FIFTH AMENDMENT TO CREDIT AGREEMENT
FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated
as of January 23, 2004, among TASTY BAKING COMPANY (the "Company"), the direct
and indirect subsidiaries of the Company parties hereto (together with the
Company, the "Borrowers"), the several banks and other financial institutions
parties hereto (individually, the "Bank"; collectively, the "Banks") and PNC
BANK, NATIONAL ASSOCIATION, as administrative agent for the Banks (in such
capacity, the "Agent").
WHEREAS, the Borrowers, the Banks and the Agent are parties to
a Credit Agreement dated as of January 31, 2002, as amended by the First
Amendment to Credit Agreement dated as of January 29, 2003, the Second Amendment
to Credit Agreement dated as of March 18, 2003, the Third Amendment to Credit
Agreement dated as of July 28, 2003 and the Fourth Amendment to Credit Agreement
dated as of November 7, 2003 (as heretofore so amended, supplemented or
otherwise modified, the "Credit Agreement"); and
WHEREAS, the Borrowers, the Agent, and the Banks have agreed
to amend the Credit Agreement by (i) reducing the total Revolver Commitments and
the total 364 Day Commitments, (ii) requiring the Borrowers to grant a security
interest in the Collateral (as defined herein) to the Agent, for the benefit of
the Banks, (iii) modifying certain interest rates and fees and (iv) amending
certain financial covenants, all on the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and for
other consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.
2. Amendment to Credit Agreement. The Credit Agreement is hereby amended
as follows effective as of the date set forth above:
(a) The total Revolver Commitments and the total 364 Day
Commitments are each hereby reduced from $25,000,000 and $15,000,000,
respectively, to $20,000,000 and $10,000,000, and each Bank's respective
Revolver Commitment and 364 Day Commitment are reduced to the amount set forth
on the revised Schedule I attached hereto which shall be substituted for the
Schedule I now attached to the Credit Agreement. On or before the effective date
of such reduction, the Borrowers shall repay outstanding Loans to the extent
necessary so that the sum of (i) the aggregate amount of outstanding Revolver
Loans plus the aggregate undrawn amount of the outstanding Letters of Credit
does not exceed the total Revolver Commitments as so reduced, and (ii) the
aggregate amount of outstanding 364 Day Loans plus the aggregate amount of
outstanding Swing Line Loans does not exceed the total 364 Day Commitments as so
reduced.
(b) The following definitions set forth in Section 1.1 are
hereby amended and restated in full to read as follows:
"`Applicable Margin': for any Base Rate Loan, LIBOR Loan or
Daily LIBOR Loan on any date, the percentage per annum set forth below opposite
the Leverage Ratio shown on the last Compliance Certificate delivered by the
Borrowers to the Agent pursuant to subsection 5.2(b) prior to such date:
Applicable Margin
LIBOR Loan/Daily
Level Leverage Ratio Base Rate Loan LIBOR Loan
----- -------------- -------------- -----------------
I Less than 2.00 to 1.00 0.00% 2.00%
II Greater than or equal to 0.25% 2.50%
2.00 to 1.00 but less than
2.50 to 1.00
III Greater than or equal to 0.75% 3.00%
2.50 to 1.00 but less than
3.75 to 1.00
IV Greater than or equal to 1.25% 3.50%
3.75 to 1.00
; provided, however, that (a) adjustments, if any, to the Applicable
Margin resulting from a change in the Leverage Ratio shall be effective
five Business Days after the Agent has received a Compliance
Certificate, (b) in the event that no Compliance Certificate has been
delivered for a fiscal quarter prior to the last date on which it can
be delivered without violation of subsection 5.2(b), the Applicable
Margin from such date until such Compliance Certificate is actually
delivered shall be that applicable under Level IV, (c) in the event
that the actual Leverage Ratio for any fiscal quarter is subsequently
determined to be greater than or less than that set forth in the
Compliance Certificate for such fiscal quarter, the Applicable Margin
shall be recalculated for the applicable period based upon such actual
Leverage Ratio and (d) anything in this definition to the contrary
notwithstanding, until receipt by the Agent of the Compliance
Certificate for the fiscal quarter ending December 27, 2003, the
Applicable Margin shall be that applicable under Level IV. Any
additional interest on the Loans resulting from the operation of clause
(c) above shall be payable by the Borrowers jointly and severally to
the Banks within five (5) days after receipt of a written demand
therefor from the Agent."
"`Commitment Fee Rate': for either Facility on any date, the
percentage per annum set forth below in the column entitled 364 Day Facility or
Revolver Facility, as applicable, opposite the Leverage Ratio shown on the last
Compliance Certificate delivered by the Borrowers to the Agent pursuant to
subsection 5.2(b) prior to such date:
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Level Leverage Ratio 364 Day Facility Revolver Facility
----- -------------- ---------------- -----------------
I Less than 2.00 to 1.00 0.30% 0.30%
II Greater than or equal to 2.00 to 0.35% 0.35%
1.00 but less than 2.50 to 1.00
III Greater than or equal to 2.50 to 0.40% 0.40%
1.00 but less than 3.75 to 1.00
IV Greater than or equal to 3.75 to 0.45% 0.45%
1.00
; provided, however, that, (a) adjustments, if any, to the Commitment
Fee Rate resulting from a change in the Leverage Ratio shall be
effective five Business Days after the Agent has received a Compliance
Certificate, (b) in the event that no Compliance Certificate has been
delivered for a fiscal quarter prior to the last date on which it can
be delivered without violation of subsection 5.2(b), the Commitment Fee
Rate from such date until such Compliance Certificate is actually
delivered shall be that applicable under Level IV, (c) in the event
that the actual Leverage Ratio for any fiscal quarter is subsequently
determined to be greater than or less than that set forth in the
Compliance Certificate for such fiscal quarter, the Commitment Fee Rate
shall be recalculated for the applicable period based upon such actual
Leverage Ratio and (d) anything in this definition to the contrary
notwithstanding, until receipt by the Agent of the Compliance
Certificate for the fiscal quarter ending December 27, 2003, the
Commitment Fee Rate shall be that applicable under Level IV. Any
additional Commitment Fee that is due to the Banks resulting from the
operation of clause (c) above shall be payable by the Borrowers jointly
and severally within five (5) days after receipt of a written demand
therefor from the Agent."
"`EBITDA': for any period of four (4) consecutive quarters,
consolidated net income (excluding extraordinary gains and losses,), plus the
sum of (a) income tax expense, (b) interest expense, (c) depreciation and
amortization and (d) other non-cash gains or charges against net income
acceptable to the Agent and the Required Banks (which shall include a non-cash
charge against net income in connection with stock-based compensation), in each
case to the extent excluded from or deducted in determining net income, as
determined for the Company and its consolidated Subsidiaries in accordance with
GAAP; provided, however, in calculating EBITDA for any four (4) consecutive
quarter period which includes the fiscal quarter ending December 27, 2003,
EBITDA shall also include the gain resulting from the sale of the Eastern Shore
sales routes in an amount not to exceed $1,300,000."
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"`Fixed Charge Coverage Ratio': for any period, the ratio of
(i) EBITDA minus capital expenditures incurred for maintenance of equipment (but
in no event less than $2,000,000 per four quarter period) to (ii) the sum of
interest expenses, income tax expenses, principal payments (other than principal
payments on revolving credit facilities), dividend Distributions and
Distributions made in connection with the repurchase or redemption of Capital
Stock, in each case as determined for the Company and its consolidated
Subsidiaries in accordance with GAAP."
"`Letter of Credit Fee Rate': on any date, the percentage
per annum set forth below opposite the Leverage Ratio shown on the last
Compliance Certificate delivered by the Borrowers to the Agent pursuant to
subsection 5.2(b) prior to such date:
Level Leverage Ratio Letter of Credit Fee Rate
I Less than 2.00 to 1.00 2.00%
II Greater than or equal to 2.00 to 2.50%
1.00 but less than 2.50 to 1.00
III Greater than or equal to 2.50 to 3.00%
1.00 but less than 3.75 to 1.00
IV Greater than or equal to 3.75 to 3.50%
1.00
; provided, however, that (a) adjustments, if any, to the Letter of
Credit Fee Rate resulting from a change in the Leverage Ratio shall be
effective five Business Days after the Agent has received a Compliance
Certificate, (b) in the event that no Compliance Certificate has been
delivered for a fiscal quarter prior to the last date on which it can
be delivered without violation of subsection 5.2(b), the Letter of
Credit Fee Rate from such date until such Compliance Certificate is
actually delivered shall be that applicable under Level IV, (c) in the
event that the actual Leverage Ratio for any fiscal quarter is
subsequently determined to be greater than or less than that set forth
in the Compliance Certificate for such fiscal quarter, the Letter of
Credit Fee Rate shall be recalculated for the applicable period based
upon such actual Leverage Ratio and (d) anything in this definition to
the contrary notwithstanding, until receipt by the Agent of the
Compliance Certificate for the fiscal quarter ending December 27, 2003,
the Letter of Credit Fee Rate shall be that applicable under Level IV.
Any additional fees on the Letters of Credit resulting from the
operation of clause (c) above shall be payable by the Borrowers jointly
and severally to the Banks within five (5) days after receipt of a
written demand therefor from the Agent."
"`Loan Documents': this Agreement, the Notes, the Joinder
and Assumption Agreements, the Security Documents and the Applications, as the
same may
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be supplemented or amended from time to time in accordance herewith or
therewith, and "Loan Document" shall mean any of the Loan Documents.
"`Permitted Acquisition': an acquisition by a Borrower of
all or substantially all of the stock or assets of a Person engaged in business
substantially similar to the Company or another Borrower or a business related
to the manufacture or distribution of food products; provided that, at the time
that any definitive agreement is entered into in respect of such acquisition, no
Default or Event of Default shall exist or would exist if such acquisition were
consummated on such date (assuming for purposes of the covenants contained in
Section 6.1 that pro forma adjustments are made to the financial statements of
the Company and its Subsidiaries reflecting such acquisition); provided further,
that, without the consent of the Required Banks, no such acquisition may be made
if, after giving pro forma effect to such acquisition, (i) the Leverage Ratio as
of the end of the most recent fiscal quarter preceding such acquisition (the
"Test Date") would be less than 2.00 to 1.0 and the aggregate consideration paid
by the Borrowers with respect to all Permitted Acquisitions (including the
proposed acquisition) (including earnouts, payments under non-compete
arrangements and assumption of Indebtedness) ("Consideration") would exceed
$10,000,000 from January 23, 2004 through and including the Revolver Termination
Date (the "Test Period"), or (ii) the Leverage Ratio as of the Test Date would
be less than 2.50 to 1.0, but greater than 2.00 to 1.0, and the Consideration
during the Test Period would exceed $5,000,000; and provided further, that if
the Consideration to be paid by the Borrowers with respect to any such
acquisition shall equal or exceed $5,000,000, then the Person to be acquired
shall have positive operating income for the twelve month period ending on the
last day of the most recently completed fiscal quarter."
"`Revolver Termination Date': the earlier of (a) January 22,
2007 or such later date to which the Revolver Termination Date shall have been
extended pursuant to subsection 2.14(d)(ii), and (b) the date the Revolver
Commitments are terminated as provided herein.
"`364 Day Termination Date': with respect to the 364 Day
Facility, the earlier of (a) January 21, 2005 or such later date to which the
364 Day Termination Date shall have been extended pursuant to subsection
2.14(d)(i) hereof and (b) the date the 364 Day Commitments are terminated as
provided herein."
(c) The following definitions are hereby added to Section 1.1 in the
appropriate alphabetical sequence:
"`Capital Expenditures': expenditures made or liabilities
incurred for the acquisition of any fixed assets or improvements, replacements,
substitutions or additions thereto which have a useful life of more than one
year, including Capital Lease Obligations, which, in accordance with GAAP, would
be classified as capital expenditures."
"`Security Documents': shall have the meaning set forth in
Section 5.11 hereof."
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(d) The definitions of "Accepted Non-Cash Charges" and "Accepted
Restructuring Charges" as set forth in Section 1.1 are hereby deleted.
(e) The following Section 5.11 is hereby added to Section 5:
"5.11 Security Documents. Execute and deliver, or cause to
be executed and delivered, to the Agent on or before January 23, 2004 (i) a
security agreement (as amended, supplemented or otherwise modified from time to
time, the "Security Agreement") pursuant to which Tasty Baking Company, TBC
Financial Services, Inc. and Tasty Baking Oxford, Inc. grant to the Agent, for
the benefit of the Banks, a first priority security interest in the Collateral
(as defined in the Security Agreement) (ii) an open-end mortgage and security
agreements (as amended, supplemented or otherwise modified from time to time,
the "Mortgage"; together with the Security Agreement, the "Security Documents")
on the real property owned by Tasty Baking Oxford, Inc. located in Pennsylvania
granting to the Agent, for the benefit of the Banks, a first mortgage lien on
such real property and (iii) a landlord waiver agreement (as amended,
supplemented or otherwise modified from time to time, the "Landlord's Waiver")
from the pension fund of Tasty Baking Company in form and substance acceptable
to the Agent with respect to the real property leased by the Company; provided,
however, that the Borrowers shall be obligated only to use their reasonable best
efforts to obtain the Landlord's Waiver; provided, further, that on or before
February 23, 2004, the Borrowers shall deliver to the Agent a title information
certificate for the real property subject to the Mortgage; provided, further, in
the event that the Company delivers a Compliance Certificate demonstrating that
both (i) the Borrowers' Leverage Ratio is less than 2.00 to 1.00 (the "Leverage
Test") for any two (2) consecutive fiscal quarter period ending on or after June
25, 2005 (each such period, the "Leverage Test Period"), and (ii) the Borrowers'
EBITDA is at least $10,000,000 for the four (4) consecutive fiscal quarter
period ending on the last day of the Leverage Test Period for which the
Borrowers' demonstrate compliance with the Leverage Test, the Agent shall (x)
release the security interest granted under the Security Agreement, (y)
terminate the Security Agreement, and (z) release the Mortgages by executing and
recording (in the office of the recorder of deeds in and for the county in which
the real property that is subject to the Mortgage is situated) a satisfaction
thereof, all at the Borrowers' sole expense."
(f) Section 6.1 entitled "Financial Condition Covenant" is hereby amended
and restated to read in full as follows:
"6.1 Financial Condition Covenants.
