basis of taxation of such Lender (or
its applicable lending office) (other than a change with respect to any
Tax on the overall net income of such Lender) with respect to this
Agreement or any of its obligations hereunder or any payments to such
Lender (or its applicable lending office) of principal, interest, fees or
any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including,
without limitation, any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of
such Lender (other than any such reserve or other requirements with
respect to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder, or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Eurodollar Rate Loans hereunder or to
reduce any amount received or receivable by such Lender (or its applicable
lending office) with respect thereto; then, in any such case, Lender shall
promptly notify Company and Administrative Agent thereof and Company shall
promptly pay to such Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender shall reasonably determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be prima facie evidence of such additional amounts.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company under this
Agreement and the other Loan Documents shall (except to the extent required by
law) be paid free and clear of, and without any deduction or withholding on
account of, any Tax (other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within the United States
of America or any political subdivision in or of the United States of America or
any other jurisdiction from which a payment is made by or on behalf of Company.
63
(ii) Withholding of Taxes. If Company or any other Person is required by
law to make any deduction or withholding on account of any such Tax from any sum
paid or payable by Company to Administrative Agent or any Lender under any of
the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay
is imposed on Company) for its own account or (if that liability is
imposed on Administrative Agent or such Lender, as the case may be) on
behalf of and in the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction,
withholding or payment, Administrative Agent or such Lender, as the case
may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or
made; and
(d) within 30 days after paying any sum from which it is required by
law to make any deduction or withholding, and within 30 days after the due
date of payment of any Tax which it is required by clause (b) above to
pay, Company shall deliver to Administrative Agent evidence of such
deduction, withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
date hereof (in the case of each Lender listed on the signature pages hereof) or
after the date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any jurisdiction
other than the United States or any state or other political subdivision
thereof (for purposes of this subsection 2.7B(iii), a "Non-US Lender")
shall deliver to Administrative Agent for transmission to Company, on or
prior to the Closing Date (in the case of each Existing Lender), on or
prior to the Effective Date (in the case of each New Lender) or on or
prior to the date of the Assignment Agreement pursuant to which it becomes
a Lender (in the case of each other Lender), and at such other times as
may be
64
necessary in the determination of Company or Administrative Agent (each in
the reasonable exercise of its discretion), (1) two original copies of
Internal Revenue Service Form 1001 or 4224 (or any successor forms),
accurately completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to establish that such
Lender is not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan Documents or
(2) if such Lender is not a "bank" or other Person described in Section
881(c)(3) of the Internal Revenue Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 (or any successor forms) pursuant to
clause (1) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any successor
form), properly completed and duly executed by such Lender, together with
any other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to establish
that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender of
interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or other
evidence with respect to United States federal income tax withholding
matters pursuant to subsection 2.7B(iii)(a) hereby agrees, from time to
time after the initial delivery by such Lender of such forms, certificates
or other evidence, whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence obsolete or inaccurate
in any material respect, such Lender shall (1) deliver to Administrative
Agent for transmission to Company two new original copies of Internal
Revenue Service Form 1001 or 4224 (or any successor forms), or a
Certificate re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8 (or any successor form), as the case may be, accurately
completed and duly executed by such Lender, together with any other
certificate or statement of exemption required in order to confirm or
establish that such Lender is not subject to deduction or withholding of
United States federal income tax with respect to payments to such Lender
under the Loan Documents or (2) immediately notify Administrative Agent
and Company of its inability to deliver any such forms, certificates or
other evidence.
(c) Company shall not be required to pay any additional amount to
any Non-US Lender under clause (c) of subsection 2.7B(ii) in respect of
deductions or withholdings of United States federal income taxes if such
Lender shall have failed to satisfy the requirements of subsection
2.7B(iii)(a) or 2.7B(iii)(b); provided that if such Lender shall have
satisfied such requirements on the Closing Date (in the case of each
Existing Lender), on the Effective Date (in the case of each New Lender)
or on the date of the Assignment Agreement pursuant to which it became a
Lender (in the case of each other Lender), nothing in this subsection
2.7B(iii)(c) shall relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.7B(ii) in the event that,
as a result of any change in any applicable law, treaty or governmental
rule, regulation or order, or any change in the interpretation,
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administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent
date establishing the fact that such Lender is not subject to withholding
as described in subsection 2.7B(iii)(a) or 2.7B(iii)(b).
C. Capital Adequacy Adjustment. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by the National Association of Insurance Commissioners,
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of the National
Association of Insurance Commissioners, any such governmental authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on the capital of such Lender or any corporation controlling such Lender
as a consequence of, or with reference to, such Lender's Loans or Commitments or
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that which such
Lender reasonably determines such Lender or such controlling corporation could
have achieved but for such adoption, effectiveness, phase-in, applicability,
change or compliance (taking into consideration the policies of such Lender or
such controlling corporation with regard to capital adequacy), then from time to
time, within fifteen Business Days after receipt by Company from such Lender of
the statement referred to in the next sentence, Company shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
D. Substitute Lenders. In the event Company is required under the
provisions of this subsection 2.7 to make payments in a material amount to any
Lender or in the event any Lender fails to lend to Company in accordance with
this Agreement, Company may, so long as no Event of Default or Potential Event
of Default shall have occurred and be continuing, elect to terminate such Lender
as a party to this Agreement; provided that, concurrently with such termination,
(i) Company shall pay that Lender all principal interest and fees and other
amounts (including without limitation amounts, if any, owed under this
subsection 2.7) due to be paid to such Lender with respect to all periods
through such date of termination, (ii) another financial institution
satisfactory to Company and Administrative Agent shall agree, as of such date,
to become a Lender for all purposes under this Agreement (whether by assignment
or amendment) and to assume all obligations of the Lender to be terminated as of
such date, and (iii) all documents and supporting materials necessary, in the
judgment of Administrative Agent to evidence the substitution of such Lender
shall have been received and approved by Administrative Agent as of such date.
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2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender or Issuing Lender to receive payments under subsection
2.7 or subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office. A certificate
as to the amount of any such expenses payable by Company pursuant to this
subsection 2.8 (setting forth in reasonable detail the basis for requesting such
amount) submitted by such Lender or Issuing Lender to Company (with a copy to
Administrative Agent) shall be conclusive absent manifest error.
SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein.
A. Letters of Credit. In addition to Company requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A(ii), and that Swing Line Lender
make Swing Line Loans pursuant to subsection 2.1A(iii), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Effective Date to but excluding the Revolving Loan
Commitment Termination Date, that one or more Lenders issue Letters of Credit
for the account of Company for the purposes specified in the definitions of
Commercial Letters of Credit and Standby Letters of Credit. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, any one or more Lenders may, but (except
as provided in subsection 3.1B(ii)) shall not be obligated to, issue such
Letters of Credit in
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accordance with the provisions of this subsection 3.1; provided that Company
shall not request that any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $7,500,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) the Revolving Loan Commitment Termination Date and
(b) the date which is one year from the date of issuance of such Standby
Letter of Credit; provided that the immediately preceding clause (b) shall
not prevent any Issuing Lender from agreeing that a Standby Letter of
Credit will automatically be extended for one or more successive periods
not to exceed one year each unless such Issuing Lender elects not to
extend for any such additional period; provided further that, unless
Requisite Lenders otherwise consent, such Issuing Lender shall give notice
that it will not extend such Standby Letter of Credit if it has knowledge
that an Event of Default has occurred and is continuing on the last day on
which such Issuing Lender may give notice to the beneficiary that it will
not extend such Standby Letter of Credit;
(iv) any Commercial Letter of Credit (a) having an expiration date
later than the earlier of (X) 30 days prior to the Revolving Loan
Commitment Termination Date and (Y) the date which is 180 days from the
date of issuance of such Commercial Letter of Credit or (b) that is
otherwise unacceptable to the applicable Issuing Lender in its reasonable
discretion;
(v) any Letter of Credit denominated in a currency other than
Dollars; or
(vi) any Letter of Credit during any period when a Lender Default
exists, unless each Issuing Lender has entered into arrangements
satisfactory to it and Company to eliminate such Issuing Lender's risk
with respect to the Defaulting Lender, including by cash collateralizing
such Defaulting Lender's Pro Rata Share of the Letter of Credit Usage
(after giving effect to the issuance of the proposed Letter of Credit).
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance of a Letter
of Credit, it shall deliver to Administrative Agent, at the Funding and Payment
Office, a Notice of Issuance of Letter of Credit no later than 12:00 Noon (New
York time) at least five Business Days, or such shorter period as may be agreed
to by the Issuing Lender in any particular instance, in advance of the proposed
date of issuance. The Notice of Issuance of Letter of Credit shall specify (a)
the proposed date of issuance (which shall be a Business
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Day), (b) the face amount of or maximum aggregate liability under, as
applicable, the Letter of Credit, (c) the expiration date of the Letter of
Credit, (d) the name and address of the beneficiary, and (e) the verbatim text
of the proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents and the verbatim text of any
certificates to be presented by the beneficiary which, if presented by the
beneficiary prior to the expiration date of the Letter of Credit, would require
the Issuing Lender to make payment under the Letter of Credit; provided that the
Issuing Lender, in its reasonable discretion, may require changes in the text of
the proposed Letter of Credit or any such documents or certificates; provided
further that no Letter of Credit shall require payment against a conforming
draft or other request for payment to be made thereunder on the same Business
Day (under the laws of the jurisdiction in which the office of the Issuing
Lender to which such draft or other request for payment is required to be
presented is located) that such draft or other request for payment is presented
if such presentation is made after 10:00 A.M. (in the time zone of such office
of the Issuing Lender) on such Business Day.
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing Lender) prior
to the issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Notice of Issuance of
Letter of Credit is no longer true and correct as of the proposed date of
issuance of such Letter of Credit, and upon the issuance of any Letter of
Credit, Company shall be deemed to have recertified, as of the date of such
issuance, as to the matters to which Company is required to certify in the
applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by Administrative Agent
of a Notice of Issuance of Letter of Credit pursuant to subsection 3.1B(i)
requesting the issuance of a Letter of Credit, in the event Administrative Agent
elects to issue such Letter of Credit, Administrative Agent shall promptly so
notify Company, and such Administrative Agent shall be the Issuing Lender with
respect thereto. In the event that Administrative Agent, in its sole discretion,
elects not to issue such Letter of Credit, Administrative Agent shall promptly
so notify Company, whereupon Company may request any other Lender to issue such
Letter of Credit by delivering to such Lender a copy of the applicable Notice of
Issuance of Letter of Credit. Any Lender so requested to issue such Letter of
Credit shall promptly notify Company and Administrative Agent whether or not, in
its sole discretion, it has elected to issue such Letter of Credit, and any such
Lender which so elects to issue such Letter of Credit shall be the Issuing
Lender with respect thereto. In the event that all other Lenders shall have
declined to issue such Letter of Credit, notwithstanding the prior election of
Administrative Agent not to issue such Letter of Credit, Administrative Agent
shall be obligated to issue such Letter of Credit and shall be the Issuing
Lender with respect thereto, notwithstanding the fact that the sum of the Letter
of Credit Usage with respect to such Letter of Credit and with respect to all
other Letters of Credit issued by Administrative when aggregated with
Administrative Agent's outstanding Revolving Loans and Swing Line Loans, may
exceed Administrative Agent's Revolving Loan Commitment then in effect.
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(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
accordance with subsection 10.6) of the conditions set forth in subsection 4.3,
the Issuing Lender shall issue the requested Letter of Credit in accordance with
the Issuing Lender's standard operating procedures (any such issuance by
Administrative Agent being effected through the Funding and Payment Office), and
upon its issuance of such Letter of Credit the Issuing Lender shall promptly
notify Administrative Agent and each Lender of such issuance, which notice shall
be accompanied by a copy of such Letter of Credit.
(iv) Reports to Lenders. Within 30 days after the end of each calendar
quarter ending after the Closing Date, so long as any Letter of Credit shall
have been outstanding during such calendar quarter, each Issuing Lender shall
deliver to Administrative Agent and Administrative Agent shall deliver to each
Lender a report setting forth for such calendar quarter the daily maximum amount
available to be drawn under the Letters of Credit that were outstanding during
such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Loan Commitment shall be deemed to, and hereby agrees to, have
irrevocably purchased from the Issuing Lender a participation in such Letter of
Credit and any drawings honored or payments made thereunder in an amount equal
to such Lender's Pro Rata Share (with respect to the Revolving Loan Commitments)
of the maximum amount which is or at any time may become available to be drawn
or required to be paid thereunder.
3.2 Letter of Credit Fees.
Company agrees to pay the following amounts to each Issuing Lender
with respect to Letters of Credit issued by it for the account of Company:
(i) with respect to each Letter of Credit, (a) a fronting fee equal
to 1/4 of 1% per annum of the daily maximum amount available to be drawn
under such Letter of Credit and (b) a Letter of Credit fee equal to the
product of (x) the Applicable Margin with respect to Eurodollar Rate
Revolving Loans and (y) the daily maximum amount available to be drawn
under such Letter of Credit, in each case payable in arrears on and to
each March 31, June 30, September 30 and December 31 of each year,
commencing on December 31, 1998, and computed on the basis of a 360-day
year for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each drawing made thereunder (without duplication of
the fees payable under clause (i) above), documentary and processing
charges in accordance with such Issuing Lender's standard schedule for
such charges in effect at the time of such issuance, amendment, transfer
or drawing, as the case may be.
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Promptly upon receipt by such Issuing Lender of any amount described in clause
(i)(b) of this subsection 3.2, such Issuing Lender shall distribute to each
other Lender its Pro Rata Share of such amount.
3.3 Drawings and Payments and Reimbursement of Amounts Paid
Under Letters of Credit.
A. Responsibility of Issuing Lender With Respect to Requests For
Drawings and Payments. In determining whether to honor any drawing or request
for payment under any Letter of Credit by the beneficiary thereof, the Issuing
Lender shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit.
In the event an Issuing Lender has determined to honor a drawing or request for
payment under a Letter of Credit issued by it, such Issuing Lender shall
immediately notify Company and Administrative Agent, and Company shall reimburse
such Issuing Lender on or before the Business Day immediately following the date
on which such drawing is honored or such payment is made (the applicable
"Reimbursement Date"), in an amount in same day funds equal to the amount of
such drawing; provided that, anything contained in this Agreement to the
contrary notwithstanding, (i) unless Company shall have notified Administrative
Agent and such Issuing Lender prior to 12:00 Noon (New York time) on the date of
such drawing or request for payment that Company intends to reimburse such
Issuing Lender for the amount of such honored drawing or payment with funds
other than the proceeds of Revolving Loans, Company shall be deemed to have
given a timely Notice of Borrowing to Administrative Agent requesting Lenders to
make Revolving Loans which are Base Rate Loans, on the applicable Reimbursement
Date in an amount equal to the amount of such honored drawing or payment and
(ii) subject to satisfaction or waiver of the conditions specified in subsection
4.2B, Lenders shall, on the applicable Reimbursement Date, make Revolving Loans
and in the amount of such honored drawing or payment, the proceeds of which
shall be applied directly by Administrative Agent to reimburse such Issuing
Lender for the amount of such honored drawing or payment; provided further that
if for any reason proceeds of Revolving Loans are not received by such Issuing
Lender on the applicable Reimbursement Date in an amount equal to the amount of
such honored drawing or payment, Company shall reimburse such Issuing Lender, on
demand, in an amount in Dollars and in same day funds equal to the excess of the
amount of such honored drawing or payment over the aggregate amount of such
Revolving Loans, if any, which are so received. Nothing in this subsection 3.3B
shall be deemed to relieve any Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and Company shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Revolving Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Payments Under Letters of
Credit.
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(i) Payment by Lenders. In the event that Company shall fail for any
reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
amount equal to the amount of any honored drawing or payment made by such
Issuing Lender under a Letter of Credit issued by it, such Issuing Lender shall
promptly notify each other Lender of the unreimbursed amount of such honored
drawing or payment and of such other Lender's respective participation therein
based on such Lender's Pro Rata Share of the Revolving Loan Commitments. Each
Lender shall make available to such Issuing Lender an amount equal to its
respective participation, in same day funds, at the office of such Issuing
Lender specified in such notice, not later than 12:00 Noon (New York time) on
the first Business Day (under the laws of the jurisdiction in which such office
of such Issuing Lender is located) after the date notified by such Issuing
Lender. In the event that any Lender fails to make available to such Issuing
Lender on such Business Day the amount of such Lender's participation in such
Letter of Credit as provided in this subsection 3.3C, such Issuing Lender shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the rate customarily used by such Issuing Lender for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. Nothing in this subsection 3.3C shall be deemed to prejudice the
right of any Lender to recover from any Issuing Lender any amounts made
available by such Lender to such Issuing Lender pursuant to this subsection 3.3C
in the event that it is determined by the final judgment of a court of competent
jurisdiction that the payment with respect to a Letter of Credit by such Issuing
Lender in respect of which payment was made by such Lender constituted gross
negligence or willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company. In
the event any Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of any honored drawing or
payment made by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall distribute to each other Lender which has paid all amounts
payable by it under subsection 3.3C(i) with respect to such honored drawing or
payment such other Lender's Pro Rata Share of all payments subsequently received
by such Issuing Lender from Company in reimbursement of such honored drawing or
payment when such payments are received. Any such distribution shall be made to
a Lender at its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to each Issuing
Lender, with respect to drawings honored or payments made under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such drawing or payment from the date such drawing is honored or
payment is made to but excluding the date such amount is reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B) at a rate equal to (a) for the period from the date
such drawing is honored or payment is made to but excluding the applicable
Reimbursement Date, the Base Rate plus the Applicable Margin with respect to
Base Rate Revolving Loans, and (b) thereafter, a rate which is 2% per annum in
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excess of the rate of interest described in the foregoing clause (a). Interest
payable pursuant to this subsection 3.3D(i) shall be computed on the basis of a
360-day year for the actual number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand is made, on the date on
which the related drawing or payment under a Letter of Credit is reimbursed in
full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly upon
receipt by any Issuing Lender of any payment of interest pursuant to subsection
3.3D(i), (a) such Issuing Lender shall distribute to each other Lender, out of
the interest received by such Issuing Lender in respect of the period from the
date of the applicable honored drawing or payment under a Letter of Credit
issued by such Issuing Lender to but excluding the date on which such Issuing
Lender is reimbursed for the amount of such drawing or payment (including any
such reimbursement out of the proceeds of Revolving Loans pursuant to subsection
3.3B), the amount that such other Lender would have been entitled to receive in
respect of the Letter of Credit fee that would have been payable in respect of
such Letter of Credit for such period pursuant to subsection 3.2 if no drawing
had been honored or payment had been made under such Letter of Credit, and (b)
in the event such Issuing Lender shall have been reimbursed by other Lenders
pursuant to subsection 3.3C(i) for all or any portion of such drawing or
payment, such Issuing Lender shall distribute to each other Lender which has
paid all amounts payable by it under subsection 3.3C(i) with respect to such
drawing or payment such other Lender's Pro Rata Share of any interest received
by such Issuing Lender in respect of that portion of such drawing or payment so
reimbursed by other Lenders for the period from the date on which such Issuing
Lender was so reimbursed by other Lenders to and including the date on which
such portion of such drawing or payment is reimbursed by Company. Any such
distribution shall be made to a Lender at its Lending Office set forth on
Schedule 2.1 or at such other address as such Lender may request.
3.4 Obligations Absolute.
The obligation of Company to reimburse each Issuing Lender for
drawings honored or payments made under the Letters of Credit issued by it and
to repay any Revolving Loans made by Lenders pursuant to subsection 3.3B and the
obligations of Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction
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between Company or one of its Subsidiaries and the beneficiary for which
any Letter of Credit was procured);
(iii) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a demand, draft or certificate or other
document which does not substantially comply with the terms of such Letter
of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lender's Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing or other request for payment under any such Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
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B. Nature of Issuing Lenders' Duties. As between Company and any
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing or
payment under such Letter of Credit; or (viii) any consequences arising from
causes beyond the control of such Issuing Lender, including, without limitation,
any Governmental Acts, and none of the above shall affect or impair, or prevent
the vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of such issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
In the event that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by any Issuing Lender or Lender with any guideline,
request or directive issued or made after the date hereof by any central bank or
other governmental or quasi-governmental authority (whether or not having the
force of law):
(i) results in any change in the basis of taxation of such Issuing
Lender or Lender (or its applicable lending or letter of credit office)
(other than a change with
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respect to any Tax on the overall net income of such Issuing Lender or
Lender) with respect to the issuing or maintaining of any Letters of
Credit or the purchasing or maintaining of any participations therein or
any other obligations under this Section 3, whether directly or by such
being imposed on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including,
without limitation, any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement in respect of any Letters of Credit issued by any
Issuing Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition on or affecting such Issuing
Lender or Lender (or its applicable lending or letter of credit office)
regarding this Section 3 or any Letter of Credit or any participation
therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (reasonably determined by such Issuing Lender or
Lender) as may be necessary to compensate such Issuing Lender or Lender for any
such increased cost or reduction in amounts received or receivable hereunder.
Such Issuing Lender or Lender shall deliver to Company a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Issuing Lender or Lender under this subsection 3.6, which
statement shall be prima facie evidence of such additional amounts.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters
of Credit hereunder are subject to the satisfaction of the following conditions.
4.1 Conditions to Term Loans and Revolving Loans.
The obligations of Lenders to make the Term Loans and the Revolving
Loans are, in addition to the conditions precedent specified in subsection 4.2,
subject to prior or concurrent satisfaction of the following conditions:
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A. Company Documents.
On or before the Effective Date, Company shall deliver or cause to
be delivered to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following, each, unless otherwise noted, dated the Effective Date:
(i) Certified copies of its Certificate of Incorporation, together with a good
standing certificate from the Secretary of State of the State of Delaware and
each other state in which it is qualified as a foreign corporation to do
business, each dated a recent date prior to the Effective Date;
(ii) Copies of its Bylaws, certified as of the Effective Date by its corporate
secretary or an assistant secretary as being in full force and effect without
modification or amendment;
(iii) Resolutions of its Board of Directors approving and authorizing the
execution, delivery and performance of the Transaction, this Agreement and the
other Loan Documents to which it is a party, certified as of the Effective Date
by its corporate secretary or an assistant secretary as being in full force and
effect without modification or amendment;
(iv) Signature and incumbency certificates of its officers executing this
Agreement and the other Loan Documents;
(v) Executed originals of this Agreement and the other Loan Documents to which
it is a party; and
(vi) Such other documents as Agents may reasonably request.
B. No Material Adverse Effect. Since [December 31, 1997], no
Material Adverse Effect (in the opinions of Administrative Agent or Lenders)
shall have occurred.
C. Corporate and Capital Structure; Capitalization of Company;
Equity Contribution.
(i) Corporate Structure. The corporate organizational structure, capital
structure and ownership of Company and its Subsidiaries shall be as set forth on
Schedule 4.1C annexed hereto.
(ii) Capital Structure and Ownership: Capitalization of Company. The
capital structure and ownership of Company, both before and after giving effect
to the Transaction, shall be as set forth on Schedule 4.1C annexed hereto.
(iii) Equity Contribution. On or before the Effective Date, Company shall
have received no less than $250,000,000 in Equity Proceeds from the Initial
Public Offering.
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D. Issuance of New Subordinated Notes. On or before the Effective
Date, Company shall have issued and sold the New Subordinated Notes in an
aggregate amount of not less than $200,000,000 and Company shall have delivered
to Administrative Agent completed, correct and conformed copies of the New
Subordinated Notes, the Subordinated Note Indenture and the other principal New
Subordinated Note Documents, all in form and substance reasonably satisfactory
to the Administrative Agent. Company shall have provided evidence satisfactory
to Agents that the proceeds of the New Subordinated Notes have been irrevocably
committed, prior to the application of the proceeds of the Term Loans and the
Revolving Loans, to the refinancing of Indebtedness under the Existing Credit
Agreement and the VDK Credit Agreement.
E. Existing Liens; No Other Indebtedness Outstanding. All security
interests attaching to any of the assets of Van ▇▇ ▇▇▇▇'▇ created to secure
obligations under any Indebtedness shall have been terminated, and Company shall
have delivered to Administrative Agent UCC-3 termination statements or
assignments (or comparable forms) and any and all other instruments of release,
satisfaction, assignment and/or reconveyance (or evidence of the filing thereof)
as may be necessary or advisable to terminate all such security interests and
all other security interests in the Collateral. Administrative Agent shall have
received an Officers' Certificate of Company stating that, after giving effect
to the transactions described in this subsection 4.1E, Loan Parties shall have
no Indebtedness outstanding other than Indebtedness permitted under the Loan
Documents.
F. Necessary Consents. Company shall have obtained all consents
necessary or advisable in connection with the Transaction, the Loan Documents
and the continued operation of the business conducted by Company and its
Subsidiaries, and each of the foregoing shall be in full force and effect and in
form and substance satisfactory to Administrative Agent (except as disclosed to
and approved by Administrative Agent). All applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on the
Transaction, and no action, request for stay, petition for review or rehearing,
reconsideration or appeal shall be pending and any time for agency action to set
aside its consent on its own motion shall have expired.
G. Collateral Access Agreements. Administrative Agent shall have
received from Company Collateral Access Agreements in form and substance
satisfactory to Administrative Agent with respect to any facility which
equipment of Company is located on the Effective Date. Company shall not own
interest in any real property on the Effective Date other than the Mortgage
Property in Pennsylvania and Tennessee and its Leasehold Property interest in
its offices in Columbus, Ohio.
H. Perfection of Security Interests in Personal Property and Mixed
Collateral. Company shall have taken or caused to be taken such actions in such
a manner so that Administrative Agent has, for the benefit of Agents and
Lenders, a valid and perfected First Priority security interest in the entire
personal property and mixed Collateral. Such actions shall include, without
limitation: (i) the delivery pursuant to the applicable Collateral
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Documents of (a) certificates (which certificates shall be properly endorsed in
blank for transfer or accompanied by irrevocable undated stock powers duly
endorsed in blank all in form and substance satisfactory to Administrative
Agent) representing all of the shares of capital stock required to be pledged
pursuant to the Collateral Documents, and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Administrative Agent) evidencing any Collateral; (d) delivery to Agents of (a)
the results of a recent search, by a Person satisfactory to Agents, of all
effective Uniform Commercial Code financing statements and fixture filings and
all judgment and tax lien filings which may have been made with respect to any
personal or mixed property of any Loan Party, together with copies of all such
filings disclosed by such search; (iii) the delivery to Administrative Agent of
Uniform Commercial Code financing statements and fixture filings executed by the
applicable Loan Parties as to all such Collateral granted by such Loan Parties
for all jurisdictions as may be necessary or desirable to perfect Administrative
Agent's security interest in such Collateral; (iv) the delivery to
Administrative Agent of all cover sheets or other documents or instruments
required to be filed with the PTO or the United States Copyright Office in order
to create or perfect Liens in respect of any IP Collateral or any registered
copyrights of Company; and (v) the delivery to Administrative Agent of evidence
reasonably satisfactory to Administrative Agent that all other filings
(including, without limitation, filings of Uniform Commercial Code termination
statements and termination statements with respect to prior Liens on IP
Collateral), recordings and other actions that Administrative Agent deems
necessary or advisable to establish, preserve and perfect the First Priority
Liens granted to Administrative Agent in personal and mixed property shall have
been made.
I. Transaction Costs. Prior to the Effective Date, Company shall
have delivered to Administrative Agent and Lenders a schedule, in a form
satisfactory to Administrative Agent, setting forth Company's reasonable best
estimate of the Transaction Costs (other than amounts payable to Agents and
Lenders).
J. Opinions of Loan Parties' Counsel. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of White & Case, counsel for the Loan Parties, in
form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Effective Date and setting forth substantially the
matters in the opinion designated in Exhibit XII annexed hereto and as to such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request, and (ii) evidence satisfactory to Administrative Agent that Loan
Parties have instructed such counsel to deliver such opinion to Lenders.
K. Opinions of Agents' Counsel. Lenders shall have received (i)
originally executed copies of one or more favorable written opinions of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to Agents, dated as of the Effective Date,
substantially in the form of Exhibit XIII annexed hereto and as to such other
matters as Agents acting on behalf of Lenders may reasonably request and (ii)
originally executed copies of one or more favorable written opinions of
[__________________], local counsel to the Agents, dated as of the Effective
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Date, substantially in the form of Exhibit XIV annexed hereto and as to such
other matters as Agents acting on behalf of Lenders may request.
L. Fees. Company shall have paid to Agents, for distribution (as
appropriate) to Agents and Lenders, the fees payable on the Effective Date
referred to in subsection 2.3.
M. Financial Statements; Pro Forma Consolidated Balance Sheet. On or
before the Effective Date, Lenders shall have received from Company (i) audited
financial statements of the Merged Companies for the years ending December 31 of
1996 and 1997, consisting of statements of direct revenues and expenses for such
years, (ii) unaudited financial statements of the Merged Companies as at March
31, 1998, consisting of a statement of direct revenues and expenses for the
three-month period ending on such date, (iii) a statement of book value of
equipment and intangibles acquired as of March 31, 1998, in reasonable detail,
and (iv) a pro forma consolidated balance sheet of Company and its Subsidiaries
as at June 30, 1998 prepared in accordance with GAAP and reflecting the
consummation of the Transaction, the related financings and the other
transactions contemplated by the Loan Documents and the New Subordinated Notes,
which pro forma statement of assets shall be in form and substance satisfactory
to Lenders and shall be certified by the chief financial officer of Company as
(a) prepared based on good faith assumptions and on the best information
available to Company as of the date of delivery thereof and (b) fairly
presenting on a pro forma basis the financial position of Company and Company as
at June 30, 1998, as adjusted as described in this clause (iv), assuming that
such events had occurred at such date.
N. Insurance Appraisal; Evidence of Insurance. Administrative Agent
shall have received (i) a copy of the insurance report prepared by Aon Risk
Services with respect to Company and its Subsidiaries and such report shall be
in form and substance satisfactory to Agents, and (ii) satisfactory certificates
of insurance with respect to each of the insurance policies required pursuant to
subsection 6.4, and Agents shall be satisfied with the nature and scope of these
insurance policies.
O. Representations and Warranties; Performance of Agreements.
Company shall have delivered to Administrative Agent an Officer's Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 hereof are true and correct in
all material respects on and as of the Effective Date to the same extent as
though made on and as of that date and that Company shall have performed in all
material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by them on or before the
Effective Date, except as otherwise disclosed to and agreed to in writing by
Administrative Agent.
P. Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and their counsel shall be
satisfactory in form and substance to Administrative
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Agent and such counsel, and Administrative Agent and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Administrative Agent may reasonably request.
4.2 Conditions to All Loans.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received on or before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, signed by the chief executive officer,
the chief financial officer or the controller of Company or by any executive
officer of Company designated by any of the above-described officers on behalf
of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true and correct in all material respects on
and as of that Funding Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects
on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event
of Default;
(iii) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement and the
other Loan Documents provide shall be performed or satisfied by it on or
before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it, on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall
not violate any law including, without limitation, Regulation G,
Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that has not been disclosed
by Company in writing and that
81
is required to be so disclosed pursuant to subsection 5.6 or 6.1(x) prior
to the making of the last preceding Loans (or, in the case of the initial
Loans, prior to the execution of this Agreement), and there shall have
occurred no development not so disclosed in any such action, suit,
proceeding, governmental investigation or arbitration so disclosed that,
in either event, in the opinion of Administrative Agent or of Requisite
Lenders, would be expected to have a Material Adverse Effect; and no
injunction or other restraining order shall have been issued and no
hearing to cause an injunction or other restraining order to be issued
shall be pending or noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation of, or to recover
any damages or obtain relief as a result of, the transactions contemplated
by this Agreement or the making of Loans hereunder.
4.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, signed by the chief executive officer, the chief financial officer or
the controller of Company or by any executive officer of Company designated by
any of the above-described officers on behalf of Company in a writing delivered
to Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lender to issue Letters of Credit and to induce
other Lenders to purchase participations therein, Company represents and
warrants to each Lender, on the date of this Agreement, on each Funding Date,
and on the date of issuance of each Letter of Credit, that the following
statements are true and correct:
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
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A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation. Each Loan Party has all requisite corporate power and authority
to own and operate its properties, to carry on its business as now conducted and
as proposed to be conducted, to enter into the Loan Documents and to carry out
the transactions contemplated thereby. Company has all requisite corporate power
and authority to issue and pay the Notes.
B. Qualification and Good Standing. Each Loan Party is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
in jurisdictions where the failure to be so qualified, authorized or in good
standing has not had and will not have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to subsection 7.11.
D. Company and Subsidiaries. All of the Subsidiaries of Company as
of the Effective Date after giving effect to the Transaction are identified in
Schedule 5.1 annexed hereto. The capital stock of each of the Subsidiaries of
Company identified in Schedule 5.1 annexed hereto is duly authorized, validly
issued, fully paid and nonassessable and none of such capital stock constitutes
Margin Stock. Company and each of the Subsidiaries of Company identified in
Schedule 5.1 annexed hereto are duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of incorporation or
formation set forth therein, have full corporate power and authority to own
their assets and properties and to operate their business as presently owned and
conducted and as proposed to be conducted, and are qualified to do business and
in good standing in every jurisdiction where their assets are located and
wherever necessary to carry out their business and operations, in each case
except where failure to be so qualified or in good standing or a lack of such
corporate power and authority has not had and will not have a Material Adverse
Effect. Schedule 5.1 annexed hereto correctly sets forth the ownership interest
of Company in each of its Subsidiaries identified therein.
E. Acquisitions. Each Loan Party shall have, upon consummation
thereof, all requisite corporate power and authority to consummate, on the terms
set forth in the applicable acquisition agreement and related documents, each
Permitted Acquisition consummated by it pursuant to subsection 7.7(vii). Upon
consummation of any such Permitted Acquisition, such Permitted Acquisition shall
have been duly authorized by all necessary corporate action of such Loan Party.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents and the Related Agreements and the issuance,
delivery and payment of the Notes have been duly authorized by all necessary
corporate or other action on the part of each of the Loan Parties thereto.
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B. No Conflict. After giving effect to the consummation of the
transactions contemplated hereby to occur on the Effective Date, the execution,
delivery and performance by each of the Loan Parties of the Loan Document and
the Related Agreements to which they are parties, the issuance, delivery and
payment of the Notes and the consummation of the transactions contemplated by
the Loan Documents do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws (or other
analogous organizational document) of any Loan Party or any of its Subsidiaries
or any order, judgment or decree of any court or other agency of government
binding on any Loan Party or any of its Subsidiaries, (ii) conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of any Loan Party or any of its
Subsidiaries, (iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of any Loan Party or any of its
Subsidiaries (other than any Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or partners or any approval or consent of any Person
under any Contractual Obligation of any Loan Party or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Effective Date.
C. Governmental Consents. The execution, delivery and performance by
the Loan Parties of the Loan Documents and Related Agreements to which they are
party, the issuance, delivery and payment of the Notes and the consummation of
the transactions contemplated by the Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body except for such registrations, consents, approvals, notices or other
actions which will be made, obtained or taken on or before the Effective Date.
D. Binding Obligation. Each of the Loan Documents and the Related
Agreements has been duly executed and delivered by each of the Loan Parties
party thereto and is the legally valid and binding obligation of each such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. Valid Issuance of Company Common Stock and Subordinated Notes.
(i) Company Common Stock. The Company Common Stock to be sold on or before
the Effective Date, when issued and delivered, will be duly and validly issued,
fully paid and nonassessable. The issuance and sale of such Company Common
Stock, upon such issuance and sale, will either (a) have been registered or
qualified under applicable federal and state securities laws or (b) be exempt
therefrom.
(ii) Subordinated Notes. Company has the corporate power and authority to
issue the Subordinated Notes. The Subordinated Notes are the legally valid and
binding obligations
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of Company, enforceable against Company in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability. The subordination
provisions of the Subordinated Note Indentures, the Subordinated Notes and the
other Subordinated Note Documents are enforceable against the holders of the
Subordinated Notes, and the Loans and all other monetary Obligations hereunder
are and will be within the definition of "Senior Indebtedness" included in such
provisions. The Subordinated Notes (a) have been registered or qualified under
applicable federal and state securities laws or (b) are exempt therefrom.
5.3 Financial Condition.
A. Financial Statements. Company has heretofore delivered to
Lenders, at Lenders' request, the following financial statements and
information: (i) the audited statements of direct revenues and expenses of the
Merged Companies for the years ended December 31, 1996 and 1997, together with
the report on such statements of direct revenues and expenses of [Deloitte &
Touche LLP], and (ii) the unaudited statement of direct revenues and expenses of
the Merged Companies as at March 31, 1998 for the three months then ended. All
such statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position of the entities described in such
financial statements as at the respective dates thereof and the results of
operations of the entities described therein for each of the periods then ended.
Company does not have (and will not immediately following the funding of the
initial Loans have) any Contingent Obligation, contingent liability or liability
for taxes, long-term lease or unusual forward or long-term commitment that is
not reflected in the most recent financial statements delivered pursuant to
subsection 6.1, the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company and its Subsidiaries taken as a whole.
(ii) The balance sheets of Company as at December 31, 1997 and March
31, 1998 and the related unaudited statements of income and changes in
stockholder's equity and of cash flows of Company for the operating period from
December 31, 1997 through March 31, 1998, copies of which have heretofore been
furnished to each Lender, present fairly in all respects the financial condition
of Company as at such dates, and the results of its operations and its cash
flows for the operating period from December 31, 1997 through March 31, 1998
(subject to normal year-end audit adjustments). All such financial statements
have been prepared in accordance with GAAP consistently applied throughout the
period presented. At the date of the most recent balance sheet referred to
above, Company did not have any material liability or material obligation which
would be required to be included in the financial statements referred to in this
subsection in accordance with GAAP which was not so included. Except as
reflected in the financial statements referred to in this subsection 5.3, during
the period from December 31, 1997 to and including the date hereof there has
been no sale, transfer or other disposition by any Loan Party of any material
part of its business or property, no material liabilities were incurred by any
Loan Party and there has
85
been no purchase or other acquisition of any business or property by any Loan
Party material in relation to the financial condition of Company at December 31,
1996.
5.4 No Material Adverse Change; No Restricted Junior Payments.
Since December 31, 1997, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Neither Company nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Junior Payment or agreed to do so except as permitted by subsection
7.5.
5.5 Title to Properties; Liens; Intellectual Property.
A. Company and its Subsidiaries have good, sufficient and legal
title to all of their respective properties and assets reflected in the
financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, except for assets
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under subsection 7.7.
Except as permitted by this Agreement, all such properties and
assets are free and clear of Liens.
B. Company has acquired, pursuant to the Acquisition Agreement, that
which Seller has represented is the ownership of all patents, copyrights
(whether registered or unregistered), trademarks (whether registered or
unregistered), trade names, trade dress, service marks, assumed names and
know-how (such items, together with all applications therefor and all other
intellectual property and proprietary rights, whether or not subject to
statutory registration or protection, being collectively referred to herein as
"MBW Intellectual Property") relating exclusively to, or used exclusively in
connection with, the Business which (i) are owned by Seller on the Closing Date
and (ii) are necessary, together with the rights licensed to Company under the
Shared Technology License Agreement and the Patent License Agreement, for the
operation of the Business as conducted on the Closing Date, except as set forth
on Schedule 5.5B annexed hereto; provided, however, that such MBW Intellectual
Property does not include any rights to the brand name "Country Crock,"
"Pennant" or "Bakers Source."
C. Company has acquired, pursuant to the Log Cabin Acquisition
Agreement, that which Kraft has represented is the ownership of all patents,
copyrights (whether registered or unregistered), trademarks (whether registered
or unregistered), trade names, trade dress, service marks, assumed names and
know-how (such items, together with all applications therefor and all other
intellectual property and proprietary rights, whether or not subject to
statutory registration or protection, being collectively referred to herein as
"Log Cabin Intellectual Property") relating exclusively to, or used exclusively
in connection with, the Log Cabin Business which (i) are owned by Kraft on July
1, 1997 and (ii) are necessary, together with the rights licensed to Company
under the Log Cabin Patent License Agreement,
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for the operation of the Log Cabin Business as conducted on July 1, 1997, except
as set forth on Schedule 5.5C annexed hereto.
D. After giving effect to the ▇▇▇▇▇▇ ▇▇▇▇▇ Acquisition, Company has
acquired, pursuant to the ▇▇▇▇▇▇ ▇▇▇▇▇ Acquisition Agreement, that which P&G has
represented is the ownership of all patents, copyrights (whether registered or
unregistered), trademarks (whether registered or unregistered), trade names,
trade dress, service marks, assumed names and know-how (such items, together
with all applications therefor and all other intellectual property and
proprietary rights, whether or not subject to statutory registration or
protection, being collectively referred to herein as "▇▇▇▇▇▇ ▇▇▇▇▇ Intellectual
Property") relating exclusively to, or used exclusively in connection with, the
▇▇▇▇▇▇ ▇▇▇▇▇ Business which (i) are owned by P&G on the Effective Date and (ii)
are necessary, together with the rights licensed to Company under the ▇▇▇▇▇▇
▇▇▇▇▇ Patent License Agreement, for the operation of the ▇▇▇▇▇▇ ▇▇▇▇▇ Business
as conducted on the Effective Date, except as set forth on Schedule 5.5D annexed
hereto.
E. Company has acquired all patents, copyrights (whether registered
or unregistered), trademarks (whether registered or unregistered), trade names,
trade dress, service marks, assumed names and know-how (such items, together
with all applications therefor and all other intellectual property and
proprietary rights, whether or not subject to statutory registration or
protection, being collectively referred to as "Van ▇▇ ▇▇▇▇'▇ Intellectual
Property) under the VDK Credit Agreement, except as set forth on Schedule 5.5E
annexed hereto.