(a) Minimum Tangible Net Worth. Permit the Tangible Net Worth of the
Company and its consolidated Subsidiaries at any time to be less
than (i) $43,000,000 adjusted for any non-cash gains or losses as
set forth in the Borrowers' audited annual consolidated financial
statements for the fiscal year ending December 27, 2003, plus
(ii) on a cumulative basis fifty percent (50%) of net income (or,
in the case of a deficit, zero percent (0%)) for the Company and
its consolidated Subsidiaries in respect of each fiscal quarter
commencing with the Borrowers' fiscal quarter ending March 27,
2004, with each increase to be effective as of the last day of
each such fiscal quarter.
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(b) Fixed Charge Coverage Ratio. Permit, as of the end of any fiscal
quarter ending during the periods specified below, the Fixed
Charge Coverage Ratio to be less than that set forth opposite
such periods:
Period Ratio
------ -----
December 27, 2003 through March 26, 2004 1.10 to 1.00
March 27, 2004 through June 25, 2004 1.05 to 1.00
June 26, 2004 through September 24, 2004 1.10 to 1.00
September 25, 2004 through December 24, 2004 1.15 to 1.00
December 25, 2004 through March 25, 2005 1.20 to 1.00
March 26, 2005 and thereafter 1.25 to 1.00
(c) Leverage Ratio. Permit, as of the end of any fiscal quarter
ending during the periods specified below, the Leverage Ratio to
exceed that set forth opposite such periods:
Period Ratio
------ -----
December 27, 2003 through June 25, 2004 4.50 to 1.00
June 26, 2004 through September 24, 2004 4.00 to 1.00
September 25, 2004 through December 24, 2004 3.50 to 1.00
December 25, 2004 through March 25, 2005 3.00 to 1.00
March 26, 2005 and thereafter 2.50 to 1.00"
(g) Section 6.4 entitled "Limitation on Indebtedness" is hereby
amended by deleting the number "$5,000,000" in clause (ii) of
subsection 6.4(b) and inserting the number "$5,500,000" in lieu
thereof.
(h) The following Section 6.12 is hereby added to the end of Section
6:
"6.12 Capital Expenditures. Contract for, purchase or make
any expenditure or commitments for Capital Expenditures in an aggregate amount
in excess of $9,000,000 during the fiscal year ending December 25, 2004 or any
fiscal year ending thereafter; provided, however, in the event that the 364
Termination Date is extended by January 21, 2005 for an additional 364 days, the
aggregate Capital Expenditures permitted for the fiscal year ending December 31,
2005 and any fiscal year ending thereafter shall be in an amount mutually agreed
to by the Borrowers and the Agent."
(i) Revised Schedule 3.2 attached hereto shall be substituted for the
corresponding Schedule 3.2 originally attached to the Credit
Agreement.
3. Representations and Warranties. The Borrowers hereby represent and
warrant to the Banks and the Agent that:
(a) There exists no Default or Event of Default under the Credit
Agreement as amended hereby;
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(b) The representations and warranties made in the Credit Agreement,
as amended hereby, and the Security Documents are true and
correct in all material respects on and as of the date hereof as
if made on and as of the date hereof; and
(c) This Amendment and the Security Documents have been duly
authorized executed and delivered so as to constitute the legal,
valid and binding obligations of the Borrowers party thereto,
enforceable in accordance with its respective terms.
4. Conditions Precedent. The effectiveness of the amendments set forth
herein is subject to the fulfillment, to the satisfaction of the Agent and its
counsel, of the following conditions precedent:
(a) The Borrowers shall have delivered to the Agent the following,
all of which shall be in form and substance satisfactory to the
Agent and shall be duly completed and executed:
(i) This Amendment;
(ii) The Security Documents;
(iii) Evidence of insurance as required by the Security
Documents;
(iv) Copies, certified by the Secretary or an Assistant Secretary
of each Borrower, of resolutions of the Board of Directors
of each Borrower in effect on the date hereof authorizing
the execution, delivery and performance of this Amendment,
the applicable Security Documents and the other documents
and transactions contemplated hereby;
(v) Copies, certified by one of its officers, of the articles or
certificate of incorporation, By-laws and fictitious name
filing, if any, of each Borrower as in effect, or a
certificate stating that there have been no changes to any
such documents since the most recent date, true and correct
copies thereof were delivered to the Agent; and
(vi) Such additional documents, certificates, and information as
the Agent may require pursuant to the terms hereof or
otherwise reasonably request.
(b) The representations and warranties set forth in the Credit Agreement,
as amended hereby, shall be true and correct in all material respects
on and as of the date hereof.
(c) No Default or Event of Default shall have occurred and be continuing
as of the date hereof.
(d) The Borrowers shall pay to the Agent for the pro rata benefit of the
Banks an amendment and modification fee equal to twenty five basis
points (0.25%) on the amount of each Bank's Commitment.
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5. Borrowers' Ratification. The Borrowers agree that they have no
defenses or set-offs against the Banks or the Agent or their respective
officers, directors, employees, agents or attorneys, with respect to the Credit
Agreement and the other Loan Documents, all of which are in full force and
effect, and that all of the terms and conditions of the Credit Agreement and the
other Loan Documents not inconsistent herewith shall remain in full force and
effect unless and until modified or amended in writing in accordance with their
terms. The Borrowers hereby ratify and confirm their respective obligations
under the Credit Agreement and the other Loan Documents and agree that the
execution and delivery of this Amendment does not in any way diminish or
invalidate any of their obligations thereunder.
6. Miscellaneous.
(a) All terms, conditions, provisions and covenants in the Credit
Agreement and the other Loan Documents and all other documents
delivered to the Agent and the Banks in connection therewith shall
remain unaltered and in full force and effect except as modified or
amended hereby. To the extent that any term or provision of this
Amendment is or may be deemed expressly inconsistent with any term or
provision in the Credit Agreement or any of the Loan Documents or any
other document executed in connection therewith, the terms and
provisions hereof shall control.
(b) Except as set forth herein, the execution, delivery and effectiveness
of this Amendment shall neither operate as a waiver of any right,
power or remedy of the Agent or the Banks under any of the Credit
Agreement or the other Loan Documents nor constitute a waiver of any
Default or Event of Default thereunder.
(c) In consideration of the Agent's and the Banks' agreement to amend the
existing credit facility, the Borrowers hereby waive and release the
Agent and the Banks and their respective officers, attorneys, agents
and employees from any liability, suit, damage, claim, loss or expense
of any kind or failure whatsoever and howsoever arising that it ever
had up until, or has as of, the date of this Amendment.
(d) This Amendment constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and agreements.
(e) The Borrowers agree to pay all of the Agent's reasonable out-of-pocket
expenses incurred in connection with the preparation, negotiation and
execution of this Amendment and the Security Documents including
without limitation, the reasonable fees and expenses of Xxxxxxx Xxxxx
Xxxxxxx & Xxxxxxxxx, LLP.
(f) In the event any provisions of this Amendment shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision
hereof.
(g) This Amendment shall be governed by and construed according to the
laws of the Commonwealth of Pennsylvania.
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(h) This Amendment shall inure to the benefit of, and be binding upon, the
parties hereto and their respective successors and assigns and may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(i) The headings used in this Amendment are for convenience of reference
only, do not form a part of this Amendment and shall not affect in any
way the meaning or interpretation of this Amendment.
(j) This Amendment may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all of which shall
constitute one and the same instrument.
SIGNATURE PAGES NEXT
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
TASTY BAKING COMPANY
By:
------------------------------------
Xxxxx X. Xxxxxxxxx
Senior Vice President
TASTYKAKE INVESTMENT COMPANY
By:
------------------------------------
Xxxxxx X. Xxxxxxxxxx
President
TBC FINANCIAL SERVICES, INC.
By:
------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
TASTY BAKING OXFORD, INC.
By:
------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
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PNC BANK, NATIONAL ASSOCIATION, as a
Bank, as Swing Line Bank, as
Issuing Bank and as Agent
By:
------------------------------------
Xxxxxxx X. Xxxxxxxxx, Xx.
Senior Vice President
CITIZENS BANK OF PENNSYLVANIA, as a
Bank
By:
------------------------------------
Xxxx X. Xxxxxxxxx
Senior Vice President
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FOURTH AMENDMENT TO CREDIT AGREEMENT
FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated
as of November __, 2003, among TASTY BAKING COMPANY (the "Company"), the direct
and indirect subsidiaries of the Company parties hereto (together with the
Company, the "Borrowers"), the several banks and other financial institutions
parties hereto (individually, the "Bank"; collectively, the "Banks") and PNC
BANK, NATIONAL ASSOCIATION, as administrative agent for the Banks (in such
capacity, the "Agent").
WHEREAS, the Borrowers, the Banks and the Agent are parties to
a Credit Agreement dated as of January 31, 2002, as amended by the First
Amendment to Credit Agreement dated January 29, 2003, the Second Amendment to
Credit Agreement dated as of March 18, 2003 and the Third Amendment to Credit
Agreement dated as of July 28, 2003 (as heretofore amended, supplemented or
otherwise modified, the "Credit Agreement"); and
WHEREAS, the Borrowers, the Agent, and the Banks have agreed
to amend the Credit Agreement to change one of the financial covenants, all on
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for
other consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.
2. Amendment to Credit Agreement. The Credit Agreement is hereby amended
as follows effective as of the date set forth above:
(a) Section 6.1(c) is hereby amended and restated in full to
read as follows:
"(c) Leverage Ratio. Permit, as of the end of any
fiscal quarter ending during the periods specified below, the Leverage Ratio to
exceed that set forth opposite such periods:
Period Ratio
------ -----
March 29, 2003 through September 27, 2003 3.00 to 1.00
September 28, 2003 through December 27, 2003 3.75 to 1.00
December 28, 2003 and thereafter 2.50 to 1.00"
3. Representations and Warranties. The Borrowers hereby represent and
warrant to the Banks and the Agent that:
(a) There exists no Default or Event of Default under the
Credit Agreement as amended hereby;
(b) The representations and warranties made in the Credit
Agreement, as amended hereby, are true and correct in all material respects on
and as of the date hereof as if made on and as of the date hereof; and
(c) This Amendment has been duly authorized executed and
delivered so as to constitute the legal, valid and binding obligations of the
Borrowers, enforceable in accordance with its respective terms.
4. Conditions Precedent. The effectiveness of the amendments set forth
herein is subject to the fulfillment, to the satisfaction of the Agent and its
counsel, of the following conditions precedent:
(a) The Borrowers shall have delivered to the Agent the
following, all of which shall be in form and substance satisfactory to the Agent
and shall be duly completed and executed:
(i) This Amendment; and
(ii) Such additional documents, certificates, and
information as the Agent may require pursuant to the
terms hereof or otherwise reasonably request.
(b) The representations and warranties set forth in the Credit
Agreement, as amended hereby, shall be true and correct in all material respects
on and as of the date hereof.
(c) No Default or Event of Default shall have occurred and be
continuing as of the date hereof.
5. Borrowers' Ratification. The Borrowers agree that they have no
defenses or set-offs against the Banks or the Agent or their respective
officers, directors, employees, agents or attorneys, with respect to the Credit
Agreement and the other Loan Documents, all of which are in full force and
effect, and that all of the terms and conditions of the Credit Agreement and the
other Loan Documents not inconsistent herewith shall remain in full force and
effect unless and until modified or amended in writing in accordance with their
terms. The Borrowers hereby ratify and confirm their respective obligations
under the Credit Agreement and the other Loan Documents and agree that the
execution and delivery of this Amendment does not in any way diminish or
invalidate any of their obligations thereunder.
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6. Miscellaneous.
(a) All terms, conditions, provisions and covenants in the
Credit Agreement and the other Loan Documents and all other documents delivered
to the Agent and the Banks in connection therewith shall remain unaltered and in
full force and effect except as modified or amended hereby. To the extent that
any term or provision of this Amendment is or may be deemed expressly
inconsistent with any term or provision in the Credit Agreement or any of the
Loan Documents or any other document executed in connection therewith, the terms
and provisions hereof shall control.
(b) Except as set forth herein, the execution, delivery and
effectiveness of this Amendment shall neither operate as a waiver of any right,
power or remedy of the Agent or the Banks under any of the Credit Agreement or
the other Loan Documents nor constitute a waiver of any Default or Event of
Default thereunder.
(c) In consideration of the Agent's and the Banks' agreement
to amend the existing credit facility, the Borrowers hereby waive and release
the Agent and the Banks and their respective officers, attorneys, agents and
employees from any liability, suit, damage, claim, loss or expense of any kind
or failure whatsoever and howsoever arising that it ever had up until, or has as
of, the date of this Amendment.
(d) This Amendment constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and agreements.
(e) The Borrowers agree to pay all of the Agent's reasonable
out-of-pocket expenses incurred in connection with the preparation, negotiation
and execution of this Amendment including without limitation, the reasonable
fees and expenses of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP.
(f) In the event any provisions of this Amendment shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
(g) This Amendment shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania.
(h) This Amendment shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns and
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
3
(i) The headings used in this Amendment are for convenience of
reference only, do not form a part of this Amendment and shall not affect in any
way the meaning or interpretation of this Amendment.
(j) This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
shall constitute one and the same instrument.
4
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
TASTY BAKING COMPANY
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
TASTYKAKE INVESTMENT COMPANY
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Vice President
TBC FINANCIAL SERVICES, INC.
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
TASTY BAKING OXFORD, INC.
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
5
PNC BANK, NATIONAL ASSOCIATION, as a Bank, as
Swing Line Bank, as Issuing Bank and as Agent
By:
-----------------------------------------
Xxxxxxx X. Xxxxxxxxx, Xx.
Senior Vice President
CITIZENS BANK OF PENNSYLVANIA, as a Bank
By:
-----------------------------------------
Xxxx X. Xxxxxxxxx
Vice President
6
THIRD AMENDMENT TO CREDIT AGREEMENT
THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated
as of July 28, 2003, among TASTY BAKING COMPANY (the "Company"), the direct and
indirect subsidiaries of the Company parties hereto (together with the Company,
the "Borrowers"), the several banks and other financial institutions parties
hereto (individually, the "Bank"; collectively, the "Banks") and PNC BANK,
NATIONAL ASSOCIATION, as administrative agent for the Banks (in such capacity,
the "Agent").
WHEREAS, the Borrowers, the Banks and the Agent are parties to
a Credit Agreement dated as of January 31, 2002, as amended by the First
Amendment to Credit Agreement dated as of January 29, 2003 by the Second
Amendment to Credit Agreement dated as of March 18, 2003 (as heretofore amended,
supplemented or otherwise modified, the "Credit Agreement"); and
WHEREAS, the Borrowers, the Agent, and the Banks have agreed
to amend the Credit Agreement by (i) changing the Letter of Credit Fee Rate and
(ii) increasing the Letter of Credit sublimit, all on the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for
other consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein
defined.
2. Amendment to Credit Agreement. The Credit Agreement is
hereby amended as follows effective as of the date set forth
above:
(a) The following definition set forth in Section 1.1 is hereby amended
and restated in full to read as follows:
"`Letter of Credit Fee Rate': on any date, the percentage per
annum set forth below opposite the Leverage Ratio shown on the last Compliance
Certificate delivered by the Borrowers to the Agent pursuant to subsection
5.2(b) prior to such date:
Letter of Credit
Level Leverage Ratio Fee Rate
----- -------------- ----------------
I Less than or equal to 1.00 1.00%
to 1.00
II Greater than 1.00 to 1.00 1.50%
but less than or equal to
1.50 to 1.00
III Greater than 1.50 to 1.00 2.00%
but less than or equal to
2.00 to 1.00
IV Greater than 2.00 to 1.00 2.50%
but less than or equal to
2.50 to 1.00
V Greater than 2.50 to 1.00 3.00%
; provided, however, that (a) adjustments, if any, to the Letter of
Credit Fee Rate resulting from a change in the Leverage Ratio shall be
effective five Business Days after the Agent has received a Compliance
Certificate, (b) in the event that no Compliance Certificate has been
delivered for a fiscal quarter prior to the last date on which it can
be delivered without violation of subsection 5.2(b), the Letter of
Credit Fee Rate from such date until such Compliance Certificate is
actually delivered shall be that applicable under Level V, (c) in the
event that the actual Leverage Ratio for any fiscal quarter is
subsequently determined to be greater than or less than that set forth
in the Compliance Certificate for such fiscal quarter, the Letter of
Credit Fee Rate shall be recalculated for the applicable period based
upon such actual Leverage Ratio and (d) anything in this definition to
the contrary notwithstanding, until receipt by the Agent of the
Compliance Certificate for the fiscal quarter ending June 30, 2003, the
Letter of Credit Fee Rate shall be that applicable under Level IV. Any
additional fees on the Letters of Credit resulting from the operation
of clause (c) above shall be payable by the Borrowers jointly and
severally to the Banks within five (5) days after receipt of a written
demand therefor from the Agent."
(b) The second proviso of the third sentence in Section 2.8(a)
entitled "Letter of Credit Subfacility" is hereby amended by deleting the number
"$4,000,000" and substituting the number "$6,000,000" in lieu thereof.
3. Representations and Warranties. The Borrowers hereby represent and
warrant to the Banks and the Agent that:
(a) There exists no Default or Event of Default under the
Credit Agreement as amended hereby;
2
(b) The representations and warranties made in the Credit
Agreement, as amended hereby, are true and correct in all material respects on
and as of the date hereof as if made on and as of the date hereof; and
(c) This Amendment has been duly authorized executed and
delivered so as to constitute the legal, valid and binding obligation of the
Borrowers, enforceable in accordance with its terms.
4. Conditions Precedent. The effectiveness of the amendments set forth
herein is subject to the fulfillment, to the satisfaction of the Agent and its
counsel, of the following conditions precedent:
(a) The Borrowers shall have delivered to the Agent the
following, all of which shall be in form and substance satisfactory to the Agent
and shall be duly completed and executed:
(i) This Amendment; and
(ii) Such additional documents, certificates, and
information as the Agent may require pursuant to the
terms hereof or otherwise reasonably request.
(b) The representations and warranties set forth in the Credit
Agreement, as amended hereby, shall be true and correct in all material respects
on and as of the date hereof.
(c) No Default or Event of Default shall have occurred and be
continuing as of the date hereof.
5. Borrowers' Ratification. The Borrowers agree that they have no
defenses or set-offs against the Banks or the Agent or their respective
officers, directors, employees, agents or attorneys, with respect to the Credit
Agreement and the other Loan Documents, all of which are in full force and
effect, and that all of the terms and conditions of the Credit Agreement and the
other Loan Documents not inconsistent herewith shall remain in full force and
effect unless and until modified or amended in writing in accordance with their
terms. The Borrowers hereby ratify and confirm their respective obligations
under the Credit Agreement and the other Loan Documents and agree that the
execution and delivery of this Amendment does not in any way diminish or
invalidate any of their obligations thereunder.
3
6. Miscellaneous.
(a) All terms, conditions, provisions and covenants in the
Credit Agreement and the other Loan Documents and all other documents delivered
to the Agent and the Banks in connection therewith shall remain unaltered and in
full force and effect except as modified or amended hereby. To the extent that
any term or provision of this Amendment is or may be deemed expressly
inconsistent with any term or provision in the Credit Agreement or any of the
Loan Documents or any other document executed in connection therewith, the terms
and provisions hereof shall control.
(b) Except as set forth herein, the execution, delivery and
effectiveness of this Amendment shall neither operate as a waiver of any right,
power or remedy of the Agent or the Banks under any of the Credit Agreement or
the other Loan Documents nor constitute a waiver of any Default or Event of
Default thereunder.
(c) In consideration of the Agent's and the Banks' agreement
to amend the existing credit facility, the Borrowers hereby waive and release
the Agent and the Banks and their respective officers, attorneys, agents and
employees from any liability, suit, damage, claim, loss or expense of any kind
or failure whatsoever and howsoever arising that it ever had up until, or has as
of, the date of this Amendment.
(d) This Amendment constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and agreements.
(e) The Borrowers agree to pay all of the Agent's reasonable
out-of-pocket expenses incurred in connection with the preparation, negotiation
and execution of this Amendment including, without limitation, the reasonable
fees and expenses of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP.
(f) In the event any provisions of this Amendment shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
(g) This Amendment shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania.
(h) This Amendment shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns and
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(i) The headings used in this Amendment are for convenience of
reference only, do not form a part of this Amendment and shall not affect in any
way the meaning or interpretation of this Amendment.
4
(j) This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
TASTY BAKING COMPANY
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
TASTYKAKE INVESTMENT COMPANY
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Vice President
TBC FINANCIAL SERVICES, INC.
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
TASTY BAKING OXFORD, INC.
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
5
PNC BANK, NATIONAL ASSOCIATION, as a Bank, as
Swing Line Bank, as Issuing Bank and as Agent
By:
-----------------------------------------
Xxxxxxx X. Xxxxxxxxx, Xx.
Senior Vice President
CITIZENS BANK OF PENNSYLVANIA, as a Bank
By:
-----------------------------------------
Xxxx X. Xxxxxxxxx
Vice President
6
SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated
as of March 18, 2003, among TASTY BAKING COMPANY (the "Company"), the direct and
indirect subsidiaries of the Company parties hereto (together with the Company,
the "Borrowers"), the several banks and other financial institutions parties
hereto (individually, the "Bank"; collectively, the "Banks") and PNC BANK,
NATIONAL ASSOCIATION, as administrative agent for the Banks (in such capacity,
the "Agent").
WHEREAS, the Borrowers, the Banks and the Agent are parties to
a Credit Agreement dated as of January 31, 2002, as amended by the First
Amendment to Credit Agreement dated January 29, 2003 (as heretofore amended,
supplemented or otherwise modified, the "Credit Agreement"); and
WHEREAS, the Borrowers, the Agent, and the Banks have agreed
to amend the Credit Agreement by (i) waiving certain covenant defaults, (ii)
changing certain interest rates and fees and (iii) amending certain financial
covenants, all on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for
other consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in
the Credit Agreement are used herein as therein defined.
2. Waiver. The Borrowers have advised the Agent that for the fiscal
quarter ending December 28, 2002, they are in violation of the
Minimum Tangible Net Worth covenant contained in Subsection
6.1(a) of the Credit Agreement and the Fixed Charge Coverage
Ratio contained in Subsection 6.1(b) of the Credit Agreement. The
Borrowers' failure to comply with the foregoing Subsections of
the Credit Agreement constitute Events of Default under the
Credit Agreement. At the Borrowers' request and in reliance upon
the Borrowers' representations and warranties set forth herein,
the Banks hereby waive the Borrowers' violation of the covenants
contained in Subsection 6.1(a) and 6.1(b) of the Credit Agreement
for such quarter and the resulting Events of Default arising
therefrom solely for the fiscal quarter ended December 28, 2002.
The foregoing waiver shall not be deemed to operate as a, or
obligate the Banks to grant any, future waiver or modification of
the provisions of Subsections 6.1(a) or 6.1(b) for any other
fiscal period or of any other term, condition or Event of Default
under the Credit Agreement.
3. Amendment to Credit Agreement. The Credit Agreement is hereby
amended as follows effective as of the date set forth above:
(a) The following definitions set forth in Section 1.1 are
hereby amended and restated in full to read as follows:
"`Applicable Margin': for any Base Rate Loan, LIBOR
Loan or Daily LIBOR Loan on any date, the percentage per annum set forth below
opposite the Leverage Ratio shown on the last Compliance Certificate delivered
by the Borrowers to the Agent pursuant to subsection 5.2(b) prior to such date:
Applicable Margin
LIBOR Loan/Daily
Level Leverage Ratio Base Rate Loan LIBOR Loan
----- -------------- -------------- -----------------
I Less than or equal to 1.00 0.00% 1.00%
to 1.00
II Greater than 1.00 to 1.00 0.00% 1.50%
but less than or equal to
1.50 to 1.00
III Greater than 1.50 to 1.00 0.00% 2.00%
but less than or equal to
2.00 to 1.00
IV Greater than 2.00 to 1.00 0.25% 2.50%
but less than or equal to
2.50 to 1.00
V Greater than 2.50 to 1.00 0.50% 3.00%
; provided, however, that (a) adjustments, if any, to the Applicable
Margin resulting from a change in the Leverage Ratio shall be effective
five Business Days after the Agent has received a Compliance
Certificate, (b) in the event that no Compliance Certificate has been
delivered for a fiscal quarter prior to the last date on which it can
be delivered without violation of subsection 5.2(b), the Applicable
Margin from such date until such Compliance Certificate is actually
delivered shall be that applicable under Level V, (c) in the event that
the actual Leverage Ratio for any fiscal quarter is subsequently
determined to be greater than or less than that set forth in the
Compliance Certificate for such fiscal quarter, the Applicable Margin
shall be recalculated for the applicable period based upon such actual
Leverage Ratio and (d) anything in this definition to the contrary
notwithstanding, until receipt by the Agent of the Compliance
Certificate for the fiscal quarter ending December 28, 2002, the
Applicable Margin shall be that applicable under Level IV. Any
additional interest on the Loans resulting from the operation of clause
2
(c) above shall be payable by the Borrowers jointly and severally to
the Banks within five (5) days after receipt of a written demand
therefor from the Agent."
"`Commitment Fee Rate': for either Facility on any
date, the percentage per annum set forth below in the column entitled 364 Day
Facility or Revolver Facility, as applicable, opposite the Leverage Ratio shown
on the last Compliance Certificate delivered by the Borrowers to the Agent
pursuant to subsection 5.2(b) prior to such date:
Level Leverage Ratio 364 Day Facility Revolver Facility
----- -------------- ---------------- -----------------
I Less than or equal to 1.00 to 0.15% 0.20%
1.00
II Greater than 1.00 to 1.00 but 0.15% 0.20%
less than or equal to 1.50 to
1.00
III Greater than 1.50 to 1.00 but 0.20% 0.25%
less than or equal to 2.00 to
1.00
IV Greater than 2.00 to 1.00 but 0.25% 0.30%
less than or equal to 2.50 to
1.00
V Greater than 2.50 to 1.00 0.30% 0.35%
; provided, however, that, (a) adjustments, if any, to the Commitment
Fee Rate resulting from a change in the Leverage Ratio shall be
effective five Business Days after the Agent has received a Compliance
Certificate, (b) in the event that no Compliance Certificate has been
delivered for a fiscal quarter prior to the last date on which it can
be delivered without violation of subsection 5.2(b), the Commitment Fee
Rate from such date until such Compliance Certificate is actually
delivered shall be that applicable under Level V, (c) in the event that
the actual Leverage Ratio for any fiscal quarter is subsequently
determined to be greater than or less than that set forth in the
Compliance Certificate for such fiscal quarter, the Commitment Fee Rate
shall be recalculated for the applicable period based upon such actual
Leverage Ratio and (d) anything in this definition to the contrary
notwithstanding, until receipt by the Agent of the Compliance
Certificate for the fiscal quarter ending December 28, 2002, the
Commitment Fee Rate shall be that applicable under Level IV. Any
additional Commitment Fee that is due to the Banks resulting from the
operation of clause (c) above shall be payable by the Borrowers jointly
and severally within five (5) days after receipt of a written demand
therefor from the Agent."
"`EBITDA': for any period of four (4) consecutive
quarters, consolidated net income (excluding extraordinary gains and losses),
plus the sum of (a)
3
income tax expense, (b) interest expense, (c) depreciation and amortization, (d)
any Accepted Non-Cash Charges and any other non-cash charge against net income
acceptable to the Agent and the Required Banks (which shall include a non-cash
charge against net income in connection with stock-based compensation) and (e)
Accepted Restructuring Charges, in each case to the extent deducted in
determining net income, as determined for the Company and its consolidated
Subsidiaries in accordance with GAAP."
"`Fixed Charge Coverage Ratio': for any period, the
ratio of (i) EBITDA to (ii) the sum of interest expenses, income tax expenses,
capital expenditures incurred for maintenance of equipment, principal payments
(other than principal payments on revolving credit facilities) and dividend
Distributions in each case as determined for the Company and its consolidated
Subsidiaries in accordance with GAAP."
"`364 Day Termination Date': with respect to the 364
Day Facility, the earlier of (a) January 28, 2004 or such later date to which
the 364 Day Termination Date shall have been extended pursuant to subsection
2.14(d)(i) hereof and (b) the date the 364 Day Commitments are terminated as
provided herein."
(b) The following definitions are added to Section 1 in the
appropriate alphabetical order:
"`Accepted Non-Cash Charges': shall mean the non-cash
pension expense of the Company recorded in the fiscal quarter ending December
28, 2002 in the amount of $4,656,000."
"`Accepted Restructuring Charges': shall mean
$1,405,000 of restructuring charges recorded during the fiscal quarter ended
June 29, 2002 and $4,936,000 of restructuring charges recorded during the fiscal
quarter ended December 28, 2002."
(c) The definitions of "Debt to Capitalization Ratio" and
"Total Capitalization" set forth in Section 1 are hereby deleted.
(d) The third sentence of Section 3.10 entitled "ERISA" is
hereby amended by deleting the phrase "which is the last annual valuation date
prior to the date on which this representation is made".
(e) Section 6.1 entitled "Financial Condition Covenants" is
hereby amended and restated in full to read as follows:
"6.1 Financial Condition Covenants.