F. Each Loan Party owns, or is licensed to use, all Intellectual
Property necessary for the operation of its business as conducted except for
Intellectual Property the failure to own or license which could not reasonably
be expected to have a Material Adverse Effect. No claim of which any Loan Party
has been given notice has been asserted and is pending by any Person challenging
or questioning the use by any Loan Party of any such Intellectual Property the
validity or effectiveness of any such Intellectual Property, nor does Company
know of any valid basis for any such claim, except for such claims that in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
5.6 Litigation: Adverse Facts.
There is no action, suit, proceeding, arbitration or governmental
investigation (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of Company,
threatened against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that, either individually or in
the aggregate together with all other such actions, proceedings and
investigations, has had, or could reasonably be expected to result in, a
Material Adverse Effect. Neither Company nor any of its Subsidiaries is or has
been (i) in violation of any applicable law (including any Pure Food and Drug
Laws that has had, or could reasonably be expected to result in, a
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Material Adverse Effect or (ii) subject to or in default with respect to any
final judgment, writ, injunction, decree, rule or regulation of any court or any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, that has had, or could
reasonably be expected to result in, a Material Adverse Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all material tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all material taxes, assessments, fees and
other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Company does not know of any
proposed tax assessment against Company or any of its Subsidiaries other than
those which are being actively contested by Company or such Subsidiary in good
faith and by appropriate proceedings and for which reserves or other appropriate
provisions, if any, as may be required in conformity with GAAP shall have been
made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreement or instrument or any charter or other
internal restriction which has had, or could reasonably be expected (based upon
assumptions that are reasonable at the time made) to result in, individually or
in the aggregate, a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all
the Material Contracts in effect on the Effective Date. All such Material
Contracts are in full force and effect and no defaults currently exist
thereunder, except where the failure to be in full force and effect, and except
for such defaults which, could not reasonably be expected to have a Material
Adverse Effect.
5.9 Governmental Regulation.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state
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statute or regulation which may limit its ability to incur Indebtedness or which
may otherwise render all or any portion of the Obligations unenforceable.
5.10 Securities Activities.
Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
5.11 Employee Benefit Plans.
A. Company and each of its ERISA Affiliates are in substantial
compliance with all applicable provisions and requirements of ERISA with respect
to each Employee Benefit Plan, and have substantially performed all their
obligations under each Employee Benefit Plan, except to the extent that any
non-compliance with ERISA or any such failure to perform would not result in
material liability of Company or any of its ERISA Affiliates.
B. No ERISA Event has occurred which has resulted or is reasonably
likely to result in any material liability to the PBGC or to any other Person.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code and/or Section 601 of ERISA, neither Company nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employees of Company or any of its Subsidiaries, except to the extent that the
provision of such benefits would not have a Material Adverse Effect.
D. No Pension Plan has an Unfunded Current Liability in an amount
that would have a Material Adverse Effect.
5.12 Certain Fees.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the loan transactions contemplated hereby,
and Company hereby indemnifies Lenders against, and agrees that it will hold
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability.
5.13 Environmental Protection.
(i) The operations of Company and each of its Subsidiaries (including,
without limitation, all operations and conditions at or in the Facilities)
comply in all material respects with all Environmental Laws;
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(ii) Company and each of its Subsidiaries have obtained all material
Governmental Authorizations under Environmental Laws necessary to their
respective operations, and all such Governmental Authorizations are in good
standing, and Company and each of its Subsidiaries are in compliance with all
material terms and conditions of such Governmental Authorizations;
(iii) Neither Company nor any of its Subsidiaries has received (a) any
notice or claim to the effect that it is or may be liable to any Person as a
result of or in connection with any Hazardous Materials or (b) any letter or
request for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ss. 9604) or comparable
state laws, and, to the best knowledge of Company, none of the operations of
Company or any of its Subsidiaries is the subject of any federal or state
investigation relating to or in connection with any Hazardous Materials at any
Facility or at any other location;
(iv) None of the operations of Company or any of its Subsidiaries is
subject to any judicial or administrative proceeding alleging the violation of
or liability under any Environmental Laws which could reasonably be expected to
have a Material Adverse Effect;
(v) To the knowledge of Company, neither Company nor any of its
Subsidiaries nor any of their respective Facilities or operations are subject to
any outstanding written order or agreement with any governmental authority or
private party relating to (a) any Environmental Laws or (b) any Environmental
Claims that could reasonably be expected to have a Material Adverse Effect;
(vi) Neither Company nor any of its Subsidiaries has any material
contingent liability in connection with any Release of any Hazardous Materials
by Company or any of its Subsidiaries;
(vii) Neither Company nor any of its Subsidiaries nor, to the knowledge of
Company, any predecessor of Company or any of its Subsidiaries has filed any
notice under any Environmental Law indicating past or present treatment or
Release of Hazardous Materials at any Facility, and none of Company's or any of
its Subsidiaries' operations involves the generation, transportation, treatment,
storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270
or any state equivalent;
(viii) To the knowledge of Company, no Hazardous Materials exist on or
under any Facility in a manner that has a reasonable possibility of giving rise
to an Environmental Claim having a Material Adverse Effect, and neither Company
nor any of its Subsidiaries has filed any notice or report of a Release of any
Hazardous Materials that has a reasonable possibility of giving rise to an
Environmental Claim having a Material Adverse Effect;
(ix) Neither Company nor any of its Subsidiaries nor, to the knowledge of
Company, any of their respective predecessors has disposed of any Hazardous
Materials in a
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manner that has a reasonable possibility of giving rise to an Environmental
Claim having a Material Adverse Effect;
(x) To the knowledge of Company, no underground storage tanks or surface
impoundments are on or at any Facility; and
(xi) To the knowledge of Company, no Lien in favor of any Person relating
to or in connection with any Environmental Claim has been filed or has been
attached to any Facility.
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 Solvency.
Each Loan Party is, and Company and its Subsidiaries, taken as a
whole, are, and, upon the incurrence of any Obligations by any Loan Party on any
date on which this representation is made, will be, Solvent.
5.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 4.1, 6.9
and 6.10 and (ii) the delivery to Administrative Agent of any Pledged Collateral
not delivered to Administrative Agent at the time of execution and delivery of
the applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Agents and Lenders, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect of any
Collateral), a valid and perfected First Priority Lien on all of the Collateral,
and all filings and other actions necessary or desirable to perfect and maintain
the perfection and First Priority status of such Liens have been duly made or
taken and remain in full force and effect, other than the filing of any UCC
financing statements delivered to Administrative Agent for filing (but not yet
filed) and the periodic filing of UCC continuation statements in respect of UCC
financing statements filed by or on behalf of Administrative Agent.
B. Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by
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subsection 5.16A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. Absence of Third-Party Filings. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.16A, (i)
no effective UCC financing statement, fixture filing or other instrument similar
in effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO or the United States Copyright Office.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant
to the Collateral Documents does not violate Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System.
E. Information Regarding Collateral. All information supplied to any
Agent by or on behalf of any Loan Party with respect to any of the Collateral
(in each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects.
5.17 Related Agreements.
Company has delivered to Administrative Agent complete and correct
copies of each Related Agreement and of all exhibits and schedules thereto.
5.18 Disclosure.
The representations of Company and its Subsidiaries contained in the
Loan Documents, the Related Agreements and in any other document, certificate or
written statement furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement, when taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact (known to Company or the
applicable Subsidiary, in the case of any document not furnished by Company or
such Subsidiary) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There is no fact known (or which should upon
the reasonable exercise of diligence be known) to Company (other than matters of
a general economic nature) that has had, or could reasonably be expected to
result in, a Material Adverse Effect and that has not been disclosed herein or
in such other documents, certificates and statements furnished to Lenders for
use in connection with the transactions contemplated hereby.
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5.19 Subordination of Seller Notes.
The subordination provisions of any Permitted Seller Notes, if any,
will be enforceable against the holders thereof, and the Loans and other
monetary obligations hereunder are and will be within the definition of "Senior
Indebtedness" included in such provisions.
5.20 Year 2000 Matters.
Any reprogramming required to permit the proper functioning (but
only to the extent that such proper functioning would otherwise be impaired by
the occurrence of the year 2000) in and following the year 2000 of computer
systems and other equipment containing embedded microchips, in either case owned
or operated by Company or any of its Subsidiaries or used or relied upon in the
conduct of their business (including any such systems and other equipment
supplied by others or with which the computer systems of Company or any of its
Subsidiaries interface), and the testing of all such systems and other equipment
as so reprogrammed, will be completed by January 1, 1999. The costs to Company
and its Subsidiaries that have not been incurred as of the date hereof for such
reprogramming and testing and for the other reasonably foreseeable consequences
to them of any improper functioning of other computer systems and equipment
containing embedded microchips due to the occurrence of the year 2000 could not
reasonably be expected to result in a Default or Event of Default or to have a
Material Adverse Effect. Except for any reprogramming referred to above, the
computer systems of Company and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient for the conduct of their business as currently conducted.
SECTION 6.
AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent (and
Administrative Agent will, after receipt thereof, deliver to each Lender):
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(i) Monthly Financials: (a) as soon as available after fiscal
month-end June 1998 and July 1998, (b) as soon as available and in any
event within 45 days after fiscal month-end August 1998 and September 1998
and (c) as soon as available and in any event within 30 days after each
fiscal month-end (other than March, June, September and December)
thereafter, the consolidated and consolidating statements of income
(through the "Earnings Before Tax" line) of Company and its Subsidiaries
for such fiscal month and for the period from the beginning of the then
current Fiscal Year to the end of such month, setting forth in each case
in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the
consolidated plan and financial forecast for the current Fiscal Year
delivered pursuant to subsection 6.1(xiii), all in reasonable detail and
certified by the chief financial officer of Company as being fairly stated
in all material respects, subject to changes resulting from audit and
normal year-end adjustments;
(ii) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each Fiscal Quarter, (a) the consolidated
and consolidating balance sheets of Company and its Subsidiaries as at the
end of such Fiscal Quarter and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of Company and
its Subsidiaries for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous fiscal year and the
corresponding figures from the consolidated plan and financial forecast
for the current Fiscal Year delivered pursuant to subsection 6.1(xiii),
all in reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments, and (b) a narrative report describing the operations of
Company and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of Company and
its Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous fiscal year
and the corresponding figures from the consolidated plan and financial
forecast delivered pursuant to subsection 6.1(xiii) for the Fiscal Year
covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a narrative
report describing the operations of Company and its Subsidiaries in the
form prepared for
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presentation to senior management for such Fiscal Year, and (c) in the
case of such consolidated financial statements, a report thereon of
independent certified public accountants of recognized national standing
selected by Company and reasonably satisfactory to Administrative Agent,
which report shall be unqualified as to the ability of Company and its
Subsidiaries to continue as a going concern and as to scope of audit, and
shall state that such consolidated financial statements fairly present, in
all material respects, the consolidated financial position of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the examination
by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards;
(iv) Officer's and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officer's Certificate of
Company stating that the signer has reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signer does not have
knowledge of the existence as at the date of such Officer's Certificate,
of any condition or event that constitutes an Event of Default or
Potential Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action Company has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable
detail compliance during and at the end of the applicable accounting
periods with the restrictions contained in Section 7, in each case to the
extent compliance with such restrictions is required to be tested during
or at the end of the applicable accounting period;
(v) Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of this
subsection 6.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies been
made, then (a) together with the first delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change, consolidated financial statements of Company and
its Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding the
Fiscal Year in which such change is made, in each case prepared on a pro
forma basis as if such change had been in effect during such periods, and
(b) together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, a written statement of the chief accounting officer or chief
95
financial officer of Company setting forth the differences which would
have resulted if such financial statements had been prepared without
giving effect to such change;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon stating whether, in
connection with their audit examination, any condition or event, insofar
as such condition or event relates to the covenants set forth in
subsection 7.6, that constitutes an Event of Default or Potential Event of
Default has come to their attention and, if such a condition or event has
come to their attention, specifying the nature and period of existence
thereof; provided that such accountants shall not be liable by reason of
any failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their audit
examination;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Company and its Subsidiaries made by such accountants,
including, without limitation, any comment letter submitted by such
accountants to management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders, (b) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press releases
and other statements made available generally by Company or any of its
Subsidiaries to the public concerning material developments in the
business of Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to Administrative Agent) or taken
any other action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to Company or
any of its Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) if Company were required to file such reports
under the Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a
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Material Adverse Effect, an Officer's Certificate specifying the nature
and period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of such
claimed Event of Default, Potential Event of Default, default, event or
condition, and what action Company has taken, is taking and proposes to
take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any officer
of Company obtaining knowledge of the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial
or otherwise), governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property of Company or
any of its Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Company to Lenders or Administrative Agent any
material development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may
be reasonably available to Company to enable Lenders and their
counsel to evaluate such matters; and (b) within 45 days after the
end of each Fiscal Quarter, a schedule of all Proceedings involving
an alleged liability of, or claims against or affecting, Company or
any of its Subsidiaries equal to or greater than $500,000 and
promptly after request by Administrative Agent such other
information as may be reasonably requested by Administrative Agent
to enable Administrative Agent and its counsel to evaluate any of
such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the occurrence of
any ERISA Event that could reasonably be expected to result in a material
liability, a written notice specifying the nature thereof, what action
Company or any of its ERISA Affiliates has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or threatened
by the Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) all
written notices received by Company or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (b) such other
documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
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(xiii) Financial Plans: as soon as available and in any event no
later than 90 days after the beginning of Fiscal Year 1998, and thereafter
as soon as practicable and in any event no later than 60 days after the
beginning of each subsequent Fiscal Year, a monthly consolidated and
consolidating plan and financial forecast for such Fiscal Year, including,
without limitation, (a) forecasted consolidated and consolidating balance
sheets and forecasted consolidated and consolidating statements of income
and cash flows of Company and its Subsidiaries for such Fiscal Year,
together with a pro forma Compliance Certificate for such Fiscal Year and
an explanation of the assumptions on which such forecasts are based, and
(b) such other information and projections as Administrative Agent may
reasonably request;
(xiv) Insurance: upon request by Administrative Agent, as soon as
practicable and in any event not less than once each Fiscal Year, a report
in form and substance satisfactory to Administrative Agent outlining all
material insurance coverage maintained as of the date of such report by
Company and its Subsidiaries and all material insurance coverage planned
to be maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits and reports,
whether prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, with respect to significant environmental matters
at any Facility or which relate to an Environmental Claim which could
result in a Material Adverse Effect;
(xvi) Board of Directors: with reasonable promptness, written notice
of any change in the Board of Directors of Company;
(xvii) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Company
and (b) all of the data required to be set forth in Schedule 5.1 annexed
hereto with respect to all Subsidiaries of Company (it being understood
that such written notice shall be deemed to supplement Schedule 5.1
annexed hereto for all purposes of this Agreement); and
(xviii) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent.
6.2 Corporate Existence, etc.
Except as permitted under subsection 7.7, Company will, and will
cause each of its Subsidiaries to, at all times preserve and keep in full force
and effect its corporate existence and all rights and franchises material to the
business of Company and its Subsidiaries (on a consolidated basis).
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6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries to, pay all
material taxes and all assessments and other governmental charges imposed upon
it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided that no such
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings timely instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
B. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person.
6.4 Maintenance of Properties; Insurance.
Company will, and will cause each of its Subsidiaries to, maintain
or cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of Company and its Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof. Company will
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage of the
kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses. Each such
policy of casualty insurance covering damage to or loss of property shall name
Administrative Agent for the benefit of Agents and Lenders as the loss payee
thereunder for all losses, subject to application of proceeds as required by
subsection 2.4B(iii)(d), and shall provide for at least 30 days' prior written
notice to Administrative Agent of any modification or cancellation of such
policy.
6.5 Inspection; Lender Meeting.
Company shall, and shall cause each of its Subsidiaries to, permit
any authorized representatives designated by any Agent or Lender to visit and
inspect any of the properties of Company or any of its Subsidiaries, including
its and their financial and accounting records, and to make copies and take
extracts therefrom, and to discuss its and their affairs, finances and accounts
with its and their officers independent public accountants, all upon reasonable
advance notice and at such reasonable times during normal business hours and as
often as may be reasonably requested. Without in any way limiting the foregoing,
Company will, upon the request of Administrative Agent, participate in a meeting
of Agents and Lenders once during each Fiscal Year to be held at Company's
corporate offices (or such other location as may be agreed to by Company and
Administrative Agent) at such time as may be agreed to by Company and
Administrative Agent.
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6.6 Compliance with Laws, etc.
Company shall, and shall cause each of its Subsidiaries to, comply
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including all Pure Food and Drug Laws),
noncompliance with which could reasonably be expected to cause a Material
Adverse Effect.
6.7 Environmental Disclosure and Inspection.
A. Company shall, and shall cause each of its Subsidiaries to,
exercise all due diligence in order to comply and cause (i) all tenants under
any leases or occupancy agreements affecting any portion of the Facilities and
(ii) all other Persons on or occupying such property, to comply with all
Environmental Laws.
B. Company agrees that Administrative Agent may, from time to time
and in its reasonable discretion, retain, at Company's expense, an independent
professional consultant to review any report relating to Hazardous Materials
prepared by or for Company and to conduct its own investigation of any Facility
currently owned, leased, operated or used by Company or any of its Subsidiaries,
and Company agrees to use all reasonable efforts to obtain permission for
Administrative Agent's professional consultant to conduct its own investigation
of any such Facility previously owned, leased, operated or used by Company or
any of its Subsidiaries. Company shall use its reasonable efforts to obtain for
Administrative Agent and its agents, employees, consultants and contractors the
right, upon reasonable notice to Company, to enter into or on to the Facilities
currently owned, leased, operated or used by Company or any of its Subsidiaries
to perform such tests on such property as are reasonably necessary to conduct
such a review and/or investigation. Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by Company and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at any such
Facility or to cause any damage or loss to any property at such Facility.
Company and Administrative Agent hereby acknowledge and agree that any report of
any investigation conducted at the request of Administrative Agent pursuant to
this subsection 6.7B will be obtained and shall be used by Administrative Agent
and Lenders for the purposes of Lenders' internal credit decisions, to monitor
and police the Loans and to protect Lenders' security interests, if any, created
by the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Company with the understanding that Company acknowledges and agrees
that (i) it will indemnify and hold harmless each Agent and Lender from any
costs, losses or liabilities relating to any Loan Party's use of or reliance on
such report, (ii) no Agent nor any Lender makes any representation or warranty
with respect to such report, and (iii) by delivering such report to Company, no
Agent nor any Lender is requiring or recommending the implementation of any
suggestions or recommendations contained in such report.
C. Company shall promptly advise Administrative Agent in writing and
in reasonable detail of (i) any Release of any Hazardous Materials required to
be reported to any federal, state, local or foreign governmental or regulatory
agency under any applicable
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Environmental Laws, (ii) any and all written communications with respect to any
Environmental Claims that have a reasonable possibility of giving rise to a
Material Adverse Effect or with respect to any Release of Hazardous Materials
required to be reported to any federal, state or local governmental or
regulatory agency, (iii) any remedial action taken by Company or any other
Person in response to (x) any Hazardous Materials on, under or about any
Facility, the existence of which has a reasonable possibility of resulting in an
Environmental Claim having a Material Adverse Effect, or (y) any Environmental
Claim that could have a Material Adverse Effect, (iv) Company's discovery of any
occurrence or condition on any real property adjoining or in the vicinity of any
Facility that could cause such Facility or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use thereof under
any Environmental Laws, and (v) any request for information from any
governmental agency that suggests such agency is investigating whether Company
or any of its Subsidiaries may be potentially responsible for a Release of
Hazardous Materials.
D. Company shall promptly notify Administrative Agent of (i) any
proposed acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to expose Company or any of its
Subsidiaries to, or result in, Environmental Claims that could have a Material
Adverse Effect or that could reasonably be expected to have a material adverse
effect on any Governmental Authorization then held by Company or any of its
Subsidiaries and (ii) any proposed action to be taken by Company or any of its
Subsidiaries to commence manufacturing, industrial or other similar operations
that could reasonably be expected to subject Company or any of its Subsidiaries
to additional laws, rules or regulations, including, without limitation, laws,
rules and regulations requiring additional environmental permits or licenses.
E. Company shall, at its own expense, provide copies of such
documents or information as Administrative Agent may reasonably request in
relation to any matters disclosed pursuant to this subsection 6.7.
6.8 Company's Remedial Action Regarding Hazardous Materials.
Company shall promptly take, and shall cause each of its
Subsidiaries promptly to take, any and all necessary remedial action in
connection with the presence, storage, use, disposal, transportation or Release
of any Hazardous Materials on or under any Facility in order to comply with all
applicable Environmental Laws and Governmental Authorizations unless the failure
to so comply could not reasonably be expected to have a Material Adverse Effect.
In the event Company or any of its Subsidiaries takes any remedial action with
respect to any Hazardous Materials on or under any Facility, Company or such
Subsidiary shall conduct and complete such remedial action in material
compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local governmental
authorities except when, and only to the extent that, Company's or such
Subsidiary's liability for such presence, storage, use, disposal, transportation
or Release of any Hazardous Materials is being contested in good faith by
Company or such Subsidiary.
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6.9 Execution of Subsidiary Guaranty and Subsidiary Security Agreements
by Subsidiaries and Future Subsidiaries.
In the event that any Person becomes a Subsidiary of Company after
the date hereof, Company will promptly notify Administrative Agent of that fact
and cause each such Subsidiary to execute and deliver to Administrative Agent a
counterpart of the Subsidiary Guaranty, the Pledge Agreement and the Security
Agreement and a new patent and trademark agreement substantially similar to the
Patent and Trademark Security Agreement, the Log Cabin Patent and Trademark
Security Agreement, the ▇▇▇▇▇▇ ▇▇▇▇▇ Patent and Trademark Security Agreement and
the Van ▇▇ ▇▇▇▇'▇ Patent and Trademark Security Agreement (collectively, the
"Subsidiary Security Agreements"), and to take all such further actions and
execute all such further documents and instruments as may be required to grant
and perfect in favor of Administrative Agent, for the benefit of Lenders, a
First Priority security interest in all of the personal property assets of such
Subsidiary described in the Subsidiary Security Agreements. Company shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Articles or Certificate of Incorporation
(or comparable constituent documents), together, if applicable, with a good
standing certificate from the Secretary of State of the jurisdiction of its
incorporation, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a copy, if applicable, of such Subsidiary's Bylaws,
certified by its corporate secretary or an assistant corporate secretary as of a
recent date prior to their delivery to Administrative Agent, (iii) a certificate
executed by the secretary or an assistant secretary of such Subsidiary as to (a)
the incumbency and signatures of the officers of such Subsidiary executing the
Subsidiary Guaranty and to which such Subsidiary is a party and (b) the fact
that the attached resolutions of the Board of Directors of such Subsidiary
authorizing the execution, delivery and performance of the Subsidiary Guaranty
and the Subsidiary Security Agreements to which such Subsidiary is a party are
in full force and effect and have not been modified or rescinded, and (iv) a
favorable opinion of counsel to such Subsidiary, in form and substance
satisfactory to Administrative Agent and its counsel, as to (a) the due
organization and good standing of such Subsidiary, (b) the due authorization,
execution and delivery by such Subsidiary of the Subsidiary Guaranty and the
Subsidiary Security Agreements to which such Subsidiary is a party, (c) the
enforceability of the Subsidiary Guaranty and the Subsidiary Security Agreements
to which such Subsidiary is a party against such Subsidiary, and (d) such other
matters as Administrative Agent may reasonably request, all of the foregoing to
be reasonably satisfactory in form and substance to Administrative Agent and its
counsel.
6.10 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral.
A. Conforming Leasehold Interests. If Company or any of its
Subsidiaries acquires any Leasehold Property, Company shall, or shall cause such
Subsidiary to, use its best efforts (without requiring Company or such
Subsidiary to relinquish any material rights or incur any material obligations
or to expend more than a nominal amount of money over and above the
reimbursement, if required, of the landlord's out-of-pocket costs, including
attorneys fees) to cause such Leasehold Property to be a Conforming Leasehold
Interest.
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B. Additional Mortgages, etc. From and after the Closing Date, in
the event that (i) Company or any Subsidiary Guarantor acquires any fee interest
in real property or any Leasehold Property or (ii) at the time any Person
becomes a Subsidiary Guarantor, such Person owns or holds any fee interest in
real property or any Leasehold Property, in either case excluding any such Real
Property Asset the encumbrancing of which requires the consent of any applicable
lessor or (in the case of clause (ii) above) then-existing senior lienholder,
where Company and its Subsidiaries are unable to obtain such lessor's or senior
lienholder's consent (any such non-excluded Real Property Asset described in the
foregoing clause (i) or (ii) being a "Mortgaged Property"), Company or such
Subsidiary Guarantor shall deliver to Administrative Agent, as soon as
practicable after such Person acquires such Mortgaged Property or becomes a
Subsidiary Guarantor, as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage in
proper form for recording in all appropriate places in all applicable
jurisdictions, encumbering the interest of such Loan Party in such
Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
Loan Party, in form and substance satisfactory to Administrative Agent and
its counsel, as to the due authorization, execution and delivery by such
Loan Party of such Mortgage and such other matters as Administrative Agent
may reasonably request, and (b) if required by Administrative Agent, an
opinion of counsel (which counsel shall be reasonably satisfactory to
Administrative Agent) in the state in which such Mortgaged Property is
located with respect to the enforceability of the form of Mortgage to be
recorded in such state and such other matters (including any matters
governed by the laws of such state regarding personal property security
interests in respect of any Collateral) as Administrative Agent may
reasonably request, in each case in form and substance reasonably
satisfactory to Administrative Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
the case of a Mortgaged Property consisting of a Leasehold Property, (a) a
Landlord Consent and Estoppel and (b) evidence that such Leasehold
Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Administrative Agent, an
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (a "Mortgage Policy") issued by the Title Company with respect to
such Mortgaged Property, in an amount satisfactory to Administrative
Agent, insuring fee simple title to, or a valid leasehold interest in,
such Mortgaged Property vested in such Loan Party and assuring
Administrative Agent that such Mortgage creates a valid and enforceable
First Priority mortgage Lien on such Mortgaged Property, subject only to a
standard survey exception, which Mortgage Policy (1) shall include an
endorsement for mechanics' liens, for future advances under this Agreement
and for any other matters reasonably requested by Administrative Agent and
(2) shall provide for affirmative insurance and such reinsurance as
Administrative Agent may reasonably request, all of the foregoing in form
and substance reasonably satisfactory to Administrative Agent;
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and (b) evidence satisfactory to Administrative Agent that such Loan Party
has (i) delivered to the Title Company all certificates and affidavits
required by the Title Company in connection with the issuance of the
Mortgage Policy and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the Mortgage Policy and all recording and
stamp taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Mortgage in the appropriate real estate
records;
(v) Title Report. If no Mortgage Policy is required with respect to
such Mortgaged Property, a title report issued by the Title Company with
respect thereto, dated not more than 30 days prior to the date such
Mortgage is to be recorded and satisfactory in form and substance to
Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
recorded documents listed as exceptions to title or otherwise referred to
in the Mortgage Policy or title report delivered pursuant to clause (v) or
(vi) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Mortgaged Property is a Flood
Hazard Property and (2) if so, whether the community in which such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Mortgaged Property is a Flood Hazard
Property, such Loan Party's written acknowledgement of receipt of written
notification from Administrative Agent (1) that such Mortgaged Property is
a Flood Hazard Property and (2) as to whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event such Mortgaged Property is a Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, evidence that Company has obtained flood
insurance in respect of such Flood Hazard Property to the extent required
under the applicable regulations of the Board of Governors of the Federal
Reserve System; and
(viii) Environmental Audit. If required by Administrative Agent,
reports and other information, in form, scope and substance satisfactory
to Administrative Agent and prepared by environmental consultants
satisfactory to Administrative Agent, concerning any environmental hazards
or liabilities to which Company or any of its Subsidiaries may be subject
with respect to such Mortgaged Property.
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6.11 Interest Rate Protection.
Within 180 days after the Effective Date, Company shall enter into
one or more Interest Rate Agreements with respect to the Loans, in an amount of
not less than 50% of the aggregate amount of Consolidated Total Debt, which
Interest Rate Agreements shall have the effect of establishing a maximum
interest rate of not more than 10% per annum with respect to such notional
principal amount, each such Interest Rate Agreement to be in form and substance
satisfactory to Administrative Agent and with a term of not less than three
years from the Effective Date.
6.12 Further Assurances.
At any time or from time to time upon the request of Administrative
Agent, Company will, at its expense, promptly execute, acknowledge and deliver
such further documents and do such other acts and things as Administrative Agent
may reasonably request in order to effect fully the purposes of the Loan
Documents and to provide for payment of the Obligations in accordance with the
terms of this Agreement, the Notes and the other Loan Documents. In furtherance
and not in limitation of the foregoing, Company shall take, and cause each of
its Subsidiaries to take, such actions as Administrative Agent may reasonably
request from time to time (including, without limitation, the execution and
delivery of guaranties, security agreements, pledge agreements, Mortgages, stock
powers, financing statements and other documents, the filing or recording of any
of the foregoing, title insurance with respect to any of the foregoing that
relates to an interest in real property, the delivery of stock certificates and
other collateral with respect to which perfection is obtained by possession, and
the obtaining of Collateral Access Agreements, in form and substance
satisfactory to Administrative Agent, executed by any Person which is party to a
co-packing agreement with Company or any of its Subsidiaries under which
equipment of Company or its Subsidiaries is maintained at a facility of such
Person) to ensure that the Obligations are guarantied by Subsidiary Guarantors
and are secured by substantially all of the assets of Company and its
Subsidiaries and all of the capital stock of Company and Subsidiary Guarantors.
In the event that Company or any of its Subsidiaries creates a new Subsidiary,
all of the capital stock or partnership interests of such new Subsidiary shall
be duly and validly pledged to Administrative Agent for the benefit of Agents
and Lenders pursuant to the Collateral Documents, subject to no other Liens.
SECTION 7.
NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
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7.1 Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection 7.4 and,
upon any matured obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so extinguished
(other than any such Indebtedness corresponding to extinguished Contingent
Obligations permitted under subsections 7.4(i)(b) and (c));
(iii) Company and its Subsidiaries may become and remain liable
with respect to Indebtedness (a) under Capital Leases capitalized on the
consolidated balance sheet of Company as liabilities, (b) in respect of
sale and lease-back transactions expressly permitted under subsection 7.8
and (c) secured by Liens permitted under subsection 7.2A(iii); provided
that the aggregate amount of Indebtedness permitted under this clause
(iii) shall not exceed $10,000,000 at any time outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its domestic Wholly Owned Subsidiaries, and any
domestic Wholly Owned Subsidiary of Company may become and remain liable
with respect to Indebtedness to Company or any other domestic Wholly Owned
Subsidiary of Company, provided that (a) all such intercompany
Indebtedness shall be evidenced by promissory notes, (b) all such
intercompany Indebtedness owed by Company to any of its respective
Subsidiaries shall be subordinated in right of payment to the payment in
full of the Obligations pursuant to the terms of the applicable promissory
notes or an intercompany subordination agreement, in each case in form and
substance satisfactory to Administrative Agent, and (c) any payment by
Company or by any Subsidiary of Company under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by Company or by such Subsidiary to Company
or to any of its Subsidiaries for whose benefit such payment is made;
(v) Company may become and remain liable with respect to
Indebtedness under the Subordinated Note Documents;
(vi) Company may become and remain liable with respect to
Indebtedness the proceeds of which are applied to refinance all or a
portion of the Term Loans, the Revolving Loans and the Subordinated Notes;
provided, that such Indebtedness shall
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be subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination provisions and other material terms
which taken as a whole are no less favorable to Company, its Subsidiaries
and Lenders than the corresponding terms of the Subordinated Note
Documents, with interest payable thereon in amounts consistent with the
then prevailing rate in the market for comparable debt Securities;
(vii) Company may become and remain liable with respect to
Permitted Seller Notes; provided that the aggregate principal amount of
such Permitted Seller Notes issued after the Closing Date shall not exceed
$10,000,000; and
(viii) Company and its Subsidiaries may become and remain liable
with respect to other Indebtedness in an aggregate principal amount not to
exceed at any time outstanding $15,000,000.
7.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or permit
to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement, or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens securing Indebtedness permitted by subsection
7.1(iii)(c) incurred (a) to finance the acquisition, construction or
improvement of any tangible personal property assets, provided that (1)
such Liens shall be created within 180 days after the acquisition,
construction or improvement of such assets, and (2) the principal amount
of Indebtedness secured by any such Liens shall at no time exceed 100%,
and the proceeds of such Indebtedness shall be used to provide not less
than 80%, of the original purchase price of such asset or the amount
expended to construct or improve such asset, as the case may be; or (b) to
renew, extend or refinance any Indebtedness described in clause (a),
provided that the amount of any such Indebtedness does not exceed the
amount of Indebtedness so renewed, extended or refinanced which is unpaid
and outstanding immediately prior to such renewal, extension or
refinancing; provided, that in the case of clause (a) or (b) such Liens
attach solely the assets financed with such Indebtedness;
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(iv) Liens on any asset securing Indebtedness permitted by
Section 7.1(iii)(b); provided that (a) the proceeds of such Indebtedness
shall be at least equal to 80% of the fair market value (as determined in
good faith by the Board of Directors, or any duly authorized committee
thereof, of Company) of such asset and (b) at the time of incurrence of
such Indebtedness, no Event of Default shall have occurred and be
continuing or would result therefrom;
(v) Liens on assets held under Capital Leases permitted under
subsection 7.1(iii)(a); and
(vi) Other Liens on assets of Company and its Subsidiaries
securing Indebtedness in an aggregate amount not to exceed $2,500,000 at
any time outstanding.
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any consensual Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided that, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not permitted by the
provisions of subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither Company
nor any of its Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein Company will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.
7.3 Investments; Joint Ventures.
Company shall not, and shall not permit any of its respective
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
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(i) Company and its Subsidiaries may make and own Investments
in Cash Equivalents;
(ii) Company and its Subsidiaries may make intercompany loans
to the extent permitted under subsection 7.1(iv);
(iii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted by subsection 7.6D;
(iv) Company and its Subsidiaries may make and own Investments
in connection with a Permitted Acquisition;
(v) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $7,500,000.
7.4 Contingent Obligations.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations arising under (a) their respective
Guaranties and (b) guarantees of Indebtedness under the Subordinated Note
Documents or permitted under subsection 7.1(vi);
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements entered into (a)
with Lenders or Affiliates of Lenders with respect to which the aggregate
net amount which Company would be liable to pay to counterparties
thereunder in the event all such Interest Rate Agreements were terminated
at the time of determination shall not exceed $2,500,000 at any time and
(b) as required under subsection 6.11 herein;
(iv) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in the
ordinary course of business in connection with Asset Sales or other sales
of assets;
(v) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under guarantees in the ordinary
course of business of the obligations of suppliers, landlords, customers,
franchisees and licensees of
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Company and its Subsidiaries in an aggregate amount not to exceed at any
time $500,000;
(vi) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under food product futures
arrangements consistent with past practices of the Business, the Log Cabin
Business, the ▇▇▇▇▇▇ ▇▇▇▇▇ Business and Van ▇▇ ▇▇▇▇'▇ and of any business
acquired under subsection 7.7(vii) for the supply of food products used in
the business of Company and its Subsidiaries; and
(vii) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and its
Subsidiaries in respect of all such Contingent Obligations shall at no
time exceed $500,000.
7.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that (i) Company may make scheduled interest
payments in respect of the Subordinated Notes in accordance with the terms
thereof and of the Subordinated Note Indentures; provided, that to the extent
the Subordinated Note Indentures permit Company to pay interest thereon or
liquidated damages in like-kind instruments in a principal amount equal to the
amount of such interest or liquidated damages, Company shall pay such interest
or liquidated damages in such like-kind instruments; (ii) Company may make
Restricted Junior Payments to the extent necessary to redeem or defease all or
any portion of the Indebtedness under the Subordinated Note Documents with
proceeds from Indebtedness permitted under subsection 7.1(vi); (iii) Company may
make scheduled interest payments in respect of Permitted Seller Notes permitted
under subsection 7.1(vii) in accordance with the terms of such Permitted Seller
Notes; (iv) Company may make regularly scheduled payments of interest in respect
of any Subordinated Indebtedness in accordance with the terms of, and only to
the extent required by, and subject to the subordination provisions contained
in, the indenture or other agreement pursuant to which such Subordinated
Indebtedness was issued, as such indenture or other agreement may be amended
from time to time to the extent permitted under subsection 7.12B; provided, that
to the extent the terms of such Subordinated Indebtedness permit Company to pay
interest or liquidated damages on such Subordinated Indebtedness in like-kind
instruments in a principal amount equal to the amount of such interest or
liquidated damages, Company shall pay such interest or liquidated damages with
such like-kind instruments; (v) Company may make Restricted Junior Payments as
contemplated by the Transaction to redeem or defease the Indebtedness under the
VDK Subordinated Note Documents; (vi) Company may make Restricted Junior
Payments to the extent necessary to redeem or defease all or any portion of the
Indebtedness under the Subordinated Note Documents (other than the VDK
Subordinated Note Documents), provided that (a) no Event of Default or Potential
Event of Default shall have occurred and be continuing or shall be caused
thereby, (b) Company shall be in compliance, on a pro forma
110
basis giving effect thereto, with the covenants set forth in subsection 7.6
hereof, (c) the Senior Leverage Ratio (calculated on a pro forma basis giving
effect thereto) shall be less than 3.75:1.00 if such redemption or defeasance
shall occur in 1998 or 1999, less than 3.50:1.00 if such redemption or
defeasance shall occur in 2000 or 2001, and less than 3.25: 1.00 if such
redemption or defeasance shall occur thereafter, (d) after giving effect to any
such redemption or defeasance, the sum of (x) the amount of cash on hand of
Company plus (y) the amount by which the Revolving Credit Commitments exceed the
Total Utilization of the Revolving Loan Commitments, shall equal or exceed
$40,000,000 (and Company shall have delivered to Administrative Agent an
Officer's Certificate (together with supporting information therefor), in form
and substance reasonably satisfactory to Administrative Agent, certifying to the
effect of clauses (b), (c) and (d)) and (e) and the aggregate amount of such
redemption or defeasance, together with any other such redemption or defeasance
since the Effective Date, shall not exceed $100,000,000; and (vi) Company may
make dividends or other distributions, direct or indirect, on account of any
shares of any class of capital stock of Company; provided that (a) the Senior
Leverage Ratio (calculated on a pro forma basis giving effect thereto) shall be
less than 2.00:1.00 or (b) either of the publicly announced ratings S&P or
▇▇▇▇▇'▇ of the current senior unsecured, non-credit enhanced long term
Indebtedness of Company that has been publicly issued are BBB-or better or Baa3
or better, respectively, and the amount of such dividend shall not exceed 50% of
Company's cumulative positive net income.
7.6 Financial Covenants.
A. Minimum Consolidated Cash Interest Coverage Ratio. Company shall
not permit the Consolidated Cash Interest Coverage Ratio for any four-Fiscal
Quarter period ending during any of the test periods set forth in the table
below to be less than the correlative ratio for such test period set forth in
the table below:
-------------------------------------------------------------------
MINIMUM CONSOLIDATED
TEST PERIOD CASH INTEREST COVERAGE
RATIO
-------------------------------------------------------------------
6/30/98 - 12/31/98 2.00:1.00
-------------------------------------------------------------------
1/01/99 - 12/31/99 2.00:1.00
-------------------------------------------------------------------
1/01/00 - 12/31/00 2.00:1.00
-------------------------------------------------------------------
1/01/01 - 12/31/01 2.25:1.00
-------------------------------------------------------------------
1/01/02 - 12/31/02 2.50:1.00
-------------------------------------------------------------------
1/01/03 - 12/31/03 2.50:1.00
-------------------------------------------------------------------
1/01/04 - 12/31/04 2.50:1.00
-------------------------------------------------------------------
1/01/05 - 6/30/05 2.50:1.00
===================================================================
111
B. Maximum Leverage Ratio. Company shall not permit the ratio of (i)
the excess of (a) Consolidated Total Debt as of the last day of any Fiscal
Quarter ending during any of the test periods set forth in the table below minus
(b) cash on hand of Company to the extent the amount of such cash exceeds
$3,500,000 as of such date, to (ii) Consolidated EBITDA for the four-Fiscal
Quarter period ending on such date to exceed the correlative ratio for such test
period set forth in the table below:
-------------------------------------------------------------------
MAXIMUM
TEST PERIOD LEVERAGE RATIO
-------------------------------------------------------------------
6/30/98 - 12/31/98 5.50:1.00
-------------------------------------------------------------------
1/01/99 - 12/31/99 5.50:1.00
-------------------------------------------------------------------
1/01/00 - 12/31/00 5.00:1.00
-------------------------------------------------------------------
1/01/01 - 12/31/01 4.50:1.00
-------------------------------------------------------------------
1/01/02 - 12/31/02 4.00:1.00
-------------------------------------------------------------------
1/01/03 - 12/31/03 3.50:1.00
-------------------------------------------------------------------
1/01/04 - 6/30/04 3.50:1.00
-------------------------------------------------------------------
7/01/04 - 6/30/05 3.00:1.00
===================================================================
C. Minimum Fixed Charge Coverage Ratio. Company shall not permit the
ratio of (i) Consolidated EBITDA for any four-Fiscal Quarter period ending
during any of the test periods set forth in the table below to (ii) Consolidated
Fixed Charges for such four-Fiscal Quarter period to be less than the
correlative ratio for such test period set forth in the table below:
112
-------------------------------------------------------------------
MINIMUM FIXED CHARGE
TEST PERIOD COVERAGE RATIO
-------------------------------------------------------------------
6/30/98 - 12/31/98 1.15:1.00
-------------------------------------------------------------------
1/01/99 - 12/31/99 1.15:1.00
-------------------------------------------------------------------
1/01/00 - 12/31/00 1.15:1.00
-------------------------------------------------------------------
1/01/01 - 12/31/01 1.20:1.00
-------------------------------------------------------------------
1/01/02 - 12/31/02 1.20:1.00
-------------------------------------------------------------------
1/01/03 - 12/31/03 1.25:1.00
-------------------------------------------------------------------
1/01/04 - 12/31/04 1.25:1.00
-------------------------------------------------------------------
1/01/05 - 6/30/05 1.25:1.00
===================================================================
D. Maximum Consolidated Capital Expenditures. Company shall not, and
shall not permit any of its respective Subsidiaries to, make or incur
Consolidated Capital Expenditures, in any Fiscal Year indicated below, in an
aggregate amount in excess of the corresponding amount (the "Maximum
Consolidated Capital Expenditures Amount") set forth below opposite such Fiscal
Year; provided that the Maximum Consolidated Capital Expenditures Amount for any
Fiscal Year shall be increased by an amount equal to the excess, if any (but in
no event more than 50% of the Maximum Consolidated Capital Expenditures Amount
for the previous Fiscal Year), of the Maximum Consolidated Capital Expenditures
Amount for the previous Fiscal Year over the actual amount of Consolidated
Capital Expenditures for such previous Fiscal Year:
-------------------------------------------------------------------
MAXIMUM CONSOLIDATED
FISCAL YEAR CAPITAL EXPENDITURES
(OR PORTION THEREOF) AMOUNT
-------------------------------------------------------------------
Fiscal Year ending in December 1998 $25,000,000
and each Fiscal Year thereafter
-------------------------------------------------------------------
; provided, however, that for purposes of this subsection 7.6D, Consolidated
Capital Expenditures shall not include (i) expenditures not exceeding $6,000,000
in the aggregate incurred on or prior to September 30, 1998 related to the
Business and the Log Cabin Business (a) to relocate Company's assets, (b) to
purchase computers and computer related equipment and (c) to pay transition
related expenses in connection with the foregoing, (ii) expenditures not
exceeding $15,000,000 in the aggregate incurred on or prior to June 30, 1999 to
relocate Company's assets related to the ▇▇▇▇▇▇ ▇▇▇▇▇ Business and transition
related expenses in connection therewith and (iii) expenditures not exceeding
$5,000,000 in the aggregate incurred on or prior to December 31, 1998 related to
additional capital expenditure projects previously identified at Van ▇▇ ▇▇▇▇'▇.