(a) Minimum Tangible Net Worth. Permit the Tangible Net Worth
of the Company and its consolidated Subsidiaries at any time to be less than (i)
$38,020,189, plus (ii) fifty percent (50%) of net income (or, in the case of a
deficit, zero percent (0%)) for the Company and its consolidated Subsidiaries on
a cumulative basis in respect of each fiscal year commencing with the Borrowers'
fiscal year ending
4
December 27, 2003, with each increase to be effective as of the last day of each
such fiscal year.
(b) Fixed Charge Coverage Ratio. As of the last day of any
fiscal quarter of the Company commencing with the fiscal quarter ending March
29, 2003, permit the Fixed Charge Coverage Ratio for the period of four
consecutive fiscal quarters ending on such date to be less than 1.10 to 1.00.
(c) Leverage Ratio. Permit, as of the end of any fiscal
quarter ending during the periods specified below, the Leverage Ratio to exceed
that set forth opposite such periods:
Period Ratio
------ -----
March 29, 2003 through September 27, 2003 3.00 to 1.00
Decmber 27, 2003 and thereafter 2.50 to 1.00"
(f) Section 6.4 entitled "Limitation on Indebtedness" is
hereby amended and restated in full to read as follows:
"6.4 Limitation on Indebtedness. Create, incur, assume
or suffer to exist, directly or indirectly any Indebtedness except the following
("Permitted Indebtedness"): (a) the obligations of the Borrowers to the Banks
hereunder; (b) Indebtedness secured by Permitted Liens to the extent that any
such Indebtedness secured by (i) Purchase Money Security Interests does not
exceed $5,000,000 in the aggregate, and (ii) Liens created pursuant to Capital
Leases (other than Liens existing or created pursuant to the Capital Lease for
the Hunting Park Avenue manufacturing facility located at 0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx, XX) does not exceed $5,000,000 in the aggregate; (c)
Indebtedness existing on the date hereof and shown on Schedule 6.4; (d) current
trade accounts payable incurred in the ordinary course of business; and (e)
intercompany indebtedness to the extent permitted by Section 6.6."
(g) Section 6.9 entitled "No Negative Pledge" is hereby
amended and restated in full to read as follows:
"6.9 No Negative Pledge. Enter into any agreement after
the date hereof with any Person other than the Agent on behalf of the Banks
pursuant to which any Borrower covenants or agrees to a prohibition upon
creating, incurring, or suffering any Lien upon any of its properties, assets or
revenues, whether now owned or hereafter acquired, except in connection with a
Capital Lease or Purchase Money Security Interest, in which case such agreement
shall be permitted but only with respect to the specific asset or assets subject
to such Capital Lease or Purchase Money Security Interest."
4. Representations and Warranties. The Borrowers hereby represent and
warrant to the Banks and the Agent that:
(a) There exists no Default or Event of Default under the
Credit Agreement as amended hereby;
5
(b) The representations and warranties made in the Credit
Agreement, as amended hereby, are true and correct in all material respects on
and as of the date hereof as if made on and as of the date hereof; and
(c) This Amendment has been duly authorized executed and
delivered so as to constitute the legal, valid and binding obligations of the
Borrowers, enforceable in accordance with its respective terms.
5. Conditions Precedent. The effectiveness of the amendments set forth
herein is subject to the fulfillment, to the satisfaction of the Agent and its
counsel, of the following conditions precedent:
(a) The Borrowers shall have delivered to the Agent the
following, all of which shall be in form and substance satisfactory to the Agent
and shall be duly completed and executed:
(i) This Amendment;
(ii) Copies, certified by the Secretary or an Assistant
Secretary of each Borrower, of resolutions of the Board
of Directors of each Borrower in effect on the date
hereof authorizing the execution, delivery and
performance of this Amendment and the other documents
and transactions contemplated hereby;
(iii) Copies, certified by one of its officers, of the
articles or certificate of incorporation, By-laws and
fictitious name filing, if any, of each Borrower as in
effect, or a certificate stating that there have been
no changes to any such documents since the most recent
date, true and correct copies thereof were delivered to
the Agent; and
(iv) Such additional documents, certificates, and
information as the Agent may require pursuant to the
terms hereof or otherwise reasonably request.
(b) The representations and warranties set forth in the Credit
Agreement, as amended hereby, shall be true and correct in all material respects
on and as of the date hereof.
(c) No Default or Event of Default shall have occurred and be
continuing as of the date hereof.
(d) The Borrowers shall pay to the Agent for the pro rata
benefit of the Banks an amendment and modification fee equal to five basis
points (0.05%) on the amount of each Bank's Commitment.
6. Borrowers' Ratification. The Borrowers agree that they have no
defenses or set-offs against the Banks or the Agent or their respective
officers, directors, employees, agents or attorneys, with respect to the Credit
Agreement and the other Loan Documents, all of which are in full force and
effect, and that all of the terms and conditions of the Credit Agreement and the
other Loan Documents not inconsistent herewith shall remain in full force and
effect unless and until modified or amended in writing in accordance with their
6
terms. The Borrowers hereby ratify and confirm their respective obligations
under the Credit Agreement and the other Loan Documents and agree that the
execution and delivery of this Amendment does not in any way diminish or
invalidate any of their obligations thereunder.
7. Miscellaneous.
(a) All terms, conditions, provisions and covenants in the
Credit Agreement and the other Loan Documents and all other documents delivered
to the Agent and the Banks in connection therewith shall remain unaltered and in
full force and effect except as modified or amended hereby. To the extent that
any term or provision of this Amendment is or may be deemed expressly
inconsistent with any term or provision in the Credit Agreement or any of the
Loan Documents or any other document executed in connection therewith, the terms
and provisions hereof shall control.
(b) Except as set forth herein, the execution, delivery and
effectiveness of this Amendment shall neither operate as a waiver of any right,
power or remedy of the Agent or the Banks under any of the Credit Agreement or
the other Loan Documents nor constitute a waiver of any Default or Event of
Default thereunder.
(c) In consideration of the Agent's and the Banks' agreement
to amend the existing credit facility, the Borrowers hereby waive and release
the Agent and the Banks and their respective officers, attorneys, agents and
employees from any liability, suit, damage, claim, loss or expense of any kind
or failure whatsoever and howsoever arising that it ever had up until, or has as
of, the date of this Amendment.
(d) This Amendment constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and agreements.
(e) The Borrowers agree to pay all of the Agent's reasonable
out-of-pocket expenses incurred in connection with the preparation, negotiation
and execution of this Amendment including without limitation, the reasonable
fees and expenses of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP.
(f) In the event any provisions of this Amendment shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
(g) This Amendment shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania.
(h) This Amendment shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns and
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
7
(i) The headings used in this Amendment are for convenience of
reference only, do not form a part of this Amendment and shall not affect in any
way the meaning or interpretation of this Amendment.
(j) This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
shall constitute one and the same instrument.
8
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
TASTY BAKING COMPANY
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
TASTYKAKE INVESTMENT COMPANY
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Vice President
TBC FINANCIAL SERVICES, INC.
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
TASTY BAKING OXFORD, INC.
By:
-----------------------------------------
Xxxxxx X. Xxxxxxxxxx
Treasurer
9
PNC BANK, NATIONAL ASSOCIATION, as a Bank, as
Swing Line Bank, as Issuing Bank and as Agent
By:
-----------------------------------------
Xxxxxxx X. Xxxxxxxxx, Xx.
Vice President
CITIZENS BANK OF PENNSYLVANIA, as a Bank
By:
-----------------------------------------
Xxxx X. Xxxxxxxxx
Vice President
10
FIRST AMENDMENT TO CREDIT AGREEMENT
-----------------------------------
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Agreement") is
made as of January 29, 2003, by and among TASTY BAKING COMPANY, a Pennsylvania
corporation (the "Company"), the subsidiaries of the Company which are parties
to this Agreement (the "Subsidiary Borrowers" and, with the Company,
collectively, the "Borrowers"), the banks which are parties to this Agreement
(each a "Bank" and collectively, the "Banks") and PNC BANK, NATIONAL ASSOCIATION
in its capacity as agent for the Banks (in such capacity, the "Agent").
BACKGROUND
----------
A. The Banks, the Borrowers and the Agent entered into a Credit
Agreement dated as of January 31, 2002 (the "Credit Agreement"), pursuant to
which the Banks agreed to make loans to, and issue letters of credit for the
benefit of, the Borrowers in an aggregate outstanding amount of up to Forty
Million Dollars ($40,000,000).
B. The Agent, the Banks and the Borrowers desire to amend the Credit
Agreement to extend the 364 Day Commitment Period described therein, all on the
terms and subject to the conditions herein set forth.
NOW THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
AGREEMENT
---------
1. Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meanings given to such terms in the Credit Agreement.
2. Amendments to Credit Agreement. The Credit Agreement is hereby
amended as follows:
(a) Effective as of January 29, 2003, the 364 Day Commitment
Period shall be extended by a period of approximately 60 days by amending the
definition of "364 Day Termination Date" in Section 1.1 of the Credit Agreement
by deleting the reference therein to "January 29, 2003" and substituting
therefor the date "March 31, 2003."
(b) Notwithstanding anything to the contrary in the
definitions of "Applicable Margin" and "Commitment Fee Rate" in Section 1.1 of
the Credit Agreement, effective as of January 29, 2003, and continuing through
March 31, 2003, the Applicable Margin for any LIBOR Loan or any Daily LIBOR Loan
and the Commitment Fee Rate for both Facilities shall in each case be that
applicable under Level VI of each such definition.
3. Loan Documents. Except where the context clearly requires otherwise,
all references to the Credit Agreement in any of the other Loan Documents or any
other document delivered to the Banks or the Agent in connection therewith shall
be to the Credit Agreement, as amended by this Agreement.
4. Borrowers' Ratification. The Borrowers agree that they have no
defenses or set-offs against the Banks or the Agent or their respective
officers, directors, employees, agents or attorneys, with respect to the Credit
Agreement and the other Loan Documents, all of which are in full force and
effect, and that all of the terms and conditions of the Credit Agreement and the
other Loan Documents not inconsistent herewith shall remain in full force and
effect unless and until modified or amended in writing in accordance with their
terms. The Borrowers hereby ratify and confirm their respective obligations
under the Credit Agreement and the other Loan Documents and agree that the
execution and delivery of this Agreement does not in any way diminish or
invalidate any of their obligations thereunder.
5. Representations and Warranties. The Borrowers hereby represent and
warrant to the Agent and the Banks that:
(a) Except as otherwise previously disclosed to the Agent and
the Banks, the representations and warranties made in the Credit Agreement, as
amended by this Agreement, are true and correct as of the date hereof;
(b) No Default or Event of Default under the Credit Agreement
exists on the date hereof; and
(c) This Agreement has been duly authorized, executed and
delivered so as to constitute the legal, valid and binding obligation of the
Borrowers, enforceable in accordance with its terms.
All of the above representations and warranties shall survive
the making of this Agreement.
6. Conditions Precedent. The effectiveness of the amendments set forth
herein is subject to the fulfillment, to the satisfaction of the Agent and its
counsel, of the following conditions precedent:
(a) The Borrowers shall have delivered to the Agent, with
copies or counterparts for each of the Banks, the following, all of which shall
be in form and substance satisfactory to the Agent and shall be duly completed
and executed:
(i) This Agreement; and
(ii) Such additional documents, certificates and information
as the Agent or the Banks may require pursuant to the
terms hereof or otherwise reasonably request.
(b) This Agreement shall have been executed and delivered by
the Banks.
(c) The representations and warranties set forth in the Credit
Agreement shall be true and correct on and as of the date hereof.
2
(d) No Default or Event of Default shall have occurred and be
continuing as of the date hereof.
7. Miscellaneous.
(a) All terms, conditions, provisions and covenants in the
Credit Agreement and the other Loan Documents and all other documents delivered
to the Agent and the Banks in connection therewith shall remain unaltered and in
full force and effect except as modified or amended hereby. To the extent that
any term or provision of this Agreement is or may be deemed expressly
inconsistent with any term or provision in the Credit Agreement or any of the
Loan Documents or any other document executed in connection therewith, the terms
and provisions hereof shall control.
(b) The execution, delivery and effectiveness of this
Agreement shall neither operate as a waiver of any right, power or remedy of the
Agent or the Banks under any of the Credit Agreement or the other Loan Documents
nor constitute a waiver of any Default or Event of Default thereunder.
(c) In consideration of the Agent's and the Banks' agreement
to amend the existing credit facility, the Borrowers hereby waive and release
the Agent and the Banks and their respective officers, attorneys, agents and
employees from any liability, suit, damage, claim, loss or expense of any kind
or failure whatsoever and howsoever arising that it ever had up until, or has as
of, the date of this Agreement.
(d) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous understandings and agreements.
(e) In the event any provisions of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
(f) This Agreement shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania.
(g) This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns and
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(h) The headings used in this Agreement are for convenience of
reference only, do not form a part of this Agreement and shall not affect in any
way the meaning or interpretation of this Agreement.
3
IN WITNESS WHEREOF, the Borrowers, the Agent and the Banks have caused
this Agreement to be executed by their duly authorized officers as of the date
first above written.
TASTY BAKING COMPANY
By:
--------------------------------------------------
Name:
Title:
TASTYKAKE INVESTMENT COMPANY
By:
--------------------------------------------------
Name:
Title:
TBC FINANCIAL SERVICES, INC.
By:
--------------------------------------------------
Name:
Title:
TASTY BAKING OXFORD, INC.
By:
--------------------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION, as a Bank, as Swing
Line Bank, as Issuing Bank and as Agent
By:
--------------------------------------------------
Name:
Title:
CITIZENS BANK OF PENNSYLVANIA, as a Bank
By:
--------------------------------------------------
Name:
Title:
4
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of January 31, 2002, among TASTY
BAKING COMPANY a Pennsylvania corporation (the "Company"), the direct and
indirect subsidiaries of the Company from time to time parties hereto (the
"Subsidiary Borrowers" and with the Company, collectively, the "Borrowers"), the
several banks and other financial institutions from time to time parties hereto
(the "Banks") and PNC BANK, NATIONAL ASSOCIATION, as agent for the Banks
hereunder (in such capacity, the "Agent").
W I T N E S S E T H:
--------------------
In consideration of the promises and the agreements
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate": as to any Person, any other Person which,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person and any member,
limited liability company manager, director, officer or employee of any such
Person. For purposes of this definition, "control" shall mean the power,
directly or indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors or managers of such Person
or (b) direct or in effect cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": for any LIBOR Loan or any Daily LIBOR
Loan on any date, the percentage per annum set forth below opposite the Leverage
Ratio shown on the last Compliance Certificate delivered by the Borrowers to the
Agent pursuant to subsection 5.2(b) prior to such date:
Level Leverage Ratio Applicable Margin
----- -------------- -----------------
I Less than or equal to 1.0 to 1.0 .80%
II Greater than 1.0 to 1.0 but less than or 1.05%
equal to 1.5 to 1.0
III Greater than 1.5 to 1.0 but less than or 1.30%
equal to 2.0 to 1.0
IV Greater than 2.0 to 1.0 but less than or 1.55%
equal to 2.5 to 1.0
V Greater than 2.5 to 1.0 but less than or 1.80%
equal to 3.0 to 1.0
VI Greater than 3.0 to 1.0 2.05%
; provided, however, that (a) adjustments, if any, to the Applicable Margin
resulting from a change in the Leverage Ratio shall be effective five Business
Days after the Agent has received a Compliance Certificate, (b) in the event
that no Compliance Certificate has been delivered for a fiscal quarter prior to
the last date on which it can be delivered without violation of subsection
5.2(b), the Applicable Margin from such date until such Compliance Certificate
is actually delivered shall be that applicable under Level VI, (c) in the event
that the actual Leverage Ratio for any fiscal quarter is subsequently determined
to be greater than or less than that set forth in the Compliance Certificate for
such fiscal quarter, the Applicable Margin shall be recalculated for the
applicable period based upon such actual Leverage Ratio and (d) anything in this
definition to the contrary notwithstanding, until receipt by the Agent of the
Compliance Certificate for the fiscal quarter ending December 31, 2001, the
Applicable Margin shall be that applicable under Level I. Any additional
interest on the Loans resulting from the operation of clause (c) above shall be
payable by the Borrowers jointly and severally to the Banks within five (5) days
after receipt of a written demand therefor from the Agent. The Applicable Margin
for all Base Rate Loans shall be zero percent (0%).
"Application": in respect of each Letter of Credit issued by
the Issuing Bank, an application, in such form as the Issuing Bank may specify
from time to time, requesting issuance of such Letter of Credit.
"Assignment and Acceptance": an assignment and acceptance
entered into by a Bank and a Purchasing Bank, and accepted by the Agent pursuant
to Section 9.6 hereof, in the form of Exhibit B attached hereto, or such other
form as shall be approved by the Agent.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/100th of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus one half of one percent (0.5%). If for any reason the Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate for any reason,
2
including the inability or failure of the Agent to obtain sufficient quotations
in accordance with the definition of such term, the Base Rate shall be
determined without regard to clause (b) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, as the case may be.
"Base Rate Loan": any Revolving Loan or 364 Day Loan bearing
interest at a rate determined by reference to the Base Rate.
"Borrowers' Representative": has the meaning assigned to such
term in Section 2.20.
"Borrowing Date": any Business Day on which a Loan is to be
made at the request of the Borrowers' Representative under this Agreement.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in Philadelphia, Pennsylvania are authorized or
required by law to close and with respect to LIBOR Loans, such day shall also be
a day on which banks are open for dealings in dollar deposits in the London
Interbank Market.
"Capital Lease": at any time, a lease with respect to which
the lessee is required to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligations": at any time, the amount of the
obligations under Capital Leases which would be shown at such time as a
liability on a consolidated balance sheet of the Company and its consolidated
Subsidiaries prepared in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Management Agreements": has the meaning assigned to such
term in Section 2.3(i).
"Change of Control": an event or series of events by which (a)
any "person" or "group" (as such terms are defined in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder), is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under such Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire without condition, other than passage of time,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 20% of the total voting power of the
then outstanding Voting Stock of the Company, or (b) from and after the date
hereof, individuals who on the date hereof constitute the Board of Directors of
the Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
was approved by a vote of a
3
majority of the directors then still in office who were either directors on the
date hereof or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
"Closing Date": the first date on which all of the conditions
precedent set forth in Section 4.1 have been satisfied or waived by the Agent.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitments": the 364 Day Commitments, the Revolver
Commitments and the Swing Line Commitments, as the context may require.
"Commitment Fees": those certain fees payable to the Banks on
the Facilities as defined in subsection 2.7(a).
"Commitment Fee Rate": for any Facility on any date, the
percentage per annum set forth below in the column entitled 364 Day Facility or
Revolver Facility, as applicable, opposite the Leverage Ratio shown on the last
Compliance Certificate delivered by the Borrowers to the Agent pursuant to
subsection 5.2(b) prior to such date:
Level Leverage Ratio 364 Day Facility Revolver Facility
----- -------------- ---------------- -----------------
I Less than or equal to 1.0 to 1.0 0.15% 0.20%
II Greater than 1.0 to 1.0 but less 0.15% 0.20%
than or equal to 1.5 to 1.0
III Greater than 1.5 to 1.0 but less 0.20% 0.25%
than or equal to 2.0 to 1.0
IV Greater than 2.0 to 1.0 but less 0.25% 0.30%
than or equal to 2.5 to 1.0
V Greater than 2.5 to 1.0 but less 0.30% 0.35%
than or equal to 3.0 to 1.0
VI Greater than 3.0 to 1.0 0.35% 0.40%
; provided, however, that, (a) adjustments, if any, to the Commitment Fee Rate
resulting from a change in the Leverage Ratio shall be effective five Business
Days after the Agent has received a Compliance Certificate, (b) in the event
that no Compliance Certificate has been delivered for a fiscal quarter prior to
the last date on which it can be delivered without violation of subsection
4
5.2(b), the Commitment Fee Rate from such date until such Compliance Certificate
is actually delivered shall be that applicable under Level VI, (c) in the event
that the actual Leverage Ratio for any fiscal quarter is subsequently determined
to be greater than or less than that set forth in the Compliance Certificate for
such fiscal quarter, the Commitment Fee Rate shall be recalculated for the
applicable period based upon such actual Leverage Ratio and (d) anything in this
definition to the contrary notwithstanding, until receipt by the Agent of the
Compliance Certificate for the fiscal quarter ending December 31, 2001, the
Commitment Fee Rate shall be that applicable under Level I. Any additional
Commitment Fee that is due to the Banks resulting from the operation of clause
(c) above shall be payable by the Borrowers jointly and severally within five
(5) days after receipt of a written demand therefor from the Agent.
"Commitment Letter": the letter, dated November 9, 2001, from
the Agent to the Company relating to the payment of certain fees and expenses in
connection with the transactions contemplated hereby, as amended, supplemented
or otherwise modified from time to time.
"Commitment Percentage": at any time, the percentage which a
Bank's 364 Day Commitments and Revolver Commitment constitutes of the aggregate
of the 364 Day Commitments and Revolver Commitment of all Banks at such time (or
at any time after the 364 Day Commitments and/or Revolver Commitments, as the
case may be, shall have expired or terminated, the percentage which the amount
of such Bank's 364 Day Exposure and/or Revolver Exposure constitutes of the
aggregate amount of the 364 Day Exposure and/or Revolver Exposure of all Banks
at such time).
"Commitment Period": with respect to the (a) 364 Day Facility,
the period from and including the date hereof to but not including the 364 Day
Termination Date, and (b) the Revolver Facility, the period from and including
the date hereof to but not including the Revolver Termination Date.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414(b), (c), (m) or (o) of
the Code.
"Compliance Certificate": has the meaning assigned to such
term in subsection 5.2(b).
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or any provision of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its property is bound.
"Daily LIBOR Loan": any Swing Line Loan and any 364 Day Loans
bearing interest at the Daily LIBOR Rate.
"Daily LIBOR Rate": the rate per annum determined by the Agent
by dividing (the resulting quotient rounded upwards, if necessary, to the
nearest 1/100th of 1%) (x) the rate of interest published each Business Day in
The Wall Street Journal "Money Rates" listing (or in the event such rate is no
longer available from such source, from such other comparable publication
5
as the Agent shall reasonably determine) under the caption "London Interbank
Offered Rates" for a one month interest period by (y) one minus the percentage
prescribed by the Federal Reserve for determining the maximum reserve
requirements with respect to any eurocurrency funding by the Banks on such day.
The rate of interest charged shall be adjusted as of each Business Day based on
changes in the Daily LIBOR Rate without notice to the Borrowers, and shall be
applicable to the then outstanding balance under the 364 Day Loans to which the
Daily LIBOR Rate applies and/or the then outstanding balance under the Swing
Line Loans from the effective date of such change.
"Debt to Capitalization Ratio" for any period, the ratio of
(i) Total Senior Funded Debt to (ii) Total Capitalization.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition precedent therein set forth, has been satisfied.
"Distribution": in respect of any Person, (a) dividends or
other distributions on Capital Stock of such Person (except distributions in
Capital Stock of such Person); (b) the redemption or acquisition of such Capital
Stock or of warrants, rights or other options to purchase such Capital Stock
(except when solely in exchange for Capital Stock of such Person); and (c) any
payment on account of, or the setting apart of any assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of any share of any class of Capital Stock of such Person or any
warrants or options to purchase any such Capital Stock.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"EBITDA": for any period of four (4) consecutive quarters,
consolidated net income (excluding extraordinary gains and losses), plus the sum
of (a) income tax expense, (b) interest expense, (c) depreciation and
amortization and (d) any other non-cash charge against net income acceptable to
the Agent and the Required Banks (which shall include a non-cash charge against
net income in connection with stock-based compensation), in each case to the
extent included in the calculation of consolidated net income, in each case to
the extent deducted in determining net income, as determined for the Company and
its consolidated Subsidiaries in accordance with GAAP.
"Environmental Laws": any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or binding requirements of any Governmental Authority, or binding Requirement of
Law regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment, as now or may at any time hereafter be
in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Rate Reserve Percentage": the maximum
percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%) as
determined by the Agent which is in effect during any relevant period: (i) as
prescribed by the Board of Governors of the Federal
6
Reserve System (or any successor) for determining the reserve requirements
(including supplemental, marginal and emergency reserve requirements) with
respect to eurocurrency funding (currently referred to as "Eurocurrency
Liabilities") of a member bank in such System; and (ii) to be maintained by a
Bank as required for reserve liquidity, special deposit, or a similar purpose by
any governmental or monetary authority of any country or political subdivision
thereof (including any central bank), against (A) any category of liabilities
that includes deposits by reference to which a LIBOR Rate is to be determined,
or (B) any category of extension of credit or other assets that includes Loans
or Tranches to which a LIBOR Rate applies.
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Existing Credit Agreement" collectively, (i) the Credit
Agreement, dated as of September 29 ,1989 among certain of the Borrowers and
First Union National Bank, as heretofore amended, supplemented or otherwise
modified, (ii) $5,000,000 Short Term Line from First Union National Bank and
(iii) the Credit Agreement, dated as of February 19, 1999 among certain of the
Borrowers and PNC Bank, National Association, as heretofore amended,
supplemented or otherwise modified
"Extensions of Credit": the collective reference to Loans made
and Letters of Credit issued under this Agreement.
"Facilities": the 364 Day Facility and the Revolver Facility.
"Federal Funds Effective Rate": for any day, 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 on the
next succeeding 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 the day of such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it.
"Fixed Charge Coverage Ratio": for any period, the ratio of
(i) EBITDA to (ii) the sum of interest expense, income tax expense, principal
payments (other than principal payments on revolving credit facilities) and
dividend Distributions in each case as determined for the Company and its
consolidated Subsidiaries in accordance with GAAP.
"GAAP": at any time with respect to the determination of the
character or amount of any asset or liability or item of income or expense, or
any consolidation or other accounting computation, generally accepted accounting
principles as in effect in the United States on the date of, or at the end of
the period covered by, the financial statements from which such asset,
liability, item of income, or item of expense, is derived, or, in the case of
any such computation, as in effect on the date when such computation is required
to be determined, consistently applied.
"Governmental Acts": has the meaning assigned to such term in
subsection 2.8(j).
7
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty Obligation": as to any Person, any guarantee of
payment or performance by such Person of any Indebtedness or other obligation of
any other Person, or any agreement to provide financial assurance with respect
to the financial condition, or the payment of the obligations of, such other
Person (including, without limitation, purchase or repurchase agreements,
reimbursement agreements with respect to letters of credit or acceptances,
indemnity arrangements, grants of security interests to support the obligations
of another Person, keepwell agreements and take-or-pay or through-put
arrangements) which has the effect of assuring or holding harmless any third
Person against loss with respect to one or more obligations of such third
Person; provided, however, the term Guaranty Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guaranty Obligation of any Person shall be deemed to
be the greater of (a) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guaranty Obligation is made and
(b) the maximum amount for which such contingently liable Person may be liable
pursuant to the terms of the instrument embodying such Guaranty Obligation,
unless such primary obligation and the maximum amount for which such
contingently liable Person may be liable are not stated or determinable, in
which case the amount of such Guaranty Obligation shall be such contingently
liable Person's maximum reasonably anticipated liability in respect thereof as
determined by the Company in good faith. Guaranty Obligations of any Person
shall include the amount of any future "earn-out" or similar payments to be made
to any other Person in connection with a Permitted Acquisition to the extent
such payments are required under GAAP to be reflected as indebtedness on the
financial statements of the contingently liable Person.
"Indebtedness": of any Person at any date, without
duplication:
(a) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), including earn-outs and similar
obligations,
(b) any other indebtedness which is evidenced by a note, bond,
debenture or similar instrument,
(c) all Capital Lease Obligations of such Person,
(d) all obligations of such Person in respect of outstanding
letters of credit, acceptances and similar obligations created for the account
of such Person,
(e) all liabilities secured by any Lien on any property owned
by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof,
(f) net liabilities of such Person under interest rate cap
agreements, interest rate swap agreements, foreign currency exchange agreements,
netting agreements and
8
other hedging agreements or arrangements (calculated on a basis satisfactory to
the Agent and in accordance with accepted practice),
(g) withdrawal liabilities of such Person or any Commonly
Controlled Entity under a Plan, and
(h) all Guaranty Obligations of such Person with respect to
liabilities of a type described in any of clauses (a) through (g) of this
definition.
The Indebtedness of any Person shall include any Indebtedness
of any partnership in which such Person is the general partner.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": has the meaning assigned to such term
in Section 3.16.
"Interest Payment Date": (a) as to any Base Rate Loan and any
Daily LIBOR Loan (other than Swing Line Loans), the last day of each calendar
quarter while such Loan is outstanding, (b) as to any LIBOR Loan having an
Interest Period of three months or less, the last day of such Interest Period,
and (c) as to any LIBOR Loan having an Interest Period longer than three months,
the day which is (i) three months after the first day of such Interest Period
and (ii) the last day of such Interest Period.