113
E. Certain Calculations.
(i) With respect to calculations of Consolidated Fixed Charges,
Consolidated EBITDA and Consolidated Cash Interest Expense for any four-Fiscal
Quarter period including the Effective Date (each such period being a "Pro Forma
Calculation Period"), such calculations shall be made on a pro forma basis
assuming, in each case, (a) that the Effective Date, the Transaction and the
related borrowings by Company pursuant to this Agreement occurred on the first
day of the applicable Pro Forma Calculation Period; (b) that Consolidated EBITDA
and Consolidated Capital Expenditures for the [two] applicable Fiscal Quarters
ending prior to the Effective Date are as set forth on Schedule 7.6E annexed
hereto; [and (c) that, with respect to calculations of Consolidated Cash
Interest Expense and each component of Consolidated Fixed Charges other than
Consolidated Capital Expenditures (Consolidated Cash Interest Expense and each
such component being, individually, a "Fixed Charge Component"), the amount of
each such Fixed Charge Component for the Pro Forma Calculation Period ending in
June 1998 shall equal the product of (i)(x) the amount of such Fixed Charge
Component for the Fiscal Quarter ending in June 1998 plus (y)(1) the Fixed
Charged Component for the Fiscal Quarter ending in March 1998 for the Business
and the Log Cabin Business plus (2) the Fixed Charge Component for the ▇▇▇▇▇▇
▇▇▇▇▇ Business for the period from the Effective Date to March 31, 1998
(multiplied by the product of ninety (90) divided by the number of days from the
Effective Date to March 31, 1998) multiplied by (ii) 2.]
(ii) With respect to any period during which new Subsidiaries,
assets or businesses are acquired pursuant to subsection 7.7(vii), for purposes
of determining compliance with the financial covenants set forth in this
subsection 7.6, Consolidated EBITDA and Consolidated Interest Expense shall be
calculated with respect to such periods and such Subsidiaries, assets or
businesses on a pro forma basis (including (x) any adjustments certified by the
chief financial officer of the Company, that would, in the reasonable
determination of the Company satisfy the requirements of Rule 11-02(a) of
Regulation S-X of the Securities Act as if included in a registration statement
filed with the Securities and Exchange Commission and (y) any other operating
expense reductions reasonably expected to result from any acquisition of stock
or assets if such expected reductions are (1) set forth in reasonable detail in
a plan approved by and set forth in resolutions adopted by the Board of
Directors of the Company, and (2) limited to operating expenses specified in
such plan (and, if any reductions are set forth in a range, the lowest amount of
such range) that would otherwise have resulted in the payment of cash within
twelve months after the date of consummation of such transaction, net of any
operating expenses (other than extraordinary items, non-recurring or temporary
charges and other similar one-time expenses) reasonably expected to be incurred
to implement such plan, and that are to be paid in cash during such twelve-month
period, certified by the chief financial officer of the Company) using the
historical financial statements of all entities or assets so acquired or to be
acquired and the consolidated financial statements of Company and its
Subsidiaries which shall be reformulated (i) as if such acquisition, and any
acquisitions which have been consummated during such period, and any
Indebtedness or other liabilities incurred in connection with any such
acquisition had been consummated or incurred at the beginning
114
of such period (and assuming that such Indebtedness bears interest during any
portion of the applicable measurement period prior to the relevant acquisition
at the weighted average of the interest rates applicable to outstanding Loans
during such period), and (a) otherwise in conformity with certain procedures to
be agreed upon between Administrative Agent and Company, all such calculations
to be in form and substance satisfactory to Administrative Agent.
7.7 Restriction on Fundamental Changes; Asset Sales.
Company shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, create any new Subsidiaries or enter into any transaction of
merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, sub-lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its business, property or fixed assets, whether now owned or
hereafter acquired, or acquire by purchase or otherwise any part of the
business, property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person, except:
(i) any Subsidiary of Company may be merged with or into
Company or any wholly owned Subsidiary Guarantor, or be liquidated, wound
up or dissolved, or all or any substantial part of its business, property
or assets may be conveyed, sold, leased, transferred or otherwise disposed
of, in one transaction or a series of transactions, to Company or any
wholly owned Subsidiary Guarantor; provided that, in the case of such a
merger, Company or such wholly owned Subsidiary Guarantor shall be the
continuing or surviving corporation;
(ii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.6D;
(iii) Company and its Subsidiaries may acquire inventory,
equipment and other assets in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof (determined in good
faith by the board of directors of Company);
(v) Company and its Subsidiaries may make any Asset Sale of
assets that have, in the aggregate, a fair market value (determined in
good faith by the board of directors of Company) not in excess of 10% of
Consolidated EBITDA for the four-Fiscal Quarter period most recently ended
prior to such Asset Sale; provided that (x) the consideration received for
such assets shall be in an amount at least equal to the fair market value
thereof (determined in good faith by the board of directors of Company);
(y) not less than 80% of the consideration received shall be cash; and (z)
115
the proceeds of such Asset Sales shall be applied as required by
subsection 2.4B(iii)(a); and
(vi) Company or any Subsidiary of Company may make
acquisitions of assets and businesses (including acquisitions of the
capital stock or other equity interests of another Person), provided that:
(a) immediately prior to and after giving effect to any
such acquisition, Company and its Subsidiaries shall be in
compliance with the provisions of subsection 7.11 hereof;
(b) after giving effect to any such acquisition, the sum
of (x) the amount of cash on hand of Company plus (y) the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments, shall equal or exceed $40,000,000;
(c) (1) Company shall be in compliance, on a pro forma
basis giving effect to the proposed acquisition, with the covenants
set forth in subsection 7.6 hereof, (2) the Senior Leverage Ratio
(calculated on a pro forma basis giving effect to the proposed
acquisition) shall be less than 3.75:1.00 in Fiscal Years 1998 and
1999, 3.50:1.00 in Fiscal Years 2000 and 2001, and 3.25:1.00
thereafter and (3) no Event of Default or Potential Event of Default
shall have occurred and be continuing at the time of such
acquisition or shall be caused thereby; and Company shall have
delivered to Administrative Agent an Officer's Certificate (together
with supporting information therefor), in form and substance
reasonably satisfactory to Administrative Agent, certifying as to
the foregoing and as to the matters referred to in subsections
7.7(vii)(a) and (b) above;
(d) any assets acquired pursuant to such acquisition shall
be subject to a First Priority Lien in favor of the Administrative
Agent on behalf of Lenders pursuant to the Collateral Documents; and
(e) each such acquisition shall be made on a fully
consensual basis between Company and its Subsidiaries, on the one
hand, and the seller or sellers of such assets or such business, on
the other hand.
7.8 Sales and Lease-Backs.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (a) which Company or any of its Subsidiaries intends
116
to use for substantially the same purpose as any other property which has been
or is to be sold or transferred by Company or any of its Subsidiaries to any
Person (other than Company or any of its Subsidiaries) in connection with such
lease, except that Company and its Subsidiaries may enter into such sale and
lease-back transactions so long as the aggregate sales price under all such
transactions in any Fiscal Year does not exceed $5,000,000.
7.9 Transactions with Shareholders and Affiliates.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons who
are not such a holder or Affiliate; provided that the foregoing restriction
shall not apply to (i) any transaction between Company and any of its Wholly
Owned Subsidiaries or between any of its Wholly Owned Subsidiaries, (ii)
reasonable and customary fees paid to members of the boards of directors of
Company and its Subsidiaries, (iii) [fees, expenses and other amounts payable to
the MDC Entities, Fenway and Dartford on the Effective Date], (iv) the
Management Fees, (v) any employment agreement entered into by Company or any of
its Subsidiaries in the ordinary course of business, and (vi) any issuance of
capital stock of Company in connection with employment arrangements, stock
options and stock ownership plans of Company or any of its Subsidiaries entered
into in the ordinary course of business.
7.10 Disposal of Subsidiary Stock.
Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except as permitted under this
Agreement or the Collateral Documents or to qualify directors if required
by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except as permitted under this Agreement or
the Collateral Documents or to Company, another Wholly Owned Subsidiary of
Company, or to qualify directors if required by applicable law.
7.11 Conduct of Business.
Company shall not, and shall not permit any of its Subsidiaries to,
engage in any business other than (i) the businesses engaged in by Company and
its Subsidiaries on the Effective Date and those food businesses which are
reasonably related to such businesses, and
117
(ii) such other lines of business as may be consented to by Administrative Agent
and Requisite Lenders.
7.12 Amendments or Waivers of Certain Related Agreements;
Amendments of Documents Relating to Subordinated Indebtedness;
Designation of "Designated Senior Indebtedness"; Preferred Stock.
A. Amendments or Waivers of Certain Related Agreements. Neither
Company nor any of its Subsidiaries will agree to any material amendment to, or
waive any of its material rights under, any of the Acquisition Agreement, the
Log Cabin Acquisition Agreement, the ▇▇▇▇▇▇ ▇▇▇▇▇ Acquisition Agreement, the
Assumption Agreement, the Log Cabin Assumption Agreement, the ▇▇▇▇▇▇ ▇▇▇▇▇
Assumption Agreement, the MDC Advisory Services Agreement, the Dartford
Management Agreement, the Fenway Agreement, the Transition Agreements, the Log
Cabin Transition Agreements, the ▇▇▇▇▇▇ ▇▇▇▇▇ Transition Agreements or the Red
Wing Co-Pack Agreements after the Effective Date if such amendment or waiver
would be adverse to Lenders without in each case obtaining the prior written
consent of Requisite Lenders to such amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries to, amend or
otherwise change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obliger thereunder or to confer
any additional rights on the holders of such Subordinated Indebtedness (or
trustee or other representative on their behalf) which would be adverse to
Company or Lenders.
C. Designation of "Designated Senior Indebtedness". Company shall
not designate any Indebtedness as "Designated Senior Indebtedness" (as defined
in the Subordinated Note Indentures) for purposes of the Subordinated Note
Indentures, without the prior written consent of Requisite Lenders.
D. Preferred Stock. Without the prior written approval of Requisite
Lenders, Company shall not amend, restate, supplement or otherwise modify its
Certificate of Incorporation if the effect of such amendment, restatement,
supplement or modification is to provide for the issuance of any preferred stock
of Company or the filing or amendment of any certificate of designation with
respect thereto.
118
7.13 Fiscal Year.
Company shall not change its Fiscal Year-end from the last Saturday
of December.
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
8.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of prepayment
or otherwise; failure by Company to pay when due any amount payable to an
Issuing Lender in reimbursement of any drawing honored or payment made under a
Letter of Credit; or failure by Company to pay any interest on any Loan or any
fee or any other amount due under this Agreement within five days after the date
due; or
8.2 Default in Other Agreements.
(i) Failure of Company or any of its Subsidiaries to pay when due
(a) any principal of or interest on any Indebtedness (other than Indebtedness
referred to in subsection 8.1) in an individual principal amount of $1,000,000
or more or any items of Indebtedness with an aggregate principal amount of
$2,000,000 or more or (b) any Contingent Obligation in an individual principal
amount of $1,000,000 or more or any Contingent Obligations with an aggregate
principal amount of $2,000,000 or more, in each case beyond the end of any grace
period provided therefor; or (ii) breach or default by Company or any of its
Subsidiaries with respect to any other material term of (a) any evidence of any
Indebtedness in an individual principal amount of $1,000,000 or more or any
items of Indebtedness with an aggregate principal amount of $2,000,000 or more
or any Contingent Obligation in an individual principal amount of $1,000,000 or
more or any Contingent Obligations with an aggregate principal amount of
$2,000,000 or more or (b) any loan agreement, mortgage, indenture or other
agreement relating to such Indebtedness or Contingent Obligation(s), if in any
case under this clause (ii) the effect of such breach or default is to cause, or
to permit the holder or holders of that Indebtedness or Contingent Obligation(s)
(or a trustee on behalf of such holder or holders) to cause, that Indebtedness
or Contingent Obligation(s) to become or be declared due and payable prior to
its stated maturity or the stated maturity of any underlying obligation, as the
case may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
8.3 Breach of Certain Covenants.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.4, 2.5 or 6.2 or Section 7 of this Agreement; or
119
8.4 Breach of Warranty.
Any material representation, warranty, certification or other
statement made by Company or any of its Subsidiaries in any Loan Document or in
any statement or certificate at any time given by Company or any of its
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or
8.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Company becoming aware of such default or (ii)
receipt by Company of notice from any Agent or Lender of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Company or any of its Subsidiaries (other than
Immaterial Subsidiaries) in an involuntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Company or any of its Subsidiaries
(other than Immaterial Subsidiaries) under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its Subsidiaries
(other than Immaterial Subsidiaries), or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of Company or any
of its Subsidiaries (other than Immaterial Subsidiaries) for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries (other than Immaterial
Subsidiaries), and any such event described in this clause (ii) shall continue
for 60 days unless dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Company or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall
120
consent to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or Company or any
of its Subsidiaries (other than Immaterial Subsidiaries) shall make any
assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries (other than Immaterial Subsidiaries) shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Company or any of its
Subsidiaries (other than Immaterial Subsidiaries) (or any committee thereof)
shall adopt any resolution or otherwise authorize any action to approve any of
the actions referred to in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $1,000,000 or (ii)
in the aggregate at any time an amount in excess of $2,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Subsidiaries or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 60 days (or
in any event later than five days prior to the date of any proposed sale
thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against Company or
any of its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which individually or in
the aggregate results in a Material Adverse Effect; or there shall exist an
Unfunded Current Liability, individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which there is no Unfunded Current Liability), which would have a Material
Adverse Effect; or
8.11 Change in Control.
(a) the MDC Entities, Dartford and Fenway together shall own,
directly or indirectly, in the aggregate, a lesser percentage of the combined
voting power of Company voting Securities than any other holder, including a
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act)
which includes such holder, of such voting Securities; (b) a majority of the
members of the Board of Directors of Company shall not be Continuing Directors;
or (c) any Person (other than the MDC Entities, Dartford and Fenway), including
a "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange
Act) which includes such Person, shall purchase or otherwise acquire, directly
or indirectly,
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beneficial ownership of Securities of Company and, as a result of such purchase
or acquisition, any Person (together with its associates and Affiliates), shall
directly or indirectly beneficially own in the aggregate Securities representing
more than 35% of the combined voting power of Company voting Securities; or
8.12 Invalidity of Guaranties.
At any time after the execution and delivery thereof, any Guaranty
of the Obligations of Company, for any reason other than the satisfaction in
full of all Obligations, ceases to be in full force and effect or is declared to
be null and void (except with respect to the obligations thereunder of
Immaterial Subsidiaries of Company) or any Loan Party (other than Immaterial
Subsidiaries of Company) denies in writing that it has any further liability,
including, without limitation, with respect to future advances by Lenders, under
any Loan Document to which it is a party; or
8.13 Failure of Security.
Any Collateral Document shall, at any time, cease to be in full
force and effect (other than by reason of a release of Collateral thereunder in
accordance with the terms hereof or thereof, the satisfaction in full of the
Obligations or any other termination of such Collateral Document in accordance
with the terms hereof or thereof) or shall be declared null and void; or the
validity or enforceability thereof shall be contested in writing by any Loan
Party; or Agent shall not have or shall cease to have a valid security interest
in any Collateral purported to be covered thereby, perfected and with the
priority required by the relevant Collateral Document, for any reason other than
the failure of Agents or any Lender to take any action within its control,
subject only to Liens permitted under the applicable Collateral Documents; or
8.14 Termination or Breach of Certain Transition Agreements, Log Cabin
Transition Agreements and ▇▇▇▇▇▇ ▇▇▇▇▇ Transaction Agreements.
The Log Cabin Co-Pack Agreement, the ▇▇▇▇▇▇ ▇▇▇▇▇ Co-Pack Agreement,
Red Wing Co-Pack Agreements or the Flavor Supply Agreement shall terminate for
any reason whatsoever or any such party shall fail to perform its obligations
under any such agreement and such failure could reasonably be expected to result
in a Material Adverse Effect, and, in either case, Company shall not have made
arrangements satisfactory to Requisite Lenders for obtaining any services that
are required to be provided by any such party to Company under such agreement
that are not being so provided as a result of such termination or failure to
perform; or
8.15 Conduct of Business By Company.
(i) Company shall (a) engage in any business other than entering
into and performing its obligations under and in accordance with the Loan
Documents and Related Agreements to which it is a party and performing the
transactions contemplated thereby or
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permitted thereunder or (b) own any assets other than (1) the capital stock of
Company and (2); or
8.16 Default Under Subordination Provisions.
Company or any guarantor of Subordinated Indebtedness shall fail to
comply with the subordination provisions contained in the Subordinated Note
Indentures or any other instrument, indenture or agreement pursuant to which
such Subordinated Indebtedness is issued;
THEN (i) upon the occurrence of any Event of Default described in
subsection 8.6 or 8.7, each of (a) the unpaid principal amount of and accrued
interest on the Loans, (b) an amount equal to the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or certificates
required to draw under such Letter of Credit) and (c) all other Obligations
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Company, and the obligation of each Lender to make any Loan,
the obligation of Administrative Agent to issue any Letter of Credit and the
right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request of
Requisite Lenders, by written notice to Company, declare all or any portion of
the amounts described in clauses (a) through (c) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each Lender
to make any Loan, the obligation of Administrative Agent to issue any Letter of
Credit and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate; provided that the foregoing shall not affect in any way the
obligations of Lenders under subsection 3.3C(i).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
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which may be made at the election of Requisite Lenders and are not intended to
benefit Company and do not grant Company the right to require Lenders to rescind
or annul any acceleration hereunder or preclude Agents or Lenders from
exercising any of the rights or remedies available to them under any of the Loan
Documents, even if the conditions set forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 Appointment.
▇. ▇▇▇▇▇ is hereby appointed Administrative Agent hereunder and
under the other Loan Documents and each Lender hereby authorizes Administrative
Agent to act as its agent in accordance with the terms of this Agreement and the
other Loan Documents. NatWest is hereby appointed Syndication Agent hereunder
and under the other Loan Documents and each Lender hereby authorizes Syndication
Agent to act as its agent in accordance with the terms of this Agreement and the
other Loan Documents. Swiss Bank is hereby appointed Documentation Agent
hereunder and under the other Loan Documents and each Lender hereby authorizes
Documentation Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. Each Agent agrees to act upon the
express conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and Company shall have no rights as a third party beneficiary
of any of the provisions thereof. In performing its functions and duties under
this Agreement, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
B. Appointment of Supplemental Collateral Agents. It is the purpose
of this Agreement and the other Loan Documents that there shall be no violation
of any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Administrative Agent deems that by
reason of any present or future law of any jurisdiction Administrative Agent may
not exercise any of the rights, powers or remedies granted herein or in any of
the other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral coagent (any such additional
individual or institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as "Supplemental Collateral
Agents").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised
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by or vested in or conveyed to Administrative Agent with respect to such
Collateral shall be exercisable by and vest in such Supplemental Collateral
Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Collateral Agent shall run to and be enforceable by either Administrative Agent
or such Supplemental Collateral Agent, and (ii) the provisions of this Section 9
and of subsections 10.2 and 10.3 that refer to Administrative Agent shall inure
to the benefit of such Supplemental Collateral Agent and all references therein
to Administrative Agent shall be deemed to be references to Administrative Agent
and/or such Supplemental Collateral Agent, as the context may require.
Should any instrument in writing from Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 Powers; General Immunity.
A. Duties Specified. Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers
hereunder and under the other Loan Documents as are specifically delegated to
such Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents, and it may perform such duties by or through its agents or
employees. No Agent shall have, by reason of this Agreement or any of the other
Loan Documents, a fiduciary relationship in respect of any Lender; and nothing
in this Agreement or any of the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon any Agent any obligations
in respect of this Agreement or any of the other Loan Documents except as
expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement or in
any financial or other statements, instruments, reports or certificates or any
other documents furnished by any Agent to Lenders or by or on behalf of Company
and/or its Subsidiaries to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall any Agent
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be required to ascertain or inquire as to the performance or observance of any
of the terms, conditions, provisions, covenants or agreements contained in any
of the Loan Documents or as to the use of the proceeds of the Loans or the use
of the Letters of Credit or as to the existence or possible existence of any
Event of Default or Potential Event of Default. Anything contained in this
Agreement to the contrary notwithstanding, Administrative Agent shall have no
liability arising from confirmations of the amount of outstanding Loans or the
Total Utilization of Revolving Loan Commitments or the component amounts thereof
C. Exculpatory Provisions. Neither any Agent nor any of such Agent's
respective officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by such Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. If any Agent shall request instructions from Lenders with
respect to any act or action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents, such Agent
shall be entitled to refrain from such act or taking such action unless and
until such Agent shall have received instructions from Requisite Lenders (or
such other Lenders as may be required to give such instructions under subsection
10.6). Without prejudice to the generality of the foregoing, (i) such Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against such Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6). Such Agent shall be entitled to refrain from exercising
any power, discretion or authority vested in it under this Agreement or any of
the other Loan Documents unless and until it has obtained the instructions of
Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
D. Agents Entitled to Act as Lender. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include such Agent
in its individual capacity. Each Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company and/or its Subsidiaries for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
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9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or, except as expressly provided elsewhere in this Agreement, to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees
to indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements) or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against such Agent in performing its duties hereunder or under the
other Loan Documents or otherwise in its capacity as such Agent in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct.
9.5 Successor Agents and Swing Line Lender.
A. Successor Agents. Any Agent may resign at any time by giving 30
days' prior written notice thereof to the other Agents, Lenders and Company, and
any Agent may be removed at any time with or without cause by an instrument or
concurrent instruments in writing delivered to Company and Administrative Agent
and signed by Requisite Lenders. Upon any such notice of resignation or any such
removal, Requisite Lenders shall have the right, upon five Business Days' notice
to Company, to appoint a successor Agent. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Agent and the retiring or removed Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Agent's resignation or removal hereunder as Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
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B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of Chase or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Administrative Agent in its
capacity as Swing Line Lender, (ii) upon such prepayment, the retiring or
removed Administrative Agent and Swing Line Lender shall surrender the Swing
Line Note held by it to Company for cancellation, and (iii) Company shall issue
a new Swing Line Note to the successor Administrative Agent and Swing Line
Lender substantially in the form of Exhibit VI annexed hereto, in the principal
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
9.6 Collateral Documents.
Each Lender and Agent hereby further authorizes Administrative Agent
to enter into each Collateral Document as secured party on behalf of and for the
benefit of Agents and Lenders and agrees to be bound by the terms of each
Collateral Document; provided that Administrative Agent shall not enter into or
consent to any amendment, modification, termination or waiver of any provision
contained in any Collateral Document without the prior consent of Requisite
Lenders (or, if required pursuant to subsection 10.6, all Lenders); provided
further, however, that, without further written consent or authorization from
Requisite Lenders, Administrative Agent may execute any documents or instruments
necessary to effect the release of any asset constituting Collateral from the
Lien of the applicable Collateral Document in the event that such asset is sold
or otherwise disposed of in a transaction effected in accordance with subsection
7.7. Anything contained in any of the Loan Documents to the contrary
notwithstanding, each Lender agrees that no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
(including, without limitation, through the exercise of a right of set-off
against call deposits of such Lender in which any funds on deposit in the
Collateral Account may from time to time be invested), it being understood and
agreed that all rights and remedies under the Collateral Documents may be
exercised solely by Administrative Agent for the benefit of Lenders in
accordance with the terms thereof.
SECTION 10.
MISCELLANEOUS
10.1 Assignments and Participations in Loans, Letters of Credit.
A. General. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign, transfer or negotiate to any Eligible
Assignee, or (ii) sell participations to any Person in, all or any part of its
Commitments (together with its Letters of Credit or participations therein made
or arising pursuant to its Revolving Loan Commitment) or any Loan or Loans made
by it or any other interest herein or in any other Obligations owed to it;
provided that no such sale, assignment, transfer or participation shall,
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without the consent of Company, require Company to file a registration statement
with the Securities and Exchange Commission or apply to qualify such sale,
assignment, transfer or participation under the securities laws of any state;
provided further, that no such sale, assignment or transfer described in clause
(i) above shall be effective unless and until an Assignment Agreement effecting
such sale, assignment or transfer shall have been accepted by Administrative
Agent and recorded in the Register as provided in subsection 10.1B(ii); provided
further, that no such sale, assignment, transfer or participation of any Letter
of Credit or any participation therein may be made separately from a sale,
assignment, transfer or participation of a corresponding interest in the
Revolving Loan Commitment and the Revolving Loans of the Lender effecting such
sale, assignment, transfer or participation; and provided further, that anything
contained herein to the contrary notwithstanding, the Swing Line Loan Commitment
and the Swing Line Loans of Swing Line Lender may not be sold, assigned or
transferred as described in clause (i) above to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contemplated
by subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or any granting of participations in, all or any part of its
Commitments or the Loans, the Letters of Credit or participations therein or the
other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
of Credit, or participation therein or other Obligation may (a) be assigned in
any amount to another Lender who is a Non-Defaulting Lender, to an Approved Fund
of a Non-Defaulting Lender, or to an Affiliate of the assigning Lender or
another Lender who, in either such case, is a Non-Defaulting Lender, with the
consent of Administrative Agent (which consent shall not be unreasonably
withheld) and the giving of notice to Company; provided that, after giving
effect to a proposed assignment to another Lender, the assigning Lender shall
have an aggregate Commitment of at least $5,000,000 unless the proposed
assignment constitutes the aggregate amount of the Commitments, Loans, Letters
of Credit, and participations therein and other Obligations of the assigning
Lender, or (b) be assigned in an aggregate amount of not less than $5,000,000
(or such lesser amount as shall constitute the aggregate amount of the
Commitments, Loans, Letters of Credit, and participations therein and other
Obligations of the assigning Lender) to any other Eligible Assignee with the
consent of Administrative Agent (which consent shall not be unreasonably
withheld) and the giving of notice to Company. To the extent of any such
assignment in accordance with either clause (a) or (b) above, the assigning
Lender shall be relieved of its obligations with respect to its Commitments,
Loans, Letters of Credit, or participations therein or other Obligations or the
portion thereof so assigned. The parties to each such assignment shall execute
and deliver to Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing fee of $3,500
payable by the assigning Lender and such certificates, documents or other
evidence, if any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required to
deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a). Upon such
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execution, delivery, acceptance and recordation, from and after the effective
date specified in such Assignment Agreement, (y) 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 Agreement, shall have the rights
and obligations of a Lender hereunder and (z) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under subsection 10.9B)
and be released from its obligations under this Agreement (and, in the case of
an Assignment Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto; provided that, anything contained in any of the Loan
Documents to the contrary notwithstanding, if such Lender is the Issuing Lender
with respect to any outstanding Letters of Credit such Lender shall continue to
have all rights and obligations of an Issuing Lender with respect to such
Letters of Credit until the cancellation or expiration of such Letters of Credit
and the reimbursement of any amounts drawn thereunder). The Commitments
hereunder shall be modified to reflect the Commitments of such assignee and any
remaining Commitments of such assigning Lender and, if any such assignment
occurs after the issuance of the Notes hereunder, the assigning Lender shall
surrender its applicable Notes and, upon such surrender, new Notes shall be
issued to the assignee and, if applicable, to the assigning Lender,
substantially in the form of Exhibit IV, Exhibit V or Exhibit VI annexed hereto,
as the case may be, with appropriate insertions, to reflect the new Commitments
and/or outstanding Term Loans of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent: Recordation in Register.
Upon its receipt of an Assignment Agreement executed by an assigning Lender and
an assignee representing that it is an Eligible Assignee, together with the
processing fee referred to in subsection 10.1B(i) and any certificates,
documents or other evidence with respect to United States federal income tax
withholding matters that such assignee may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a), Administrative Agent
shall, if such Assignment Agreement has been completed and is in substantially
the form of Exhibit XV hereto and if Administrative Agent have consented to the
assignment evidenced thereby (to the extent such consent is required pursuant to
subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall evidence any
required consent of Administrative Agent to such assignment), (b) record the
information contained therein in the Register, and (c) give prompt notice
thereof to Company. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in this
subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
(i) effecting the extension of the final maturity of the Loan allocated to such
participation, (ii) effecting a reduction of the principal amount of or
affecting the rate of interest payable on any Loan allocated to such
participation, (iii) releasing all or substantially all of the Collateral, or
(iv) releasing all of the Guarantors from their obligations under the
Guaranties, and all amounts payable by Company hereunder
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(including, without limitation, amounts payable to such Lender pursuant to
subsections 2.6D, 2.7 and 3.6) shall be determined as if such Lender had not
sold such participation. Company and each Lender hereby acknowledge and agree
that, solely for purposes of subsections 10.4 and 10.5, (a) any participation
will give rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender (without having to obtain the consent of Company or
Administrative Agent) may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender and its Notes to secure obligations of
such Lender, including, without limitation, assignments and pledges to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and any Lender which is an investment fund
may pledge all or any portion of its Notes or Loans to its trustee to secure its
obligations to such trustee; provided that (i) no Lender shall, as between
Company and such Lender, be relieved of any of its obligations hereunder as a
result of any such assignment and pledge and (ii) in no event shall such Federal
Reserve Bank be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.20.
F. Limitation. No assignee, participant or other transferee or any
Lender's rights shall be entitled to receive any greater payment under
subsection 2.7 than such Lender would have been entitled to receive with respect
to the rights transferred, unless such transfer is made with Company's prior
written consent or at a time when the circumstances giving rise to such greater
payment did not exist.
G. Representations of Lenders. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (i) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
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10.2 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and out of pocket expenses of Administrative Agent in connection with the
preparation of the Loan Documents; (ii) all the actual and reasonable costs of
furnishing all opinions by counsel for Company (including, without limitation,
any opinions requested by Lenders as to any legal matters arising hereunder) and
of Company's performance of and compliance with all agreements and conditions on
its part to be performed or complied with under this Agreement and the other
Loan Documents including, without limitation, with respect to confirming
compliance with environmental and insurance requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Agents (including allocated costs
of internal counsel) in connection with the negotiation, preparation, execution
and administration of the Loan Documents and the Loans and any consents,
amendments, waivers or other modifications hereto or thereto and any other
documents or matters requested by Company; (iv) all other actual and reasonable
costs and expenses incurred by Agents in connection with the negotiation,
preparation and execution of the Loan Documents and the transactions
contemplated hereby and thereby; and (v) after the occurrence of an Event of
Default, all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel) and costs of settlement, incurred by Agents
and Lenders in enforcing any Obligations of or in collecting any payments due
from Company hereunder or under the other Loan Documents by reason of such Event
of Default or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Agents and Lenders,
and the officers, directors, trustees, partners, employees, agents, attorneys
and affiliates of any of Agents and Lenders (collectively called the
"Indemnitees") from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including, without limitation,
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including, without limitation,
Lenders' agreement to make the Loans hereunder or the use or intended use of the
proceeds of any of the Loans or the issuance of Letters of Credit hereunder or
the use or intended use
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of any of the Letters of Credit) (collectively called the "Indemnified
Liabilities"); provided that Company shall not have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent,
and only to the extent, of any particular liability, obligation, loss, damage,
penalty, claim, cost, expense or disbursement that arose from the gross
negligence or willful misconduct of that Indemnitee as determined by a final
judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default each Lender is hereby authorized
by Company at any time or from time to time, without notice to Company or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender (at any office of that
Lender wherever located) to or for the credit or the account of Company against
and on account of the obligations and liabilities of Company to that Lender
under this Agreement, the Notes, the Letters of Credit and participations
therein, including, but not limited to, all claims of any nature or description
arising out of or connected with this Agreement, the Notes, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Company hereby further grants to
each Agent and Lender a security interest in all deposits and accounts
maintained with such Agent or Lender as security for the Obligations.
10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of
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the Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided that if
all or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy
reorganization or insolvency proceeding of Company or otherwise, those purchases
shall be rescinded and the purchase prices paid for such participations shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Company expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and all
rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by Company to that holder with respect thereto as fully as if that
holder were owed the amount of the participation held by that holder.
10.6 Amendments and Waivers.
A. No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, or consent to any departure by
Company or any other Loan Party therefrom, shall in any event be effective
without the written concurrence of Requisite Lenders; provided that any such
amendment, modification, termination, waiver or consent which: reduces the
principal amount of any of the Loans; changes in any manner the definition of
"Requisite Lenders" (it being understood that, with the consent of the Requisite
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of "Requisite Lenders" on substantially the same
basis as the Tranche A Term Loan Commitments, Tranche A Term Loans, Revolving
Loan Commitments and Revolving Loans are included on the Effective Date);
changes in any manner any provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of all Lenders; postpones the
scheduled final maturity date of any of the Loans; postpones the date or reduces
the amount of any scheduled payment (but not prepayment) of principal of any of
the Loans; postpones the date or reduces the amount of any scheduled reduction
(but not prepayment) of the Revolving Loan Commitments; postpones the date on
which any interest or any fees are payable; decreases the interest rate borne by
any of the Loans (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2E) or the amount of any
fees payable hereunder; increases the maximum duration of Interest Periods
permitted hereunder; releases all or substantially all of the Collateral;
releases all or substantially all of the Subsidiary Guarantors from their
obligations under the Subsidiary Guaranty; reduces the amount or postpones the
due date of any amount payable in respect of, or extends the required expiration
date of, any Letter of Credit; changes the obligations of Lenders relating to
the purchase of participations in Letters of Credit in any manner that could be
adverse to any Issuing Lender; or changes in any manner the provisions contained
in subsection 8.1 or this subsection 10.6; shall be effective only if evidenced
by a writing signed by or on behalf of all Lenders to whom are owed Obligations
being directly
134
affected by such amendment, modification, termination, waiver or consent. In
addition, (i) any amendment, modification, termination or waiver of any of the
provisions contained in Section 4 shall be effective only if evidenced by a
writing signed by or on behalf of Administrative Agent and Requisite Lenders,
(ii) no amendment, modification, termination or waiver of any provision of any
Note shall be effective without the written concurrence of the Lender which is
the holder of that Note, (iii) no amendment, modification, termination or waiver
of any provision of this Agreement which disproportionately and adversely
affects the obligation of any Loan Party to make payments (including without
limitation mandatory prepayments) to the holders of the Term Loans or the
holders of the Revolving Loans and Revolving Loan Commitments, shall be
effective without the written concurrence of the holders of more than 50% in
principal amount of the class (i.e., Tranche A Term Loans or Revolving Loans and
Revolving Loan Commitments each being a "class" of Loans) of Loans so
disproportionately and adversely affected; (iv) no increase in the Commitments
of any Lender over the amount thereof then in effect shall be effective without
the written concurrence of that Lender, it being understood and agreed that in
no event shall waivers or modifications of conditions precedent, covenants,
Events of Default, Potential Events of Default or of a mandatory prepayment or a
reduction of any or all of the Commitments be deemed to constitute an increase
of the Commitment of any Lender and that an increase in the available portion of
any Commitment of any Lender shall not be deemed to constitute an increase in
the Commitment of such Lender, (v) no amendment, modification, termination or
waiver of any provision of subsection 2.1A(iii) or any other provision of this
Agreement relating to the Swing Line Loan Commitment or the Swing Line Loans
shall be effective without the written concurrence of Swing Line Lender, (vi) no
amendment, modification, termination or waiver of any provision of Section 3
relating to the rights or obligations of any or all Issuing Lenders shall be
effective without the written concurrence of Administrative Agent and each
Lender who is an Issuing Lender with respect to any Letter of Credit then
outstanding, and (vii) no amendment, modification, termination or waiver of any
provision of Section 9 or of any other provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of Administrative Agent
shall be effective without the written concurrence of Administrative Agent.
Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Company in any case shall entitle Company to any other or further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 10.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company.
B. If, in connection with any proposed change, waiver, discharge or
termination to any of the provision of this Agreement as contemplated by the
proviso in the first sentence of this subsection 10.6, the consent of Requisite
Lenders is obtained but consent of one or more of such other Lenders whose
consent is required is not obtained, then Company may, so long as all
non-consenting Lenders are so treated, elect to terminate such Lender as a party
to this Agreement; provided that, concurrently with such termination, (i)
Company shall pay that Lender all principal, interest and fees and other amounts
due to be
135
paid to such Lender with respect to all periods through such date of
termination, (ii) another financial institution satisfactory to Company and
Administrative Agent (or if Administrative Agent is also a Lender to be
terminated, the successor Administrative Agent) shall agree, as of such date, to
become a Lender for all purposes under this Agreement (whether by assignment or
amendment) and to assume all obligations of the Lender to be terminated as of
such date, and (iii) all documents and supporting materials necessary, in the
judgment of Administrative Agent (or if Administrative Agent is also a Lender to
be terminated, the successor Administrative Agent) to evidence the substitution
of such Lender shall have been received and approved by Administrative Agent as
of such date.
10.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telecopy or telex, or four Business Days
after depositing it in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided that notices to Administrative
Agent shall not be effective until received. For the purposes hereof, the
address of each party hereto shall be as set forth under such party's name on
the signature pages hereof or (i) as to Company and Administrative Agent, such
other address as shall be designated by such Person in a written notice
delivered to the other parties hereto and (ii) as to each other party, such
other address as shall be designated by such party in a written notice delivered
to Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.4, 10.5 and 10.20 shall survive the payment of the
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn or paid thereunder, and the termination of
this Agreement.
136
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 Headings.
137
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither Company's
rights nor obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
10.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE
WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND
138
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY
IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1402 OR OTHERWISE.
10.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/ BORROWER RELATIONSHIP OR OTHER RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event
of litigation, this Agreement may be filed as a written consent to a trial by
the court.
10.19 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant
to the requirements of this Agreement which has been identified as confidential
by Company in accordance with such Lender's customary procedures for handling
confidential information of
139
this nature, it being understood and agreed by Company that in any event a
Lender may make disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participation therein or as required
or requested by any governmental agency or representative thereof or pursuant to
legal process or by the National Association of Insurance Commissioners or in
connection with the exercise of any remedy under the Loan Documents; provided
that, unless specifically prohibited by applicable law or court order, each
Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries.
10.20 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY: AURORA FOODS INC.
By:
--------------------------------
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ De Leeuw & Co.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
Dartford Partnership L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
White & Case
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AGENTS AND LENDERS: THE CHASE MANHATTAN BANK,
individually and as Administrative Agent
By:
-------------------------------------
Name:
Title:
Notice Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Loan Servicing Group
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
NATIONAL WESTMINSTER BANK
PLC,
individually and as Syndication Agent
By:
-------------------------------------
Name:
Title:
Notice Address:
Gleacher NatWest Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SWISS BANK CORPORATION,
individually and as Documentation Agent
By:
-------------------------------------
Name:
Title:
Notice Address:
SBC Warburg Dillon Read Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX A
TO CREDIT AGREEMENT
PRICING GRID
RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED EBITDA
Less than Less than
5.25 but Less than Less than Less than 3.75:1
Greater 5:00 but 4.75:1 but 4.25:1 but but Greater
Greater than than or Greater than Greater than Greater than than or Equal
or Equal to Equal or Equal to or Equal to or Equal to to Less Than
5:25:1 to 5:00:1 4:75:1 4.25:1 3.75:1 3.25:1 3.25:1
------ --------- ------ ------ ------ ------ ------
Revolving Credit Loans and
Tranche A Term Loans:
ABR Loans 1.25% 1.00% 0.75% 0.50% 0.25% 0.00% 0.00%
Eurodollar Loans 2.25% 2.00% 1.75% 1.50% 1.25% 1.00% 0.875%
Commitment Fee: 0.50% 0.50% 0.375% 0.375% 0.375% 0.30% 0.30%
---------------
STB DRAFT
6/18/98
EXHIBIT I
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Third Amended and Restated Credit Agreement
dated as of June __, 1998, as amended, restated, supplemented or otherwise
modified to the date hereof (said Third Amended and Restated Credit Agreement,
as so amended, restated, supplemented or otherwise modified, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Aurora Foods Inc., a Delaware
corporation ("Company"), the financial institutions listed therein as Lenders,
The Chase Manhattan Bank, as administrative agent (in such capacity,
"Administrative Agent"), National Westminster Bank PLC, as Syndication Agent,
and Swiss Bank Corporation, as Documentation Agent, this represents Company's
request to borrow as follows:
1. Date of borrowing: ______________, [199_] [200_]
2. Amount of borrowing: $_____________________
3. Lender(s): |_| a. Lenders, in
accordance with
their applicable Pro
Rata Shares
|_| b. Swing Line Lender
4. Type of Loans: |_| a. Tranche A Term Loans
|_| b. Revolving Loans
|_| c. Swing Line Loan
5. Interest rate option:(1) |_| a. Base Rate Loan(s)
|_| b. Eurodollar Rate
Loans with an
initial Interest
Period of __________
month(s)
The proceeds of such Loans are to be deposited in Company's account at
Administrative Agent.
The undersigned officer, to the best of his or her knowledge, and Company
certify that:
--------
(1) Term Loans and Revolving Loans may be Base Rate Loans or Eurodollar Rate
Loans. Swing Line Loans shall be Base Rate Loans.
I-1
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case such representations and warranties were true and correct in
all material respects on and as of such earlier date;
(ii) No event has occurred and is continuing or would result from
the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default; [and]
(iii) Company has performed in all material respects all agreements
and satisfied all conditions which the Credit Agreement provides shall be
performed or satisfied by it on or before the date hereof [; and] [.]
[(iv) FOR REVOLVING LOANS: The amount of the proposed borrowing will
not cause the Total Utilization of Revolving Loan Commitments to exceed
the Revolving Loan Commitments.]
DATED:___________________ AURORA FOODS INC.