"Interest Period": with respect to any LIBOR Loan:
(a) initially the period commencing on the borrowing or
continuation date, as the case may be, and ending one, two, three or six months
thereafter, as selected by the Borrowers in their Notice of Borrowing, given
with respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such LIBOR Loan and ending one,
two, three or six months thereafter, as selected by the Borrowers by irrevocable
notice to the Agent in a Notice of Borrowing not less than three Business Days
prior to the last day of the then current Interest Period with respect thereto;
provided, that the foregoing provisions relating to Interest Periods are subject
to the following:
(i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding
Business Day;
(ii) 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
9
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month;
(iii) with respect to 364 Day Loans that are LIBOR Loans, no
Interest Period shall extend beyond the 364 Day Termination
Date;
(iv) with respect to Revolving Loans that are LIBOR Loans, no
interest period shall extend beyond the Revolver Termination
Date; and
(v) the Borrowers shall select Interest Periods so as not to
require a payment or prepayment of any LIBOR Loan during an
Interest Period for such Loan.
"Issuing Bank": PNC Bank, National Association, or such other
Bank as designated by the Company to be the Issuing Bank and approved by the
Required Banks, in its capacity as issuer of any Letter of Credit.
"Joinder and Assumption Agreement": a Joinder and Assumption
Agreement substantially in the form of Exhibit D hereto pursuant to which a
Subsidiary shall join this Agreement and other Loan Documents, as amended,
supplemented or otherwise modified from time to time.
"Law": any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Governmental Authority.
"Lending Office": the lending office(s) of the Banks set forth
on Schedule I hereto or notice of which has been given to the Agent in
accordance with the provisions of this Agreement.
"Letter of Credit": has the meaning assigned to that term in
subsection 2.8(a).
"Letter of Credit Coverage Requirement": with respect to each
Letter of Credit at any time, 102% of the maximum amount available to be drawn
thereunder at such time (determined without regard to whether any conditions to
drawing could be met at such time).
"Letter of Credit Fee": has the meaning assigned to that term
in subsection 2.8(b).
"Letter of Credit Fee Rate": on any date, the percentage per
annum set forth below opposite the Leverage Ratio shown on the last Compliance
Certificate delivered by the Borrowers to the Agent pursuant to subsection
5.2(b) prior to such date:
Letter of Credit
Level Fee Rate
----- -----------------
I Less than or equal to 1.0 .80%
to 1.0
10
II Greater than 1.0 to 1.0 but 1.05%
less than or equal to 1.5
to 1.0
III Greater than 1.5 to 1.0 but 1.30%
less than or equal to 2.0
to 1.0
IV Greater than 2.0 to 1.0 but 1.55%
less than or equal to 2.5
to 1.0
V Greater than 2.5 to 1.0 but 1.80%
less than or equal to 3.0
to 1.0
VI Greater than 3.0 to 1.0 2.05%
; provided, however, that (a) adjustments, if any, to the Letter of Credit Fee
Rate resulting from a change in the Leverage Ratio shall be effective five
Business Days after the Agent has received a Compliance Certificate, (b) in the
event that no Compliance Certificate has been delivered for a fiscal quarter
prior to the last date on which it can be delivered without violation of
subsection 5.2(b), the Letter of Credit Fee Rate from such date until such
Compliance Certificate is actually delivered shall be that applicable under
Level VI, (c) in the event that the actual Leverage Ratio for any fiscal quarter
is subsequently determined to be greater than or less than that set forth in the
Compliance Certificate for such fiscal quarter, the Letter of Credit Fee Rate
shall be recalculated for the applicable period based upon such actual Leverage
Ratio and (d) anything in this definition to the contrary notwithstanding, until
receipt by the Agent of the Compliance Certificate for the fiscal quarter ending
December 31, 2001, the Letter of Credit Fee Rate shall be that applicable under
Level I. Any additional fees on the Letters of Credit resulting from the
operation of clause (c) above shall be payable by the Borrowers jointly and
severally to the Banks within five (5) days after receipt of a written demand
therefor from the Agent.
"Letter of Credit Obligations": at any time, an amount equal
to the sum of (a) 100% of the maximum amount available to be drawn under all
Letters of Credit outstanding at such time (determined without regard to whether
any conditions to drawing could be met at such time) and (b) the aggregate
amount of drawings under Letters of Credit which have not then been reimbursed
pursuant to subsection 2.8(d)(i).
"Letter of Credit Participant": in respect of each Letter of
Credit, each Bank (other than the Issuing Bank) in its capacity as the holder of
a participating interest in such Letter of Credit.
"Leverage Ratio" as of the last day of any fiscal quarter, the
ratio of Total Senior Funded Debt on such date to (ii) EBITDA on such date.
11
"LIBOR Loan": any Revolving Loan or 364 Day Loan bearing
interest at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate": with respect to the 364 Day Loans and the
Revolving Loans comprising any Tranche to which the LIBOR Rate applies for any
Interest Period, the interest rate per annum determined by the Agent by dividing
(the resulting quotient rounded upward to the nearest 1/100th of 1% per annum)
(i) the rate of interest determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the London interbank offered rate of interest per annum appearing on Telerate
display page 3750 or such other display page on the Telerate System as may
replace such page evidencing quotes by the British Bankers' Association (or
appropriate successor or, if the British Bankers' Association or its successor
ceases to provide such quotes, a comparable replacement determined by the Agent)
at approximately 11:00 a.m., London time, two (2) Business Days prior to the
first day of such Interest Period for an amount comparable to such Tranche and
having a borrowing date and a maturity comparable to such Interest Period by
(ii) a number equal to 1.00 minus the Eurocurrency Rate Reserve Percentage. Such
LIBOR Rate may also be expressed by the following formula:
Telerate page 3750 quoted by British Bankers'
LIBOR Rate = Association or appropriate successor
-----------------------------------------------
1.00 - Eurocurrency Rate Reserve Percentage
The LIBOR Rate shall be adjusted with respect to any LIBOR Loan outstanding on
the effective date of any change in the Eurocurrency Rate Reserve Percentage as
of such effective date. The Agent shall give prompt notice to the Borrowers of
the LIBOR Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).
"Loan Documents": this Agreement, the Notes, the Joinder and
Assumption Agreements and the Applications, as the same may be supplemented or
amended from time to time in accordance herewith or therewith, and Loan Document
shall mean any of the Loan Documents.
"Loans": the collective reference to the 364 Day Loans, the
Revolving Loans and the Swing Line Loans.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property or financial condition of the Borrowers taken
as a whole, (b) the ability of the Company and the other Borrowers to perform
their obligations under this Agreement, the Notes or any other Loan Document or
(c) the validity or enforceability of this Agreement, the Notes or any of the
other Loan Documents or the rights or remedies of the Agent or the Banks
hereunder or thereunder.
12
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphynels, and ureaformaldehyde insulation.
"Xxxxx'x": Xxxxx'x Investors Services, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Notes": means the Revolver Notes, the 364 Day Notes and the
Swing Line Note.
"Notice of Borrowing": with respect to a Loan of any Type, a
notice from the Borrowers' Representative in respect of such Loan, in the form
of Notice of Borrowing attached hereto as Exhibit C.
"Original Currency": has the meaning assigned to such term in
Section 2.19.
"Other Currency": has the meaning assigned to such term in
Section 2.19.
"Participant": has the meaning assigned to such term in
subsection 9.6(f).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": an acquisition by a Borrower of all
or substantially all of the stock or assets of a Person engaged in business
substantially similar to the Company or another Borrower or a business related
to the manufacture or distribution of food products; provided that, at the time
that any definitive agreement is entered into in respect of such acquisition, no
Default or Event of Default shall exist or would exist if such acquisition were
consummated on such date (assuming for purposes of the covenants contained in
Section 6.1 that pro forma adjustments are made to the financial statements of
the Company and its Subsidiaries reflecting such acquisition); provided further,
that, without the consent of the Required Banks, the aggregate consideration
paid by the Borrowers with respect to any one or series of related Permitted
Acquisitions (including earnouts, payments under non-compete arrangements and
assumption of debt) shall not exceed $30,000,000; and provided further, that if
the aggregate consideration to be paid by the Borrowers with respect to any such
acquisition (including earnouts, payments under non-compete arrangements and
assumptions of debt) shall exceed $20,000,000, then the Person to be acquired
shall have positive operating income for the twelve month period ending on the
last day of the most recently completed fiscal quarter.
"Permitted Investments": (a) marketable direct obligations
issued or unconditionally guaranteed by the United States of America or any
agency or instrumentality thereof or guaranteed by the United States of America
or any agency or instrumentality thereof, in each case maturing within one year
from the date of acquisition thereof;
(b) marketable general obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality
13
thereof maturing within six months from the date of acquisition, having one of
the two highest ratings generally obtainable from either S&P or Xxxxx'x at the
date of acquisition;
(c) commercial paper maturing no more than six months from the
date of acquisition thereof and, at the time of acquisition, having a rating of
A-1 (or the equivalent) or higher from S&P and P-1 (or the equivalent) or higher
from Moody's;
(d) money market mutual funds which make investments
principally in securities of the type described in clauses (a) through (c) above
in accordance with the regulations of the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended; and
(e) fully collateralized repurchase agreements with a term of
not more than 30 days for underlying securities of the type described in
paragraphs (a) and (b) of this definition;
provided, that, in each case, such obligations are payable in U.S. Dollars.
"Permitted Liens": (a) any Liens for current taxes,
assessments and other governmental charges not yet due and payable or being
contested in good faith by any Borrower by appropriate proceedings and for which
adequate reserves have been established by the Company and its Subsidiaries on a
consolidated basis as reflected in its financial statements;
(b) any mechanic's, landlord's, materialman's, carrier's,
warehousemen's or similar Liens for sums not yet due or being contested in good
faith by the any Borrower by appropriate proceedings and for which adequate
reserves have been established by the Company and its Subsidiaries on a
consolidated basis as reflected in its financial statements;
(c) existing building restrictions, ordinances, privileges,
rights of utility companies, easements, rights-of-way, restrictions and other
similar encumbrances on the real property or fixtures of the Borrowers existing
as of the date hereof and such Liens hereafter incurred in the ordinary course
of business, which individually or in the aggregate are not substantial in
amount and which do not in any case materially detract from the value to the
Borrowers of the property subject thereto or interfere with the ordinary conduct
of the business of the Borrowers;
(d) Liens (other than Liens imposed on any property of the
Borrowers or any ERISA Affiliate pursuant to ERISA or Section 412 of the Code)
incurred or deposits made in the ordinary course of business, including Liens in
connection with workers' compensation, unemployment insurance and other types of
social security and Liens to secure performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases that are not Capital Leases,
performance bonds, sales contracts and other similar obligations, in each case,
not incurred in connection with the obtaining of credit or the payment of a
deferred purchase price, and which do not, in the aggregate, result in a
Material Adverse Effect;
(e) Purchase Money Security Interests or Liens created
pursuant to Capital Leases; provided, that (x) such Liens shall be created
simultaneously with the acquisition
14
of the property which is subject to such Lien, (y) such Liens do not at any time
encumber any property other than such property and (z) the Liens are not
modified to secure any Indebtedness other than that used to acquire such
property;
(f) Liens existing on real property or equipment of a
Subsidiary which Lien existed at the time of the acquisition of such Subsidiary;
(g) Liens existing upon the date hereof as set forth in
Schedule II hereto;
(h) judgment and other similar Liens arising in connection
with court proceedings, in existence less than thirty (30) days after entry
thereof or with respect to which execution has been stayed or the payment of
which is covered in full (subject to a customary deductible) by insurance
maintained with responsible insurance companies and the claims secured thereby
are being actively contested in good faith and by appropriate legal proceedings;
(i) Liens in favor of any governmental agency or authority for
the purpose of financing, through industrial revenue bonds or notes, the
construction, acquisition or purchase of facilities, or machinery, equipment or
other assets, or of any air, water or solid waste pollution control facilities
to be used in connection with any such property;
(j) other Liens incidental to the conduct of the Borrowers'
businesses conducted in the ordinary course (including without limitation, Liens
on goods securing trade letters of credit issued in respect of importation of
goods in the ordinary course of business) or the ownership of any Borrower's
property and assets which were not incurred in connection with the borrowing of
money or the obtaining of advances or credit and which do not in the aggregate
materially detract from the value of such Borrower's property or assets or
materially impair the use thereof in its business;
(k) Liens in favor of the Company or another Borrower on the
assets of any Borrower; and
(l) any other Liens permitted under the terms of this
Agreement.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which any Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Prime Rate": the rate of interest per annum publicly
announced from time to time by PNC Bank, National Association as its prime rate
in effect at its principal office in Philadelphia, Pennsylvania, which rate may
not be the lowest rate then being charged by the Bank to commercial borrowers;
each change in the Prime Rate shall be effective on the date such change is
publicly announced as effective.
15
"Principal Office": the main banking office of the Agent in
Philadelphia, Pennsylvania.
"Properties": the collective reference to the facilities and
properties owned, leased or operated by the Borrowers.
"Publication 500": has the meaning assigned to such term in
subsection 2.8(f).
"Purchase Money Security Interest": Liens upon tangible
personal property securing loans to the Borrowers or deferred payments by the
Borrowers for the purchase of such tangible personal property, in each case
securing amounts which do not exceed the purchase price of the property subject
to such security interests.
"Purchasing Bank": has the meaning assigned to such term in
subsection 9.6(b).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect, and all official rulings
and interpretations thereunder or thereof.
"Regulation X": Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect, and all official rulings
and interpretations thereunder or thereof.
"Reimbursement Obligation": in respect of each Letter of
Credit, the obligation of the Borrowers to reimburse the Issuing Bank for all
drawings made thereunder in accordance with subsection 2.8(d) and the
Application related to such Letter of Credit for amounts drawn under such Letter
of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c)(1), (2), (4), (5), (6), (10) and (13) of ERISA.
"Required Banks": at any time, those Banks holding (a) 66 2/3%
of the sum of the 364 Day Commitments and the Revolver Commitments of such Banks
or (b) in the event the 364 Day Commitments and/or the Revolver Commitments, as
the case may be, shall have expired or been terminated, the sum of 66 2/3% of
the 364 Day Exposure and/or the Revolver Exposure of such Banks.
"Requirement of Law": as to any Person, the Articles or
Certificate of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case binding upon such Person or any of its property or to which such
Person or any of its property is subject.
"Responsible Officer": with respect to any Borrower, the chief
executive officer, president, vice president - finance, treasurer or chief
financial officer of such Borrower. Unless
16
otherwise qualified, all references to a "Responsible Officer" in this Agreement
shall refer to a Responsible Officer of the Borrowers' Representative.