By:___________________________
Name:
Title:
I-2
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Third Amended and Restated Credit Agreement
dated as of June __, 1998, as amended, restated, supplemented or otherwise
modified to the date hereof (said Third Amended and Restated Credit Agreement,
as so amended, restated, supplemented or otherwise modified, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Aurora Foods Inc., a Delaware
corporation ("Company"), the financial institutions listed therein as Lenders,
The Chase Manhattan Bank, as Administrative Agent, National Westminster Bank
PLC, as Syndication Agent, and Swiss Bank Corporation, as Documentation Agent,
this represents Company's request to convert or continue Loans as follows:
1. Date of conversion/continuation: __________________, [199_] [200_]
2. Amount of Loans being converted/continued: $__________________
3. Type of Loans being converted/continued:
|_| a. Tranche A Term Loans
|_| b. Revolving Loans
4. Nature of conversion/continuation:
|_| a. Conversion of Base Rate Loans to Eurodollar Rate Loans
|_| b. Conversion of Eurodollar Rate Loans to Base Rate Loans
|_| c. Continuation of Eurodollar Rate Loans as such
5. If Loans are being continued as or converted to Eurodollar Rate
Loans, the duration of the new Interest Period that commences on the
conversion/continuation date: ________________ month(s)
II-1
In the case of a conversion to or continuation of Eurodollar Rate
Loans, the undersigned officer, to the best of his or her knowledge, and Company
certify that no Event of Default or Potential Event of Default has occurred and
is continuing under the Credit Agreement.
DATED: _________________ AURORA FOODS INC.
By:__________________________
Name:
Title:
II-2
EXHIBIT III
[FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT]
NOTICE OF ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Third Amended and Restated Credit Agreement
dated as of June __, 1998, as amended, restated, supplemented or otherwise
modified to the date hereof (said Third Amended and Restated Credit Agreement,
as so amended, restated, supplemented or otherwise modified, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Aurora Foods Inc., a Delaware
corporation ("Company"), the financial institutions listed therein as Lenders,
The Chase Manhattan Bank as Administrative Agent, National Westminster Bank PLC,
as Syndication Agent, and Swiss Bank Corporation, as Documentation Agent, this
represents Company's request for the issuance of a Letter of Credit by
Administrative Agent as follows:
1. Date of issuance of Letter of Credit: _______________, [199_]
[200_]
2. Type of Letter of Credit:
|_| a. Commercial Letter of Credit
|_| b. Standby Letter of Credit
3. Face amount of Letter of Credit: $________________
4. Expiration date of Letter of Credit: ______________, [199_]
[200_]
5. Name and address of beneficiary:
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
6. Attached hereto is:
|_| a. the verbatim text of such proposed Letter of
Credit
|_| b. a description of the proposed terms and conditions
of such Letter of Credit, including a precise
description of any documents to be presented by
the beneficiary which, if presented by the
beneficiary prior to the expiration date of such
Letter of Credit, would require the Issuing Lender
to make payment under such Letter of Credit.
III-1
The undersigned officer, to the best of his or her knowledge, and Company
certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case such representations and warranties were true and correct in
all material respects on and as of such earlier date;
(ii) No event has occurred and is continuing or would result from
the issuance of the Letter of Credit contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(iii) Company has performed in all material respects all agreements
and satisfied all conditions which the Credit Agreement provides shall be
performed or satisfied by it on or before the date hereof; and
(iv) The issuance of the proposed Letter of Credit will not cause
(a) the Letter of Credit Usage to exceed $7,500,000 or (b) the Total
Utilization of Revolving Loan Commitments to exceed the Revolving Loan
Commitments.
DATED: _________________ AURORA FOODS INC.
By:_____________________________
Name:
Title:
III-2
EXHIBIT IV
[FORM OF TRANCHE A TERM NOTE]
AURORA FOODS INC.
PROMISSORY NOTE DUE JUNE 30, 2005
$[1] New York, New York
June __, 1998
FOR VALUE RECEIVED, AURORA FOODS INC., a Delaware corporation
("Company"), promises to pay to [2] ("Payee") or its registered assigns the
principal amount of [3] ($[1]) in the installments referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Third Amended and Restated Credit Agreement dated as of June __, 1998, by and
among Company, the financial institutions listed therein as Lenders, The Chase
Manhattan Bank, as administrative agent (in such capacity, "Administrative
Agent"), National Westminster Bank PLC, as Syndication Agent, and Swiss Bank
Corporation, as Documentation Agent (said Third Amended and Restated Credit
Agreement, as it may be amended, restated, supplemented or otherwise modified
from time to time, being the "Credit Agreement", the terms defined therein and
not otherwise defined herein being used herein as therein defined).
Company shall make principal payments on this Note in consecutive
quarterly installments as set forth in the Credit Agreement, commencing on
December 31, 1998 and ending on June 30, 2005. Each such installment shall be
due on the date specified in the Credit Agreement and in an amount determined in
accordance with the provisions thereof; provided that the last such installment
shall be in an amount sufficient to repay the entire unpaid principal balance of
this Note, together with all accrued and unpaid interest thereon.
----------
[1] Insert amount of Lender's Tranche A Term Loan in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Tranche A Term Loan in words.
IV-1
This Note is one of Company's "Tranche A Term Notes" in the
aggregate principal amount of $225,000,000 and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is hereby
made for a more complete statement of the terms and conditions under which the
Tranche A Term Loan evidenced hereby was made and is to be repaid.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
this Note shall have been accepted by Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii) of the Credit Agreement, Company
and Administrative Agent shall be entitled to deem and treat Payee as the owner
and holder of this Note and the Loan evidenced hereby. Payee hereby agrees, by
its acceptance hereof, that before disposing of this Note or any part hereof it
will make a notation hereon of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
subsection 2.4B(iii) of the Credit Agreement and to prepayment at the option of
Company as provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Guaranties and is
secured pursuant to the Collateral Documents.
IV-2
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
AURORA FOODS INC.
By:___________________________
Name:
Title:
IV-3
EXHIBIT V
[FORM OF REVOLVING NOTE]
AURORA FOODS INC.
PROMISSORY NOTE DUE JUNE 30, 2005
$[1] New York, New York
June __, 1998
FOR VALUE RECEIVED, AURORA FOODS INC., a Delaware corporation
("Company"), promises to pay to the order of [2] ("Payee") or its registered
assigns, on or before June 30, 2005, the lesser of (x) [3] ($[1]) and (y) the
unpaid principal amount of all advances made by Payee to Company as Revolving
Loans under the Credit Agreement referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Third Amended and Restated Credit Agreement dated as of June __, 1998 by and
among Company, the financial institutions listed therein as Lenders, The Chase
Manhattan Bank, as administrative agent (in such capacity, "Administrative
Agent"), National Westminster Bank PLC, as Syndication Agent, and Swiss Bank
Corporation, as Documentation Agent (said Third Amended and Restated Credit
Agreement, as it may be amended, restated, supplemented or otherwise modified
from time to time, being the "Credit Agreement", the terms defined therein and
not otherwise defined herein being used herein as therein defined).
This Note is one of Company's "Revolving Notes" in the aggregate
principal amount of $175,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the
----------
[1] Insert amount of Lender's Revolving Loan Commitment in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Revolving Loan Commitment in words.
V-1
assignment or transfer of this Note shall have been accepted by Administrative
Agent and recorded in the Register as provided in subsection 10.1B(ii) of the
Credit Agreement, Company and Administrative Agent shall be entitled to deem and
treat Payee as the owner and holder of this Note and the Loans evidenced hereby.
Payee hereby agrees, by its acceptance hereof, that before disposing of this
Note or any part hereof it will make a notation hereon of all principal payments
previously made hereunder and of the date to which interest hereon has been
paid; provided, however, that the failure to make a notation of any payment made
on this Note shall not limit or otherwise affect the obligations of Company
hereunder with respect to payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
subsection 2.4B(iii) of the Credit Agreement and to prepayment at the option of
Company as provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Guaranties and is
secured pursuant to the Collateral Documents.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
V-2
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
AURORA FOODS INC.
By:_________________________
Name:
Title:
V-3
TRANSACTIONS
ON
REVOLVING NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- --------- --------- --------- --------- -------
V-4
EXHIBIT VI
[FORM OF SWING LINE NOTE]
AURORA FOODS INC.
PROMISSORY NOTE DUE JUNE 30, 2005
$10,000,000 New York, New York
June __, 1998
FOR VALUE RECEIVED, AURORA FOODS INC., a Delaware corporation
("Company"), promises to pay to [NAME OF SWING LINE LENDER] ("Payee") or its
registered assigns, on or before June 30, 2005, the lesser of (x) TEN MILLION
AND NO DOLLARS ($10,000,000.00) and (y) the unpaid principal amount of all
advances made by Payee to Company as Swing Line Loans under the Credit Agreement
referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Third Amended and Restated Credit Agreement dated as of June __, 1998, by and
among Company, the financial institutions listed therein as Lenders, The Chase
Manhattan Bank as administrative agent (in such capacity, "Administrative
Agent") National Westminster Bank PLC, as Syndication Agent, and Swiss Bank
Corporation, as Documentation Agent (said Third Amended and Restated Credit
Agreement, as it may be amended, restated, supplemented or otherwise modified
from time to time, being the "Credit Agreement", the terms defined therein and
not otherwise defined herein being used herein as therein defined).
This Note is Company's "Swing Line Note" and is issued pursuant to
and entitled to the benefits of the Credit Agreement, to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Swing Line Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in
subsection 2.4B(iii) of the Credit Agreement and to
VI-1
prepayment at the option of Company as provided in subsection 2.4B(i) of the
Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Guaranties and is
secured pursuant to the Collateral Documents.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.16 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
[Remainder of page intentionally left blank]
VI-2
IN WITNESS WHEREOF, Company has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
AURORA FOODS INC.
By:_________________________
Name:
Title:
VI-3
TRANSACTIONS
ON
SWING LINE NOTE
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
---- --------- --------- --------- -------
VI-4
EXHIBIT VII
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of ______________,
[199_][200_] by THE UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES of Aurora Foods
Inc., a Delaware corporation ("Company") (each such undersigned Subsidiary a
"Guarantor" and collectively, "Guarantors"; provided that after the date hereof,
Guarantors shall be deemed to include any Additional Guarantors (as hereinafter
defined)), in favor of and for the benefit of THE CHASE MANHATTAN BANK, as
administrative agent for and representative of (in such capacity herein called
"Guarantied Party") the financial institutions ("Lenders") party to the Credit
Agreement referred to below and any Interest Rate Exchangers (as hereinafter
defined).
RECITALS
A. Company has entered into that certain Third Amended and Restated
Credit Agreement dated as of June __, 1998 (said Third Amended and Restated
Credit Agreement, as amended, restated, supplemented or otherwise modified from
time to time, being the "Credit Agreement"; capitalized terms defined therein
and not otherwise defined herein being used herein as therein defined) with
Lenders, The Chase Manhattan Bank, as Administrative Agent, National Westminster
Bank PLC, as Syndication Agent, and Swiss Bank Corporation, as Documentation
Agent.
B. Company may from time to time enter, or may from time to time
have entered, into one or more Interest Rate Agreements (collectively, the
"Lender Interest Rate Agreements") with or one or more Lenders or their
Affiliates (in such capacity, collectively, "Interest Rate Exchangers") in
accordance with the terms of the Credit Agreement, and it is desired that the
obligations of Company under the Lender Interest Rate Agreements, including
without limitation the obligation of Company to make payments thereunder in the
event of early termination thereof (all such obligations being the "Interest
Rate Obligations"), together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be guarantied hereunder.
C. A portion of the proceeds of the Loans may be advanced to
Guarantors and thus the Guarantied Obligations (as hereinafter defined) are
being incurred for and will inure to the benefit of Guarantors (which benefits
are hereby acknowledged).
D. It is a condition precedent to the making of the initial Loans
under the Credit Agreement that Company's obligations thereunder be guarantied
by Guarantors.
VII-1
E. Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Guarantied Party to enter into the Credit
Agreement and to make Loans and other extensions of credit thereunder and to
induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, Guarantors hereby agree as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
As used in this Guaranty, the following terms shall have the
following meanings unless the context otherwise requires:
"Beneficiaries" means Guarantied Party, Lenders and any Interest
Rate Exchangers.
"Guarantied Obligations" has the meaning assigned to that term in
subsection 2.1.
"Guaranty" means this Subsidiary Guaranty dated as of __________,
[199_][200_], as it may be amended, restated, supplemented or otherwise
modified from time to time.
"payment in full", "paid in full" or any similar term means payment
in full of the Guarantied Obligations, including without limitation all
principal, interest, costs, fees and expenses (including without
limitation legal fees and expenses) of Beneficiaries as required under the
Loan Documents and the Lender Interest Rate Agreements.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Guaranty unless otherwise specifically
provided.
(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions and
provisions of the Credit Agreement, the terms, conditions and provisions of this
Guaranty shall prevail.
VII-2
SECTION 2.
THE GUARANTY
2.1 Guaranty of the Guarantied Obligations.
Subject to the provisions of subsection 2.2(a), Guarantors jointly
and severally hereby irrevocably and unconditionally guaranty the due and
punctual payment in full of all Guarantied Obligations when the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. ss. 362(a)). The term "Guarantied Obligations" is used herein in
its most comprehensive sense and includes:
(a) any and all Obligations of Company and any and all Interest Rate
Obligations, in each case now or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, whether due or
not due, and however arising under or in connection with the Credit
Agreement and the other Loan Documents and the Lender Interest Rate
Agreements, including those arising under successive borrowing
transactions under the Credit Agreement which shall either continue the
Obligations of Company or from time to time renew them after they have
been satisfied and including interest which, but for the filing of a
petition in bankruptcy with respect to Company, would have accrued on any
Guarantied Obligations, whether or not a claim is allowed against Company
for such interest in the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 Limitation on Amount Guarantied; Contribution by Guarantors.
(a) Anything contained in this Guaranty to the contrary
notwithstanding, if any Fraudulent Transfer Law (as hereinafter defined) is
determined by a court of competent jurisdiction to be applicable to the
obligations of any Guarantor under this Guaranty, the obligations of such
Guarantor hereunder shall be limited to a maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving effect
to all other liabilities of such Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Guarantor (i) in respect of intercompany indebtedness to
Company or other affiliates of Company to the extent that such indebtedness
would be discharged in an amount equal to the amount paid by such Guarantor
hereunder and (ii) under any guaranty of
VII-3
Subordinated Indebtedness which guaranty contains a limitation as to maximum
amount similar to that set forth in this subsection 2.2(a), pursuant to which
the liability of such Guarantor hereunder is included in the liabilities taken
into account in determining such maximum amount) and after giving effect as
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such Guarantor pursuant to applicable law or
pursuant to the terms of any agreement (including without limitation any such
right of contribution under subsection 2.2(b)).
(b) Guarantors under this Guaranty together desire to allocate among
themselves (collectively, the "Contributing Guarantors"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by any Guarantor under
this Guaranty (a "Funding Guarantor") that exceeds its Fair Share (as defined
below) as of such date, that Funding Guarantor shall be entitled to a
contribution from each of the other Contributing Guarantors in the amount of
such other Contributing Guarantor's Fair Share Shortfall (as defined below) as
of such date, with the result that all such contributions will cause each
Contributing Guarantor's Aggregate Payments (as defined below) to equal its Fair
Share as of such date. "Fair Share" means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (i) the ratio of
(x) the Fair Share Contribution Amount (as defined below) with respect to such
Contributing Guarantor to (y) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (ii) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations guarantied. "Fair
Share Shortfall" means, with respect to a Contributing Guarantor as of any date
of determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "Fair
Share Contribution Amount" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty determined as of such date, in
the case of any Guarantor, in accordance with subsection 2.2(a); provided that,
solely for purposes of calculating the "Fair Share Contribution Amount" with
respect to any Contributing Guarantor for purposes of this subsection 2.2(b),
any assets or liabilities of such Contributing Guarantor arising by virtue of
any rights to subrogation, reimbursement or indemnification or any rights to or
obligations of contribution hereunder shall not be considered as assets or
liabilities of such Contributing Guarantor. "Aggregate Payments" means, with
respect to a Contributing Guarantor as of any date of determination, an amount
equal to (i) the aggregate amount of all payments and distributions made on or
before such date by such Contributing Guarantor in respect of this Guaranty
(including in respect of this subsection 2.2(b)) minus (ii) the aggregate amount
of all payments received on or before such date by such
VII-4
Contributing Guarantor from the other Contributing Guarantors as contributions
under this subsection 2.2(b). The amounts payable as contributions hereunder
shall be determined as of the date on which the related payment or distribution
is made by the applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this subsection 2.2(b) shall not
be construed in any way to limit the liability of any Contributing Guarantor
hereunder.
2.3 Payment by Guarantors: Application of Payments.
Subject to the provisions of subsection 2.2(a), Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of Company to pay
any of the Guarantied Obligations when and as the same shall become due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.
362(a)), Guarantors will upon demand pay, or cause to be paid, in cash, to
Guarantied Party for the ratable benefit of Beneficiaries, an amount equal to
the sum of the unpaid principal amount of all Guarantied Obligations then due as
aforesaid, accrued and unpaid interest on such Guarantied Obligations (including
without limitation interest which, but for the filing of a petition in
bankruptcy with respect to Company, would have accrued on such Guarantied
Obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding) and all other Guarantied Obligations then
owed to Beneficiaries as aforesaid. All such payments shall be applied promptly
from time to time by Guarantied Party as provided in subsection 2.4D of the
Credit Agreement.
2.4 Liability of Guarantors Absolute.
Each Guarantor agrees that its obligations hereunder are
irrevocable, absolute, independent and unconditional and shall not be affected
by any circumstance which constitutes a legal or equitable discharge of a
guarantor or surety other than payment in full of the Guarantied Obligations. In
furtherance of the foregoing and without limiting the generality thereof, each
Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Guarantied Party may enforce this Guaranty upon the occurrence
of an Event of Default under the Credit Agreement or the occurrence of an
Early Termination Date (as defined in a Master Agreement or an Interest
Rate Swap Agreement or Interest Rate and Currency Exchange Agreement in
the form prepared by the International Swap and Derivatives Association
Inc. or a similar event under any
VII-5
similar swap agreement) under any Lender Interest Rate Agreement (either
such occurrence being an "Event of Default" for purposes of this Guaranty)
notwithstanding the existence of any dispute between Company and any
Beneficiary with respect to the existence of such Event of Default.
(c) The obligations of each Guarantor hereunder are independent of
the obligations of Company under the Loan Documents or the Lender Interest
Rate Agreements and the obligations of any other guarantor (including any
other Guarantor) of the obligations of Company under the Loan Documents or
the Lender Interest Rate Agreements, and a separate action or actions may
be brought and prosecuted against such Guarantor whether or not any action
is brought against Company or any of such other guarantors and whether or
not Company is joined in any such action or actions.
(d) Payment by any Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
any Guarantor's liability for any portion of the Guarantied Obligations
which has not been paid. Without limiting the generality of the foregoing,
if Guarantied Party is awarded a judgment in any suit brought to enforce
any Guarantor's covenant to pay a portion of the Guarantied Obligations,
such judgment shall not be deemed to release such Guarantor from its
covenant to pay the portion of the Guarantied Obligations that is not the
subject of such suit, and such judgment shall not, except to the extent
satisfied by such Guarantor, limit, affect, modify or abridge any other
Guarantor's liability hereunder in respect of the Guarantied Obligations.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of any Guarantor's
liability hereunder, from time to time may (i) renew, extend, accelerate,
increase the rate of interest on, or otherwise change the time, place,
manner or terms of payment of the Guarantied Obligations, (ii) settle,
compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guarantied
Obligations or any agreement relating thereto and/or subordinate the
payment of the same to the payment of any other obligations; (iii) request
and accept other guaranties of the Guarantied Obligations and take and
hold security for the payment of this Guaranty or the Guarantied
Obligations; (iv) release, surrender, exchange, substitute, compromise,
settle, rescind, waive, alter, subordinate or modify, with or without
consideration, any security for payment of the Guarantied Obligations, any
other guaranties of the Guarantied Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guarantied
Obligations; (v) enforce and apply any security
VII-6
now or hereafter held by or for the benefit of such Beneficiary in respect
of this Guaranty or the Guarantied Obligations and direct the order or
manner of sale thereof, or exercise any other right or remedy that such
Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent with the Credit
Agreement or the applicable Lender Interest Rate Agreement and any
applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against Company or
any security for the Guarantied Obligations; and (vi) exercise any other
rights available to it under the Loan Documents or the Lender Interest
Rate Agreements.
(f) This Guaranty and the obligations of Guarantors hereunder shall
be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other
than payment in full of the Guarantied Obligations), including without
limitation the occurrence of any of the following, whether or not any
Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce or agreement or election not to
assert or enforce, or the stay or enjoining, by order of court, by
operation of law or otherwise, of the exercise or enforcement of, any
claim or demand or any right, power or remedy (whether arising under the
Loan Documents the Lender Interest Rate Agreements, at law, in equity or
otherwise) with respect to the Guarantied Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for
the payment of the Guarantied Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from, any of the
terms or provisions (including without limitation provisions relating to
events of default) of the Credit Agreement, any of the other Loan
Documents, any of the Lender Interest Rate Agreements or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security
for the Guarantied Obligations, in each case whether or not in accordance
with the terms of the Credit Agreement or such Loan Document, such Lender
Interest Rate Agreement or any agreement relating to such other guaranty
or security; (iii) the Guarantied Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable
in any respect; (iv) the application of payments received from any source
(other than payments received pursuant to the other Loan Documents or any
of the Lender Interest Rate Agreements or from the proceeds of any
security for the Guarantied Obligations, except to the extent such
security also serves as collateral for indebtedness other than the
Guarantied Obligations) to the payment of indebtedness other than the
Guarantied
VII-7
Obligations, even though any Beneficiary might have elected to apply such
payment to any part or all of the Guarantied Obligations; (v) any
Beneficiary's consent to the change, reorganization or termination of the
corporate structure or existence of Company or any of its Subsidiaries and
to any corresponding restructuring of the Guarantied Obligations; (vi) any
failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guarantied Obligations; (vii) any
defenses, set-offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guarantied Obligations,
including, but not limited to, failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury; and (viii) any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to
any extent vary the risk of any Guarantor as an obliger in respect of the
Guarantied Obligations.
2.5 Waivers by Guarantors.
Each Guarantor hereby waives, for the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of payment
or performance by such Guarantor, to (i) proceed against Company, any
other guarantor (including any other Guarantor) of the Guarantied
Obligations or any other Person, (ii) proceed against or exhaust any
security held from Company, any such other guarantor or any other Person
(iii) proceed against or have resort to any balance of any deposit account
or credit on the books of any Beneficiary in favor of Company or any other
Person, or (iv) pursue any other remedy in the power of any Beneficiary
whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including without
limitation any defense based on or arising out of the lack of validity or
the unenforceability of the Guarantied Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability
of Company from any cause other than payment in full of the Guarantied
Obligations;
(c) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal;
(d) any defense based upon any Beneficiary's errors or omissions in
the administration of the Guarantied Obligations, except behavior which
amounts to bad faith;
VII-8
(e) (i) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms of this Guaranty and any
legal or equitable discharge of such Guarantor's obligations hereunder,
(ii) the benefit of any statute of limitations affecting such Guarantor's
liability hereunder or the enforcement hereof, (iii) any rights to
set-offs, recoupments and counterclaims, and (iv) promptness, diligence
and any requirement that any Beneficiary protect, secure, perfect or
insure any security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Credit
Agreement, the Lender Interest Rate Agreements or any agreement or
instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related
thereto, notices of any extension of credit to Company and notices of any
of the matters referred to in subsection 2.4 and any right to consent to
any thereof; and
(g) any defenses or benefits that may be derived from or afforded by
law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of this Guaranty.
2.6 Guarantors' Rights of Subrogation, Contribution, Etc.
Until the Guarantied Obligations have been paid in full and the
Commitments terminated, each Guarantor hereby waives any claim, right or remedy,
direct or indirect, that such Guarantor now has or may hereafter have against
Company or any of its assets in connection with this Guaranty or the performance
by such Guarantor of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise and including, without limitation, (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against Company, (b) any right to enforce, or to participate in, any claim,
right or remedy that any Beneficiary now has or may hereafter have against
Company, and (c) any benefit of, and any right to participate in, any collateral
or security now or hereafter held by any Beneficiary. In addition, until the
Guarantied Obligations shall have been paid in full and the Commitments shall
have terminated and all Letters of Credit shall have expired or been cancelled,
each Guarantor shall withhold exercise of any right of contribution such
Guarantor may have against any other guarantor (including any other Guarantor)
of the Guarantied Obligations (including without limitation any such right of
contribution under subsection 2.2(b)). Each Guarantor further agrees that, to
the extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void
VII-9
or voidable for any reason, any rights of subrogation, reimbursement or
indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any tine when all Guarantied
Obligations shall not have been paid in full, such amount shall be held in trust
for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over
to Guarantied Party for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations, whether matured or unmatured, in accordance
with the terms hereof.
2.7 Subordination of Other Obligations.
Any indebtedness of Company or any Guarantor now or hereafter held
by any Guarantor (the "Obligee Guarantor") is hereby subordinated in right of
payment to the Guarantied Obligations, and any such indebtedness collected or
received by the Obligee Guarantor after an Event of Default has occurred and is
continuing shall be held in trust for Guarantied Party on behalf of
Beneficiaries and shall forthwith be paid over to Guarantied Party for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of the Obligee Guarantor under any other provision of this Guaranty.
2.8 Expenses.
Guarantors jointly and severally agree to pay, or cause to be paid,
on demand, and to save Beneficiaries harmless against liability for, any and all
costs and expenses (including fees and disbursements of counsel and allocated
costs of internal counsel) incurred or expended by any Beneficiary in connection
with the enforcement of or preservation of any rights under this Guaranty.
2.9 Continuing Guaranty.
This Guaranty is a continuing guaranty and shall remain in effect
until all of the Guarantied Obligations shall have been paid in full and the
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled. Each Guarantor hereby irrevocably waives any right to revoke
this Guaranty as to future transactions giving rise to any Guarantied
Obligations.
2.10 Authority of Guarantors or Company.
It is not necessary for any Beneficiary to inquire into the capacity
or powers of any Guarantor or Company or the
VII-10
officers, directors or any agents acting or purporting to act on behalf of any
of them.
2.11 Financial Condition of Company.
Any Loans may be granted to Company or continued from time to time,
and any Lender Interest Rate Agreement may be entered into from time to time, in
each case without notice to or authorization from any Guarantor regardless of
the financial or other condition of Company at the time of any such grant or
continuation or at the time such Lender Interest Rate Agreement is entered into,
as the case may be. No Beneficiary shall have any obligation to disclose or
discuss with any Guarantor its assessment, or any Guarantor's assessment, of the
financial condition of Company. Each Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Loan
Documents and the Lender Interest Rate Agreements, and each Guarantor assumes
the responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Company now known or hereafter known
by any Beneficiary.
2.12 Rights Cumulative.
The rights,powers and remedies given to Beneficiaries by this
Guaranty are cumulative and shall be in addition to and independent of all
rights, powers and remedies given to Beneficiaries by virtue of any statute or
rule of law or in any of the other Loan Documents, any of the Lender Interest
Rate Agreements or any agreement between any Guarantor and any Beneficiary or
Beneficiaries or between Company and any Beneficiary or Beneficiaries. Any
forbearance or failure to exercise, and any delay by any Beneficiary in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
2.13 Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty.
(a) So long as any Guarantied Obligations remain outstanding, no
Guarantor shall, without the prior written consent of Guarantied Party acting
pursuant to the instructions of Requisite Obligees (as defined in subsection
3.14), commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against Company. The obligations
of Guarantors under this Guaranty shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding, voluntary or
involuntary, involving
VII-11
the bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of Company or by any defense which Company may have by reason of the
order, decree or decision of any court or administrative body resulting from any
such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guarantied Obligations which accrues after the commencement of
any proceeding referred to in clause (a) above (or, if interest on any portion
of the Guarantied Obligations ceases to accrue by operation of law by reason of
the commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of Guarantors and Beneficiaries that the Guarantied Obligations which
are guarantied by Guarantors pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve Company of any
portion of such Guarantied Obligations. Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Guarantied Party, or allow the claim of
Guarantied Party in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guarantied Obligations for all purposes under this
Guaranty.
2.14 Notice of Events.
As soon as any Guarantor obtains knowledge thereof, such Guarantor
shall give Guarantied Party written notice of any condition or event which has
resulted in a breach of or noncompliance with any other condition or covenant
contained herein.
2.15 Set Off.
In addition to any other rights any Beneficiary may have under law
or in equity, if any amount shall at any time be due and owing by any Guarantor
to any Beneficiary under this Guaranty, such Beneficiary is authorized at any
time or from time to time upon the occurrence and during the continuation of any
Event of Default, without notice (any such notice being hereby expressly
waived), to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness of such
VII-12
Beneficiary owing to such Guarantor and any other property of such Guarantor
held by any Beneficiary to or for the credit or the account of such Guarantor
against and on account of the Guarantied Obligations and liabilities of such
Guarantor to any Beneficiary under this Guaranty.
2.16 Discharge of Guaranty Upon Sale of Guarantor.
If all of the stock of any Guarantor or any of its successors in
interest under this Guaranty shall be sold or otherwise disposed of (including
by merger or consolidation) in an Asset Sale not prohibited by subsection 7.7 of
the Credit Agreement or otherwise consented to by Requisite Lenders, the
Guaranty of such Guarantor or such successor in interest, as the case may be,
hereunder shall automatically be discharged and released without any further
action by any Beneficiary or any other Person effective as of the time of such
Asset Sale; provided that, as a condition precedent to such discharge and
release, Guarantied Party shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery to Guarantied Party
of the applicable Net Cash Proceeds.
SECTION 3.
MISCELLANEOUS
3.1 Survival of Warranties.
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Guaranty and the other Loan Documents
and the Lender Interest Rate Agreements and any increase in the Commitments
under the Credit Agreement.
3.2 Notices.
Any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, or upon receipt of
telefacsimile or telex (with received answerback) or three Business Days after
depositing it in the United States mail with postage pre-paid and properly
addressed; provided, notices to Guarantied Party shall not be effective until
received. For purposes hereof, the address of each party hereto shall be as set
forth under such party's name on the signature pages hereof or, as to any party,
such other address as shall be designated by such party in a written notice
delivered to the other parties hereto.
3.3 Severability.
In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the
VII-13
remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby.
3.4 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision
of this Guaranty, and no consent to any departure by any Guarantor therefrom,
shall in any event be effective without the written concurrence of Guarantied
Party and, in the case of any such amendment or modification, each Guarantor
against whom enforcement of such amendment or modification is sought. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given.
3.5 Headings.
Section and subsection headings in this Guaranty are included herein
for convenience of reference only and shall not constitute a part of this
Guaranty for any other purpose or be given any substantive effect.
3.6 Applicable Law; Rules of Construction.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS AND
BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Guaranty mutatis mutandis.
3.7 Successors and Assigns.
This Guaranty is a continuing guaranty and shall be binding upon
each Guarantor and its respective successors and assigns. This Guaranty shall
inure to the benefit of Beneficiaries and their respective successors and
assigns. No Guarantor shall assign this Guaranty or any of the rights or
obligations of such Guarantor hereunder without the prior written consent of all
Lenders. Any Beneficiary may, without notice or consent, assign its interest in
this Guaranty in whole or in part. The terms and provisions of this Guaranty
shall inure to the benefit of any transferee or assignee of any Loan, and in the
event of such transfer or assignment the rights and privileges herein conferred
upon such Beneficiary shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof.
3.8 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT
OF OR RELATING TO THIS GUARANTY, OR ANY OBLIGATIONS
VII-14
HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ BY EXECUTING AND
DELIVERING THIS GUARANTY, EACH GUARANTOR, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO SUCH GUARANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 3.2; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GUARANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT BENEFICIARIES RETAIN THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST SUCH GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES
THAT THE PROVISIONS OF THIS SUBSECTION 3.8 RELATING TO JURISDICTION AND VENUE
SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW
YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
3.9 Waiver of Trial by Jury.
EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, EACH
BENEFICIARY HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The scope
of this waiver is intended to be all-encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each Guarantor
and, by its acceptance of the benefits hereof, each Beneficiary (i) acknowledges
that this waiver is a material inducement for such Guarantor and Beneficiaries
to enter into a business relationship, that such Guarantor and Beneficiaries
have already relied on this waiver in entering into this Guaranty or accepting
the benefits thereof, as the case may be, and that each will continue to rely on
this waiver in their related future dealings and (ii) further warrants and
represents that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED BY GUARANTIED
PARTY AND EACH GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY. In the
event of litigation, this Guaranty may be filed as a written consent to a trial
by the court.
VII-15
3.10 No Other Writing.
This writing is intended by Guarantors and Beneficiaries as the
final expression of this Guaranty and is also intended as a complete and
exclusive statement of the terms of their agreement with respect to the matters
covered hereby. No course of dealing, course of performance or trade usage, and
no parol evidence of any nature, shall be used to supplement or modify any terms
of this Guaranty. There are no conditions to the full effectiveness of this
Guaranty.
3.11 Further Assurances.
At any time or from time to time, upon the request of Guarantied
Party, Guarantors shall execute and deliver such further documents and do such
other acts and things as Guarantied Party may reasonably request in order to
effect fully the purposes of this Guaranty.
3.12 Additional Guarantors.
The initial Guarantors hereunder shall be such of the Subsidiaries
of Company as are signatories hereto on the date hereof. From time to time
subsequent to the date hereof, additional Subsidiaries of Company may become
parties hereto, as additional Guarantors (each an "Additional Guarantor") by
executing a counterpart of this Guaranty. Upon delivery of any such counterpart
to Administrative Agent, notice of which is hereby waived by Guarantors, each
such Additional Guarantor shall be a Guarantor and shall be as fully a party
hereto as if such Additional Guarantor were an original signatory hereof. Each
Guarantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Guarantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Guarantor hereunder. This Guaranty
shall be fully effective as to any Guarantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Guarantor hereunder.
3.13 Counterparts; Effectiveness.
This Guaranty may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original for all purposes; but
all such counterparts together shall constitute but one and the same instrument.
This Guaranty shall become effective as to each Guarantor upon the execution of
a counterpart hereof by such Guarantor (whether or not a counterpart hereof
shall have been executed by any other Guarantor) and receipt by Guarantied Party
of written or telephonic notification of such execution and authorization of
delivery thereof.
VII-16
3.14 Guarantied Party as Administrative Agent.
(a) Guarantied Party has been appointed to act as Guarantied Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Guarantied Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action solely in
accordance with this Guaranty and the Credit Agreement; provided that Guarantied
Party shall exercise, or refrain from exercising, any remedies hereunder in
accordance with the instructions of (i) Requisite Lenders or (ii) after payment
in full of all Obligations under the Credit Agreement and the other Loan
Documents, the holders of a majority of the aggregate notional amount (or, with
respect to any Lender Interest Rate Agreement that has been terminated in
accordance with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early termination payments then
due) under such Lender Interest Rate Agreement) under all Lender Interest Rate
Agreements (Requisite Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this subsection 3.14, each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to enforce this
Guaranty, it being understood and agreed by such Interest Rate Exchanger that
all rights and remedies hereunder may be exercised solely by Guarantied Party
for the benefit of Beneficiaries in accordance with the terms of this subsection
3.14.
(b) Guarantied Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Guarantied Party under this Guaranty;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Guarantied Party under this Guaranty;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Guarantied Party under this Guaranty, and the
retiring or removed Guarantied Party under this Guaranty shall promptly (i)
transfer to such successor Guarantied Party all sums held hereunder, together
with all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Guarantied Party under this
Guaranty, and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Guarantied Party of the rights
created hereunder, whereupon such retiring or removed Guarantied Party shall be
VII-17
discharged from its duties and obligations under this Guaranty. After any
retiring or removed Guarantied Party's resignation or removal hereunder as
Guarantied Party, the provisions of this Guaranty shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Guaranty while it
was Guarantied Party hereunder.
[Remainder of page intentionally left blank]
VII-18
IN WITNESS WHEREOF, each of the undersigned Guarantors has
caused this Guaranty to be duly executed and delivered by its officer
thereunto duly authorized as of the date first written above.
[GUARANTOR]
By:_____________________________
Name:
Title:
Notice Address for the foregoing
Guarantors:
_________________________________
_________________________________
_________________________________
Attention:_______________________
Facsimile:_______________________
with a copy to:
▇▇▇▇▇▇ De Leeuw & Co.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
Dartford Partnership L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
White & Case
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
VII-19
IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused
this Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of ____________, [199_][200_].
[NAME OF ADDITIONAL GUARANTOR]
By:______________________________
Name:
Title:
Notice Address:
_________________________________
_________________________________
_________________________________
VII-20
EXHIBIT VIII
[FORM OF PLEDGE AGREEMENT]
THIRD AMENDED AND RESTATED PLEDGE AGREEMENT
This THIRD AMENDED AND RESTATED PLEDGE AGREEMENT (this "Agreement")
is dated as of June __, 1998 and entered into by and among AURORA FOODS INC., a
Delaware corporation ("Company" or "Pledgor"); provided that after the Effective
Date, "Pledgors" shall mean and include Company and any Additional Pledgors (as
hereinafter defined)), and THE CHASE MANHATTAN BANK, as administrative agent for
and representative of (in such capacity herein called "Secured Party") the
financial institutions ("Lenders") party to the Credit Agreement referred to
below and any Interest Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the shares of
stock (the "Pledged Shares") described in Part A of Schedule I annexed hereto
and issued by the corporations named therein and (ii) the indebtedness (the
"Pledged Debt") described in Part B of said Schedule I and issued by the
obligors named therein.
B. Pursuant to that certain Third Amended and Restated Credit
Agreement dated as of June __, 1998 (said Third Amended and Restated Credit
Agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among Company, Lenders, Secured Party, as Administrative Agent, National
Westminster Bank PLC, as Syndication Agent, and Swiss Bank Corporation, as
Documentation Agent, Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company.
C. Company may from time to time enter, or may from time to time
have entered, into one or more Interest Rate Agreements (collectively, the
"Lender Interest Rate Agreements") with one or more Lenders or their Affiliates
(in such capacity, collectively, "Interest Rate Exchangers") in accordance with
the terms of the Credit Agreement, and it is desired that the obligations of
Company under the Lender Interest Rate Agreements, including without limitation
the obligation of Company to make payments thereunder in the event of early
termination thereof (all such obligations being the "Interest Rate
Obligations"), together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be secured hereunder.
D. Additional Pledgors shall execute and deliver counterparts to
that certain Subsidiary Guaranty (said Subsidiary
VIII-1
Guaranty, as it may be amended, restated, supplemented or otherwise modified
from time to time, being the "Subsidiary Guaranty") in favor of Secured Party
for the benefit of Lenders and any Interest Rate Exchangers, pursuant to which
each Additional Pledgor shall guaranty the prompt payment and performance when
due of all obligations of Company under the Credit Agreement and an obligations
of Company under the Lender Interest Rate Agreements, including without
limitation the obligation of Company to make payments thereunder in the event of
early termination thereof.
E. It is a condition precedent to the initial extensions of credit
by Lenders under the Credit Agreement that each Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and to induce Interest Rate Exchangers to enter into Lender Interest
Rate Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Pledgor hereby agrees with
Secured Party as follows:
SECTION 1. Pledge of Security.
Each Pledgor hereby pledges and assigns to Secured Party, and hereby
grants to Secured Party a security interest in, all of Pledgor's right, title
and interest in and to the following (the "Pledged Collateral"):
(a) the Pledged Shares owned by such Pledgor and the certificates
representing such Pledged Shares and any interest of such Pledgor in the
entries on the books of any financial intermediary pertaining to such
Pledged Shares, and all dividends, cash, warrants, rights, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Shares; provided, however, that to the extent the issuer of any of
the Pledged Shares is a controlled foreign corporation (used hereinafter
as such term is defined in Section 957(a) or a successor provision of the
Internal Revenue Code of 1986, as amended from time to time), such Pledgor
shall only be required to pledge Pledged Shares of, certificates
representing Pledged Shares of, and such interests pertaining to Pledged
Shares of such issuer possessing up to but not exceeding 65% of the voting
power of all classes of capital stock entitled to vote of such issuer, and
all dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Pledged Shares;
VIII-2
(b) the Pledged Debt owned by such Pledgor and the instruments
evidencing such Pledged Debt, and all interest, cash, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
Pledged Debt;
(c) all additional shares of, and all securities convertible into
and warrants, options and other rights to purchase or otherwise acquire,
stock of any issuer of any Pledged Shares from time to time acquired by
such Pledgor in any manner (which shares shall be deemed to be part of the
Pledged Shares), the certificates or other instruments representing such
additional shares, securities, warrants, options or other rights and any
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such additional shares (all such shares,
securities, warrants, options, rights, certificates, instruments and
interests collectively being "Additional Pledged Shares"), and all
dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Additional Pledged
Shares; provided, however, that to the extent that the issuer of any
Additional Pledged Shares is a controlled foreign corporation, such
Pledgor shall only be required to pledge Additional Pledged Shares of such
issuer possessing up to but not exceeding 65% of the voting power of all
classes of capital stock entitled to vote of such issuer, and all
dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such Additional Pledged
Shares;
(d) all additional indebtedness from time to time owed to such
Pledgor by any obligor on any Pledged Debt and the instruments evidencing
such indebtedness, and all interest, cash, instruments and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
indebtedness;
(e) all shares of, and all securities convertible into and warrants,
option and other rights to purchase or otherwise acquire, stock of any
Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct Subsidiary of such Pledgor (which shares shall be
deemed to be part of the Pledged Shares), the certificates or other
instruments representing such shares, securities, warrants, options or
other rights and any interest of such Pledgor in the entries on the books
of any financial intermediary pertaining to such shares (all such shares,
securities, warrants, options, rights, certificates, instruments and
interests collectively being "New Pledged Shares"), and all dividends,
cash, warrants, rights,
VIII-3
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of such shares, securities, warrants, options or other rights;
provided, however, that in the event that any such direct Subsidiary is a
controlled foreign corporation, such Pledgor shall only be required to
pledge New Pledged Shares of such Subsidiary possessing up to but not
exceeding 65% of the voting power of all classes of capital stock entitled
to vote of such Subsidiary, and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all of such New Pledged Shares;
(f) all indebtedness from time to time owed to such Pledgor by any
Person that, after the date of this Agreement, becomes, as a result of
such any occurrence, a direct or indirect Subsidiary of such Pledgor, and
all interest, cash, instruments and other property or proceeds from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness; and
(g) to the extent not covered by clauses (a) through (f) above, all
proceeds of any or all of the foregoing Pledged Collateral. For purposes
of this Agreement, the term "proceeds" includes whatever is receivable or
received when Pledged Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary
or involuntary, and includes, without limitation, proceeds of any
indemnity or guaranty payable to such Pledgor or Secured Party from time
to time with respect to any of the Pledged Collateral.
SECTION 2. Security for Obligations.
This Agreement secures, and the Pledged Collateral pledged and
assigned by each Pledgor is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including without
limitation the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.
362(a)), of all Secured Obligations with respect to such Pledgor. "Secured
Obligations" means
(a) with respect to Company, all obligations and liabilities of
every nature of Company now or hereafter existing under or arising out of
or in connection with the Credit Agreement and the other Loan Documents
and any Lender Interest Rate Agreements, and
(b) with respect to each Additional Pledgor, all obligations and
liabilities of every nature of Additional
VIII-4
Pledgors now or hereafter existing under or arising out of or in
connection with the Subsidiary Guaranty,
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender or Interest Rate Exchanger as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Pledgors now or hereafter existing under this Agreement.
SECTION 3. Delivery of Pledged Collateral.
All certificates or instruments representing or evidencing the
Pledged Collateral shall be delivered to and held by or on behalf of Secured
Party pursuant hereto and shall be in suitable form for transfer by delivery or,
as applicable, shall be accompanied by the appropriate Pledgor's endorsement,
where necessary, or duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Secured Party. Upon the
occurrence and during the continuation of an Event of Default (as defined in the
Credit Agreement) or the occurrence of an Early Termination Date (as defined in
a Master Agreement or an Interest Rate Swap Agreement or Interest Rate and
Currency Exchange Agreement in the form prepared by the International Swap and
Derivatives Association Inc. or a similar event under any similar swap
agreement) under any Lender Interest Rate Agreement (either such occurrence
being an "Event of Default" for purposes of this Agreement), Secured Party shall
have the right, without notice to any Pledgor, to transfer to or to register in
the name of Secured Party or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable rights specified in Section 7(a). In
addition, Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties.
Each Pledgor represents and warrants as of the date it becomes a
party hereto as follows:
VIII-5
(a) Due Authorization, etc. of Pledged Collateral. All of the
Pledged Shares owned by such Pledgor have been duly authorized and validly
issued and are fully paid and non-assessable. All of the Pledged Debt
owned by such Pledgor has been duly authorized, authenticated or issued,
and delivered and is the legal, valid and binding obligation of the
issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged Shares owned by
such Pledgor constitute the percentage of the issued and outstanding
shares of stock of each issuer thereof set forth on Schedule I annexed
hereto, and there are no outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or property
that is now or hereafter convertible into, or that requires the issuance
or sale of, any Pledged Shares. The Pledged Debt owned by such Pledgor
constitutes all of the issued and outstanding intercompany indebtedness
evidenced by a promissory note of the respective issuers thereof owing to
such Pledgor.
(c) Ownership of Pledged Collateral. Such Pledgor is the legal,
record and beneficial owner of the Pledged Collateral owned by such
Pledgor free and clear of any Lien except for the security interest
created by this Agreement.
(d) Perfection. The pledge of the Pledged Collateral pursuant to
this Agreement creates a valid and perfected first priority security
interest in the Pledged Collateral, securing the payment of the Secured
Obligations.
SECTION 5. Transfers and Other Liens; Additional Pledged Collateral; etc.
Each Pledgor shall:
(a) not, except as expressly permitted by the Credit Agreement, (i)
sell, assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, any of the Pledged Collateral, (ii)
create or suffer to exist any Lien upon or with respect to any of the
Pledged Collateral, except for the security interest under this Agreement,
or (iii) permit any issuer of Pledged Shares to merge or consolidate
unless all the outstanding capital stock of the surviving or resulting
corporation is, upon such merger or consolidation, pledged hereunder and
no cash, securities or other property is distributed in respect of the
outstanding shares of any other constituent corporation; provided that if
the surviving or resulting corporation upon any such merger or
consolidation involving an issuer of Pledged Shares which is a controlled
foreign corporation is a controlled foreign corporation, then such Pledgor
shall only be required to pledge outstanding capital stock of such
surviving or resulting corporation possessing up to but not exceeding 65%
of the voting power of all classes of capital
VIII-6
stock of such issuer entitled to vote; provided further that in the event
any Pledgor makes an Asset Sale permitted by the Credit Agreement and the
assets subject to such Asset Sale are Pledged Shares, Secured Party shall
release the Pledged Shares that are the subject of such Asset Sale to such
Pledgor free and clear of the lien and security interest under this
Agreement concurrently with the consummation of such Asset Sale; and
provided further, that as a condition precedent to such release, Secured
Party shall have received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery to Secured Party of the Net
Cash Proceeds of such Asset Sale in the event and to the extent that all
or any portion of such Net Cash Proceeds are required to be applied to
prepay the Loans under the Credit Agreement.
(b) (i) cause each issuer of Pledged Shares not to issue any stock
or other securities in addition to or in substitution for the Pledged
Shares issued by such issuer, except to a Pledgor, (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and
all additional shares of stock or other securities of each issuer of
Pledged Shares, and (iii) pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all shares of stock
of any Person that, after the date of this Agreement, becomes, as a result
of any occurrence, a direct Subsidiary of any Pledgor; provided, that
notwithstanding anything contained in this clause (b) to the contrary,
such Pledgor shall only be required to pledge the outstanding capital
stock of a controlled foreign corporation possessing up to but not
exceeding 65% of the voting power of all classes of capital stock of such
controlled foreign corporation entitled to vote;
(c) (i) pledge hereunder, immediately upon their issuance, any and
all instruments or other evidences of additional indebtedness from time to
time owed to such Pledgor by any obligor on the Pledged Debt, and (ii)
pledge hereunder, immediately upon their issuance, any and all instruments
or other evidences of indebtedness from time to time owed to such Pledgor
by any Person that after the date of this Agreement becomes, as a result
of any occurrence, a direct or indirect Subsidiary of any Pledgor;
(d) promptly deliver to Secured Party all written notices received
by it with respect to the Pledged Collateral; and
(e) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Pledged
Collateral, except to the extent the validity thereof is being contested
in good faith; provided that such Pledgor shall in any event pay such
taxes, assessments, charges, levies or claims not later than five
VIII-7
days prior to the date of any proposed sale under any judgement, writ or
warrant of attachment entered or filed against Pledgor or any of the
Pledged Collateral as a result of the failure to make such payment.
SECTION 6. Further Assurances; Pledge Amendments.
(a) Each Pledgor agrees that from time to time, at the expense of
Pledgors, such Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the foregoing, such
Pledgor will: (i) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby and (ii) at
Secured Party's request, appear in and defend any action or proceeding that may
affect such Pledgor's title to or Secured Party's security interest in all or
any part of the Pledged Collateral.
(b) Each Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder
as provided in Section 5(b) or (c), promptly (and in any event within five
Business Days) deliver to Secured Party a Pledge Amendment, duly executed by
such Pledgor, in substantially the form of Schedule II annexed hereto (a "Pledge
Amendment"), in respect of the additional Pledged Shares or Pledged Debt to be
pledged pursuant to this Agreement. Each Pledgor hereby authorizes Secured Party
to attach each Pledge Amendment to this Agreement and agrees that all Pledged
Shares or Pledged Debt listed on any such Pledge Amendment delivered to Secured
Party shall for all purposes hereunder be considered Pledged Collateral;
provided that the failure of a Pledgor to execute a Pledge Amendment with
respect to any additional Pledged Shares or Pledged Debt pledged pursuant to
this Agreement shall not impair the security interest of Secured Party therein
or otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto.
SECTION 7. Voting Rights; Dividends; Etc.
(a) Pledgors' Rights. So long as no Event of Default shall have
occurred and be continuing:
(i) Pledgors shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement
or the Credit Agreement;
VIII-8
(ii) Pledgors shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all
dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(1) dividends and interest paid or payable other than in cash
in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange
for, any Pledged Collateral,
(2) dividends and other distributions paid or payable in cash
in respect of any Pledged Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in-surplus, and
(3) cash paid, payable or otherwise distributed in respect of
principal or in redemption of or in exchange for any Pledged
Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as, Pledged
Collateral and shall, if received by a Pledgor, be received in trust for the
benefit of Secured Party, be segregated from the other property or funds of such
Pledgor and be forthwith delivered to Secured Party as Pledged Collateral in the
same form as so received (with all necessary endorsements); and
(iii) Secured Party shall promptly execute and deliver (or cause to
be executed and delivered) to Pledgors all such proxies, dividend payment
orders and other instruments as Pledgors may from time to time reasonably
request for the purpose of enabling Pledgors to exercise the voting and
other consensual rights which they are entitled to exercise pursuant to
paragraph (i) above and to receive the dividends, principal or interest
payments which they are authorized to receive and retain pursuant to
paragraph (ii) above.
(b) Secured Party's Rights. Upon acceleration of the maturity of the
Loans in accordance with Section 8 of the Credit Agreement and upon the
occurrence and during the continuation of an Event of Default:
(i) upon written notice from Secured Party to a Pledgor, all rights
of such Pledgor to exercise the voting and other consensual rights which
it would otherwise be entitled to exercise pursuant to Section 7(a)(i)
shall cease, and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to exercise such voting and
other consensual rights;
(ii) all rights of Pledgors to receive the dividends and interest
payments which they would otherwise be
VIII-9
authorized to receive and retain pursuant to Section 7(a)(ii) shall cease,
and all such rights shall thereupon become vested in Secured Party who
shall thereupon have the sole right to receive and hold as Pledged
Collateral such dividends and interest payments; and
(iii) all dividends, principal and interest payments which are
received by a Pledgor contrary to the provisions of paragraph (ii) of this
Section 7(b) shall be received in trust for the benefit of Secured Party,
shall be segregated from other funds of such Pledgor and shall forthwith
be paid over to Secured Party as Pledged Collateral in the same form as so
received (with any necessary endorsements).
(c) Irrevocable Proxy. In order to permit Secured Party to exercise
the voting and other consensual rights which it may be entitled to exercise
pursuant to Section 7(b)(i) and to receive all dividends and other distributions
which it may be entitled to receive under Section 7(a)(ii) or Section 7(b)(ii),
(i) each Pledgor shall promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment orders and other
instruments as Secured Party may from time to time reasonably request and (ii)
without limiting the effect of the immediately preceding clause (i), each
Pledgor hereby grants to Secured Party an IRREVOCABLE PROXY to vote the Pledged
Shares owned by such Pledgor and to exercise all other rights, powers,
privileges and remedies to which a holder of the Pledged Shares would be
entitled (including without limitation giving or withholding written consents of
shareholders, calling special meetings of shareholders and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Shares on the
record books of the issuer thereof) by any other Person (including the issuer of
the Pledged Shares or any officer or agent thereof), upon the occurrence of an
Event of Default and which proxy shall only terminate upon the payment in full
of the Secured Obligations.
SECTION 8. Secured Party Appointed Attorney-in-Fact.
Each Pledgor hereby irrevocably appoints Secured Party as such
Pledgor's attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:
(a) to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged Collateral
without the signature of such Pledgor;
(b) to ask, demand, collect, ▇▇▇ for, recover, compound, receive and
give acquittance and receipts for
VIII-10
moneys due and to become due under or in respect of any of the Pledged
Collateral;
(c) to receive, endorse and collect any instruments made payable to
such Pledgor representing any dividend, principal or interest payment or
other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same; and
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the
rights of Secured Party with respect to any of the Pledged Collateral.
SECTION 9. Secured Party May Perform.
If any Pledgor fails to perform any agreement contained herein,
Secured Party may itself perform, or cause performance of, such agreement, and
the expenses of Secured Party incurred in connection therewith shall be payable
by Pledgors under Section 13(b).
SECTION 10. Standard of Care.
The powers conferred on Secured Party hereunder are solely to
protect its interest in the Pledged Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the exercise of reasonable care
in the custody of any Pledged Collateral in its possession and the accounting
for moneys actually received by it hereunder, Secured Party shall have no duty
as to any Pledged Collateral, it being understood that Secured Party shall have
no responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not Secured Party has or is deemed to have
knowledge of such matters, (b) taking any necessary steps (other than steps
taken in accordance with the standard of care set forth above to maintain
possession of the Pledged Collateral) to preserve rights against any parties
with respect to any Pledged Collateral, (c) taking any necessary steps to
collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value. Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property consisting of negotiable securities.
SECTION 11. Remedies.
(a) If any Event of Default shall have occurred and be continuing,
Secured Party may exercise in respect of the Pledged
VIII-11
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "Code") (whether or not the Code applies to the affected
Pledged Collateral), and Secured Party may also in its sole discretion, without
notice except as specified below, sell the Pledged Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange or
broker's board or at any of Secured Party's offices or elsewhere, for cash, on
credit or for future delivery, at such time or times and at such price or prices
and upon such other terms as Secured Party may deem commercially reasonable,
irrespective of the impact of any such sales on the market price of the Pledged
Collateral. Secured Party or any Lender or Interest Rate Exchanger may be the
purchaser of any or all of the Pledged Collateral at any such sale and Secured
Party, as agent for and representative of Lenders and Interest Rate Exchangers
(but not any Lender or Lenders or Interest Rate Exchanger or Interest Rate
Exchangers in its or their respective individual capacities unless Requisite
Obligees (as defined in Section 15(a)) shall otherwise agree in writing), shall
be entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Pledged Collateral sold at any such
public sale, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Pledged Collateral payable by Secured
Party at such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Pledgor, and each
Pledgor hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Each Pledgor agrees that, to the extent notice of sale shall be required by law,
at least ten days' notice to such Pledgor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated to make any sale
of Pledged Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Pledgor hereby
waives any claims against Secured Party arising by reason of the fact that the
price at which any Pledged Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale, even if
Secured Party accepts the first offer received and does not offer such Pledged
Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Pledged Collateral are insufficient to pay all the Secured
Obligations, Pledgors shall be jointly and severally liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency.
VIII-12
(b) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or qualification of such
Pledged Collateral under the Securities Act and/or such state securities laws,
to limit purchasers to those who will agree, among other things, to acquire the
Pledged Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. Each Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable than those obtainable
through a public sale without such restrictions and, notwithstanding such
circumstances, such Pledgor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Secured Party shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Pledged Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell any or
all of the Pledged Collateral, upon written request, each Pledgor shall and
shall cause each issuer of any Pledged Shares owned by such Pledgor to be sold
hereunder from time to time to furnish to Secured Party all such information as
Secured Party may request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by Secured
Party in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.
SECTION 12. Application of Proceeds.
All proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral shall be applied as provided in subsection 2.4D of the Credit
Agreement.
SECTION 13. Indemnity and Expenses.
(a) Pledgors jointly and severally agree to indemnify Secured Party,
each Lender and each Interest Rate Exchanger from and against any and all
claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's or
such Lender's or Interest Rate Exchanger's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
VIII-13
(b) Pledgors jointly and severally agree to pay to Secured Party
upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by any Pledgor to perform or observe any of the provisions hereof.
(c) The obligations of Pledgors in this Section 13 shall survive the
termination of this Agreement and the discharge of Pledgors' other obligations
under this Agreement, the Lender Interest Rate Agreements, the Credit Agreement
and the other Loan Documents.
SECTION 14. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Pledged Collateral and shall (a) remain in full force and effect until the
payment in full of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Pledgors and their respective successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Pledged Collateral
shall revert to the applicable Pledgors. Upon any such termination Secured Party
will, at Pledgors' expense, execute and deliver to Pledgors such documents as
Pledgors shall reasonably request to evidence such termination and Pledgors
shall be entitled to the return, upon their request and at their expense,
against receipt and without recourse to Secured Party, of such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
SECTION 15. Secured Party as Administrative Agent.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action
VIII-14
(including without limitation the release or substitution of Pledged
Collateral), solely in accordance with this Agreement and the Credit Agreement;
provided that Secured Party shall exercise, or refrain from exercising, any
remedies provided for in Section 11 in accordance with the instructions of (i)
Requisite Lenders or (ii) after payment in full of all Obligations under the
Credit Agreement and the other Loan Documents, the holders of a majority of the
aggregate notional amount (or, with respect to any Lender Interest Rate
Agreement that has been terminated in accordance with its terms, the amount then
due and payable (exclusive of expenses and similar payments but including any
early termination payments then due) under such Lender Interest Rate Agreement)
under all Lender Interest Rate Agreements (Requisite Lenders or, if applicable,
such holders being referred to herein as "Requisite Obligees"). In furtherance
of the foregoing provisions of this Section 15(a), each Interest Rate Exchanger,
by its acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Pledged Collateral hereunder, it being
understood and agreed by such Interest Rate Exchanger that all rights and
remedies hereunder may be exercised solely by Secured Party for the benefit of
Lenders and Interest Rate Exchangers in accordance with the terms of this
Section 15(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to
VIII-15
its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
SECTION 16. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by any Pledgor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Pledgors;
provided that any Pledge Amendment in the form of Schedule II annexed hereto or
any amendment hereto pursuant to Section 19 shall be effective upon execution by
any Pledgor and Pledgors hereby waive any requirement of notice of or consent to
any such Pledge Amendment or amendment. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 17. Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be as
provided in subsection 10.8 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 18. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 19. Additional Pledgors.
From time to time subsequent to the date hereof, Subsidiaries of
Company may become parties hereto, as additional Pledgors (each an "Additional
Pledgor"), by executing an acknowledgement to this Agreement substantially in
the form of Schedule III annexed hereto. Upon delivery of any such
VIII-16
counterpart to Administrative Agent and Secured Party, notice of which is hereby
waived by Pledgors, each such Additional Pledgor shall be a Pledgor and shall be
as fully a party hereto as if such Additional Pledgor were an original signatory
hereto. Each Pledgor expressly agrees that its obligations arising hereunder
shall not be affected or diminished by the addition or release of any other
Pledgor hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Pledgor hereunder. This Agreement
shall be fully effective as to any Pledgor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Pledgor hereunder.
SECTION 20. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 21. Headings.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 22. Governing Law; Terms; Rules of Construction.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT
THE CODE PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined. The rules of construction set forth in subsection 1.3 of the Credit
Agreement shall be applicable to this Agreement mutatis mutandis.
SECTION 23. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR ARISING OUT OF
OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PLEDGOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
VIII-17
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III)
AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH
PLEDGOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 17; (IV) AGREES THAT
SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER SUCH PLEDGOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES
THAT SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MATTER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH PLEDGOR IN THE COURTS OF
ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 23
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
SECTION 24. Waiver of Jury Trial.
PLEDGORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Pledgor and Secured Party acknowledge that this waiver is
a material inducement for Pledgors and Secured Party to enter into a business
relationship, that Pledgors and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Pledgor and Secured Party further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 24 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 25. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
VIII-18
[Remainder of page intentionally left blank]
VIII-19
IN WITNESS WHEREOF, Pledgors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
AURORA FOODS INC.
By:___________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Secured Party
By:___________________________
Name:
Title:
VIII-20
SCHEDULE I
TO PLEDGE AGREEMENT
Attached to and forming a part of the Third Amended and Restated
Pledge Agreement dated as of June __, 1998, by and among the Pledgors referred
to therein and The Chase Manhattan Bank, as Secured Party.
Part A
================================================================================
Percentage
of
Stock Number Outstanding
Stock Class of Certificate Par of Shares
Pledgor Issuer Stock Nos. Value Shares Pledged
================================================================================
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
Part B
=========================================================================
Pledgor Debt Issuer Amount of Indebtedness
=========================================================================
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
=========================================================================
VIII-21
SCHEDULE II
TO PLEDGE AGREEMENT
[FORM OF PLEDGE AMENDMENT]
This Pledge Amendment, dated ____________, [199_] [200_] is
delivered pursuant to Section 6(b) of the Pledge Agreement referred to below.
The undersigned hereby agrees that this Pledge Amendment may be attached to the
Third Amended and Restated Pledge Agreement dated as of June __, 1998, by and
among the Pledgors referred to therein and The Chase Manhattan Bank, as Secured
Party (the "Pledge Agreement", capitalized terms defined therein being used
herein as therein defined), and that the [Pledged Shares] [Pledged Debt] listed
on this Pledge Amendment shall be deemed to be part of the [Pledged Shares]
[Pledged Debt] and shall become part of the Pledged Collateral and shall secure
all Secured Obligations.
[NAME OF PLEDGOR]
By:___________________________
Name:
Title:
================================================================================
Percentage of
Stock Number Outstanding
Class of Certificate of Shares
Stock Issuer Stock Nos. Par Value Shares Pledged
================================================================================
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
========================================================
Debt Issuer Amount of
Indebtedness
========================================================
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
========================================================
VIII-22
SCHEDULE III
TO PLEDGE AGREEMENT
[FORM OF PLEDGE ACKNOWLEDGEMENT]
This Pledge Acknowledgement, dated ____________, [199_] [200_], is
delivered pursuant to Section 19 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Acknowledgement may be attached to
the Third Amended and Restated Pledge Agreement dated June __, 1998, by and
among the Pledgors referred to therein and The Chase Manhattan Bank, as Secured
Party (the "Pledge Agreement", capitalized terms defined therein being used
herein as therein defined), that the undersigned by executing and delivering
this Acknowledgement hereby becomes a Pledgor under the Pledge Agreement in
accordance with Section 19 thereof and agrees to be bound by all of the terms
thereof, and that the [Pledged Shares] [Pledged Debt] listed on this Pledge
Acknowledgement shall be deemed to be part of the [Pledged Shares] [Pledged
Debt] and shall become part of the Pledged Collateral and shall secure all
Secured Obligations.
[NAME OF ADDITIONAL PLEDGOR]
By:_________________________
Name:
Title:
Notice Address:
____________________________
____________________________
____________________________
VIII-23
================================================================================
Percentage of
Stock Number Outstanding
Class of Certificate of Shares
Stock Issuer Stock Nos. Par Value Shares Pledged
================================================================================
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
========================================================
Debt Issuer Amount of
Indebtedness
========================================================
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
========================================================
VIII-24
EXHIBIT IX
[FORM OF SECURITY AGREEMENT]
THIRD AMENDED AND RESTATED SECURITY AGREEMENT
This THIRD AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement") is
dated as of June __, 1998 and entered into by and among AURORA FOODS INC., a
Delaware corporation ("Company" or "Grantor"); provided that after the Effective
Date, "Grantors" shall mean and include Company and any Additional Grantors (as
hereinafter defined)) and THE CHASE MANHATTAN BANK, as administrative agent for
and representative of (in such capacity herein called "Secured Party") the
financial institutions ("Lenders") party to the Credit Agreement referred to
below and any Interest Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pursuant to that certain Third Amended and Restated Credit
Agreement dated as of June __, 1998 (said Third Amended and Restated Credit
Agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined)
by and among Company, Lenders, Secured Party, as Administrative Agent, National
Westminster Bank PLC, as Syndication Agent, and Swiss Bank Corporation, as
Documentation Agent, Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company.
B. Company may from time to time enter, or may from time to time
have entered, into one or more Interest Rate Agreements (collectively, the
"Lender Interest Rate Agreements") with one or more Lenders or their Affiliates
(in such capacity, collectively, "Interest Rate Exchangers") in accordance with
the terms of the Credit Agreement, and it is desired that the obligations of
Company under the Lender Interest Rate Agreements, including without limitation
the obligation of Company to make payments thereunder in the event of early
termination thereof (all such obligations being the "Interest Rate
Obligations"), together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be secured hereunder.
C. Additional Grantors shall execute and deliver counterparts to
that certain Subsidiary Guaranty (said Subsidiary Guaranty, as it may be
amended, restated, supplemented or otherwise modified from time to time, being
the "Subsidiary Guaranty") in favor of Secured Party for the benefit of Lenders
and any Interest Rate Exchangers, pursuant to which each Additional Grantor
shall guaranty the prompt payment and performance when due of all obligations of
Company under the Credit Agreement and the other Loan Documents and all
obligations
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of Company under the Lender Interest Rate Agreements, including without
limitation the obligation of Company to make payments thereunder in the event of
early termination thereof.
D. It is a condition precedent to the extensions of credit by
Lenders under the Credit Agreement that Grantors shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and to induce Interest Rate Exchangers to enter into the Lender
Interest Rate Agreements, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, each Grantor hereby
agrees with Secured Party as follows:
SECTION 1. Grant of Security.
Each Grantor hereby assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of such Grantor's right, title and
interest in and to the following, in each case whether now or hereafter existing
or in which Grantor now has or hereafter acquires an interest and wherever the
same may be located (the "Collateral"):
(a) all equipment in all of its forms (including, but not limited
to, all machinery, all computers, all data processing, computer or office
equipment, all furniture and all trucks and other vehicles), all parts
thereof and all accessions thereto (any and all such equipment, parts and
accessions being the "Equipment");
(b) all inventory in all of its forms (including, but not limited
to, (i) all goods held by such Grantor for sale or lease or to be
furnished under contracts of service or so leased or furnished, (ii) all
raw materials, work in process, finished goods, samples, and materials
used or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or otherwise
used or consumed in such Grantor's business, (iii) all goods in which such
Grantor has an interest in mass or a joint or other interest or right of
any kind, and (iv) all goods which are returned to or repossessed by such
Grantor) and all accessions thereto and products thereof (all such
inventory, accessions and products being the "Inventory") and all
negotiable and non-negotiable documents of title (including without
limitation warehouse receipts, dock receipts and bills of lading) issued
by any Person covering any Inventory (any such negotiable document of
title being a "Negotiable Document of Title");
(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights
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and obligations of any kind owned by or owing to such Grantor and all
rights in, to and under all security agreements, leases and other
contracts securing or otherwise relating to any such accounts, contract
rights, chattel paper, documents, instruments, general intangibles or
other obligations (any and all such accounts, contract rights, chattel
paper, documents, instruments, general intangibles and other obligations
being the "Accounts", and any and all such security agreements, leases and
other contracts being the "Related Contracts");
(d) all agreements to which such Grantor is a party, including
without limitation those listed in Schedule 1(d) annexed hereto, as each
such agreement may be amended, restated, supplemented or otherwise
modified from time to time (said agreements, as so amended, restated,
supplemented or otherwise modified, being referred to herein individually
as an "Assigned Agreement" and collectively as the "Assigned Agreements"),
including, without limitation, (i) all rights of such Grantor to receive
moneys due or to become due under or pursuant to the Assigned Agreements,
(ii) all rights of such Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreements,
(iii) all claims of such Grantor for damages arising out of any breach of
or default under the Assigned Agreements, and (iv) all rights of such
Grantor to terminate, amend, supplement, modify or exercise rights or
options under the Assigned Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;
(e) all cash, money, currency and deposit accounts, including
without limitation demand, time, savings, passbooks or similar accounts
maintained with Lenders or other banks, savings and loan associations or
other financial institutions;
(f) all trademarks, trademark applications, trade names, trade
secrets, trade dress, service marks, business names, patents, patent
applications, licenses, copyrights and copyright applications owned by
such Grantor, and all goodwill associated with any of the foregoing;
(g) to the extent not included in any other paragraph of this
Section 1, all other general intangibles (including without limitation
unpatented formulas, recipes, manufacturing methods and processes,
inventions, discoveries, tax refunds, rights to payment or performance,
choses in action and judgments taken on any rights or claims included in
the Collateral);
(h) all plant fixtures, business fixtures and other fixtures and
storage and office facilities, and all accessions thereto and products
thereof;
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(i) all books, records, ledger cards, files, sales records, sales
and promotional data, invoices, product specifications, drawings,
advertising materials, customer lists, cost and pricing information,
supplier lists, business plans, catalogs, quality control manuals,
blueprints, correspondence, computer programs, tapes, disks and related
data processing software that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful in
the collection thereof or realization thereupon; and
(j) all proceeds, products, rents and profits of or from any and all
of the foregoing Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "proceeds" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary.
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral assigned by each Grantor
is collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including without limitation the payment of amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all Secured Obligations
with respect to such Grantor. "Secured Obligations" means
(a) with respect to Company, all obligations and liabilities of
every nature of Company now or hereafter existing under or arising out of
or in connection with the Credit Agreement and the other Loan Documents
and any Lender Interest Rate Agreement, and
(b) with respect to each Additional Grantor, all obligations and
liabilities of every nature of Additional Grantors now or hereafter
existing under or arising out of or in connection with the Subsidiary
Guaranty,
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary,
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direct or indirect, absolute or contingent, liquidated or unliquidated, whether
or not jointly owed with others, and whether or not from time to time decreased
or extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from Secured
Party or any Lender or Interest Rate Exchanger as a preference, fraudulent
transfer or otherwise, and all obligations of every nature of Grantors now or
hereafter existing under this Agreement.
SECTION 3. Grantors Remain Liable.
Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts and agreements included
in the Collateral by reason of this Agreement, nor shall Secured Party be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 4. Representations and Warranties.
Each Grantor represents and warrants as of the date it becomes a
party hereto as follows:
(a) Ownership of Collateral. Except as expressly permitted by the
Credit Agreement and except for the security interest created by this
Agreement, such Grantor owns the Collateral owned by such Grantor free and
clear of any Lien.
(b) Locations of Equipment and Inventory. All of the Equipment and
Inventory is, as of the date such Grantor has become a party hereto,
located at the places specified in Schedule 4(b) annexed hereto.
(c) Negotiable Documents of Title. No Negotiable Documents of Title
are outstanding with respect to any of the Inventory.
(d) Office Locations. The chief place of business, the chief
executive office and the office where such Grantor keeps its records
regarding the Accounts and all originals of all chattel paper that
evidence Accounts are located at the locations set forth on Schedule 4(d)
annexed hereto.
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(e) Names. No Grantor has in the past done, and no Grantor now does,
business under any other name (including any trade-name or fictitious
business name) except the names listed in Schedule 4(e) annexed hereto.
(f) Delivery of Certain Collateral. All notes and other instruments
(excluding checks) comprising any and all items of Collateral have been
delivered to Secured Party duly endorsed and accompanied by duly executed
instruments of transfer or assignment in blank.
(g) Perfection. The security interests in the Collateral granted to
Secured Party for the ratable benefit of the Lenders and Interest Rate
Exchangers hereunder constitute valid security interests in the
Collateral. Upon the filing of UCC financing statements naming each
Grantor as "debtor", naming Secured Party as "secured party" and
describing the Collateral in the filing offices set forth on Schedule 4(g)
annexed hereto, the security interests in the Collateral granted to
Secured Party for the ratable benefit of the Lenders and Interest Rate
Exchangers will, to the extent a security interest in the Collateral may
be perfected by filing UCC financing statements, constitute perfected
security interests therein prior to all other Liens.
SECTION 5. Further Assurances.
(a) Each Grantor agrees that from time to time, at the expense of
Grantors, such Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor will:
(i) at the request of Secured Party, ▇▇▇▇ conspicuously each item of chattel
paper included in the Accounts, each Related Contract and, at the request of
Secured Party, each of its records pertaining to the Collateral, with a legend,
in form and substance satisfactory to Secured Party, indicating that such
Collateral is subject to the security interest granted hereby, (ii) at the
request of Secured Party, deliver and pledge to Secured Party hereunder all
promissory notes and other instruments (including checks) and all original
counterparts of chattel paper constituting Collateral, duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to Secured Party, (iii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (iv) promptly after the acquisition by such
Grantor of any item of
IX-6
Equipment which is covered by a certificate of title under a statute of any
jurisdiction under the law of which indication of a security interest on such
certificate is required as a condition of perfection thereof, execute and file
with the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, (v) within 30 days after the end of each calendar year and June 30 of
each calendar year, deliver to Secured Party copies of all such applications or
other documents filed during such semiannual period and copies of all such
certificates of title issued during such semiannual period indicating the
security interest created hereunder in the items of Equipment covered thereby,
(vi) at any reasonable time, upon request by Secured Party, exhibit the
Collateral to and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (vii) at Secured Party's request,
appear in and defend any action or proceeding that may affect such Grantor's
title to or Secured Party's security interest in all or any part of the
Collateral.
(b) Each Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of any Grantor. Each Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or of
a financing statement signed by such Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Each Grantor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
SECTION 6. Certain Covenants of Grantors.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the
Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any change
in such Grantor's chief place of business, chief executive office or
residence or the office where such Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts;
and
IX-7
(d) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Collateral, except
to the extent the validity thereof is being contested in good faith;
provided that such Grantor shall in any event pay such taxes, assessments,
charges, levies or claims not later than five days prior to the date of
any proposed sale under any judgement, writ or warrant of attachment
entered or filed against such Grantor or any of the Collateral as a result
of the failure to make such payment.
SECTION 7. Special Covenants With Respect to Equipment and Inventory.
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at the
places therefor specified on Schedule 4(b) annexed hereto or, upon 30
days' prior written notice to Secured Party, at such other places in
jurisdictions where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby, or to enable Secured
Party to exercise and enforce its rights and remedies hereunder, with
respect to such Equipment and Inventory shall have been taken;
(b) cause the Equipment owned by such Grantor to be maintained and
preserved in the same condition, repair and working order as when new,
ordinary wear and tear excepted, and in accordance with such Grantor's
past practices. Each Grantor shall promptly furnish to Secured Party a
statement respecting any material loss or damage to any of the Equipment
owned by such Grantor;
(c) keep correct and accurate records of Inventory owned by such
Grantor, itemizing and describing the kind, type and quantity of such
Inventory, such Grantor's cost therefor and (where applicable) the current
list prices for such Inventory;
(d) if any Inventory is in possession or control of any of such
Grantor's agents or processors, if the aggregate book value of all such
Inventory exceeds $300,000, and in any event upon the occurrence of an
Event of Default (as defined in the Credit Agreement) or the occurrence of
an Early Termination Date (as defined in a Master Agreement or an Interest
Rate Swap Agreement or Interest Rate and Currency Exchange Agreement in
the form prepared by the International Swap and Derivatives Association
Inc. or a similar event under any similar swap agreement) under any Lender
Interest Rate Agreement (either such occurrence being an "Event of
Default" for purposes of this Agreement), instruct such agent or processor
to hold all such Inventory
IX-8
for the account of Secured Party and subject to the instructions of
Secured Party.
(e) promptly upon the issuance and delivery to such Grantor of any
Negotiable Document of Title, deliver such Negotiable Document of Title to
Secured Party.
SECTION 8. Insurance.
Each Grantor shall, at its own expense, maintain insurance with
respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement.
SECTION 9. Special Covenants with respect to Accounts and Related Contracts.
(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 4 or, upon 30
days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security interest
granted or purported to be granted hereby, or to enable Secured Party to
exercise and enforce its rights and remedies hereunder, with respect to such
Accounts and Related Contracts shall have been taken. Each Grantor will hold and
preserve such records and chattel paper and will permit representatives of
Secured Party at any time during normal business hours to inspect and make
abstracts from such records and chattel paper, and each Grantor agrees to render
to Secured Party, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. Promptly upon the
request of Secured Party, each Grantor shall deliver to Secured Party complete
and correct copies of each Related Contract.
(b) Each Grantor shall, for not less than 3 years from the date on
which such Account arose, maintain (i) complete records of each Account of such
Grantor, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor under the Accounts and Related Contracts. In
connection with such collections, each Grantor may take (and, at Secured Party's
direction, shall take) such action as such Grantor or Secured Party may deem
necessary or advisable to enforce collection of amounts due or to become due
under the Accounts; provided, however, that Secured Party shall have the right
at any time, upon the occurrence and during the continuation of an Event of
Default or a Potential Event of Default and upon written notice
IX-9
to such Grantor of its intention to do so, to notify the account debtors or
obligors under any Accounts of the assignment of such Accounts to Secured Party
and to direct such account debtors or obligors to make payment of all amounts
due or to become due to such Grantor thereunder directly to Secured Party, to
notify each Person maintaining a lockbox or similar arrangement to which account
debtors or obligors under any Accounts have been directed to make payment to
remit all amounts representing collections on checks and other payment items
from time to time sent to or deposited in such lockbox or other arrangement
directly to Secured Party and, upon such notification and at the expense of
Grantors, to enforce collection of any such Accounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by such Grantor of the
notice from Secured Party referred to in the proviso to the preceding sentence,
(i) all amounts and proceeds (including checks and other instruments) received
by such Grantor in respect of the Accounts and the Related Contracts shall be
received in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of such Grantor and shall be forthwith paid over or
delivered to Secured Party in the same form as so received (with any necessary
endorsement) to be held as cash Collateral and applied as provided by Section
18, and (ii) such Grantor shall not adjust, settle or compromise the amount or
payment of any Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.
SECTION 10. Special Provisions With Respect to the Assigned Agreements.
(a) Each Grantor shall at its expense:
(i) if consistent with sound business practices, perform and observe
all terms and provisions of the Assigned Agreements to be performed or
observed by it, maintain the Assigned Agreements in full force and effect,
enforce the Assigned Agreements in accordance with their terms, and take
all such action to such end as may be from time to time requested by
Secured Party; and
(ii) upon the reasonable request of Secured Party, furnish to
Secured Party, promptly upon receipt thereof, copies of all notices,
requests and other documents received by such Grantor under or pursuant to
the Assigned Agreements, and from time to time (A) furnish to Secured
Party such information and reports regarding the Assigned Agreements as
Secured Party may reasonably request and (B) upon request of Secured Party
make to the parties to such Assigned Agreements such demands and requests
for information and reports or for action as such Grantor is entitled to
make under the Assigned Agreements.
(b) Upon the occurrence and during the continuance of an Event of
Default, no Grantor shall:
IX-10
(i) cancel or terminate any of the Assigned Agreements or consent to
or accept any cancellation or termination thereof;
(ii) amend or otherwise modify the Assigned Agreements or give any
consent, waiver or approval thereunder;
(iii) waive any default under or breech of the Assigned Agreements;
(iv) consent to or permit or accept any prepayment of amounts to
become due under or in connection with the Assigned Agreements, except as
expressly provided therein; or
(v) take any other action in connection with the Assigned Agreements
that would materially impair the value of the interest or rights of such
Grantor thereunder or that would materially impair the interest or rights
of Secured Party.
SECTION 11. Deposit Accounts.
Upon the occurrence and during the continuation of an Event of
Default, Secured Party may exercise dominion and control over, and refuse to
permit further withdrawals (whether of money, securities, instruments or other
property) from any deposit accounts maintained with Secured Party constituting
part of the Collateral.
SECTION 12. License of Patents, Trademarks, Copyrights, etc.
Each Grantor hereby assigns, transfers and conveys to Secured Party,
effective upon the occurrence of any Event of Default, the nonexclusive right
and license to use all trademarks, tradenames, copyrights, patents or technical
processes owned or held by such Grantor that are necessary for the use and
enjoyment of the Collateral and any other collateral granted by such Grantor as
security for the Secured Obligations, together with any goodwill associated
therewith, all to the extent necessary to enable Secured Party to use, possess
and realize on the Collateral and to enable any successor or assign to enjoy the
benefits of the Collateral. This right and license shall inure to the benefit of
all successors, assigns and transferees of Secured Party and its successors,
assigns and transferees, whether by voluntary conveyance, operation of law,
assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise.
Such right and license is granted free of charge, without requirement that any
monetary payment whatsoever be made to such Grantor.
SECTION 13. Transfers and Other Liens.
No Grantor shall:
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(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit
Agreement; or
(b) except for the security interest created by this Agreement,
create or suffer to exist any Lien upon or with respect to any of the
Collateral to secure the indebtedness or other obligations of any Person.
SECTION 14. Secured Partner Appointed Attorney-in-Fact.
Each Grantor hereby irrevocably appoints Secured Party as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to obtain and adjust insurance required to be maintained by such
Grantor or paid to Secured Party pursuant to Section 8;
(b) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, ▇▇▇ for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clauses (a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by Secured
Party in its sole discretion, any such payments made by Secured Party to
become obligations of such Grantor to Secured Party, due and payable
immediately without demand;
(f) upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors,
assignments,
IX-12
verifications and notices in connection with Accounts and other documents
relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and Grantors' expense, at
any time or from time to time, all acts and things that Secured Party
deems necessary to protect, preserve or realize upon the Collateral and
Secured Party's security interest therein in order to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
SECTION 15. Secured Party May Perform.
If any Grantor fails to perform any agreement contained herein,
Secured Party may itself perform, or cause performance of, such agreement, and
the expenses of Secured Party incurred in connection therewith shall be payable
by such Grantor under Section 19(b).
SECTION 16. Standard of Care.
The powers conferred on Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.
SECTION 17. Remedies.
If any Event of Default shall have occurred and be continuing,
Secured Party may exercise in respect of the Collateral, in addition to all
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "Code") (whether
or not the Code applies to the affected Collateral), and also may (a) require
each Grantor to, and each Grantor hereby agrees that it will at its expense and
upon request of Secured Party forthwith, assemble all or part of the Collateral
as directed by Secured Party and make it available to Secured Party at a place
to be designated by Secured Party that is reasonably convenient to both parties,
(b) enter onto the
IX-13
property where any Collateral is located and take possession thereof with or
without judicial process, (c) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (d) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (c) and collecting any
Secured Obligation, and (e) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable. Secured Party or
any Lender or Interest Rate Exchanger may be the purchaser of any or all of the
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders and Interest Rate Exchangers (but not any Lender or Lenders or
Interest Rate Exchanger or Interest Rate Exchangers in its or their respective
individual capacities unless Requisite Obligees (as defined in Section 21(a))
shall otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
any Grantor, and each Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to such Grantor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against Secured Party arising
by reason of the fact that the price at which any Collateral may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale, even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree. If the proceeds of any sale
or other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be jointly and severally liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency.
IX-14
SECTION 18. Application of Proceeds.
Except as expressly provided elsewhere in this Agreement, all
proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral shall be applied as
provided in subsection 2.4D of the Credit Agreement.
SECTION 19. Indemnity and Expenses.
(a) Grantors jointly and severally agree to indemnify Secured Party,
each Lender and each Interest Rate Exchanger from and against any and all
claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's or
such Lender's or Interest Rate Exchanger's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured Party
upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of Secured Party hereunder, or (iv)
the failure by any Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantors in this Section 19 shall survive the
termination of this Agreement and the discharge of Grantors' other obligations
under this Agreement, the Lender Interest Rate Agreements, the Credit Agreement
and the other Loan Documents.
SECTION 20. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Grantors and their respective successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the payment in full of all
Secured
IX-15
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantors. Upon any such termination Secured Party will,
at Grantors' expense, execute and deliver to Grantors such documents as Grantors
shall reasonably request to evidence such termination.
SECTION 21. Secured Party as Administrative Agent.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 17 in accordance with the instructions of (i) Requisite Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the holders of a majority of the aggregate notional amount
(or, with respect to any Lender Interest Rate Agreement that has been terminated
in accordance with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early termination payments then
due) under such Lender Interest Rate Agreement) under all Lender Interest Rate
Agreements (Requisite Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this Section 21(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize upon
any of the Collateral hereunder, it being understood and agreed by such Interest
Rate Exchanger that all rights and remedies hereunder may be exercised solely by
Secured Party for the benefit of Lenders and Interest Rate Exchangers in
accordance with the terms of this Section 21(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and
IX-16
become vested with all the rights, powers, privileges and duties of the retiring
or removed Secured Party under this Agreement, and the retiring or removed
Secured Party under this Agreement shall promptly (i) transfer to such successor
Secured Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions, as
may be necessary or appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder, whereupon
such retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
SECTION 22. Additional Grantors.