"Revolver Commitment": the obligation of any Bank to make
Revolving Loans and to issue and/or acquire participating interests in Letters
of Credit hereunder, in an aggregate amount at any one time outstanding not to
exceed the amount set forth opposite such Bank's name on Schedule I hereto under
the caption "Revolver Commitment", as the same may be changed from time to time
in accordance with the provisions of this Agreement and/or any applicable
Assignment and Acceptance.
"Revolver Exposure": as to any Bank at any date, an amount
equal to the sum of (a) the aggregate amount of all Revolving Loans made by such
Bank then outstanding, and (b) such Bank's Commitment Percentage of the Letter
of Credit Obligations then outstanding.
"Revolver Extension Request": has the meaning assigned to such
term in subsection 2.14(d)(ii).
"Revolver Facility": the revolving credit facility pursuant to
which the Banks have committed to make Revolving Loans and to issue and/or
acquire participating interests in Letters of Credit hereunder.
"Revolver Notes": has the meaning assigned to such term in
Section 2.6(b).
"Revolver Termination Date": the earlier of (a) January 31,
2005 or such later date to which the Revolver Termination Date shall have been
extended pursuant to subsection 2.14(d)(ii), and (b) the date the Revolver
Commitments are terminated as provided herein.
"Revolving Loans": has the meaning assigned to such term in
Section 2.1(b).
"S&P": Standard & Poor's Rating Group, a division of
XxXxxx-Xxxx Corporation.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Subsequent Revolver Termination Date": has the meaning
assigned to such term in subsection 2.14(d)(ii).
"Subsequent 364 Day Termination Date": has the meaning
assigned to such term in subsection 2.14(d)(i).
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other governing body of such entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all
17
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of a Borrower.
"Swing Line Bank": PNC Bank, National Association, and any
successor thereto, or any other Bank to which the Swing Line Commitment is
assigned.
"Swing Line Commitment": the obligation of the Swing Line Bank
to make Swing Line Loans in an aggregate amount at any one time outstanding not
to exceed the amount set forth opposite the Swing Line Bank's name on Schedule I
hereto under the caption "Swing Line Commitment", as the same may be changed
from time to time in accordance with the provisions of this Agreement and/or any
applicable Assignment and Acceptance.
"Swing Line Conversion Date": has the meaning assigned to such
term in subsection 2.3(d).
"Swing Line Loan": has the meaning assigned to such term in
subsection 2.3(a).
"Swing Line Note": has the meaning assigned to such term in
subsection 2.3(c).
"Swing Line Repayment Date": has the meaning assigned to such
term in subsection 2.3(b).
"Tangible Net Worth": at any time, the net book value of the
Shareholders' equity of the Company as would be shown on a consolidated balance
sheet at such time minus all assets which would be considered intangible under
GAAP.
"Taxes": has the meaning assigned to such term in Section
2.17.
"Total Capitalization": at any period, the sum of (i) Tangible
Net Worth plus (ii) Total Senior Funded Debt.
"Total Senior Funded Debt": as of the last day of any fiscal
quarter, without duplication, the aggregate consolidated long term and short
term senior Indebtedness of the Company and its consolidated Subsidiaries.
"Tranche": specified portions of 364 Day Loans and Revolving
Loans outstanding as follows: (a) any 364 Day Loans or any Revolving Loans to
which a LIBOR Rate applies which become subject to the same LIBOR Rate under the
same Notice of Borrowing and which have the same Interest Period (b) any 364 Day
Loans to which the Daily LIBOR Rate applies and (c) all 364 Day Loans and
Revolving Loans to which the Base Rate applies shall each constitute one
Tranche.
"364 Day Commitment": as to any Bank, the obligation of such
Bank to make 364 Day Loans and to make or participate in Swing Line Loans, in an
appropriate amount at any one time outstanding not to exceed the amount set
forth opposite such Bank's name on Schedule I hereto under the caption "364 Day
Commitment," as the same may be changed from time to time in accordance with the
provisions of this Agreement and/or any applicable Assignment and Acceptance.
18
"364 Day Commitment Period": the period from and including the
date hereof to but not including the 364 Day Termination Date.
"364 Day Exposure": as to any Bank at any date, an amount
equal to the sum of (a) the appropriate amount of all 364 Day Loans made by such
Bank then outstanding and (b) such Bank's Commitment Percentage of the amount of
the Swing Line Loans then outstanding.
"364 Day Extension Request": has the meaning assigned to such
term in subsection 2.14(d)(i).
"364 Day Facility": the revolving credit facility pursuant to
which the Banks have committed to make 364 Day Loans and make or participate in
Swing Line Loans.
"364 Day Loans": has the meaning assigned to such term in
subsection 2.1(a).
"364 Day Notes": has the meaning assigned to such term in
Section 2.6(a), as the same may be amended, supplemented or otherwise modified
from time to time.
"364 Day Termination Date": with respect to the 364 Day
Facility, the earlier of (a) January 29, 2003 or such later date to which the
364 Day Termination Date shall have been extended pursuant to subsection
2.14(d)(i) hereof and (b) the date the 364 Day Commitments are terminated as
provided herein.
"Type": when used in respect of any Loan, shall refer to the
Rate by reference to which interest on such Loan is determined. For purposes
hereof, "Rate" shall include the LIBOR Rate, the Daily LIBOR Rate (in the case
of 364 Day Loans or Swing Line Loans) and the Base Rate.
"Voting Stock": Capital Stock of any class or classes of a
Person the holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the directors (or Persons performing similar
functions).
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes, the other
Loan Documents or any certificate or other document made or delivered pursuant
hereto or thereto.
(b) As used herein and in the Notes and the other Loan
Documents, and in any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms relating to the Company and its Subsidiaries
not defined in Section 1.1 and accounting terms partly defined in Section 1.1,
to the extent not defined, shall have the respective meanings given to them
under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
19
(d) The meanings given to terms defined in this Agreement
shall be equally applicable to both the singular and plural forms of such terms.
SECTION 2. LOANS AND TERMS OF COMMITMENTS
2.1 The Loans.
---------
(a) 364 Day Facility. Subject to the terms and conditions
hereof including, without limitation, the conditions to each Extension of Credit
set forth in Section 4.2 hereof, each Bank severally (and not jointly) agrees to
make revolving credit loans under the 364 Day Facility (the "364 Day Loans") to
the Borrowers on a joint and several basis from time to time during the 364 Day
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed the amount of such Bank's 364 Day Commitment; provided, that after
giving effect to each such 364 Day Loan the aggregate amount of 364 Day Loans
from such Bank shall not exceed (x) such Bank's 364 Day Commitment minus (y)
such Bank's pro rata share of (based on its Commitment Percentage) the amount of
Swing Line Loans then outstanding. The 364 Day Commitments may be terminated or
reduced from time to time pursuant to Section 2.14. Within the foregoing limits,
the Borrowers may during such Commitment Period borrow, repay and reborrow under
the 364 Day Commitments, subject to and in accordance with the terms and
limitations hereof.
(b) Revolver Facility. Subject to the terms and conditions
hereof including, without limitation, the conditions at each Extension of Credit
set forth in Section 4.2 hereof, each Bank severally (and not jointly) agrees to
make revolving credit loans under the Revolver Facility (the "Revolving Loans")
to the Borrowers on a joint and several basis from time to time during the
Revolver Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed the amount of such Bank's Revolver Commitment;
provided, that after giving effect to each such Revolving Loan, the aggregate
amount of outstanding Revolving Loans made by such Bank shall not exceed (x)
such Bank's Revolver Commitment minus (y) the sum of such Bank's pro rata share
(based on its Commitment Percentage) of the amount of Letter of Credit
Obligations then outstanding. The Revolver Commitments may be terminated or
reduced from time to time pursuant to Section 2.14. Within the foregoing limits,
the Borrowers may during such Commitment Period borrow, repay and reborrow under
the Revolver Commitments, subject to and in accordance with the terms and
limitations hereof.
(c) Type of Loans.
(i) The 364 Day Loans may from time to time be (A) LIBOR
Loans, (B) Base Rate Loans, (C) Daily LIBOR Loans or (D) a combination thereof,
as determined by the Borrowers and notified to the Agent in accordance with
Sections 2.4 and 2.5; provided, that no Loan shall be made as a LIBOR Loan after
the date that is one month prior to the 364 Day Termination Date.
(ii) The Revolving Loans may from time to time be (A) LIBOR
Loans, (B) Base Rate Loans or (C) a combination thereof, as determined by the
Borrowers and notified to the Agent in accordance with Sections 2.4 and 2.5;
provided, that no Loan shall be made as a LIBOR Loan after the date that is one
month prior to the Revolver Termination Date.
20
2.2 Procedure for 364 Day Loans and Revolving Loans.
-----------------------------------------------
(a) Except as otherwise provided herein, the Borrowers may
from time to time prior to the applicable Termination Date request the Banks to
make 364 Day Loans and/or Revolving Loans by delivering to the Agent, not later
than 10:00 a.m., Philadelphia time, (i) three (3) Business Days prior to the
proposed Borrowing Date with respect to the making of Loans to which the LIBOR
Rate applies and (ii) the Business Day of the proposed Borrowing Date with
respect to the making of a Loan to which the Base Rate applies, of a duly
completed Notice of Borrowing or a request by telephone immediately confirmed in
writing, it being understood that the Agent may rely on the authority of any
individual making such a telephonic request without the necessity of receipt of
such written confirmation. Each Notice of Borrowing shall be irrevocable and
shall specify (i) the proposed Borrowing Date; (ii) the aggregate amount of the
proposed Loans comprising each Tranche, the amount of which shall be in integral
multiples of $100,000 and not less than $1,000,000 or, if less, the maximum
amount under the 364 Day Commitment or the Revolver Commitment, as the case may
be; (iii) whether the LIBOR Rate, LIBOR Daily Rate (in the case of the 364 Day
Loans) or Base Rate shall apply to the proposed Loans comprising the applicable
Tranche; and (iv) in the case of a Tranche to which the LIBOR Rate applies, the
Interest Period for the proposed Loans comprising such Tranche.
(b) The Agent shall, promptly after receipt by it of a Notice
of Borrowing pursuant to this Section 2.2, notify the Banks of its receipt of
such Notice of Borrowing specifying: (i) the proposed Borrowing Date and the
time and method of disbursement of the Loans requested thereby; (ii) the amount
and Type of each such Loan and the applicable Interest Period (if any); and
(iii) the apportionment among the Banks of such Loans as determined by the Agent
in accordance with Section 2.5. Subject to the terms and conditions hereof, each
Bank shall remit the principal amount of each Loan to the Agent at the Principal
Office prior to 2:00 p.m., Philadelphia time on the Borrowing Date requested by
the Borrowers in funds immediately available to the Agent. Such borrowing will
then be made available to the Borrowers by the Agent crediting the account of
the Company on the books of the office specified in subsection 9.2 with the
aggregate of the amounts made available to the Agent by the Banks and in like
funds as received by the Agent. Unless the Agent shall have received notice from
a Bank prior to the date of any borrowing that such Bank will not make available
to the Agent such Bank's portion of such borrowing, the Agent may assume that
such Bank has made such portion available in accordance with this subsection
2.2(b) and the Agent may, in reliance upon such assumption, make available to
the Borrowers on such date a corresponding amount. If and to the extent that any
Bank shall not have made such Bank's pro rata portion of such borrowing
available to the Agent, such Bank and the Borrowers (without prejudice to the
Borrowers' rights against such Bank) severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrowers until
the date such amount is repaid to the Agent at (i) in the case of the Borrowers,
the interest rate applicable at the time to the Loans comprising such borrowing
and (ii) in the case of such Bank, the Federal Funds Effective Rate, provided,
that, if such Bank shall not pay such amount within three Business Days of such
Borrowing Date, the interest rate on such overdue amount shall, at the
expiration of such three Business Day period, be the rate per annum applicable
to Base Rate Loans. If such
21
Bank shall repay to the Agent such corresponding amount, such amount shall
constitute such Bank's Loan as part of such borrowing for purposes of this
Agreement.
(c) If in a Notice of Borrowing no election as to the Type of
Loan is specified in any such notice, then the requested Loan shall be a Base
Rate Loan, and if no election as to the Facility under which the Loan is to be
made is specified, then the requested Loan shall be a Revolving Loan. If a LIBOR
Loan is requested but no Interest Period with respect to such Loan is specified
in any such notice, then the Borrowers shall be deemed to have selected an
Interest Period of one month's duration.
2.3 Swing Line Loans.
(a) Subject to the terms and conditions hereof, the Swing Line
Bank may in its discretion make swing line loans in Dollars (the "Swing Line
Loans") to the Borrowers from time to time during the 364 Day Commitment Period
in an aggregate outstanding principal amount up to the amount of the Swing Line
Commitment for periods not to exceed seven days as requested by the Borrowers
and agreed to by the Swing Line Bank; provided, that, no Swing Line Loan shall
be made if, after giving effect to the making of such Swing Line Loan and the
simultaneous application of the proceeds thereof, (x) the aggregate amount of
all outstanding Swing Line Loans plus the aggregate amount of all outstanding
364 Day Loans would exceed the aggregate amount of the 364 Day Commitments of
all of the Banks or (y) the aggregate amount of all 364 Day Loans made by a Bank
plus such Bank's pro rata share (based on its Commitment Percentage) of the
amount of Swing Line Loans then outstanding would exceed its 364 Day Commitment.
Within the foregoing limits, the Borrowers may during the 364 Commitment Period
borrow, repay and reborrow under the Swing Line Commitment, subject to and in
accordance with the terms and limitations hereof. Each Swing Line Loan shall be
a Daily LIBOR Loan based on the Daily LIBOR Rate, plus the Applicable Margin.
(b) The Borrowers may request a Swing Line Loan to be made on
any Business Day. Each request for a Swing Line Loan shall be in the form of a
Notice of Borrowing (or a request by telephone immediately confirmed in writing,
it being understood that the Swing Line Bank may rely on the authority of any
individual making such telephonic request without the necessity of receipt of
such written confirmation) and received by the Agent not later than 11:00 a.m.
(Philadelphia time) on the Business Day such Swing Line Loan is to be made,
specifying in each case (i) the amount to be borrowed, (ii) the requested
borrowing date, and (iii) the date such Swing Line Loan is to be repaid, if
applicable (the "Swing Line Repayment Date"). The request for such Swing Line
Loan shall be irrevocable. Provided that all applicable conditions precedent
contained herein have been satisfied, the Swing Line Bank shall, not later than
4:00 p.m., Philadelphia time, on the date specified in the Borrowers' request
for such Swing Line Loan, make such Swing Line Loan by crediting the Borrowers'
deposit account with the Swing Line Bank.