From time to time subsequent to the date hereof, Subsidiaries of
Company may become parties hereto as additional Grantors (each an "Additional
Grantor") by executing a counterpart of this Agreement and delivering
supplements to Schedule 4(b), Schedule 4(d), Schedule 4(e) and Schedule 4(g) in
substantially the forms annexed hereto, which supplements shall thereby
supplement and amend such Schedules. Upon delivery of any such counterpart to
Administrative Agent and Secured Party, notice of which is hereby waived by
Grantors, each such Additional Grantor shall be a Grantor and shall be as fully
a party hereto as if such Additional Grantor were an original signatory hereto.
Each Grantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.
SECTION 23. Amendments; Etc.
No amendment, modification, termination or waiver of any provision
of this Agreement, and no consent to any departure by any Grantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party and, in the case of any such amendment or modification, by
Grantors; provided that any amendment hereto pursuant to Section 22 shall be
effective upon execution by any Additional Grantor and Grantors hereby waive any
requirement of notice of or consent to any such amendment. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
IX-17
SECTION 24. Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be as
provided in subsection 10.8 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 25. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 26. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 27. Headings.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 28. Governing Law; Terms; Rules of Construction.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT
THE CODE PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST
IX-18
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless
otherwise defined herein or in the Credit Agreement, terms used in Articles 8
and 9 of the Uniform Commercial Code in the State of New York are used herein as
therein defined. The rules of construction set forth in subsection 1.3 of the
Credit Agreement shall be applicable to this Agreement mutatis mutandis.
SECTION 29. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF
OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 24; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION;
AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 29 RELATING TO JURISDICTION
AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE
UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 30. Waiver of Jury Trial.
GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Grantor and Secured Party acknowledge that this waiver is
a material inducement for Grantors and Secured Party to enter into a business
relationship, that Grantors and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Grantor and Secured Party further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR
IX-19
IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS
SECTION 30 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
SECTION 31. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
IX-20
IN WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
AURORA FOODS INC.
By:__________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Secured Party
By:__________________________
Name:
Title:
IX-21
IN WITNESS WHEREOF, the undersigned Additional Grantor has caused
this Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of ____________________, [199_] [200_].
[NAME OF ADDITIONAL GRANTOR]
By:__________________________
Name:
Title:
Notice Address:
_____________________________
_____________________________
_____________________________
IX-22
SCHEDULE 1(d)
TO
SECURITY AGREEMENT
Assigned Agreements
Name of Grantor Assigned Agreements
--------------- -------------------
IX-23
SCHEDULE 4(b)
TO
SECURITY AGREEMENT
Locations of Equipment and Inventory
Name of Grantor Locations of Equipment and Inventory
--------------- ------------------------------------
IX-24
SCHEDULE 4(d)
TO
SECURITY AGREEMENT
Office Locations
Name of Grantor Office Locations
--------------- ----------------
IX-25
SCHEDULE 4(e)
TO
SECURITY AGREEMENT
Other Names
Name of Grantor Other Names
--------------- -----------
IX-26
SCHEDULE 4(g)
TO
SECURITY AGREEMENT
Filing Offices
--------------
IX-27
EXHIBIT X
[FORM OF VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT]
VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT
This VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT (this
"Agreement") is dated as of June __, 1998 and entered into by and among AURORA
FOODS INC., a Delaware corporation ("Company") (Company being referred to herein
as a "Grantor"; provided that after the Effective Date, "Grantors" shall mean
and include Company and any Additional Grantors (as hereinafter defined)), and
THE CHASE MANHATTAN BANK, as administrative agent for and representative of (in
such capacity herein called "Secured Party") the financial institutions
("Lenders") party to the Credit Agreement referred to below and any Interest
Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pursuant to that certain Third Amended and Restated Credit
Agreement dated as of June __, 1998 (said Third Amended and Restated Credit
Agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined)
by and among Company, Lenders, Secured Party, as Administrative Agent, National
Westminster Bank PLC, as Syndication Agent, and Swiss Bank Corporation, as
Documentation Agent, Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Company.
B. Company may from time to time enter, or may from time to time
have entered, into one or more Interest Rate Agreement (collectively, the
"Lender Interest Rate Agreements") with one or more Lenders or their Affiliates
(in such capacity, collectively, "Interest Rate Exchangers") in accordance with
the terms of the Credit Agreement, and it is desired that the obligations of
Company under the Lender Interest Rate Agreements, including without limitation
the obligation of Company to make payments thereunder in the event of early
termination thereof (all such obligations being the "Interest Rate
Obligations"), together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be secured hereunder.
C. Additional Grantors shall execute and deliver counterparts to
that certain Subsidiary Guaranty (said Subsidiary Guaranty, as it may be
amended, restated, supplemented or otherwise modified from time to time, being
the "Subsidiary Guaranty") in favor of Secured Party for the benefit of Lenders
and any Interest Rate Exchangers, pursuant to which each Additional Grantor
shall guaranty the prompt payment and performance when due of all obligations of
Company under the
X-1
Credit Agreement and the other Loan Documents and all obligations of Company
under the Lender Interest Rate Agreements, including without limitation the
obligation of Company to make payments thereunder in the event of early
termination thereof.
D. Grantors own and use in their business, and will in the future
adopt and so use, various intangible assets, including trademarks, service
marks, designs, logos, indicia, trade names, corporate names, company names,
business names, fictitious business names, trade styles and/or other source
and/or business identifiers and applications pertaining thereto (collectively,
the "Trademarks").
E. Secured Party desires Grantors to assign and grant to it a lien
on and security interest in all of Grantors' existing and future Trademarks, all
registrations that have been or may hereafter be issued or applied for thereon
in the United States and any state thereof and in foreign countries (the
"Registrations"), all common law and other rights in and to the Trademarks in
the United States and any state thereof and in foreign countries (the "Trademark
Rights"), all goodwill of Grantors' business symbolized by the Trademarks and
associated therewith, including without limitation the documents and things
described in Section 1(b) (the "Associated Goodwill"), and all proceeds of the
Trademarks, the Registrations, the Trademark Rights and the Associated Goodwill,
and Grantors agree to assign and grant to Secured Party a secured and protected
interest in the Trademarks, the Registrations, the Trademark Rights, the
Associated Goodwill and all the proceeds thereof as provided herein.
F. Pursuant to the Security Agreement, each Grantor has assigned and
granted to Secured Party a lien on and security interest in, among other assets,
all Grantors' equipment, inventory, accounts and general intangibles relating to
the products and services sold or delivered under or in connection with the
Trademarks such that, upon the occurrence and during the continuation of an
Event of Default (as defined in the Credit Agreement) or the occurrence of an
Early Termination Date (as defined in a Master Agreement or an Interest Rate
Swap Agreement or Interest Rate and Currency Exchange Agreement in the form
prepared by the International Swap and Derivatives Association Inc. or a similar
event under any similar swap agreement) under any Lender Interest Rate Agreement
(either such occurrence being an "Event of Default" for purposes of this
Agreement), Secured Party would be able to exercise its remedies consistent with
the Security Agreement, this Agreement and applicable law to foreclose upon
Grantors' business and use the Trademarks, the Registrations and the Trademark
Rights in conjunction with the continued operation of such business, maintaining
substantially the same product and service specifications and quality as
maintained by Grantors, and benefit from the Associated Goodwill.
G. It is a condition precedent to the extensions of credit by
Lenders under the Credit Agreement that Grantors shall
X-2
have assigned and granted the security interests and undertaken the obligations
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and other extensions of credit under the Credit
Agreement and to induce Interest Rate Exchangers to enter into the Lender
Interest Rate Agreements, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, each Grantor hereby
agrees with Secured Party as follows:
SECTION 1. Assignment and Grant of Security.
Each Grantor hereby grants to Secured Party a security interest in
all of such Grantor's right, title and interest in and to the following, in each
case whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the "Collateral"):
(a) each of the Trademarks and rights and interests in Trademarks
which are presently, or in the future may be, owned or held (whether
pursuant to a license or otherwise) by such Grantor, in whole or in part
(including without limitation the Trademarks specifically identified in
Schedule I annexed hereto, as the same may be amended pursuant hereto from
time to time), and including all Trademark Rights with respect thereto and
all federal, state and foreign Registrations therefor heretofore or
hereafter granted or applied for, the right (but not the obligation) to
register claims under any state or federal trademark law or regulation or
any trademark law or regulation of any foreign country and to apply for,
renew and extend the Trademarks, Registrations and Trademark Rights, the
right (but not the obligation) to ▇▇▇ or bring opposition or cancellation
proceedings in the name of such Grantor or in the name of Secured Party or
otherwise for past, present and future infringements of the Trademarks,
Registrations or Trademark Rights and all rights (but not obligations)
corresponding thereto in the United States and any foreign country, and
the Associated Goodwill; it being understood that the rights and interests
included herein shall include, without limitation, all rights and
interests pursuant to licensing or other contracts in favor of such
Grantor pertaining to the Trademarks, Registrations or Trademark Rights
presently or in the future owned or used by third parties but, in the case
of third parties which are not Affiliates of such Grantor, only to the
extent permitted by such licensing or other contracts or otherwise
permitted by applicable law and, if not so permitted under any such
contracts and applicable law, only with the consent of such third parties;
(b) the following documents and things in such Grantor's possession,
or subject to such Grantor's right to possession, related to (Y) the
production, sale and delivery
X-3
by such Grantor, or by any Affiliate, licensee or subcontractor of such
Grantor, of products or services sold or delivered by or under the
authority of such Grantor in connection with the Trademarks, Registrations
or Trademark Rights (which products and services shall, for purposes of
this Agreement, be deemed to include, without limitation, products and
services sold or delivered pursuant to merchandising operations utilizing
any Trademarks, Registrations or Trademark Rights); or (Z) any retail or
other merchandising operations conducted under the name of or in
connection with the Trademarks, Registrations or Trademark Rights by such
Grantor or any Affiliate, licensee or subcontractor of such Grantor:
(i) all lists and ancillary documents that identify and
describe any of such Grantor's customers, or those of their
Affiliates, licensees or subcontractors, for products sold and
services delivered under or in connection with the Trademarks or
Trademark Rights, including without limitation any lists and
ancillary documents that contain a customer's name and address, the
name and address of any of its warehouses, branches or other places
of business, the identity of the Person or Persons having the
principal responsibility on a customer's behalf for ordering
products or services of the kind supplied by such Grantor, or the
credit, payment, discount, delivery or other sale terms applicable
to such customer, together with information setting forth the total
purchases, by brand, product, service, style, size or other
criteria, and the patterns of such purchases;
(ii) all product and service specification documents and
production and quality control manuals used in the manufacture or
delivery of products and services sold or delivered under or in
connection with the Trademarks or Trademark Rights;
(iii) all documents which reveal the name and address of any
source of supply, and any terms of purchase and delivery, for any
and all materials, components and services used in the production of
products and services sold or delivered under or in connection with
the Trademarks or Trademark Rights; and
(iv) all documents constituting or concerning the then current
or proposed advertising and promotion by such Grantor or its
Affiliates, licensees or subcontractors of products and services
sold or delivered under or in connection with the Trademarks or
Trademark Rights including, without limitation, all documents which
reveal the media used or to be used and the cost for all such
advertising conducted within the described period or planned for
such products and services; and
X-4
(c) all patents and patent applications and rights and interests in
patents and patent applications that are presently, or in the future may
be, owned, held (whether pursuant to a license or otherwise) or used by
such Grantor in whole or in part (including, without limitation, the
patents and patent applications listed in Schedule II annexed hereto, as
the same may be amended pursuant hereto from time to time), all rights
(but not obligations) corresponding thereto (including without limitation
the right (but not the obligation) to ▇▇▇ for past, present and future
infringements in the name of such Grantor or in the name of Secured
Party), and all re-issues, divisions, continuations, renewals, extensions
and continuations-in-part thereof (all of the foregoing being collectively
referred to as the "Patents"); it being understood that the rights and
interests assigned hereby shall include, without limitation, all rights
and interests pursuant to licensing or other contracts in favor of such
Grantor pertaining to any Patent presently or in the future owned, held or
used by third parties but, in the case of third parties which are not
Affiliates of such Grantor, only to the extent permitted by such licensing
or other contracts or otherwise permitted by applicable law and, if not so
permitted under any such contracts and applicable law, only with the
consent of such third parties;
(d) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that
at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon; and
(e) all proceeds, products, rents and profits (including without
limitation license royalties and proceeds of infringement suits) of or
from any and all of the foregoing Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not Secured
Party is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of
the foregoing Collateral. For purposes of this Agreement, the term
"proceeds" includes whatever is receivable or received when Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of, whether
such disposition is voluntary or involuntary.
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral assigned by each Grantor
is collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including without limitation the payment of amounts that
would become due but for the operation of the automatic stay
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under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all
Secured Obligations with respect to such Grantor. "Secured Obligations" means
(a) with respect to Company, all obligations and liabilities of
every nature of Company now or hereafter existing under or arising out of
or in connection with the Credit Agreement and the other Loan Documents
and any Lender Interest Rate Agreement, and
(b) with respect to each Additional Grantor, all obligations and
liabilities of every nature of Grantors now or hereafter existing under or
arising out of or in connection with the Subsidiary Guaranty,
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest, Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender or Interest Rate Exchanger as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Grantors now or hereafter existing under this Agreement.
SECTION 3. Grantors Remain Liable.
Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts and agreements included
in the Collateral by reason of this Agreement, nor shall Secured Party be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
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SECTION 4. Representations and Warranties.
Each Grantor represents and warrants as of the date it becomes a
party hereto as follows:
(a) Ownership of Collateral. Except as expressly permitted by the
Credit Agreement and for the security interest assigned and created by
this Agreement, such Grantor is the legal and beneficial owner of the
entire right, title and interest in and to (i) each Material Trademark
Property (as defined in subsection 4(b) of this Agreement), free and clear
of any Lien other than Liens of mechanics, materialmen, attorneys and
other similar liens imposed by laws in the ordinary course of business in
connection with the establishment, creation or application for
Registration of any Trademarks, Registrations or Trademark Rights for sums
not yet delinquent or being contested in good faith (such Liens being
referred to herein as "Permitted Trademark Liens"), and (ii) each Material
Patent (as defined in subsection 4(b) of this Agreement), free and clear
of any Lien other than Liens of mechanics, materialmen, attorneys and
other similar liens imposed by law in the ordinary course of business in
connection with the establishment, creation or application for any Patent
for sums not yet delinquent or being contested in good faith (such Liens
being referred to herein as "Permitted Patent Liens"). Except such as may
have been filed in favor of Secured Party relating to this Agreement, no
effective financing statement or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or
recording office, including the United States Patent and Trademark Office.
(b) Description of Collateral. A true and complete list of all
Trademarks, Registrations and Trademark Rights owned or held (whether
pursuant to a license or otherwise) by such Grantor, in whole or in part,
as of the date such Grantor has entered into this Agreement is set forth
in Schedule I annexed hereto. Each Trademark, Registration or Trademark
Right designated on Schedule I annexed hereto as a Material Trademark
Property, and each other Trademark, Registration or Trademark Right
hereafter arising or otherwise owned or held by any Grantor that is
material to any of such Grantor's business or operations is referred to
herein as a "Material Trademark Property". A true and complete list of all
Patents owned or held (whether pursuant to a license or otherwise) by such
Grantor, in whole or in part, as of the date such Grantor has entered into
this Agreement is set forth in Schedule II annexed hereto. Each Patent
designated on Schedule II annexed hereto as a Material Patent and each
other Patent hereafter arising or otherwise owned or held by such Grantor
that is material to any of such Grantor's business or operations is
referred to herein as a "Material Patent".
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(c) Validity and Enforceability of Collateral. To the knowledge of
Grantors, each Material Trademark Property and each Material Patent is
valid, subsisting and enforceable. As of the date each Grantor has entered
into this Agreement, such Grantor is not aware of any pending or
threatened claim by any third party that any Material Trademark Property
or any Material Patent is invalid or unenforceable or that the use of any
Material Trademark Property or any Material Patent violates the rights of
any third person or of any basis for any such claim, and there is no such
pending or threatened claim whether arising prior to or after the
Effective Date, that could reasonably be expected to have a Material
Adverse Effect.
(d) Office Locations. The chief place of business, the chief
executive office and the office where such Grantor keeps its records
regarding the Collateral is at the locations set forth on Schedule III
annexed hereto.
(e) Names. No Grantor has in the past done, and no Grantor now does,
business under any other name (including any trade name or fictitious
business name) except under the names listed on Schedule IV annexed
hereto.
(f) Perfection. The security interests in the Collateral granted to
Secured Party for the ratable benefit of the Lenders and Interest Rate
Exchangers hereunder constitute valid security interests in the
Collateral. Upon the filing of UCC financing statements naming each
Grantor as "debtor", naming Secured Party as "secured party" and
describing the Collateral in the filing offices set forth on Schedule V
annexed hereto and the recording of this Agreement with the United States
Patent and Trademark Office, the security interests in the Collateral
granted to Secured Party for the ratable benefit of the Lenders and
Interest Rate Exchangers will, to the extent a security interest in the
Collateral may be perfected by filing UCC financing statements and
recording this Agreement, constitute valid and perfected security
interests therein prior to all other Liens (subject only to Permitted
Patent Liens and Permitted Trademark Liens).
SECTION 5. Further Assurances; New Trademarks, Registrations and Trademark
Rights; New Patents and Patent Applications; Certain Inspection
Rights.
(a) Each Grantor agrees that from time to time, at the expense of
Grantors, such Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest assigned or purported to be assigned or granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
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Without limiting the generality of the foregoing, each Grantor will: (i) at the
request of Secured Party, take reasonable steps to indicate that such Collateral
is subject to the security interest granted hereby, (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (iii) use its best efforts to obtain any
necessary consents of third parties to the assignment and perfection of a
security interest to Secured Party with respect to any Collateral, and (iv) at
Secured Party's request, appear in and defend any action or proceeding that may
materially affect such Grantor's title to or Secured Party's security interest
in all or any part of the Collateral.
(b) Each Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of any Grantor. Each Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or of
a financing statement signed by such Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(c) Each Grantor hereby authorizes Secured Party to modify this
Agreement without obtaining such Grantor's approval of or signature to such
modification by (i) amending Schedule I annexed hereto to include reference to
any right, title or interest in any existing Trademark, Registration or
Trademark Right or any Trademark, Registration or Trademark Right acquired or
developed by any Grantor after its execution hereof or to delete any reference
to any right, title or interest in any Trademark, Registration or Trademark
Right in which no Grantor has or claims any right, title or interest, or (ii)
amending Schedule II annexed hereto to include reference to any right, title or
interest in any existing Patent or any Patent acquired or developed by any
Grantor after its execution hereof or to delete any reference to any right,
title or interest in any Patent in which no Grantor has or claims any right,
title or interest.
(d) Each Grantor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
(e) If any Grantor shall obtain rights to any new Trademarks,
Registrations or Trademark Rights, or to any patentable inventions, or become
entitled to the benefit of any patent application or patent or any reissue,
division, continuation, renewal, extension, or continuation-in-part of any
Patent or any improvement in any Patent, the provisions of this Agreement shall
automatically apply thereto. Each Grantor shall
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promptly notify Secured Party in writing of any of the foregoing rights or
benefits, including, without limitation, rights to any new Trademarks or
Trademark Rights, acquired by such Grantor after the date hereof and of any
Registrations issued or applications for Registration made after the date
hereof, which notice shall state whether such Trademark, Registration or
Trademark Right constitutes a Material Trademark Property or whether such Patent
constitutes a Material Patent. Within a reasonable time after the filing of an
application for Registration for any Trademark, or an application for any Patent
the applicable Grantor shall execute, deliver and record in all places where
this Agreement is recorded an appropriate Patent and Trademark Security
Agreement, substantially in the form hereof, with appropriate insertions, or an
amendment to this Agreement, in form and substance satisfactory to Secured
Party, pursuant to which such Grantor shall assign and grant a security interest
to the extent of its interest in such Registration or Patent as provided herein
to Secured Party unless so doing would, in the reasonable judgment of such
Grantor, after due inquiry, result in the grant of a Patent or Registration in
the name of Secured Party, in which event such Grantor shall give written notice
to Secured Party as soon as reasonably practicable and the filing shall instead
be undertaken as soon as practicable but in no case later than immediately
following the grant of such Patent or Registration.
(f) Each Grantor hereby grants to Secured Party and its employees,
representatives and agents the right to visit such Grantor's and any of its
Affiliate's or subcontractor's plants, facilities and other places of business
that are utilized in connection with the manufacture, production, inspection,
storage or sale of products and services sold or delivered under any of the
Patents, Trademarks, Registrations or Trademark Rights (or which were so
utilized during the prior six month period), and to inspect the quality control
and all other records relating thereto upon reasonable notice to such Grantor
and as often as may be reasonably requested.
SECTION 6. Certain Covenants of Grantors.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the
Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any change
in such Grantor's chief place of business or chief executive office or the
office where such Grantor keeps its records regarding the Collateral;
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(d) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Collateral, except
to the extent the validity thereof is being contested in good faith;
provided that such Grantor shall in any event pay such taxes, assessments,
charges, levies or claims not later than five days prior to the date of
any proposed sale under any judgment, writ or warrant of attachment
entered or filed against such Grantor or any of the Collateral as a result
of the failure to make such payment;
(e) not sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit
Agreement;
(f) except for Permitted Patent Liens and Permitted Trademark Liens
and the security interest assigned and created by this Agreement, not
create or suffer to exist any Lien upon or with respect to any of the
Collateral to secure the indebtedness or other obligations of any Person;
(g) diligently keep reasonable records respecting the Collateral
assigned by it hereunder and at all times keep at least one complete set
of its records concerning substantially all of the Patents, Trademarks,
Registrations and Trademark Rights at its chief executive office or
principal place of business;
(h) not permit the inclusion in any contract to which it becomes a
party of any provision that could or might in any way conflict with this
Agreement or impair or prevent the assignment and creation of a security
interest in any Grantor's rights and interests in any property included
within the definitions of any Patents, Trademarks, Registrations,
Trademark Rights and Associated Goodwill acquired;
(i) use proper statutory notice in connection with its use of each
Material Patent and Material Trademark Property to the extent reasonably
necessary for the protection of such Material Patent or Material Trademark
Property;
(j) use consistent standards of quality (which may be consistent
with such Grantor's past practices) in the manufacture, sale and delivery
of products and services sold or delivered under or in connection with the
Trademarks, Registrations and Trademark Rights, including, to the extent
applicable, in the operation and maintenance of its retail stores and
other merchandising operations; and
(k) upon any officer of such Grantor obtaining knowledge thereof,
promptly notify Secured Party in writing of any event that may materially
and adversely affect the value of the Collateral or any portion thereof,
the ability
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of any Grantor or Secured Party to dispose of the Collateral or any
portion thereof, or the rights and remedies of Secured Party in relation
thereto, including without limitation the levy of any legal process
against the Collateral or any portion thereof
SECTION 7. Amounts Payable in Respect of the Collateral.
Except as otherwise provided in this Section 7, each Grantor shall
continue to collect, at its own expense, all amounts due or to become due to
Grantors in respect of the Collateral or any portion thereof. In connection with
such collections, each Grantor may take (and, at Secured Party's direction,
shall take) such action as such Grantor or Secured Party may deem necessary or
advisable to enforce collection of such amounts; provided, however, that Secured
Party shall have the right at any time, upon the occurrence and during the
continuation of an Event of Default or a Potential Event of Default and upon
written notice to such Grantor of its intention to do so, to notify the obligors
with respect to any such amounts of the existence of the security interest
assigned and created hereby, and to direct such obligors to make payment of all
such amounts directly to Secured Party, and, upon such notification and at the
expense of Grantors, to enforce collection of any such amounts and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as such Grantor might have done. After receipt by such Grantor
of the notice from Secured Party referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including checks and other instruments)
received by such Grantor in respect of amounts due to such Grantor in respect of
the Collateral or any portion thereof shall be received in trust for the benefit
of Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 14, and (ii) such Grantor shall not adjust,
settle or compromise the amount or payment of any such amount or release wholly
or partly any obliger with respect thereto or allow any credit or discount
thereon.
SECTION 8. Patent or Trademark Applications and Litigation.
(a) Each Grantor shall have the duty diligently to prosecute any
trademark application relating to any Material Trademark Property that is
pending as of the date such Grantor has entered into this Agreement, to make
federal application on any existing or future registerable but unregistered
Material Trademark Property (whenever it is commercially reasonable in the
reasonable judgement of such Grantor to do so), and to file and prosecute
opposition and cancellation proceedings, renew Registrations and do any and all
acts which are necessary or desirable to preserve and maintain all rights in all
Material Trademark Properties. Any expenses incurred in connection therewith
shall be borne solely by Grantors. No Grantor shall
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abandon any Material Trademark Property unless it is commercially reasonable in
the judgment of such Grantor to do so.
(b) Each Grantor shall have the duty diligently to prosecute any
patent application relating to any Material Patent that is pending as of the
date such Grantor has entered into this Agreement and to do any and all acts
which are necessary or desirable to preserve and maintain all rights in all
Material Patents. Any expenses incurred in connection therewith shall be borne
solely by Grantors. Each Grantor shall not, as to any patentable invention or
Patent that constitutes or could constitute a Material Patent, abandon any
pending patent application or any Patent without the prior written consent of
Secured Party.
(c) Except as provided in Section 8(e), each Grantor shall have the
right to commence and prosecute in its own name, as real party in interest, for
its own benefit and at its own expense, such suits, proceedings or other actions
for infringement, unfair competition, dilution or other damage as are in its
reasonable business judgment necessary to protect the Collateral. Secured Party
shall provide, at Grantor's expense, all reasonable and necessary cooperation in
connection with any such suit, proceeding or action including, without
limitation, joining as a necessary party.
(d) Each Grantor shall promptly, following its becoming aware
thereof, notify Secured Party of the institution of, or of any adverse
determination in, any proceeding (whether in the United States Patent and
Trademark Office or any federal, state, local or foreign court) described in
subsection 8(a), 8(b) or 8(c) or regarding such Grantor's claim of ownership in
or right to use any of the Trademarks, Registrations or Trademark Rights, its
right to register the same, or its right to keep and maintain such Registration.
Such Grantor shall provide to Secured Party any information with respect thereto
requested by Secured Party.
(e) Anything contained herein to the contrary notwithstanding, upon
the occurrence and during the continuation of an Event of Default, Secured Party
shall have the right (but not the obligation) to bring suit, in the name of any
Grantor, Secured Party or otherwise, to enforce any Patent, Trademark,
Registration, Trademark Right and any license thereunder and to enforce its
rights hereunder in Associated Goodwill, in which event each Grantor shall, at
the request of Secured Party, do any and all lawful acts and execute any and all
documents required by Secured Party in aid of such enforcement and each Grantor
shall promptly, upon demand, reimburse and indemnify Secured Party as provided
in Section 15 in connection with the exercise of its rights under this Section
8. To the extent that Secured Party shall elect not to bring suit to enforce any
Patent, Trademark, Registration, Trademark Right or any license thereunder or to
enforce its rights hereunder in Associated Goodwill as provided in this Section
8(e), each Grantor agrees to use all reasonable
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measures, whether by action, suit, proceeding or otherwise, to prevent the
infringement of any of the Patents, Trademarks, Registrations or Trademark
Rights or of Grantors' or Secured Party's rights in Associated Goodwill by
others and for that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing necessary to prevent such
infringement.
SECTION 9. Non-Disturbance Agreements, etc.
If and to the extent that any Grantor is permitted to license the
Collateral, Secured Party shall enter into a non-disturbance agreement or other
similar arrangement, at Grantors' request and expense, with such Grantor and any
licensee of any Collateral permitted hereunder in form and substance
satisfactory to Secured Party pursuant to which (a) Secured Party shall agree
not to disturb or interfere with such licensee's rights under its license
agreement with such Grantor so long as such licensee is not in default
thereunder and (b) such licensee shall acknowledge and agree that the Collateral
licensed to it is subject to the security interest assigned and created in favor
of Secured Party and the other terms of this Agreement.
SECTION 10. Secured Party Appointed Attorney-in-Fact.
Each Grantor hereby irrevocably appoints Secured Party as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to endorse such Grantor's name on all applications, documents,
papers and instruments necessary for Secured Party in the use or
maintenance of the Collateral;
(b) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, ▇▇▇ for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (b) above;
(d) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the
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Collateral or otherwise to enforce the rights of Secured Party with
respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by Secured
Party in its sole discretion, any such payments made by Secured Party to
become obligations of such Grantor to Secured Party, due and payable
immediately without demand; and
(f) upon the occurrence and during the continuance of an Event of
Default, (i) to execute and deliver any of the assignments or documents
requested by Secured Party pursuant to Section 13(b), (ii) to grant or
issue an exclusive or non-exclusive license to the Collateral or any
portion thereof to any Person, and (iii) otherwise generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Secured Party
were the absolute owner thereof for all purposes, and to do, at Secured
Party's option and Grantors' expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect,
preserve or realize upon the Collateral and Secured Party's security
interest therein in order to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
SECTION 11. Secured Party May Perform.
If any Grantor fails to perform any agreement contained herein,
Secured Party may itself perform, or cause performance of, such agreement, and
the expenses of Secured Party incurred in connection therewith shall be payable
by such Grantor under Section 15.
SECTION 12. Standard of Care.
The powers conferred on Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for monies
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property of a similar nature.
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SECTION 13. Remedies.
If any Event of Default shall have occurred and be continuing:
(a) Secured Party may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "Code") (whether or not the Code applies to the affected
Collateral), and also may (i) require each Grantor to, and each Grantor
hereby agrees that it will at its expense and upon request of Secured
Party forthwith, assemble all or part of the Collateral as directed by
Secured Party and make it available to Secured Party at a place to be
designated by Secured Party that is reasonably convenient to both parties,
(ii) enter onto the property where any Collateral is located and take
possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store the Collateral or otherwise prepare
the Collateral for disposition in any manner to the extent Secured Party
deems appropriate, (iv) take possession of any Grantor's premises or place
custodians in exclusive control thereof, remain on such premises and use
the same for the purpose of taking any actions described in the preceding
clause (iii) and collecting any Secured Obligation, (v) exercise any and
all rights and remedies of Grantors under or in connection with the
contracts related to the Collateral or otherwise in respect of the
Collateral, including without limitation any and all rights of Grantors to
demand or otherwise require payment of any amount under, or performance of
any provision of, such contracts, and (vi) without notice except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, at such time or
times and at such price or prices and upon such other terms as Secured
Party may deem commercially reasonable. Secured Party or any Lender or
Interest Rate Exchanger may be the purchaser of any or all of the
Collateral at any such sale and Secured Party, as agent for and
representative of Lenders and Interest Rate Exchangers (but not any Lender
or Lenders or Interest Rate Exchanger or Interest Rate Exchangers in its
or their respective individual capacities unless Requisite Obligees (as
defined in Section 17(a)) shall otherwise agree in writing), shall be
entitled, for the purpose of bidding and making settlement or payment of
the purchase price for all or any portion of the Collateral sold at any
such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by
Secured Party at such sale. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Grantor, and each
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Grantor hereby waives (to the extent permitted by applicable law) all
rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Each Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to such Grantor of the
time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. Secured Party
shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. Secured Party may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. Each Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price
at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if
Secured Party accepts the first offer received and does not offer such
Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be jointly and severally liable for the
deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency.
(b) Upon written demand from Secured Party, each Grantor shall
execute and deliver to Secured Party an assignment or assignments of the
Patents, Trademarks, Registrations, Trademark Rights and the Associated
Goodwill and such other documents as are requested by Secured Party. Each
Grantor agrees that such an assignment and/or recording shall be applied
to reduce the Secured Obligations outstanding only to the extent that
Secured Party (or any Lender) receives cash proceeds in respect of the
sale of, or other realization upon, the Collateral.
(c) Within five Business Days after written notice from Secured
Party, each Grantor shall make available to Secured Party, to the extent
within each applicable Grantor's power and authority, such personnel in
such Grantor's employ on the date of such Event of Default as Secured
Party may reasonably designate, by name, title or job responsibility, to
permit such Grantor to continue, directly or indirectly, to produce,
advertise and sell the products and services sold or delivered by such
Grantor under or in connection with the Patents, Trademarks, Registrations
and Trademark Rights, such persons to be available to perform their prior
functions on Secured Party's behalf and to be compensated by Secured Party
at Grantors' expense on a per diem, pro rata basis consistent with the
salary and benefit structure applicable to each as of the date of such
Event of Default.
X-17
SECTION 14. Application of Proceeds.
Except as expressly provided elsewhere in this Agreement, all
proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral shall be applied as
provided in subsection 2.4D of the Credit Agreement.
SECTION 15. Indemnity and Expenses.
(a) Grantors jointly and severally agree to indemnify Secured Party,
each Lender and each Interest Rate Exchanger from and against any and all
claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's or
such Lender's or Interest Rate Exchanger's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured Party
upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of Secured Party hereunder, or (iv)
the failure by any Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantors in this Section 15 shall survive the
termination of this Agreement and the discharge of Grantors' other obligations
under this Agreement, the Interest Rate Agreements, the Credit Agreement and the
other Loan Documents.
SECTION 16. Continuing Security Interest; Transfer of Loans.
This Agreement shall assign and create a continuing security
interest in the Collateral and shall (a) remain in full force and effect until
the payment in full of the Secured Obligations, the cancellation or termination
of the Commitments and the cancellation or expiration of all outstanding Letters
of Credit, (b) be binding upon Grantors and their respective successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the payment in full
X-18
of all Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all outstanding Letters of Credit, the
security interest assigned and granted hereby shall terminate and all rights to
the Collateral shall revert to the applicable Grantors. Upon any such
termination Secured Party will, at Grantors' expense, execute and deliver to
Grantors such documents as Grantors shall reasonably request to evidence such
termination.
SECTION 17. Secured Party as Administrative Agent.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 13 in accordance with the instructions of (i) Requisite Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the holders of a majority of the aggregate notional amount
(or, with respect to any Lender Interest Rate Agreement that has been terminated
in accordance with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early termination payments then
due) under such Lender Interest Rate Agreement) under all Lender Interest Rate
Agreements (Requisite Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this Section 17(a), each Interest Rate Exchanger, by its acceptance of the
benefits hereof, agrees that it shall have no right individually to realize upon
any of the Collateral hereunder, it being understood and agreed by such Interest
Rate Exchanger that all rights and remedies hereunder may be exercised solely by
Secured Party for the benefit of Lenders and Interest Rate Exchangers in
accordance with the terms of this Section 17(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and
X-19
become vested with all the rights, powers, privileges and duties of the retiring
or removed Secured Party under this Agreement, and the retiring or removed
Secured Party under this Agreement shall promptly (i) transfer to such successor
Secured Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions, as
may be necessary or appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder, whereupon
such retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
SECTION 18. Amendments; Etc.
No amendment, modification, termination or waiver of any provision
of this Agreement, and no consent to any departure by any Grantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party and, in the case of any such amendment or modification, by
Grantors; provided that any amendment hereto pursuant to Section 21 or Section
5(c) shall be effective upon execution by any Additional Grantor and Grantors
hereby waive any requirement of notice of or consent to any such amendment. Any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
SECTION 19. Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be
provided in subsection 10.8 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
X-20
SECTION 20. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 21. Additional Grantors.
From time to time subsequent to the date hereof, Subsidiaries of
Company may become parties hereto as additional Grantors (each an "Additional
Grantor") by executing an acknowledgement to this Agreement substantially in the
form of Schedule VI annexed hereto. Upon delivery of any such acknowledgment to
Administrative Agent and Secured Party, notice of which is hereby waived by
Grantors, each such Additional Grantor shall be a Grantor and shall be as fully
a party hereto as if such Additional Grantor were an original signatory hereto.
Each Grantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.
SECTION 22. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 23. Headings.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 24. Governing Law; Terms; Rules of Construction.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
X-21
OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK. Unless otherwise defined herein or in the Credit Agreement,
terms used in Articles 8 and 9 of the Uniform Commercial Code in the State of
New York are used herein as therein defined. The rules of construction set forth
in subsection 1.3 of the Credit Agreement shall be applicable to this Agreement
mutatis mutandis.
SECTION 25. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF
OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 19; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION;
AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 25 RELATING TO JURISDICTION
AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE
UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 26. Waiver of Jury Trial.
GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Grantor and Secured Party acknowledge that this waiver is
a material inducement for Grantors and Secured Party to enter into a business
relationship, that Grantors and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Grantor and Secured Party further
warrant and represent that
X-22
each has reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 26 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
SECTION 27. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
X-23
IN WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
AURORA FOODS INC.
By: ______________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Secured Party
By: ______________________________________
Name:
Title:
X-24
SCHEDULE I
TO
VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT
United States
Registered Trademark Registration Registration
Owner Description Number Date
---------- ------------- ------------ ------------
X-25
SCHEDULE II
TO
VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT
PATENTS ISSUED
--------------
Patent No. Issue Date Invention
---------- ---------- ---------
PATENTS PENDING
---------------
Applicant's Name Date Filed Application No. Invention Inventor
---------------- ---------- --------------- --------- --------
X-26
SCHEDULE III
TO
VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT
Office Locations
----------------
Name of Grantor Office Location
--------------- ---------------
X-27
SCHEDULE IV
TO
VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT
Other Names
-----------
Name of Grantor Other Names
--------------- -----------
X-28
SCHEDULE V
TO
VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT
Filing Offices
--------------
X-29
SCHEDULE VI
TO VAN ▇▇ ▇▇▇▇'▇ PATENT AND TRADEMARK SECURITY AGREEMENT
[FORM OF ACKNOWLEDGEMENT]
This Acknowledgement, dated __________________, [199_] [200_], is
delivered pursuant to Section 21 of the Van ▇▇ ▇▇▇▇'▇ Patent and Trademark
Security Agreement referred to below. The undersigned hereby agrees that this
Acknowledgement may be attached to the Van ▇▇ ▇▇▇▇'▇ Patent and Trademark
Security Agreement dated June __, 1998, by and among the Grantors referred to
therein and The Chase Manhattan Bank, as Secured Party (the "Van ▇▇ ▇▇▇▇'▇
Patent and Trademark Security Agreement", capitalized terms defined therein
being used herein as therein defined), that the undersigned by executing and
delivering this Acknowledgement hereby becomes a Grantor under the Van ▇▇ ▇▇▇▇'▇
Patent and Trademark Security Agreement in accordance with Section 21 thereof
and agrees to be bound by all of the terms thereof, and that the Patents,
Registrations and Trademark Rights described on this Acknowledgement shall be
deemed to be part of the and shall become part of the Collateral and shall
secure all Secured Obligations.
[NAME OF ADDITIONAL GRANTOR]
By: ________________________________
Name:
Title:
Notice Address:
____________________________________
____________________________________
____________________________________
____________________________________
X-30
Trademark Registrations
-----------------------
Registered Trademark Registration Registration
Owner Description Number Date Jurisdiction
---------- ----------- ------------ ------------ ------------
Patents Issued
--------------
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
Patents Pending
---------------
Applicant's Name Date Filed Application No. Invention Inventor
---------------- ---------- --------------- --------- --------
X-31
EXHIBIT XI
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected [Title] of Aurora Foods Inc., a Delaware
corporation ("Company");
(2) I have reviewed the terms of that certain Third Amended and
Restated Credit Agreement dated as of June __, 1998, by and among Company, the
financial institutions listed therein as Lenders, The Chase Manhattan Bank, as
Administrative Agent, National Westminster Bank PLC, as Syndication Agent, and
Swiss Bank Corporation, as Documentation Agent, as amended, restated,
supplemented or otherwise modified to the date hereof (said Third Amended and
Restated Credit Agreement, as so amended, restated, supplemented or otherwise
modified, being the "Credit Agreement", the terms defined therein and not
otherwise defined in this Certificate (including Attachment No. 1 annexed hereto
and made a part hereof) being used in this Certificate as therein defined), and
the terms of the other Loan Documents, and I have made, or have caused to be
made under my supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period covered
by the attached financial statements; and
(3) The examination described in paragraph (2) above did not
disclose, and I have no knowledge of, the existence of any condition or event
which constitutes an Event of Default or Potential Event of Default during or at
the end of the accounting period covered by the attached financial statements or
as of the date of this Certificate[, except as set forth below].
[Set forth [below] [in a separate attachment to this Certificate]
are all exceptions to paragraph (3) above listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
Company has taken, is taking, or proposes to take with respect to each such
condition or event:
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________]
XI-1
The foregoing certifications, together with the computations set
forth in Attachment No. 1 annexed hereto and made a part hereof and the
financial statements delivered with this Certificate in support hereof, are made
and delivered this __ day of ________, [199_] [200_] pursuant to subsection
6.1(iv) of the Credit Agreement.
AURORA FOODS INC.
By: ___________________________
Name:
Title:
XI-2
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a Compliance
Certificate dated as of ______________, [199_][200_] and pertains to the period
from ______________, [199_][200_], to [199_][200_]. Subsection references herein
to relate to subsections of the Credit Agreement.
================================================================================
A. Indebtedness
--------------------------------------------------------------------------------
1. Indebtedness under Capital Leases of
the type described in subsection
7.1(iii)(a): $__________
--------------------------------------------------------------------------------
2. Indebtedness in respect of sale and lease-back transactions expressly
permitted under subsection 7.8: $__________
--------------------------------------------------------------------------------
3. Indebtedness secured by Liens permitted
under subsection 7.2A(iii): $__________
--------------------------------------------------------------------------------
4. Indebtedness of the type described in
subsection 7.1(iii) (A.1 + A.2 + A.3): $__________
--------------------------------------------------------------------------------
5. Maximum Indebtedness permitted under
subsection 7.1(iii): $10,000,000
--------------------------------------------------------------------------------
6. Aggregate principal amount of Permitted
Seller Notes issued after the Effective
Date: $__________
--------------------------------------------------------------------------------
7. Maximum principal amount permitted under
subsection 7.1(vii): $10,000,000
--------------------------------------------------------------------------------
8. Indebtedness of the type described in
subsection 7.1(viii): $__________
--------------------------------------------------------------------------------
9. Maximum Indebtedness permitted under
subsection 7.1(viii): $15,000,000
--------------------------------------------------------------------------------
B. Liens
--------------------------------------------------------------------------------
1. Indebtedness secured by Liens described
in subsection 7.2A(iii): $__________
--------------------------------------------------------------------------------
2. Original purchase price (or cost of
acquisition, construction or improvement) of
assets financed with Indebtedness secured by
Liens permitted under subsection 7.2A(iii): $__________
--------------------------------------------------------------------------------
3. Percentage of purchase price (or cost of acquisition, construction or
improvement) financed with Indebtedness secured by Liens permitted under
subsection 7.2A(iii) ((B. 1)/(B.2)): $___________
--------------------------------------------------------------------------------
XI-3
--------------------------------------------------------------------------------
4. Maximum percentage permitted to be
financed under subsection 7.2A(iii): 100%
--------------------------------------------------------------------------------
5. Minimum percentage permitted to be
financed under subsection 7.2A(iii): 80%
--------------------------------------------------------------------------------
6. Proceeds of Indebtedness permitted by
subsection 7.1(iii)(c) incurred
during period and secured by Liens on assets: $__________
--------------------------------------------------------------------------------
7. Fair market value of assets securing
Liens described in item B.6: $__________
--------------------------------------------------------------------------------
8. Percentage of fair market value constituted
by proceeds of Indebtedness ((B.6)/(B.7)): $__________
--------------------------------------------------------------------------------
9. Minimum percentage permitted under
subsection 7.2A(iv): 80%
--------------------------------------------------------------------------------
10. Indebtedness secured by Liens described
in subsection 7.2A(vi): $__________
--------------------------------------------------------------------------------
11. Indebtedness secured by Liens on assets under
Capital Leases permitted under subsection 7.2A(v): $__________
--------------------------------------------------------------------------------
12. Maximum Indebtedness permitted to be secured by
Liens under subsection 7.2A(vi): $2,500,000
--------------------------------------------------------------------------------
C. Investments
--------------------------------------------------------------------------------
1. Investments consisting of advances made
during Fiscal Year-to-date to make
payments contemplated by subsection
7.5(v)(a): $__________
--------------------------------------------------------------------------------
2. Minimum permitted under subsection
7.5(v)(a): $_________
--------------------------------------------------------------------------------
3. Investments of the type described in
subsection 7.3(iii): $__________
--------------------------------------------------------------------------------
4. Maximum permitted under subsection
7.3(v): $7,500,000
--------------------------------------------------------------------------------
XI-4
--------------------------------------------------------------------------------
D. Contingent Obligations
--------------------------------------------------------------------------------
1. Net amount which Company would be liable to pay to
counterparties under Interest Rate Agreements of the
type described in subsection 7.4(iii) in the event
such Interest Rate Agreements were terminated on the
date hereof: $__________
--------------------------------------------------------------------------------
2. Maximum amount permitted under subsection 7.4(iii): $2,500,000
--------------------------------------------------------------------------------
3. Contingent Obligations under guarantees in the
ordinary course of business of the type described in
subsection 7.4(v): $__________
--------------------------------------------------------------------------------
4. Maximum permitted under subsection
7.4(v): $500,000
--------------------------------------------------------------------------------
5. Contingent Obligations of the type
described in subsection 7.4(vii): $__________
--------------------------------------------------------------------------------
6. Maximum permitted under subsection
7.4(vii): $500,000
--------------------------------------------------------------------------------
E. Restricted Junior Payments
--------------------------------------------------------------------------------
1. Restricted Junior Payments made during
Fiscal Year-to-date of the type described
in subsection 7.5(v)(a): $__________
--------------------------------------------------------------------------------
2. Aggregate advances made during Fiscal Year-to-date
to make payments contemplated by subsection 7.5(v)(a)
(E.1 + C.1): $__________
--------------------------------------------------------------------------------
3. Maximum permitted under subsection
7.5(v)(a): $__________
--------------------------------------------------------------------------------
4. Restricted Junior Payments made after the Effective
Date of the type described in subsection 7.5(vi): $__________
--------------------------------------------------------------------------------
5. Maximum permitted under subsection
7.5(vi): $2,000,000
--------------------------------------------------------------------------------
F. Minimum Interest Coverage Ratio ([calculated on a
pro forma basis for Fiscal Quarters ending prior to
the Effective Date for the four-Fiscal Quarter period
ending, _________ [199_] [200 ]) $__________
--------------------------------------------------------------------------------
1. Consolidated Net Income:
--------------------------------------------------------------------------------
2. Consolidated Interest Expense (to the extent
deducted in determining Consolidated Net Income): $__________
--------------------------------------------------------------------------------
XI-5
--------------------------------------------------------------------------------
3. Depreciation (to the extent deducted in
determining Consolidated Net Income): $__________
--------------------------------------------------------------------------------
4. Depletion (to the extent deducted in
determining Consolidated Net Income): $__________
--------------------------------------------------------------------------------
5. Amortization (to the extent deducted in
determining Consolidated Net Income): $__________
--------------------------------------------------------------------------------
6. Federal, state, local and foreign income
taxes (to the extent deducted in determining
Consolidated Net Income): $__________
--------------------------------------------------------------------------------
7. Transaction fees paid to the MDC Entities
and/or Dartford and/or Fenway in connection
with acquisitions made in accordance with
the terms of the MDC Advisory Services
Agreement, the Dartford Management Agreement
and the Fenway Agreement (to the extent
deducted in determining Consolidated Net
Income): $__________
--------------------------------------------------------------------------------
8. Non-recurring charges incurred prior to
_________ __, 1998 with respect to
relocation of Company's assets related to
the Business and the Log Cabin Business (to
the extent deducted in determining
Consolidated Net Income) (if greater than
$6,000,000, enter "$6,000,000"): $__________
--------------------------------------------------------------------------------
9. Non-recurring charges incurred prior to
_________ __, 1999 with respect to
relocation of the Company's assets (if
greater than $15,000,000, enter
"$15,000,000"): $__________
--------------------------------------------------------------------------------
10. Manufacturing overhead charges related to
the ▇▇▇▇▇▇ ▇▇▇▇▇ Transitional Supply
Agreement (if greater than $8,200,000, enter
"$8,200,000"): $__________
--------------------------------------------------------------------------------
11. Other non-cash items reducing Consolidated
Net Income (to the extent deducted in
determining Consolidated Net Income): $__________
--------------------------------------------------------------------------------
12. Extraordinary and unusual losses (to the
extent deducted in determining Consolidated
Net Income): $__________
--------------------------------------------------------------------------------
13. Non-cash items increasing Consolidated Net
Income: $__________
--------------------------------------------------------------------------------
14. Extraordinary and unusual gains: $__________
--------------------------------------------------------------------------------
15. Consolidated EBITDA ((F.1 + F.2 + F.3 + F.4
+ F.5 + F.6 + F.7 + F.8 + F.9 + F.10) -
(F.11 + F.12)): $__________
--------------------------------------------------------------------------------
XI-6
--------------------------------------------------------------------------------
16. Consolidated Cash Interest Expense: $__________
--------------------------------------------------------------------------------
17. Interest Coverage Ratio ((F.13):(F.14)): _____:1.00
--------------------------------------------------------------------------------
18. Minimum Interest Coverage Ratio required
under section 7.6A: _____:1.00
--------------------------------------------------------------------------------
G. Maximum Leverage Ratio ([calculated on a
pro forma basis for Fiscal Quarters
ending prior to the Effective Date] as of
____________, [199_] [200_]) $__________
--------------------------------------------------------------------------------
1. Consolidated Total Debt: $__________
--------------------------------------------------------------------------------
2. Cash on hand of Company minus $3,500,000 (if
difference is equal to or less than zero,
enter "0"): $__________
--------------------------------------------------------------------------------
3. Consolidated EBITDA for the four-Fiscal
Quarter period ended on the above date (F.13
above): $__________
--------------------------------------------------------------------------------
4. Leverage Ratio ((G.1- G.2)/G.3):
--------------------------------------------------------------------------------
5. Maximum Leverage Ratio permitted under
subsection 7.6B: _____: 1.00
--------------------------------------------------------------------------------
H. Minimum Fixed Charge Coverage Ratio
([calculated on a pro forma basis for Fiscal
Quarters ending prior to the Effective Date]
for the four-Fiscal Quarter period ending
___________, [199_][200_]) $__________
--------------------------------------------------------------------------------
1. Consolidated EBITDA (F.13 above): $__________
--------------------------------------------------------------------------------
2. Scheduled amortization of Indebtedness of
and its Subsidiaries (as reduced by payments
previously made), and discount or premium
relating to any such Indebtedness, whether
expensed or capitalized: $__________
--------------------------------------------------------------------------------
3. Consolidated Cash Interest Expense (F.14
above): $__________
--------------------------------------------------------------------------------
4. Consolidated Capital Expenditures: $__________
--------------------------------------------------------------------------------
5. Taxes actually paid in cash by Subsidiaries: $__________
--------------------------------------------------------------------------------
6. Consolidated Fixed Charges (H.2 + H.3 + H.4
+ H.5): $__________
--------------------------------------------------------------------------------
7. Fixed Charge Coverage Ratio ((H.1):(H.6)): _____:1.00
--------------------------------------------------------------------------------
XI-7
--------------------------------------------------------------------------------
8. Minimum Fixed Charge Coverage Ratio
required under subsection 7.6C: _____:1.00
--------------------------------------------------------------------------------
I. Consolidated Capital Expenditures (for
the Fiscal Year ending ___________in $__________
December [199_] [200_] [to date])
--------------------------------------------------------------------------------
1. Consolidated Capital Expenditures: $__________
--------------------------------------------------------------------------------
2. Maximum Consolidated Capital Expenditures
Amount permitted under subsection 7.6D (as
adjusted (calculations and supporting
information therefor attached hereto) in
accordance with the provisos to such
subsection): $__________
--------------------------------------------------------------------------------
J. Fundamental Changes
--------------------------------------------------------------------------------
1. Aggregate fair market value of assets sold
in Asset Sales described in subsection
7.7(v) during the period commencing
___________, [199_] [200_]: $__________
--------------------------------------------------------------------------------
2. Consolidated EBITDA (F. 13 above): $__________
--------------------------------------------------------------------------------
3. Maximum Asset Sales permitted under
subsection 7.7(v) (.10 x (J. 2)): $__________
--------------------------------------------------------------------------------
4. Consideration received in Asset Sales
described in subsection 7.7(vi) during the
period commencing ___________, [199_]
[200_]: $__________
--------------------------------------------------------------------------------
5. Cash consideration received in Asset Sales
described in subsection 7.7(v) during the
period commencing ___________, [199_]
[200_]: $__________
--------------------------------------------------------------------------------
6. Minimum cash consideration permitted
under subsection 7.7(v) (.80 x (J.4)): $__________
--------------------------------------------------------------------------------
[K. Consolidated Excess Cash Flow (for the
Fiscal Year ending December 31, [199_]
[200 ]) [ONLY USE FOR FISCAL YEAR [1998]
AND THEREAFTER] $__________
--------------------------------------------------------------------------------
1. Consolidated EBITDA (F.13 above): $__________
--------------------------------------------------------------------------------
2. Extraordinary and unusual cash gains (to
the extent included in item F.12 above): $__________
--------------------------------------------------------------------------------
3. Consolidated Working Capital Adjustment: $__________
--------------------------------------------------------------------------------
XI-8
--------------------------------------------------------------------------------
4. Voluntary and scheduled cash repayments of
Consolidated Total Debt (excluding
repayments of Revolving Loans except to the
extent the Revolving Loan Commitments are
permanently reduced): $__________
--------------------------------------------------------------------------------
5. Consolidated Capital Expenditures (net of
any proceeds of related financings with
respect to such expenditures): $__________
--------------------------------------------------------------------------------
6. Expenditures made in connection with any
Permitted Acquisition pursuant to
subsection 7.7(vi) (net of any proceeds
of related financings with respect to
such acquisitions), including without
limitation transaction fees paid in cash
to the MDC Entities and/or Dartford
and/or Fenway, in connection with such
acquisitions in accordance with the terms
of the MDC Advisory Services Agreement,
the Dartford Management Agreement and the $__________
Fenway Agreement:
--------------------------------------------------------------------------------
7. Consolidated Interest Expense (F.14
above): $__________
--------------------------------------------------------------------------------
8. Extraordinary and unusual cash losses (to
the extent included in item F.10 above): $__________
--------------------------------------------------------------------------------
9. Consolidated Excess Cash Flow ((K.1 + K2 +
K3) - (K.4 + K5 + K.6 + K.7 + K8)): $__________
--------------------------------------------------------------------------------
10. Portion of Consolidated Excess Cash Flow
required to be prepaid (.50x or .25x if
Leverage Ratio is less than ____:1.00 (K.9)) $__________
================================================================================
XI-9
EXHIBIT XII
[FORM OF OPINION OF COUNSEL TO LOAN PARTIES]
[LETTERHEAD OF WHITE & CASE]
June __, 1998
The Chase Manhattan Bank,
as Administrative Agent under the
Third Amended and Restated Credit
Agreement referred to below
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
National Westminster Bank PLC,
as Syndication Agent under the
Third Amended and Restated Credit
Agreement referred to below
____________________
____________________
Swiss Bank Corporation,
as Documentation Agent under the
Third Amended and Restated Credit
Agreement referred to below
____________________
____________________
and
The Lenders Listed on
Schedule A Annexed Hereto
Re: Third Amended and Restated Credit Agreement dated as of June
__, 1998, by and among Aurora Foods Inc., the financial
institutions listed therein as Lenders, The Chase Manhattan
Bank, as Administrative Agent, National Westminster Bank PLC,
as Syndication Agent, and Swiss Bank Corporation, as
Documentation Agent
Ladies and Gentlemen:
We have acted as special counsel to (i) Aurora Foods Inc., a
Delaware corporation ("Company"), in connection with that certain Third Amended
and Restated Credit Agreement dated as of June __, 1998 (the "Credit Agreement";
capitalized terms used herein without definition have the same meanings as in
the Credit Agreement), by and among Company, the financial institutions listed
therein as Lenders, The Chase Manhattan Bank, as
XII-1
Administrative Agent, National Westminster Bank PLC, as Syndication Agent, and
Swiss Bank Corporation, as Documentation Agent and (ii) the Loan Parties in
connection with documents executed in connection with the Credit Agreement. This
opinion is rendered to you in compliance with subsection 4.1J of the Credit
Agreement.
In our capacity as such counsel, we have examined originals, or
copies identified to our satisfaction as being true copies, of such records,
documents or other instruments as in our judgment are necessary or appropriate
to enable us to render the opinions expressed below. These records, documents
and instruments included the following:
(a) All records of proceedings and actions of the respective Boards
of Directors of each of the Loan Parties relating to the Credit Agreement
and the transactions contemplated thereby;
(b) The Credit Agreement;
(c) The Revolving Credit and Tranche A Term Notes delivered on the
Effective Date (collectively, the "Notes");
(d) The Collateral Account Agreement;
(e) The Pledge Agreement;
(f) The Security Agreement;
(g) The Mortgages;
(h) The Van ▇▇ ▇▇▇▇'▇ Patent and Trademark Security Agreement; and
(i) Copies of Uniform Commercial Code financing statements and
fixture filings (collectively, the "Financing Statements") to be filed in
the filing offices listed for the Company on Schedule I annexed hereto
(the "Filing Offices") in the states (the "Relevant States") in which such
Filing Offices are located.
The documents referenced in items (b) through (i) above are
collectively referred to herein as the "Loan Documents".
In connection with this opinion, we have also examined such other
agreements, documents, certificates and other statements of government officials
and corporate officers of the Loan Parties and such other papers as we have
deemed necessary as a basis for such opinions. In all such examinations, we have
assumed the genuineness of all signatures on original and certified documents
and the conformity to original or certified documents of all documents submitted
to us as conformed or photostatic copies.
XII-2
On the basis of the foregoing, and in reliance thereon, and subject
to the limitations, qualifications and exceptions set forth below, we are of the
opinion that:
1. Each Loan Party is duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has all corporate
power and authority necessary to own and operate its properties and carry out
its business as now conducted.
2. Each Loan Party has all requisite corporate power and authority
to execute and deliver the Loan Documents to which it is a party and any
financing statements or fixture filings to be executed in connection therewith
(collectively, the "Financing Statements") in which it is named as Debtor and to
perform the Loan Documents to which it is a party and to carry out the
transactions contemplated thereby.
3. The authorized and outstanding capital stock of each Loan Party
is as set forth on Schedule B annexed hereto. The Loan Party listed on Schedule
C annexed hereto is the record owner of the Pledged Shares (as defined in the
Pledge Agreement).
4. The execution and delivery of each of the Loan Documents and the
Financing Statements and the performance of each of the Loan Documents have been
duly authorized by all necessary corporate action on the part of each Loan Party
which is a party thereto or which is named therein as a Debtor. Each Loan
Document and each Financing Statement has been duly executed and delivered by
each Loan Party which is a party thereto or which is named therein as a Debtor,
and each Loan Document constitutes the valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally or by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at law).
5. None of the execution or delivery by the Loan Parties of the Loan
Documents to which it is a party or the Financing Statements in which it is
named as a debtor nor the performance by the Loan Parties of the Loan Documents
nor the consummation of the transactions contemplated thereby will (i) conflict
with, result in a breach or violation of, or constitute a default under, any of
the terms, conditions or provisions of any New York State or Federal or Delaware
corporation law, statute, rule or regulation (including, without limitation,
Regulations T, U or X of the Board of Governors of the Federal Reserve System)
or any order, writ, judgment, injunction or decree of any New York State or
Federal court or other adjudicative body or arbitrator to which Company or any
Loan Party or any of their respective assets or properties is subject and of
which we are aware, or (ii) result in the creation of any
XII-3
Lien upon any of the properties or assets of any Loan Party under any order
referred to in clause (i) above (other than Liens created pursuant to the Loan
Documents and the Financing Statements).
6. Upon delivery to the Administrative Agent pursuant to the Pledge
Agreement of the certificates representing the Pledged Shares, and assuming (i)
continued possession by the Administrative Agent (or an agent of the
Administrative Agent) of the certificates representing the Pledged Shares in the
State or New York, (ii) that the Administrative Agent has taken delivery of the
certificates representing the Pledged Shares in good faith and (iii) that
neither the Administrative Agent nor any Lender has notice, prior to or on the
date of delivery of such Pledged Shares, of an adverse claim within the meaning
of the Uniform Commercial Code (the "UCC") as in effect on the date hereof in
the State of New York (the "New York UCC"), the execution of the Pledge
Agreement by the Loan Parties will create a perfected security interest in favor
of the Administrative Agent in the Pledged Shares, which security interest has
priority over all other liens except as follows:
(a) we express no opinion as to any Loan Party's right in or title
to the Pledged Shares;
(b) priority may be subject to claims or liens in favor of the
United States, or any State of the United States or any agency,
instrumentality or political subdivision thereof, including, without
limitation, (i) liens for the payment of Federal, state or local taxes
which are given priority by operation of law, (ii) liens under Title IV of
the Employee Retirement Income Security Act of 1974, as amended, and (iii)
claims arising under the Federal Priority Statute (31 U.S.C. ss. 3713);
(c) we express no opinion as to the security interest of the
Administrative Agent in proceeds of or distributions on the Pledged
Shares; and
(d) we express no opinion as to the priority of the security
interests in the Pledged Shares as against any lien creditor (as such term
is defined in Article 9 of the New York UCC) or any buyer, to the extent
that the security interests therein purport to secure any advances or
other extensions of credit other than obligations incurred pursuant to
existing commitments under the Credit Agreement.
7. The Security Agreement creates a valid lien and security interest
in favor of the Administrative Agent in the Collateral (as defined in the
Security Agreement) purported to be covered thereby. The Financing Statements
are in appropriate form and upon the filing of such Financing Statements in the
applicable Filing Offices, assuming that the representations made by each of the
Loan Parties in the Security Agreement with respect to the locations of their
respective Collateral (as
XII-4
defined in the Security Agreement) are true and correct, all filings,
registrations and recordings necessary or appropriate to create, maintain,
preserve, protect and perfect the security interests granted by each Loan Party
to Administrative Agent under the Security Agreement in respect of all
Collateral (as defined in the Security Agreement) will have been accomplished in
accordance with the UCC as in effect on the date hereof in the respective
Relevant States and the security interests granted by the Loan Parties to the
Administrative Agent pursuant to the Security Agreement in and to such
Collateral will constitute perfected security interests therein to the extent
that such Collateral consists of the type of property in which a security
interest may be perfected by filing a financing statement or fixture financing
statement, as applicable, under the UCC as in effect on the date hereof in the
Relevant States except as follows:
(a) we express no opinion as to perfection of the security interest
of the Administrative Agent in machinery and equipment physically located
at [the plant of Cereal Food Processors, Inc. in ▇▇▇▇▇▇ Springs, Kansas]
to the extent such machinery and equipment are fixtures as defined in
Section 9-313 of the UCC;
(b) we express no opinion as to the security interest of the
Administrative Agent in proceeds of or distributions on the Collateral;
(c) in the case of Collateral referred to in this paragraph 9,
Article 9 of the UCC requires the filing of continuation statements within
the period of six months prior to the expiration of five years from the
date of the original filings, in order to maintain the effectiveness of
the filings referred to in this paragraph; and
(d) in the case of property which becomes Collateral after the date
hereof, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code limits the extent
to which priority acquired by a debtor after the commencement of a case
under the Federal Bankruptcy Code may be subject to a security interest
arising from a security agreement entered into by the debtor before the
commencement of such case.
8. Assuming the truth and accuracy of the representations of the
Loan Parties in the Van ▇▇ ▇▇▇▇'▇ Patent and Trademark Security Agreement, upon
the filing of the Financing Statements relating to the Collateral under the Van
▇▇ ▇▇▇▇'▇ Patent and Trademark Security Agreement in the offices of the
Secretary of State of the Relevant States and the recording of the Van ▇▇ ▇▇▇▇'▇
Patent and Trademark Security Agreement in the trademark records of the United
States Patent and Trademark Office and in the patent records of the United
States Patent and Trademark office, we are aware of no additional actions to be
taken in order to create and perfect security interests in favor of
Administrative Agent in the Trademarks (as defined in the Van
XII-5
▇▇ ▇▇▇▇'▇ Patent and Trademark Security Agreement) described on Schedule I
annexed to the Van ▇▇ ▇▇▇▇'▇ Patent and Trademark Security Agreement or the
Patents (as defined in the Van ▇▇ ▇▇▇▇'▇ Patent and Trademark Security
Agreement) described on Schedule II to the Van ▇▇ ▇▇▇▇'▇ Patent and Trademark
Security Agreement. However, we express no opinion as to the sufficiency of the
foregoing actions to create and perfect security interests in such Patents and
Trademarks to the extent federal law is determined to be applicable to the
creation and perfection of such security interests. In addition, we express no
opinion as to whether federal law or the laws of the states in which the Filing
Offices are located governs the validity or perfection of such security
interests. We express no opinion as to the validity or perfection of a security
interest in the Trademarks described on Schedule I annexed to the Van ▇▇ ▇▇▇▇'▇
Patent and Trademark Security Agreement or the Patents described on Schedule II
annexed to the Van ▇▇ ▇▇▇▇'▇ Patent and Trademark Security Agreement to the
extent the rights of the Loan Parties in such Trademarks or Patents are granted,
created or vested under the laws of Puerto Rico, Canada or any other country or
jurisdiction outside the United States.
9. Upon receipt by Administrative Agent of any cash representing
Collateral under the Collateral Account Agreement and assuming Administrative
Agent maintains dominion and control of the Collateral Account in the manner set
forth in the Collateral Account Agreement, the Collateral Account Agreement will
create in favor of Administrative Agent a perfected security interest in the
Collateral Account.
10. The choice of law of the State of New York as the governing law
of each of the Loan Documents is a valid choice of law.
11. None of the Loan Parties is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. No Loan Party is a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
12. [All Obligations under the Credit Agreement are within the
definition of "Designated Senior Indebtedness" contained in the subordination
provisions of the Subordinated Bridge Loan Documents.]
13. No law of the State of New York regulating the maximum rate of
interest which may be charged, taken or received applies to the Loans.
To the extent that the obligations of any of the Loan Parties may be
dependent upon such matters, we have assumed for purposes of this opinion (i)
that each party to the agreements
XII-6
and contracts referred to herein (including, without limitation, the Loan
Parties except in the case of clause (iii) of this sentence) is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation; (ii) that each such party has the requisite
corporate or other organizational power and authority to perform its obligations
under such agreements and contracts, as applicable, and (iii) that such
agreements and contracts have been duly authorized, executed and delivered by,
and each of them constitutes the legally valid and binding obligation of, such
parties, as applicable, enforceable against such parties in accordance with
their respective terms. Except as expressly covered in this opinion, we are not
expressing any opinion as to the effect of compliance by any Lender with any
state or federal laws or regulations applicable to the transactions because of
the nature of any of its businesses.
The opinions contained in paragraphs 4, 6, 7, 8, and 9 are subject
to the following additional limitations, qualifications, exceptions and
assumptions:
(a) We express no opinion as to the enforceability of any
indemnification or contribution provisions in the Loan Documents to the
extent the rights to indemnification or contribution provided for therein
are violative of any law, rule or regulation (including any securities
law, rule or regulation) or public policy relating thereto.
(b) There may be limitations upon the exercise of remedial or
procedural provisions contained in the Loan Documents, but such
limitations do not make the rights and remedies provided in or
contemplated by the Loan Documents inadequate for the practical
realization of the rights and remedies afforded thereby.
(c) We express no opinion as the applicability to the Loan Documents
of Section 548 of the Bankruptcy Code (11 U.S.C. Section 548) or Article
10 of the New York Debtor and Creditor Law relating to fraudulent
transfers and obligations.
(d) We wish to point out that the law of the State of New York
generally imposes an obligation of good faith and reasonableness in the
performance and enforcement of contracts.
A copy of this opinion letter may be delivered by any of you to any
Eligible Assignee in connection with and at the time of any assignment and
delegation by any of you as a Lender to such Eligible Assignee of all or a
portion of your Loans and Commitments in accordance with the provisions of the
Credit Agreement, and such Eligible Assignee may rely on the opinions expressed
above as if this opinion letter were addressed and delivered to such Eligible
Assignee on the date hereof.
XII-7
This opinion is rendered only to Syndication Agent, Documentation
Agent, Administrative Agent and Lenders and is solely for their benefit in
connection with the above transactions. This opinion may not be relied upon by
Syndication Agent, Documentation Agent, Administrative Agent or Lenders for any
other purpose, or quoted to or relied upon by any other person, firm or
corporation for any purpose without our prior written consent.
The opinions expressed above are limited to questions arising under
the Federal law of the United States, the General Corporation Law of the State
of Delaware and the law of the State of New York, except that our opinions set
forth in paragraphs 7 and 8 above (to the extent governed by a law other than
that of the Federal law of the United States of America, the General Corporation
Law of the State of Delaware and the law of the State of New York) are based
upon our review of generally available compilations of law relating to such
matters.
Very truly yours,
White & Case
XII-8
SCHEDULE A
LENDERS
XII-9
SCHEDULE I
FILING OFFICES
XII-10
SCHEDULE B
CAPITALIZATION OF LOAN PARTIES
1. Aurora Foods Inc.
XII-11
SCHEDULE C
RECORD OWNERS OF PLEDGED SHARES
XII-12
EXHIBIT XIII
[FORM OF OPINION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
June __, 1998
The Chase Manhattan Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
National Westminster Bank PLC,
as Syndication Agent
____________________
____________________
Swiss Bank Corporation,
as Documentation Agent
____________________
____________________
and
The Lenders Party to the Third
Amended and Restated Credit
Agreement Referenced Below
Re: Loans to Aurora Foods Inc.
Ladies and Gentlemen:
We have acted as counsel to The Chase Manhattan Bank, as
Administrative Agent (in such capacity, the "Administrative Agent"), National
Westminster Bank PLC, as Syndication Agent (in such capacity, the "Syndication
Agent"), and Swiss Bank Corporation, as Documentation Agent (in such capacity,
the "Documentation Agent"), in connection with the preparation and delivery of a
Third Amended and Restated Credit Agreement dated as of June __, 1998 (the
"Credit Agreement") among Aurora Foods Inc., a Delaware corporation ("Company"),
the financial institutions listed therein as lenders ("Lenders"), the
Administrative Agent, Syndication Agent and Documentation Agent (collectively,
Administrative Agent, Syndication Agent and Documentation Agent are "Agents")
and in connection with the preparation and delivery of certain related
documents.
This opinion is delivered to you pursuant to Section 4.1(K) of the
Credit Agreement. Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
XIII-1
In connection with this opinion, we have participated in various
conferences with representatives of Company and Agents and conferences and
telephone calls with White & Case and ▇▇▇▇▇▇▇▇ & ▇'▇▇▇▇, LLP, counsel to Loan
Parties, during which the Credit Agreement and related matters have been
discussed, and we have also participated in the meeting held on the date hereof
(the "Closing") incident to the funding of the initial loans made under the
Credit Agreement. Moreover, we have examined the following documents:
(a) the forms of the Credit Agreement and the exhibits thereto,
including the forms of the promissory notes annexed thereto (the "Notes");
(b) the opinion letter of White & Case (the "W&C Opinion");
(c) the officers' certificates and other documents delivered at the
Closing.
In such examination, we have assumed the legal capacity of all
natural persons, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified, conformed or photostatic copies and the conformity of such documents
to the original documents.
Insofar as our opinion expressed below relates to the matters set
forth in the W&C Opinion, we have assumed without independent investigation the
correctness of the matters set forth therein, and our opinion is subject to the
assumptions, qualifications and limitations set forth in the W&C Opinion. We
have also assumed that the Credit Agreement and the Notes constitute valid and
legally binding obligations of the Agents and the Lenders.
Based upon the foregoing, and subject to the qualifications and
comments set forth below, we are of the opinion that, insofar as the law of the
State of New York is concerned, the Credit Agreement and the Notes constitute
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms.
Our opinion is subject to the following qualifications:
(d) Our opinion is subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(e) We express no opinion as to any indemnification obligations of
the Company under the Credit Agreement to the
XIII-2
extent such obligations might be deemed to be inconsistent with public policy.
(f) We express no opinion as to the provisions of Section 10.4 of
the Credit Agreement purporting to grant a right to setoff to participants.
(g) We express no opinion as to any provision of the Credit
Agreement that purports to establish an evidentiary standard for determinations
by the Lenders or the Agents.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State of
New York.
This opinion is rendered to you in connection with the
above-described transaction. This opinion may not be relied upon by you for any
other purpose or relied upon by any other person, firm or corporation without
our prior written consent.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
XIII-3
EXHIBIT XIV
[FORM OF OPINION OF LOCAL COUNSEL]
June __, 1998
The Chase Manhattan Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
National Westminster Bank PLC,
as Syndication Agent
[ADDRESS]
Swiss Bank Corporation,
as Documentation Agent
[ADDRESS]
And each of the Lenders parties to the Third Amended
and Restated Credit Agreement referred to below
We have acted as special counsel in the State of ____________ (the
"State") to Aurora Foods Inc., a Delaware corporation (the "Borrower") in
connection with (a) the Third Amended and Restated Credit Agreement, dated as of
June __, 1998 (the "Credit Agreement"), among Borrower, the financial
institutions from time to time parties thereto (the "Lenders"), The Chase
Manhattan Bank, as Administrative Agent, National Westminster Bank PLC, as
Syndication Agent and Swiss Bank Corporation, as Documentation Agent and (b) the
Third Amended and Restated Security Agreement (the "Security Agreement")
delivered pursuant to the Credit Agreement.
The opinions expressed below are furnished to you pursuant to the Credit
Agreement. Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings ascribed to them in the Credit
Agreement.
In arriving at the opinions expressed below,
(a) we have examined and relied on the originals, or copies certified or
otherwise identified to our satisfaction, of each of (1) the Credit Agreement,
(2) the Security Agreement and (3) the mortgage listed on Schedule 1 (the "State
Mortgage");
(b) we have examined unfiled copies of financing statements (collectively,
the "Financing Statements") naming Borrower as Debtor and the Administrative
Agent as Secured Party and describing the Collateral (as defined in the Security
Agreement and the State Mortgage) as to which security interests may be
XIV-1
perfected by filing under the Uniform Commercial Code of the State (the "Filing
Collateral"), which we understand will be filed in the filing offices listed on
Schedule 2 (the "Filing Offices"); and
(c) we have examined such corporate documents and records of the Loan
Parties and such other instruments and certificates of public officials,
officers and representatives of the loan parties and other Persons, and we have
made such investigations of law, in each case as we have deemed appropriate as a
basis for such opinions.
In rendering the opinions expressed below, we have assumed, with your
permission, without independent investigation or inquiry, (a) the authenticity
of all documents submitted to us as originals, (b) the genuineness of all
signatures on all documents that we examined and (c) the conformity to authentic
originals of documents submitted to us as certified, conformed or photostatic
copies.
Based upon and subject to the foregoing, we are of the opinion that:
1. The execution and delivery by Borrower of the Security Agreement, the
performance by Borrower of its obligations thereunder and the creation and
perfection of any security interest upon or with respect to any of the
properties of Borrower provided for therein 1. do not and will not violate any
Requirement of Law of the State and 2. except for the filings described on
Schedule 2 to perfect the security interests created by the Security Agreement
with respect to the Filing Collateral and the recordings described on Schedule 1
attached hereto to perfect the liens created by the State Mortgage do not and
will not require any Governmental Authorization.
2. (a) The provisions of the Security Agreement create in favor of the
Agent a legal, valid and enforceable security interest in the Collateral.
(b) The Agent, upon filing of the Financing Statements in the Filing
Offices, will have a perfected security interest in the Filing Collateral.
3. The State Mortgage
(a) constitutes a legal, valid and binding obligation of Borrower
enforceable against Borrower in accordance with its terms;
(b) is in proper form for recording;
(c) complies as to form with all existing Requirements of Law;
XIV-2
(d) creates in favor of the Mortgagee (as defined in such State Mortgage)
a legal, valid and binding lien on the real property and fixtures described in
such State Mortgage, enforceable as such against Borrower and, when recorded in
the applicable office listed on Schedule 1, all other Persons; and
(e) when recorded in the applicable office listed on Schedule 1, will
constitute a perfected lien on the real property and fixtures described in such
State Mortgage.
The facts that (a) the State Mortgage secures the guaranty of obligations
arising under a term loan facility and a revolving line of credit and (b) the
Term Loans and Revolving Loans may from time to time be repaid in full or in
part and reborrowed in accordance with the terms of the Credit Agreement will
not result in a subordination of the liens of the State Mortgage to any other
lien on the real property and fixtures described in such State Mortgage or
otherwise impair the priority of the liens of such State Mortgage.
4. The courts of the State will enforce those provisions in the Security
Agreement and the State Mortgage which provide that the validity, construction
and enforceability of such documents will be governed by the laws of the State
of New York, except that the Courts of the State may apply the internal law of
the State to determine the perfection and effect of perfection of the liens
created under such documents and the application of remedies in enforcing such
liens with respect to property located in the State.
Our opinions set forth in paragraphs 2 and 3 above are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
We are members of the bar of the State and we express no opinion as to the
laws of any jurisdiction other than the laws of the State and the Federal laws
of the United States of America.
This opinion has been rendered solely for your benefit and for the benefit
of your Eligible Assignees pursuant to the Credit Agreement in connection with
the Credit Agreement and the transactions contemplated thereby and may not be
used, circulated, quoted, relied upon or otherwise referred to for any other
purpose without our prior written consent; provided, however, that this opinion
may be delivered to your regulators, accountants, attorneys and other
professional advisers and may be used in connection with any legal or regulatory
proceeding relating to the subject matter of this opinion.
Very truly yours,
XIV-3
Schedule 1
MORTGAGE RECORDINGS
IN THE STATE OF _______________
Description of Mortgage
Recording Office
Mortgage dated as of June __, 1998 Office of __________
County Clerk
from Aurora Foods Inc., as Mortgagor, to
The Chase Manhattan Bank, as Mortgagee
XIV-4
Schedule 2
FILING OFFICES
IN THE STATE OF ________________
1. Office of the Secretary of State of the State of ______________
2. Office of the ______________ County Clerk
XIV-5
EXHIBIT XV
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "Agreement") is entered into by and
between the parties designated as Assignor ("Assignor") and Assignee
("Assignee") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "Schedule of
Terms") and relates to that certain Credit Agreement described in the Schedule
of Terms (said Credit Agreement, as amended, restated, supplemented or otherwise
modified to the date hereof and as it may hereafter be amended, restated,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. Assignment and Assumption.
(a) Effective upon the Settlement Date specified in Item 4 of the
Schedule of Terms (the "Settlement Date"), Assignor hereby sells and assigns to
Assignee, without recourse, representation or warranty (except as expressly set
forth herein), and Assignee hereby purchases and assumes from Assignor, that
percentage interest in all of Assignor's rights and obligations as a Lender
arising under the Credit Agreement and the other Loan Documents with respect to
Assignor's Commitments and outstanding Loans, if any, which represents, as of
the Settlement Date, the percentage interest specified in Item 3 of the Schedule
of Terms of all rights and obligations of Lenders arising under the Credit
Agreement and the other Loan Documents with respect to the Commitments and any
outstanding Loans (the "Assigned Share"). Without limiting the generality of the
foregoing, the parties hereto hereby expressly acknowledge and agree that any
assignment of all or any portion of Assignor's rights and obligations relating
to Assignor's Revolving Loan Commitment shall include (i) in the event Assignor
is an Issuing Lender with respect to any outstanding Letters of Credit (any such
Letters of Credit being "Assignor Letters of Credit"), the sale to Assignee of a
participation in the Assignor Letters of Credit and any drawings thereunder as
contemplated by subsection 3.1C of the Credit Agreement and (ii) the sale to
Assignee of a ratable portion of any participations previously purchased by
Assignor pursuant to said subsection 3.1C with respect to any Letters of Credit
other than the Assignor Letters of Credit.
(b) In consideration of the assignment described above, Assignee
hereby agrees to pay to Assignor, on the Settlement Date, the principal amount
of any outstanding Loans included within the Assigned Share, such payment to be
made by
XV-1
wire transfer of immediately available funds in accordance with the applicable
payment instructions set forth in Item 5 of the Schedule of Terms.
(c) Assignor hereby represents and warrants that Item 3 of the
Schedule of Terms correctly sets forth the amount of the Commitments, the
outstanding Term Loan and the Pro Rata Share corresponding to the Assigned
Share.
(d) Assignor and Assignee hereby agree that, upon giving effect to
the assignment and assumption described above, (i) Assignee shall be a party to
the Credit Agreement and shall have all of the rights and obligations under the
Loan Documents, and shall be deemed to have made all of the covenants and
agreements contained in the Loan Documents, arising out of or otherwise related
to the Assigned Share, and (ii) Assignor shall be absolutely released from any
of such obligations, covenants and agreements assumed or made by Assignee in
respect of the Assigned Share. Assignee hereby acknowledges and agrees that the
agreement set forth in this Section 1(d) is expressly made for the benefit of
Company, Agents, Assignor and the other Lenders and their respective successors
and permitted assigns.
(e) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect the assignment by
Assignor and the assumption by Assignee of Assignor's rights and obligations
with respect to the Assigned Share, (ii) any other assignments by Assignor of a
portion of its rights and obligations with respect to the Commitments and any
outstanding Loans shall have no effect on the Commitments, the outstanding
Tranche A Term Loan and the respective Pro Rata Shares corresponding to the
Assigned Shares as set forth in Item 3 of the Schedule of Terms or on the
interest of Assignee in any outstanding Revolving Loans corresponding thereto,
and (iii) from and after the Settlement Date, Administrative Agent shall make
all payments under the Credit Agreement in respect of the Assigned Share
(including without limitation all payments of principal and accrued but unpaid
interest, commitment fees and letter of credit fees with respect thereto) (1) in
the case of any such interest and fees that shall have accrued prior to the
Settlement Date, to Assignor, and (2) in all other cases, to Assignee; provided
that Assignor and Assignee shall make payments directly to each other to the
extent necessary to effect any appropriate adjustments in any amounts
distributed to Assignor and/or Assignee by Administrative Agent under the Loan
Documents in respect of the Assigned Share in the event that, for any reason
whatsoever, the payment of consideration contemplated by Section 1(b) occurs on
a date other than the Settlement Date.
XV-2
SECTION 2. Certain Representations, Warranties and Agreements.
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse claim.
(b) Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Loan Documents or for any representations, warranties,
recitals or statements made therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Assignor to Assignee or by or on behalf
of Company or of any other Loan Party to Assignor or Assignee in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall Assignor be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default.
(c) Assignee represents and warrants that it is an Eligible
Assignee; that it has experience and expertise in the making or purchasing of
loans such as the Loans; that it has acquired the Assigned Share for its own
account in the ordinary course of its business and without a view to
distribution of the Loans within the meaning of the Securities Act or the
Exchange Act or other federal securities laws (it being understood that, subject
to the provisions of subsection 10.1 of the Credit Agreement, the disposition of
the Assigned Share or any interests therein shall at all times remain within its
exclusive control); and that it has received, reviewed and approved a copy of
the Credit Agreement (including all Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received from
Assignor such financial information regarding Company and its Subsidiaries as is
available to Assignor and as Assignee has requested, that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the assignment evidenced by this Agreement,
and that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. Assignor shall have no duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Assignee or to provide Assignee
with any other credit or other information with respect thereto, whether coming
into its possession before the making of the initial Loans or at any time or
times thereafter, and Assignor shall not have any responsibility with respect to
the accuracy of or the completeness of any information provided to Assignee.
XV-3
(e) Each party to this Agreement represents and warrants to the
other party hereto that it has full power and authority to enter into this
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity.
SECTION 3. Miscellaneous.
(a) Each of Assignor and Assignee hereby agrees from time to time,
upon request of the other such party hereto, to take such additional actions and
to execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed by
the party (including, if applicable, any party required to evidence its consent
to or acceptance of this Agreement) against whom enforcement of such change,
waiver, discharge or termination is sought.
(c) Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed. For the purposes hereof, the notice address of each of
Assignor and Assignee shall be as set forth on the Schedule of Terms or, as to
either such party, such other address as shall be designated by such party in a
written notice delivered to the other such party. In addition, the notice
address of Assignee set forth on the Schedule of Terms shall serve as the
initial notice address of Assignee for purposes of subsection 10.8 of the Credit
Agreement.
(d) In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
(e) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5~1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
XV-4
(f) This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
(g) This Agreement may be executed in one or more counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
(h) This Agreement shall become effective upon the date (the
"Assignment Effective Date") upon which all of the following conditions are
satisfied: (i) the execution of a counterpart hereof by each of Assignor and
Assignee, (ii) the giving of notice to Company, (iii) the receipt by
Administrative Agent of the processing and recordation fee referred to in
subsection 10.1B(i) of the Credit Agreement, (iv) in the event Assignee is a
Non-US Lender (as defined in subsection 2.7B(iii)(a) of the Credit Agreement),
the delivery by Assignee to Administrative Agent of such forms, certificates or
other evidence with respect to United States federal income tax withholding
matters as Assignee may be required to deliver to Administrative Agent pursuant
to said subsection 2.7B(iii)(a), (v) the execution of a counterpart hereof by
Administrative Agent as evidence of its consent hereto to the extent required
under subsection 10.1B(i) of the Credit Agreement and by Administrative Agent as
evidence of its acceptance hereof in accordance with subsection 10.1B(ii) of the
Credit Agreement, (vi) the receipt by Administrative Agent of originals or
telefacsimiles of the counterparts described above and authorization of delivery
thereof, and (vii) the recordation by Administrative Agent in the Register of
the pertinent information regarding the assignment effected hereby in accordance
with subsection 10.1B(ii) of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers hereunto duly
authorized, such execution being made as of the Effective Date in the applicable
spaces provided on the Schedule of Terms.
XV-5
SCHEDULE OF TERMS
1. Company: AURORA FOODS INC., a Delaware corporation
2. Name and Date of Credit Agreement: Third Amended and Restated Credit
Agreement dated as of June __, 1998, by and among Company, the financial
institutions listed therein as Lenders, The Chase Manhattan Bank, as
Administrative Agent, National Westminster Bank PLC, as Syndication Agent,
and Swiss Bank Corporation, as Documentation Agent.
3. Amounts:
Re: Tranche A Re: Revolving
Term Loans Loans
(a) Aggregate $__________ $__________
Commitments of
all Lenders: ___________% ___________%
(b) Assigned
Share/Pro Rata
Share: $__________ $__________
(c) Amount of
Assigned Share
of Commitments: $__________ $___________
(d) Amount of
Assigned Share: $__________ $___________
4. Settlement Date: ___________________, [199_][200_]
5. Payment Instructions:
ASSIGNOR: ASSIGNEE:
See Annex A See Annex B
6. Notice Addresses:
ASSIGNOR: ASSIGNEE:
See Annex A See Annex B
7. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: _________________ By: ________________
Name: Name:
Title: Title:
Consented to and accepted in
accordance with subsections 10.1B(i)
and (ii) of the Credit Agreement
THE CHASE MANHATTAN BANK,
as Administrative Agent
XV-6
By: _________________
Name:
Title:
XV-7
ANNEX A
Assignor Payment Instructions:
___________________________
___________________________
___________________________
Attention:_________________
Reference:_________________
Assignor Notice Addresses:
___________________________
___________________________
___________________________
Attention:_________________
Reference:_________________
XV-8
ANNEX B
Assignee Payment Instructions:
___________________________
___________________________
___________________________
Attention:_________________
Reference:_________________
Assignee Notice Addresses:
___________________________
___________________________
___________________________
Attention:_________________
Reference:_________________
XV-9
EXHIBIT XVI
[FORM OF PERMITTED SELLER NOTE]
___% NON-NEGOTIABLE SUBORDINATED NOTE
[Insert Date] $__________
AURORA FOODS INC., a Delaware corporation (the "Borrower"), hereby
promises upon the terms and subject to the provisions hereof to pay to [NAME OF
SELLER] (the "Holder"), the principal amount of [__________] Dollars
($_________).
This _____% Non-Negotiable Junior Subordinated Note (the "Note") was
issued pursuant to the Purchase Agreement (the "Purchase Agreement") dated as of
[__________, [199_] [200_], between the Borrower and the Holder.
1. Definitions. As used herein, the following terms shall have the
following meanings:
"Indebtedness" means (i) all obligations for borrowed money or for
the deferred purchase price of property or services (including, without
limitation, all obligations contingent or otherwise in connection with
acceptance, letter of credit or similar facilities, (ii) all obligations
evidenced by bonds, notes, debentures or other similar instruments or
securities, (iii) all indebtedness created or arising under any sale and
leaseback arrangement, conditional sale or other title retention agreement with
respect to property owned or acquired (whether or not the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (iv) all rental obligations under
capital leases to the extent not included in clause (iii) above, (v) all
guarantees (direct or indirect), all contingent reimbursement obligations under
undrawn letters of credit and all other contingent obligations in respect of, or
obligations to purchase or otherwise acquire or to assure payment of,
indebtedness of others and (vi) indebtedness of others secured by any lien upon
property, whether or not assumed, but only to the extent of such property's fair
market value.
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Senior Agent" shall mean The Chase Manhattan Bank, as
Administrative Agent for the Lenders under the Senior Credit Agreement, and its
successors in such capacity, or if there is then no acting Administrative Agent
under the Senior Credit Agreement, financial institutions holding a majority in
principal amount of the Senior Debt outstanding thereunder.
XVI-1
"Senior Credit Agreement" shall mean the Third Amended and Restated
Credit Agreement, dated as of June __, 1998, by and among the Borrower, the
financial institutions listed therein as Lenders, The Chase Manhattan Bank, as
Administrative Agent, National Westminster Bank PLC, as Syndication Agent, and
Swiss Bank Corporation, as Documentation Agent, as amended, restated, modified
or supplemented from time to time hereafter, together with any credit agreement
or similar document from time to time executed by the Borrower to evidence any
Refinancing (as defined in the definition of Senior Indebtedness) or successive
Refinancings.
"Senior Indebtedness" shall mean (i) all Obligations (as defined in
the Senior Credit Agreement) (including Contingent Obligations, as defined in
the Senior Credit Agreement) now or hereafter incurred pursuant to and in
accordance with the terms of the Senior Debt Documents, (ii) any additional
Indebtedness incurred under or pursuant to the Senior Credit Agreement and the
other Senior Debt Documents whether such Obligations or additional Indebtedness
involve principal prepayment charges, interest (including, without limitation,
interest accruing after the filing of a petition initiating any proceeding under
the Bankruptcy Code, whether or not allowed as a claim in such proceeding)
indemnities or reimbursement of fees, expenses or other amounts, and (iii) any
indebtedness incurred for the purpose of refinancing, restructuring, extending
or renewing (collectively, "Refinancing") the obligations of the Borrower under
the Senior Credit Agreement as set forth in clauses (i) and (ii) above.
"Senior Debt Documents" shall mean the Senior Credit Agreement and
all other documents and instruments delivered or filed in connection with the
creation or incurrence of any Senior Indebtedness (including, without
limitation, the guaranty agreements executed and delivered by the subsidiaries
of the Borrower in respect of the Obligations under the Senior Credit
Agreement).
"Senior Lenders" shall mean the financial institutions party to the
Senior Credit Agreement as "Lenders" from time to time.
2. Payment of Interest. Interest shall accrue on the unpaid
principal amount of this Note from the date hereof at the rate of [_____]% per
annum [NOT TO EXCEED 12%] (the "Interest Rate"), calculated on the basis of a
365 day year: The Borrower shall pay interest semi-annually in arrears on the
fifteenth day of January and July in each year (each, an "Interest Payment
Date") commencing on ___________, [199_] [200_].
3. Payment of Principal.
(a) Scheduled Payment. Subject to the provisions of Section 4
hereof, on [__________], [199_][200_] (the "Maturity Date"), the Borrower shall
pay to the holder of this Note the entire principal amount of this Note, plus
all accrued and unpaid interest hereon which is then unpaid.
XVI-2
(b) Optional Prepayments. Subject to the provisions of Section 4
hereof, the Borrower may, at any time and from time to time, without premium or
penalty, prepay all or a portion of the unpaid principal amount of this Note,
together with unpaid interest accrued since the preceding Interest Payment Date
to which interest has been paid on such portion of the principal amount which it
is prepaying; provided, that no such prepayment shall be made if such prepayment
is then prohibited by the terms of any Senior Indebtedness. A prepayment of less
than all of the unpaid principal amount of this Note shall not relieve the
Borrower of its obligation to make the scheduled payment on this Note on the
Maturity Date. Each partial payment under this Note shall first be credited to
accrued and unpaid interest on the principal being prepaid, and the remainder
shall be credited to principal. Whenever any payment to be made hereunder shall
be due on a date which is not a business day, the payment shall be made on the
next succeeding business day and such extension of time shall be included in the
computation of interest with respect to such payment.
4. Subordination.
(a) Agreement to Subordinate. The Borrower and, by its acceptance
hereof, each Holder agree that the indebtedness of the Borrower evidenced by
this Note, whether for principal, interest on any other amount payable under or
in respect hereof and all rights or claims arising out of or associated with
such Indebtedness (the "Subordinated Obligations"), shall be junior and
subordinate in right of payment to the prior payment in full in cash of all
Senior Indebtedness, in accordance with the provisions of this Section 4. Each
holder of Senior Indebtedness shall be deemed to have acquired Senior
Indebtedness in reliance upon the agreements of the Borrower and the holder of
this Note contained in this Section 4. The provisions of this Section 4 shall be
reinstated if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by any holder of Senior Indebtedness or
any representative of such holder upon the insolvency, bankruptcy or
reorganization of the Borrower. Any provision of this Note to the contrary
notwithstanding (other than the provision contained in Section 6), the Borrower
shall not make, and no Holder shall accept, any payment or prepayment of
principal, or prepayment of other amounts due thereunder, of any kind whatsoever
(including without limitation by distribution of assets, set off, exchange or
any other manner) with respect to the Subordinated Obligations at any time when
any of the Senior Indebtedness remains outstanding. Holder may receive interest
payments in respect of the Subordinated Obligations in accordance with the terms
of this Note except to the extent and at the times prohibited or restricted by
the provisions of this Section 4. In no event shall the Holder commence any
action or proceeding to contest the provisions of this Section 4 or the priority
of the Liens (as defined in the Senior Credit Agreement) granted to the holders
of the Senior Indebtedness by the Borrower. No Holder shall take, accept or
receive any collateral security from the Borrower for the payment of the
Subordinated Obligations.
XVI-3
(b) Liquidation, Dissolution, Bankruptcy. In the event of any
insolvency, bankruptcy, dissolution, winding up, liquidation, arrangement,
reorganization, marshalling of assets or liabilities, composition, assignment
for the benefit of creditors or other similar proceedings relating to the
Borrower, its debts, its property or its operations, whether voluntary or
involuntary, including, without limitation the filing of any petition or the
taking of any action to commence any of the foregoing (which, in the case of
action by a third party, is not dismissed within 60 days) (a "Bankruptcy
Event"), all Senior Indebtedness shall first be paid in full in cash or other
immediately available funds before Holder shall be entitled to receive or retain
any payment or distribution of assets of the Borrower with respect to any
Subordinated Obligations. In the event of any such Bankruptcy Event, any payment
or distribution of assets to which Holder would be entitled if the Subordinated
Obligations were not subordinated to the Senior Indebtedness in accordance with
this Section 4, whether in cash, property, securities or otherwise, shall be
paid or delivered by the debtor, custodian, trustee or agent or other Person
making such payment or distribution, or by the Holder if received by it,
directly to the Senior Agent on behalf of the holders of the Senior Indebtedness
for application to the payment of the Senior Indebtedness remaining unpaid, to
the extent necessary to make payment in full in cash or other immediately
available funds of all Senior Indebtedness remaining unpaid, after giving effect
to any concurrent payment or distribution to or for the holders of the Senior
Indebtedness.
(c) No Payments with Respect to Subordinated Obligations in Certain
Circumstances.
(i) In circumstances in which Section 4(b) is not applicable, no
payment of any nature (including, without limitation, any distribution of
assets) in respect of the Subordinated Obligations (including, without
limitation, pursuant to any judgment with respect thereto or on account of the
purchase or redemption or other acquisition of Subordinated Obligations, by set
off, prepayment exchange or other manner) shall be made by or on behalf of the
Borrower if, at the time of such payment:
(A) a default in the payment when due (whether at the maturity
thereof, or upon acceleration of maturity or otherwise and without giving
effect to any applicable grace periods) of all or any portion of the Senior
Indebtedness (whether of principal, interest or any other amount with
respect thereto) shall have occurred, and such default shall not have been
cured or waived in accordance with the terms of the Senior Debt Documents;
or
(B) subject to the last sentence of this Section 4(c), (x) the
Borrower shall have received notice from the Senior Agent of the occurrence
of one or more Events of Default (as defined in the Senior Credit
Agreement) in respect of the Senior Indebtedness (other than payment
defaults described in Section 4(c)(i)(A) above), (y) each such Event of
Default shall not have been cured or waived in accordance with the
XVI-4
terms of the Senior Debt Documents, and (z) 180 days shall not have elapsed
since the date such notice was received.
The Borrower may resume payments (and may make any payments missed
due to the application of Section 4(c)(i) in respect of the Subordinated
Obligations or any judgment with respect thereto:
(A) in the case of a default referred to in clause (A) of this
Section 4(c)(i), upon a cure or waiver thereof in accordance with the terms
of the Senior Debt Documents; or
(B) in the case of an Event of Default or Events of Default referred
to in clause (B) of this Section 4(c)(i), upon the earlier to occur of (1)
the cure or waiver of all such Events of Default in accordance with the
terms of the Senior Debt Documents, or (2) the expiration of such period of
180 days.
(ii) Following any acceleration of the maturity of any Senior
Indebtedness and as long as such acceleration shall continue unrescinded and
unannulled, such Senior Indebtedness shall first be paid in full in cash, or
provision for such payment shall be made in a manner satisfactory to the holders
of the Senior Indebtedness, before any payment is made on account of or applied
on the Subordinated Obligations.
(iii) The Borrower shall give prompt written notice to the Holder of
(A) any default in respect of Senior Obligations referred to in Section
4(c)(i)(A) and (B) any notice of the type described in Section 4(c)(i)(B) from
the Senior Agent.
(d) When Distribution Must Be Paid Over. In the event that Holder
shall receive any payment or distribution of assets that Holder is not entitled
to receive or retain under the provisions of this Note, Holder shall hold any
amount so received in trust for the holders of Senior Indebtedness, shall
segregate such assets from other assets held by Holder and shall forthwith turn
over such payment or distribution (without liability for interest thereon) to
the Senior Agent on behalf of the holders of Senior Indebtedness in the form
received (with any necessary endorsement) to be applied to Senior Indebtedness.
(e) Exercise of Remedies. So long as any Senior Indebtedness is
outstanding (including any loans, any letters of credit, any commitments to lend
or any lender guarantees), Holder (solely in its capacity as a holder of this
Note) shall not exercise any rights or remedies with respect to an Event of
Default under this Note, including, without limitation, any action (l) to demand
or ▇▇▇ for collection of amounts payable hereunder, (2) to accelerate the
principal of this Note, or (3) to commence or join with any other creditor
(other than the holder of a majority in principal amount of the Senior
Indebtedness) in commencing any proceeding in connection with or premised on the
occurrence of a Bankruptcy Event prior to the earlier of:
XVI-5
(A) the payment in full in cash or other immediately available funds
of all Senior Indebtedness;
(B) the initiation of a proceeding (other than a proceeding
prohibited by clause (3) of this Section 4(e)) in connection with or
premised upon the occurrence of a Bankruptcy Event;
(C) the expiration of 180 days immediately following the receipt by
the Senior Agent of notice of the occurrence of such Event of Default from
the Holder; and
(D) the acceleration of the maturity of the Senior Indebtedness;
provided, however, that if, with respect to (B) and (D) above, such proceeding
or acceleration, respectively, is rescinded, or with respect to (C) above,
during such 180-day period such Event of Default has been cured or waived, the
prohibition against taking the actions described in this section 4(e) shall
automatically be reinstated as of the date of the rescission, cure or waiver, as
applicable. In all events, unless an event described in clause (A), (B) or (D)
above has occurred and not been rescinded, the Holder shall give thirty (30)
days prior written notice to the Senior Agent before taking any action described
in this Section 4(e), which notice shall describe with specificity the action
that the Holder in good faith intends to take.
(f) Acceleration of Payment of Note. If this Note is declared due
and payable prior to the Maturity Date, no direct or indirect payment that is
due solely by reason of such declaration shall be made, nor shall application be
made of any distribution of assets of the Borrower (whether by set off or in any
other manner, including, without limitation, from or by way of collateral) to
the payment, purchase or other acquisition or retirement of this Note, unless,
in either case, (i) all amounts due or to become due on or in respect of the
Senior Indebtedness (including with respect to any outstanding letters of
credit) shall have been previously paid in full in cash or other immediately
available funds or in any other manner satisfactory to all holders of such
Senior Indebtedness, (ii) all commitments to lend under Senior Indebtedness
shall have been terminated, (iii) all guarantees constituting Senior
Indebtedness shall have been terminated and (iv) all lender guarantees
constituting Senior Indebtedness shall have been permanently reduced to zero.
(g) Proceedings Against Borrower. So long as any Senior Indebtedness
is outstanding (including any loans, any commitments to lend or open lender
guarantees or any lender guarantees, Holder (solely in its capacity as a holder
of this Note) shall not commence any bankruptcy, insolvency, reorganization or
other similar proceeding against Borrower.
(h) Amending Senior Indebtedness. Any holder of Senior Indebtedness
may, at any time and from time to time, without the consent of or notice to
Holder (i) modify or amend the terms of the Senior Indebtedness provided that
such Senior
XVI-6
Indebtedness cannot be extended or renewed past June 30, 2005, (ii) sell,
exchange, release, fail to perfect a lien on or a security interest in or
otherwise in any manner deal with or apply any property pledged or mortgaged to
secure, or otherwise securing, Senior Indebtedness, (iii) release any guarantor
or any other person liable in any manner for the Senior Indebtedness, (iv)
exercise or refrain from exercising any rights against Borrower or any other
person, (v) apply any sums by whomever paid or however realized to Senior
Indebtedness or (vi) take any other action that might be deemed to impair in any
way the rights of the holder of this Note. Any and all of such actions may be
taken by the holders of Senior Indebtedness without incurring responsibility to
Holder and without impairing or releasing the obligations of Holder to the
holders of Senior Indebtedness.
(i) Certain Rights in Bankruptcy. Holder hereby irrevocably
authorizes and empowers each holder of Senior Indebtedness (and its
representative or representatives) to demand, ▇▇▇ for, collect and receive all
payments and distributions under the terms of this Note, to file and prove all
claims (including claims in bankruptcy) relating to this Note, to exercise any
right to vote arising with respect to this Note and any claims hereunder in any
bankruptcy, insolvency or similar proceeding and take any and all other actions
in the name of Holder (solely in its capacity as a holder of this Note), as such
holder of Senior Indebtedness determines to be necessary or appropriate.
(j) Subrogation. No payment or distribution to any holder of Senior
Indebtedness pursuant to the provisions of this Note shall entitle Holder to
exercise any right of subrogation in respect thereof until (i)(w) all Senior
Indebtedness shall have been paid in full in cash or other immediately available
funds or in any other manner satisfactory to all holders of Senior Indebtedness,
(x) all commitments to lend under Senior Indebtedness shall have been
terminated, (y) all guarantees constituting Senior Indebtedness shall have been
terminated and (z) all lender guarantees constituting Senior Indebtedness shall
have been permanently reduced to zero or (ii) all holders of Senior Indebtedness
have consented in writing to the taking of such action.
(k) Relative Rights. The provisions of this Section 4 are for the
benefit of the holders of Senior Indebtedness (and their successors and assigns)
and shall be enforceable by them directly against Holder. Holder acknowledges
and agrees that any breach of the provisions of this Section 4 will cause
irreparable harm for which the payment of monetary damages may be inadequate.
For this reason, Holder agrees that, in addition to any remedies at law or
equity to which a holder of the Senior Indebtedness may be entitled, a holder of
the Senior Indebtedness will be entitled to an injunction or other equitable
relief to prevent breaches of the provisions of this Section 4 and/or to compel
specific performance of such provisions. The provisions of this Section 4 shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of Senior Indebtedness is rescinded or must otherwise be returned by
any holder of Senior Indebtedness upon the occurrence of a Bankruptcy Event or
XVI-7
otherwise, all as though such payment had not been made. The provisions of this
Section 4 are not intended to impair and shall not impair as between Borrower
and Holder, the obligation of Borrower, which is absolute and unconditional, to
pay Holder all amounts owing under this Note.
(l) Reliance on Orders and Decrees. Subject to the provisions of
Section 4(d) hereof, upon any payment or distribution of assets of Borrower,
whether in cash, property, securities or otherwise, Holder shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which any insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to Holder for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section 4.
5. Events of Default.
(a) Definition. The following shall be an "Event of Default" under
this Note;
(i) the Borrower shall fail to make any payment of interest on this
Note when the same shall become due and payable and such failure shall
continue for a period of 5 days;
(ii) the Borrower shall fail to make any payment of the principal of
this Note when the same shall become due and payable, whether on the
Maturity Date or otherwise;
(iii) (A) the Borrower shall commence any case, proceeding or action
(x) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to its debts, or (y)
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, (B) the
Borrower shall make a general assignment for the benefit of its creditors,
(C) there shall be commenced against the Borrower any case, proceeding or
other action of a nature referred to in clause (A) above which shall not
have been vacated or discharged within 60 days from the commencement
thereof, or (D) a court shall enter a decree or order for relief in any
involuntary case under Title 11 of the United States Code, as amended from
time to time, or any applicable bankruptcy or similar law now or hereafter
in effect, which
XVI-8
decree or order is not stayed, vacated, discharged, or bonded pending
appeal within 60 days from the entry thereof; or
(iv) the acceleration of the maturity of the Senior Indebtedness.
(b) Remedies. If an Event of Default shall occur and be continuing,
then, subject to the provisions of Section 4, the Holder may, upon written
notice to the Borrower, declare all amounts owing under this Note to be
immediately due and payable.
Subject to the immediately preceding paragraph and to Section 4
above, the Holder shall also have all other rights in respect of this Note
following the occurrence and during the continuance of an Event of Default which
are available pursuant to applicable law or in equity.
[6. Right of Set-Off. Anything in this Note to the contrary
notwithstanding, nothing in this Note shall preclude the Borrower from timely
exercising such Borrower's right pursuant to Section _____ of the Purchase
Agreement to set-off indemnification claims against this Note and/or interest
payments under this Note.]
7. No Presentment. The Borrower, for itself and any guarantors
hereof, and their successors and assigns, waives presentment, demand, protest
and notice thereof or of dishonor, and waives any right to be released by reason
of any extension of time or change in the terms of payment.
8. Amendment. So long as any Senior Indebtedness is outstanding
(including any commitment under the Senior Agent Documents) the terms of this
Note may be amended only with the consent of the Senior Agent. Subject to the
foregoing, without the consent of the Senior Agent hereof, this Note may be
amended by the Borrower and the Holder to cure any ambiguity, defect or
inconsistency that does not affect the subordination provisions hereof or the
rights of the Senior Lenders.
9. Cancellation. After all unpaid principal and interest owed on
this Note has been paid in full, this Note shall be surrendered to the Borrower
for cancellation and shall not be reissued.
10. Transfer Restrictions: Acknowledgment of Security Interest. This
Note shall not be transferrable by the Holder hereof without the prior written
consent of the Borrower (which consent shall not be unreasonably withheld). The
Holder hereby acknowledges, and agrees to, the Borrower's grant of its interest
herein to the Lenders under the Credit Agreement, dated as of the date hereof,
to collaterally secure the Borrower's obligations under such Credit Agreement.
11. Payment of Expenses. The Borrower agrees to pay all costs and
expenses (including reasonable attorneys' fees) reasonably incurred by the
Holder after the occurrence and during the continuance of an Event of Default in
enforcing any obligations under this Note or in collecting any payments due
XVI-9
from Borrower under this Note (including in connection with a bankruptcy or
insolvency proceeding with respect to the Borrower).
12. Governing Law. The construction, validity and interpretation of
this Note shall be governed by and construed in accordance with the domestic
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.
13. Descriptive Headings. The descriptive headings of this Note are
inserted for convenience only, and do not constitute a part of this Note.
XVI-10
IN WITNESS WHEREOF, the Borrower has executed and delivered this
Note on the date first written above.
AURORA FOODS INC.
By: _______________________________
Name:
Title:
Agreed:
[NAME OF SELLER]
By: _______________________________
Name:
Title:
XVI-11
EXHIBIT XVII
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Third Amended and Restated
Credit Agreement dated as of June __, 1998 (said Third Amended and Restated
Credit Agreement, as amended, restated, supplemented or otherwise modified to
the date hereof, being the "Credit Agreement"), by and among Aurora Foods Inc.,
a Delaware corporation, the financial institutions listed therein as Lenders
("Lenders"), The Chase Manhattan Bank, as Administrative Agent, National
Westminster Bank PLC, as Syndication Agent, and Swiss Bank Corporation, as
Documentation Agent. Pursuant to subsection 2.7B(iii) of the Credit Agreement,
the undersigned hereby certifies that it is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By: _______________________________
Name:
Title:
XVII-1
EXHIBIT XVIII
[FORM OF COLLATERAL ACCOUNT AGREEMENT]
COLLATERAL ACCOUNT AGREEMENT
This COLLATERAL ACCOUNT AGREEMENT (this "Agreement") is dated as of
June __, 1998 and entered into by and between AURORA FOODS INC., a Delaware
corporation ("Pledgor"), and THE CHASE MANHATTAN BANK, as administrative agent
for and representative of (in such capacity herein called "Secured Party") the
financial institutions ("Lenders") party to the Third Amended and Restated
Credit Agreement referred to below.
PRELIMINARY STATEMENTS
A. Pursuant to that certain Third Amended and Restated Credit
Agreement dated as of June __, 1998 (said Third Amended and Restated Credit
Agreement, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among Pledgor, Lenders, Secured Party, as Administrative Agent, National
Westminster Bank PLC, as Syndication Agent, and Swiss Bank Corporation, as
Documentation Agent, Lenders have made certain commitments, subject to the terms
and conditions set forth in the Credit Agreement, to extend certain credit
facilities to Pledgor.
B. It is a condition precedent to the initial extensions of credit
by Lenders under the Credit Agreement that Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Lenders to make Loans and issue Letters of Credit under the Credit
Agreement and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. Certain Definitions.
The following terms used in this Agreement shall have the following
meanings:
"Collateral" means (i) the Collateral Account, (ii) all amounts on
deposit from time to time in the Collateral Account, (iii) all interest, cash,
instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Collateral, and (iv) to the extent not covered by clauses (i) through
(iii) above, all proceeds of any or all of the foregoing Collateral.
XVIII-1
"Collateral Account" means the restricted deposit account
established and maintained by Secured Party pursuant to subsection 2(a).
"Secured Obligations" means all obligations and liabilities of every
nature of Pledgor now or hereafter existing under or arising out of or in
connection with the Credit Agreement and the other Loan Documents and all
extensions or renewals thereof, whether for principal, interest (including
without limitation interest that, but for the filing of a petition in bankruptcy
with respect to Pledgor, would accrue on such obligations), reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased, created
or incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from Secured Party or any Lender as a preference,
fraudulent transfer or otherwise, and all obligations of every nature of Pledgor
now or hereafter existing under this Agreement.
SECTION 2. Establishment and Operation of Collateral Account.
(a) Secured Party is hereby authorized to establish and maintain at
its office at ________________________________, as a blocked account in the name
of Secured Party and under the sole dominion and control of Secured Party, a
restricted deposit account designated as "Aurora Foods Inc. Collateral Account".
(b) The Collateral Account shall be operated in accordance with the
terms of this Agreement.
(c) All amounts at any time held in the Collateral Account shall be
beneficially owned by Pledgor but shall be held in the name of Secured Party
hereunder, for the benefit of Lenders, as collateral security for the Secured
Obligations upon the terms and conditions set forth herein. Pledgor shall have
no right to withdraw, transfer or, except as expressly set forth herein,
otherwise receive any funds deposited into the Collateral Account.
(d) Anything contained herein to the contrary notwithstanding, the
Collateral Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or governmental authority, as may now or hereafter be
in effect.
SECTION 3. Deposits of Cash Collateral.
(a) All deposits of funds in the Collateral Account shall be made by
wire transfer (or, if applicable, by intra-bank transfer from another account of
Pledgor) of immediately available funds, in each case addressed as follows:
XVIII-2
Account No.:
ABA No.:
Reference:
Attention:
Pledgor shall, promptly after initiating a transfer of funds to the Collateral
Account, give notice to Secured Party by telefacsimile of the date, amount and
method of delivery of such deposit.
(b) If an Event of Default has occurred and is continuing and, in
accordance with Section 8 of the Credit Agreement, Pledgor is required to pay to
Secured Party an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding under the Credit Agreement,
Pledgor shall deliver funds in such an amount for deposit in the Collateral
Account in accordance with Section 3(a). Upon any drawing under any outstanding
Letter of Credit in respect of which Pledgor has deposited in the Collateral
Account any amounts described above, Secured Party shall apply such amounts to
reimburse the Issuing Lender for the amount of such drawing. In the event the
amount deposited in the Collateral Account pursuant to this Section 3(b) exceeds
the maximum amount available to be drawn under all Letters of Credit, Secured
Party shall apply such excess amount then on deposit in the Collateral Account
in accordance with subsection 2.4D of the Credit Agreement.
(c) Pledgor shall, promptly after initiating a transfer of funds to
the Collateral Account, give notice to Secured Party by telefacsimile of the
date, amount and method of delivery of such deposit.
SECTION 4. Pledge of Security for Secured Obligations.
Pledgor hereby pledges and assigns to Secured Party, and hereby
grants to Secured Party a security interest in, all of Pledgor's right, title
and interest in and to the Collateral as collateral security for the prompt
payment or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all
Secured Obligations.
SECTION 5. No Investment of Amounts in the Collateral Account; Interest on
Amounts in the Collateral Account.
(a) Cash held by Secured Party in the Collateral Account shall not
be invested by Secured Party but instead shall be maintained as a cash deposit
in the Collateral Account pending application thereof as elsewhere provided in
this Agreement.
(b) To the extent permitted under Regulation Q of the Board of
Governors of the Federal Reserve System, any cash held in the Collateral Account
shall bear interest at the standard rate paid by Secured Party to its customers
for deposits of like amounts and terms.
XVIII-3
(c) Subject to Secured Party's rights under Section 12, any interest
earned on deposits of cash in the Collateral Account in accordance with
subsection 5(b) shall be deposited directly into and held in the Collateral
Account.
SECTION 6. Representations and Warranties.
Pledgor represents and warrants as follows:
(a) Ownership of Collateral. Pledgor is (or at the time of transfer
thereof to Secured Party will be) the legal and beneficial owner of the
Collateral from time to time transferred by Pledgor to Secured Party, free
and clear of any Lien except for the security interest created by this
Agreement.
(b) Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the grant by Pledgor of the
security interest granted hereby, (ii) the execution, delivery or
performance of this Agreement by Pledgor, or (iii) the perfection of or the
exercise by Secured Party of its rights and remedies hereunder (except as
may have been taken by or at the direction of Pledgor).
(c) Perfection. The pledge and assignment of the Collateral pursuant
to this Agreement creates a valid and perfected first priority security
interest in the Collateral, securing the payment of the Secured
Obligations.
(d) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of Pledgor with respect
to the Collateral is accurate and complete in all respects.
SECTION 7. Further Assurances.
Pledgor agrees that from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Secured
Party may request, in order to perfect and protect any security interest granted
or purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Pledgor will: (a) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as Secured
Party may request, in order to perfect and preserve the security interests
granted or purported to be granted hereby and (b) at Secured Party's request,
appear in and defend any action or proceeding that may affect Pledgor's
beneficial title to or Secured Party's security interest in all or any part of
the Collateral.
SECTION 8. Transfers and other Liens.
XVIII-4
Pledgor agrees that it will not (a) sell, assign (by operation of
law or otherwise) or otherwise dispose of any of the Collateral or (b) create or
suffer to exist any Lien upon or with respect to any of the Collateral, except
for the security interest under this Agreement.
SECTION 9. Secured Party Appointed Attorney-in-Fact.
Pledgor hereby irrevocably appoints Secured Party as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation to file one or more financing or
continuation statements, or amendments thereto, relative to all or any part of
the Collateral without the signature of Pledgor.
SECTION 10. Secured Party May Perform.
If Pledgor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
Pledgor under subsection 10.2 of the Credit Agreement.
SECTION 11. Standard of Care.
The powers conferred on Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral, it being understood that Secured Party shall have no responsibility
for (a) taking any necessary steps (other than steps taken in accordance with
the standard of care set forth above to maintain possession of the Collateral)
to preserve rights against any parties with respect to any Collateral or (b)
taking any necessary steps to collect or realize upon the Secured Obligations or
any guarantee therefor, or any part thereof, or any of the Collateral. Secured
Party shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property of like kind.
SECTION 12. Remedies.
(a) If any Event of Default or Potential Event of Default shall have
occurred and be continuing, Secured Party may (i) transfer any or all of the
Collateral to an account established in Secured Party's name (whether at Secured
Party or otherwise) or (ii) otherwise register title to any Collateral in the
name of Secured Party or one of its nominees or agents, without reference to any
interest of Pledgor.
XVIII-5
(b) If any Event of Default shall have occurred and be continuing,
subject to the provisions of subsection 3(b), Secured Party may exercise in
respect of the Collateral, in addition to all other rights and remedies
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "Code") (whether or not the Code applies to the affected
Collateral).
(c) If the proceeds of any disposition of the Collateral are
insufficient to pay all the Secured Obligations, Pledgor shall be liable for the
deficiency and the fees of any attorneys employed by Secured Party to collect
such deficiency.
(d) Anything contained herein to the contrary notwithstanding, any
of the Collateral consisting of cash held by Secured Party in the Collateral
Account shall be subject to Secured Party's rights of set-off under subsection
10.4 of the Credit Agreement.
SECTION 13. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Pledgor, its successors and assigns, and (c) inure,
together with the rights and remedies of Secured Party hereunder, to the benefit
of Secured Party and its successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Pledgor. Upon any such termination Secured Party shall, at Pledgor's
expense, execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination and Pledgor shall be entitled to
the return, upon its request and at its expense, against receipt and without
recourse to Secured Party, of such of the Collateral as shall not have been
otherwise applied pursuant to the terms hereof.
SECTION 14. Secured Party as Administrative Agent.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement.
XVIII-6
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums held by Secured Party hereunder (which
shall be deposited in a new Collateral Account established and maintained by
such successor Secured Party), together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Secured Party under this Agreement, and (ii) execute and deliver to
such successor Secured Party such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
SECTION 15. Amendments; Etc.
No amendment, modification, termination or waiver of any provision
of this Agreement, and no consent to any departure by Pledgor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Secured Party and, in the case of any such amendment or modification, by
Pledgor. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 16. Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex (with
received answerback), or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed; provided that notices
to Secured Party shall not be effective until received. For the purposes hereof,
the
XVIII-7
address of each party hereto shall be as provided in subsection 10.8 of the
Credit Agreement.
SECTION 17. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 18. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 19. Headings.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 20. Governing Law; Terms.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT
THE CODE PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Credit Agreement, terms used in Articles 8 and 9 of the
Uniform Commercial Code in the State of New York are used herein as therein
defined.
SECTION 21. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
XVIII-8
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XVIII-9
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
AURORA FOODS INC.
By: _______________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Secured Party
By: _______________________________
Name:
Title:
XVIII-10
EXHIBIT XIX
[FORM OF COLLATERAL ACCESS AGREEMENT]
COLLATERAL ACCESS AGREEMENT
RECORDING REQUESTED BY:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
AND WHEN RECORDED MAIL TO:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Re: AURORA FOODS INC.
--------------------------------------------------------------------------------
Space above this line for recorder's use only
REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT
This REAL PROPERTY HOLDER'S WAIVER AND CONSENT AGREEMENT (this
"Agreement") is dated as of ____, [199_][200_] and entered into by
__________________, a ___________________ ("Real Property Holder"), to and for
the benefit of THE CHASE MANHATTAN BANK, having offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as administrative agent (in such capacity, "Administrative
Agent") for the financial institutions ("Lenders") which are or may hereafter
become parties to the Credit Agreement (as hereinafter defined).
R E C I T A L S
C. [Aurora Foods Inc.] [Name of Subsidiary], a [_________]
corporation ("Company"), has possession of and occupies all or a portion of the
property described on Exhibit A annexed hereto (the "Premises").
D. Company's interest in the Premises [arises under the lease
agreement (the "Lease")][is subject to the [mortgage][deed of trust] (the
"Mortgage")] more particularly described on Exhibit B annexed hereto, pursuant
to which Real Property Holder has rights, upon the terms and conditions set
forth therein, to take possession of, and otherwise assert control over, the
Premises.
E. Administrative Agent, Lenders, National Westminster Bank PLC, as
Syndication Agent, and Swiss Bank Corporation, as Documentation Agent, have
entered into that certain Third Amended and Restated Credit Agreement dated as
of June __, 1998 (said Third Amended and Restated Credit Agreement, as amended,
restated, supplemented or otherwise modified from time to time, being the
"Credit Agreement") with [Company] [Aurora Foods Inc., a Delaware corporation of
which Company is a subsidiary
XIX-1
("Borrower")] and Company has executed [a guaranty,] a security agreement and
other collateral documents in relation to the Credit Agreement.
F. [Company's guaranty of] the extensions of credit made by Lenders
to [Company] [Borrower] under the Credit Agreement will be secured, in part, by
all raw materials, work-in-process and finished goods inventory of Company
(including all inventory of Company now or hereafter located on the Premises
(the "Inventory")) and all equipment, machinery and other goods used in
Company's business (including all equipment of Company now or hereafter located
on the Premises (the "Equipment" and, together with the Inventory, the
"Collateral")).
G. Administrative Agent has requested that Real Property Holder
execute this Agreement as a condition to the extension of credit to [Company]
[Borrower] under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Real Property Holder hereby represents and warrants to, and
covenants and agrees with, Administrative Agent as follows:
1. Real Property Holder hereby (a) waives and releases unto
Administrative Agent and its successors and assigns any and all rights granted
by or under any present or future laws to levy or distraint for rent or any
other charges which may be due to Real Property Holder against the Collateral,
and any and all other claims, liens and demands of every kind which it now has
or may hereafter have against the Collateral, and (b) agrees that any rights it
may have in or to the Collateral, no matter how arising (to the extent not
effectively waived pursuant to clause (a) of this paragraph 1), shall be second
and subordinate to the rights of Administrative Agent in respect thereof. Real
Property Holder acknowledges that the Collateral is and will remain personal
property and not fixtures even though it may be affixed to or placed on the
Premises.
2. Real Property Holder certifies that (a) Real Property Holder is
the [landlord under the Lease][beneficiary under the Mortgage], (b) the
[Lease][Mortgage] is in full force and effect and has not been amended,
modified, or supplemented except as set forth on Exhibit B annexed hereto, (c)
there is no defense, offset, claim or counterclaim by or in favor of Real
Property Holder against Company under the [Lease][Mortgage] or against the
obligations of Real Property Holder under the [Lease][Mortgage], (d) no notice
of default has been given under or in connection with the [Lease][Mortgage]
which has not been cured, and Real Property Holder has no knowledge of the
occurrence of any other default under or in connection with the
[Lease][Mortgage], and (e) except as disclosed to Administrative Agent, no
portion of the Premises is encumbered in any way by any deed of trust or
mortgage lien or ground or superior lease.
3. Real Property Holder consents to the installation or placement of
the Collateral on the Premises, and Real Property
XIX-2
Holder grants to Administrative Agent a license to enter upon and into the
Premises to do any or all of the following with respect to the Collateral:
assemble, have appraised, display, remove, maintain, prepare for sale or lease,
repair, transfer, or sell (at public or private sale). In entering upon or into
the Premises, Administrative Agent hereby agrees to indemnify, defend and hold
Real Property Holder harmless from and against any and all claims, judgments,
liabilities, costs and expenses incurred by Real Property Holder caused solely
by Administrative Agent's entering upon or into the Premises and taking any of
the foregoing actions with respect to the Collateral. Such costs shall include
any damage to the Premises made by Administrative Agent in severing and/or
removing the Collateral therefrom.
4. Real Property Holder agrees that it will not prevent
Administrative Agent or its designee from entering upon the Premises at all
reasonable times to inspect or remove the Collateral. In the event that Real
Property Holder has the right to, and desires to, obtain possession of the
Premises [(either through expiration of the Lease or termination thereof due to
the default of Company thereunder)] [(through the exercise of its rights under
the Mortgage upon a default by Company thereunder)], Real Property Holder will
deliver notice (the "Real Property Holder's Notice") to Administrative Agent to
that effect. Within the 45 day period after Administrative Agent receives the
Real Property Holder's Notice, Administrative Agent shall have the right, but
not the obligation, to cause the Collateral to be removed from the Premises.
During such 45 day period, Real Property Holder will not remove the Collateral
from the Premises nor interfere with Administrative Agent's actions in removing
the Collateral from the Premises or Administrative Agent's actions in otherwise
enforcing its security interest in the Collateral. Notwithstanding anything to
the contrary in this paragraph, Administrative Agent shall at no time have any
obligation to remove the Collateral from the Premises.
5. Real Property Holder shall send to Administrative Agent a copy of
any notice of default under the [Lease][Mortgage] sent by Real Property Holder
to Company. In addition, Real Property Holder shall send to Administrative Agent
a copy of any notice received by Real Property Holder of a breach or default
under any other lease, mortgage, deed of trust, security agreement or other
instrument to which Real Property Holder is a party which may affect Company's
rights in, or possession of, the Premises.
6. All notices to Administrative Agent under this Agreement shall be
in writing and sent to Administrative Agent at its address set forth on the
signature page hereof by telefacsimile, by United States mail, or by overnight
delivery service.
7. The provisions of this Agreement shall continue in effect until
Real Property Holder shall have received Administrative Agent's written
certification that all amounts advanced under the Credit Agreement have been
paid in full.
XIX-3
8. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the State of New York, without regard to
conflicts of laws principles.
XIX-4
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the day and year first set forth above.
[NAME OF REAL PROPERTY HOLDER]
By: _______________________________
Name:
Title:
By its acceptance hereof, as of the day and year first set forth
above, Administrative Agent agrees to be bound by the provisions hereof.
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: _______________________________
Name:
Title:
XIX-5
EXHIBIT A TO COLLATERAL ACCESS AGREEMENT
LEGAL DESCRIPTION OF PREMISES
XIX-6
EXHIBIT B TO COLLATERAL ACCESS AGREEMENT
DESCRIPTION OF [LEASE] [MORTGAGE]
XIX-7
EXHIBIT XX
[FORM OF MORTGAGE]
MORTGAGE
[TO BE PROVIDED]
XX-8