(c) The obligation of the Borrowers to repay the Swing Line
Loans shall be evidenced by a promissory note of the Borrowers dated the date
hereof, payable to the order of the Swing Line Bank in the principal amount of
the Swing Line Commitment and
22
substantially in the form of Exhibit A-3 (as amended, supplemented or otherwise
modified from time to time, the "Swing Line Note").
(d) Swing Line Loans and accrued interest thereon shall be
repaid on the earlier of (1) the 364 Day Termination Date, (2) the Swing Line
Repayment Date for such Swing Line Loan or (3) the seventh day after the date
such Swing Line Loan was made (any such date being the "Swing Line Conversion
Date"). Unless the Borrowers shall have notified the Agent prior to 11:00 a.m.,
Philadelphia time, on such Swing Line Conversion Date that the Borrowers intend
to repay such Swing Line Loan with funds other than the proceeds of a 364 Day
Loan, the Borrowers shall be deemed to have given notice to the Agent requesting
the Banks to make 364 Day Loans which shall earn interest at the Daily LIBOR
Rate in effect on the Swing Line Conversion Date in an aggregate amount equal to
the amount of such Swing Line Loan plus interest thereon, and subject to
satisfaction or waiver of the conditions specified in Section 4.2, the Banks
shall, on the Swing Line Conversion Date, make 364 Day Loans, which shall earn
interest at the Daily LIBOR Rate, in an aggregate amount equal to the amount of
such Swing Line Loan plus interest thereon, the proceeds of which shall be
applied directly by the Agent to repay the Swing Line Bank for such Swing Line
Loan plus accrued interest thereon; and provided, further, that if for any
reason the proceeds of such 364 Day Loans are not received by the Swing Line
Bank on the Swing Line Conversion Date in an aggregate amount equal to the
amount of such Swing Line Loan plus accrued interest, the Borrowers shall
reimburse the Swing Line Bank on the day immediately following the Swing Line
Conversion Date, in same day funds, in an amount equal to the excess of the
amount of such Swing Line Loan over the aggregate amount of such 364 Day Loans,
if any, received plus accrued interest thereon.
(e) In the event that the Borrowers shall fail to repay the
Swing Line Bank as provided in this Section 2.3(e) in an amount equal to the
amount required under Section 2.3(d), the Agent shall promptly notify each Bank
of the unpaid amount of such Swing Line Loan and of such Bank's respective
participation therein in an amount equal to such Bank's pro rata share of such
Swing Line Loan (based on its Commitment Percentage). Each Bank shall make
available to the Agent for payment to the Swing Line Bank an amount equal to its
respective participation therein (including without limitation its pro rata
share of accrued but unpaid interest thereon), in same day funds, at the office
of the Agent specified in such notice, not later than 11:00 a.m., Philadelphia
time, on the Business Day after the date the Agent notifies each Bank. In the
event that any Bank fails to make available to the Agent the amount of such
Bank's participation in such unpaid amount as provided herein, the Swing Line
Bank shall be entitled to recover such amount on demand from such Bank together
with interest thereon at a rate per annum equal to the Federal Funds Effective
Rate for each day during the period between the Swing Line Conversion Date and
the date on which any Bank makes available its participation in such unpaid
amount. The failure of any Bank to make available to the Agent its pro rata
share of any such unpaid amount shall not relieve any other Bank of its
obligations hereunder to make available to the Agent its pro rata share of such
unpaid amount on the Swing Line Conversion Date. The Agent shall distribute to
each Bank which has paid all amounts payable by it under this Section 2.3(e)
with respect to the unpaid amount of any Swing Line Loan, such Bank's pro rata
share of all payments received by the Agent from the Borrowers in repayment of
such Swing Line Loan when such payments are received. Notwithstanding anything
to the contrary herein, each Bank which has paid all amounts payable by it under
this Section 2.3(e) shall have a direct right to repayment of such amounts from
the Borrowers subject
23
to the procedures for repaying Banks set forth in this Section 2.3(e) and the
provisions of Section 9.8.
(f) In the event the 364 Day Commitments are terminated in
accordance with the terms hereof, the Swing Line Commitment shall also be
terminated automatically. In the event the Borrowers reduce the 364 Day
Commitment to less than the Swing Line Commitment, the Swing Line Commitment
shall immediately be reduced to an amount equal to the 364 Day Commitment. In
the event the Borrowers reduce the 364 Day Commitment to less than the
outstanding principal amount of the Swing Line Loans, the Borrowers shall
immediately repay the amount by which the outstanding Swing Line Loans exceeds
the Swing Line Commitment as so reduced plus accrued interest thereon.
(g) At no time shall there be more than two outstanding Swing
Line Loans. Each Swing Line Loan shall be in an original principal amount of
$100,000 or a whole multiple thereof.
(h) The Borrowers shall have the right at any time and from
time to time to prepay the Swing Line Loans, in whole or in part, without
premium or penalty (but in any event subject to Section 2.18), upon prior
written, facsimile or telephonic notice to the Swing Line Bank given no later
than 11:00 a.m., Philadelphia time, on the date of any proposed prepayment. Each
notice of prepayment shall specify the Swing Line Loan to be prepaid and the
amount to be prepaid, shall be irrevocable and shall commit the Borrowers to
prepay such amount on such date, with accrued interest thereon and any amounts
owed under Section 2.18 hereof.
(i) In addition to making Swing Line Loans pursuant to the
foregoing provisions of this Section 2.3, without the requirement for a specific
request from the Borrowers pursuant to Section 2.3(b), the Swing Line Bank may
make Swing Line Loans to the Borrowers in accordance with the provisions of the
agreements between the Borrowers and the Swing Line Bank relating to the
Borrowers' deposit, sweep and other accounts at the Swing Line Bank and related
arrangements and agreements regarding the management and investment of the
Borrowers' cash assets as in effect from time to time (the "Cash Management
Agreements") to the extent of the daily aggregate net negative balance in the
Borrowers' accounts which are subject to the provisions of the Cash Management
Agreements. Swing Line Loans made pursuant to this Section 2.3(i) in accordance
with the provisions of the Cash Management Agreements shall (i) be subject to
the limitations as to aggregate amount set forth in Section 2.3(a), (ii) not be
subject to the limitations as to number or individual amount set forth in
Sections 2.3(g) or the repayment provisions of Section 2.3(d), (iii) be payable
by the Borrowers, both as to principal and interest, at the times set forth in
the Cash Management Agreements (but in no event later than the 364 Day
Termination Date), (iv) not be made at any time after the Swing Line Bank has
notice of the occurrence of a Default or Event of Default, (v) if not repaid by
the Borrowers in accordance with the provisions of the Cash Management
Agreements, be subject to each Bank's obligation to purchase participating
interests therein pursuant to Section 2.3(e), and (vi) except as provided in the
foregoing subsections (i) through (v), be subject to all of the terms and
conditions of this Section 2.3.
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2.4 Conversion and Continuation Options. The Borrowers shall
have the right at any time upon prior irrevocable notice to the Agent (i) not
later than 10:00 a.m., Philadelphia time, one Business Day prior to conversion,
(A) with respect to a 364 Day Loan, to convert any LIBOR Loan or Daily LIBOR
Loan to a Base Rate Loan, and (B) with respect to a Revolving Loan, to convert
any LIBOR Loan to a Base Rate Loan, (ii) not later than 10:00 a.m., Philadelphia
time, one Business Day prior to conversion or continuation, with respect to a
364 Day Loan, to convert any Base Rate Loan into a Daily LIBOR Loan, to continue
any Daily LIBOR Loan as a Daily LIBOR Loan or convert any LIBOR Loan into a
Daily LIBOR Loan and (iii) not later than 10:00 a.m., Philadelphia time, three
Business Days prior to conversion or continuation, (A) with respect to a 364 Day
Loan, to convert any Base Rate Loan into a LIBOR Loan, to continue any LIBOR
Loan as a LIBOR Loan for any additional Interest Period or convert any Daily
LIBOR Loan into LIBOR Loan and (B) with respect to a Revolving Loan, to convert
any Base Rate Loan into a LIBOR Loan or continue any LIBOR Loan as a LIBOR Loan
for any additional Interest Period, subject in each case to the following:
(a) a LIBOR Loan may not be converted at a time other than the
last day of the Interest Period applicable thereto;
(b) any portion of a Loan maturing or required to be repaid in
less than one month may not be converted into or continued as a LIBOR Loan;
(c) no LIBOR Loan may be continued as such and no Base Rate
Loan may be converted to a LIBOR Loan when any Default has occurred and is
continuing and the Agent or the Required Banks have determined that such a
continuation is not appropriate; and
(d) any portion of a LIBOR Loan that cannot be converted into
or continued as a LIBOR Loan by reason of subsection 2.4(b) or 2.4(c) or as to
which the Borrowers have failed to give notice of conversion or continuation
automatically shall be converted to a Base Rate Loan on the last day of the
Interest Period in effect for such Loan.
Each request by the Borrowers to convert or continue a Loan
shall constitute a representation and warranty that no Default shall have
occurred and be continuing. Accrued interest on a Loan (or portion thereof)
being converted shall be paid by the Borrowers at the time of conversion. In
connection with each such conversion or continuation requested by the Borrowers,
the Borrowers shall deliver to the Agent a Notice of Borrowing or shall make
such request by telephone immediately confirmed in writing, it being understood
that the Agent may rely on the authority of any individual making such
telephonic request without the necessity of receipt of such written
confirmation.
2.5 Nature of Banks' Obligations with Respect to Loans. Each
Bank shall be obligated to participate in each request for Loans pursuant to
Section 2.2 in accordance with its pro rata share (based on its Commitment
Percentage) of the applicable Facility. The obligations of each Bank hereunder
are several (and not joint). The failure of any Bank to perform its obligations
hereunder shall not affect the obligations of the Borrowers to any other party
nor shall any other party be liable for the failure of any Bank to perform its
obligations hereunder. The Banks shall have no obligation to make 364 Day Loans
or Swing Line Loans hereunder on
25
or after the 364 Day Termination Date or to make Revolving Loans on or after the
Revolver Termination Date.
2.6 Notes.
(a) The 364 Day Loans made by each Bank shall be evidenced by
a promissory note of the Borrowers, substantially in the form of Exhibit A-1,
with appropriate insertions as to payee, date and principal amount (each as
amended, supplemented or otherwise modified from time to time, a "364 Day
Note"), payable to the order of such Bank and in a principal amount equal to the
amount of the initial 364 Day Commitment of such Bank. Each Bank is hereby
authorized to record the date, currency, Type and amount of each 364 Day Loan
made by such Bank, each continuation thereof, each conversion of all or a
portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof and, in the case of LIBOR Loans, the length of
each Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its 364 Day Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded
in the absence of manifest error, provided, that the failure of any Bank to make
such recordation (or any error in such recordation) shall not affect the
obligations of the Borrowers hereunder or under such 364 Day Note. Each 364 Day
Note shall (a) be dated the Closing Date, (b) be stated to mature on the 364 Day
Termination Date and (c) provide for the payment of interest in accordance with
Sections 2.9 and 2.10.
(b) The Revolving Loans made by each Bank shall be evidenced
by a promissory note of the Borrowers, substantially in the form of Exhibit A-2,
with appropriate insertions as to payee, date and principal amount (each as
amended, supplemented or otherwise modified from time to time, a "Revolver
Note"), payable to the order of such Bank and in a principal amount equal to the
amount of the initial Revolver Commitment of such Bank. Each Bank is hereby
authorized to record the date, currency, Type and amount of each Revolving Loan
made by such Bank, each continuation thereof, each conversion of all or a
portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof and, in the case of LIBOR Loans, the length of
each Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its Revolver Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded
in the absence of manifest error, provided, that the failure of any Bank to make
such recordation (or any error in such recordation) shall not affect the
obligations of the Borrowers hereunder or under such Revolver Note. Each
Revolver Note shall (a) be dated the Closing Date, (b) be stated to mature on
the Revolver Termination Date and (c) provide for the payment of interest in
accordance with Sections 2.9 and 2.10.
(c) The Swing Line Loans shall be evidenced by the Swing Line
Note, payable to the order of the Swing Line Bank and in a principal amount
equal to the amount of the Swing Line Commitment. The Swing Line Bank is hereby
authorized to record the date, Type and amount of each Swing Line Loan made by
such Bank and the date and amount of each payment or prepayment of principal
thereof on the schedule annexed to and constituting a part of the Swing Line
Note, and any such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded in the absence of manifest error,
provided, that the failure of the Swing Line Bank to make such recordation (or
any error in such recordation) shall
26
not affect the obligations of the Borrowers hereunder or under the Swing Line
Note. The Swing Line Note shall (a) be dated the Closing Date, and (b) be stated
to mature on the 364 Day Termination Date.
2.7 Fees.
(a) The Borrowers jointly and severally agree to pay to the
Agent for the account of each Bank, on each December 31, March 31, June 30 and
September 30 during the 364 Day Commitment Period and the Revolver Commitment
Period and on the date on which the 364 Day Commitments and/or the Revolver
Commitments shall be permanently reduced or terminated as provided herein, a
commitment fee (the "Commitment Fee") at a rate per annum equal to the
applicable Commitment Fee Rate in effect from time to time on the average daily
amount of the difference between (i) the sum of the 364 Day Commitment and the
Revolver Commitment of such Bank and (ii) the sum of the 364 Day Exposure and
the Revolver Exposure of such Bank during the preceding quarter (or shorter
period commencing with the date hereof or ending with the Termination Date for
such Facility or the date on which such 364 Day Commitments or Revolver
Commitments, as the case may be, shall be terminated or reduced). All Commitment
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 360 days and shall be paid in Dollars. The Commitment Fees due to each
Bank shall commence to accrue on the date hereof, and shall cease to accrue, as
to the 364 Day Commitment, on the 364 Day Termination Date or, as to the
Revolver Commitment, on the Revolver Termination Date. The Agent shall
distribute the applicable Commitment Fees among the Banks pro rata in accordance
with their respective Commitment Percentages.
(b) The Borrowers jointly and severally agree to pay the
Agent, for its own account, administrative and other fees at the times and in
the amounts set forth in the Commitment Letter.
(c) The Borrowers jointly and severally agree to pay the Agent
for the account of each Bank on the Closing Date, a closing fee equal to 0.15%
of the sum of the 364 Day Commitment and the Revolver Commitment of each such
Bank.
(d) The foregoing fees shall be paid on the dates due, in
immediately available funds, to the Agent for distribution, if and as
appropriate, among the Banks. Once paid, none of the foregoing fees shall be
refundable under any circumstances.
2.8 Letter of Credit Subfacility.
(a) Letter of Credit Requests and Availability. In lieu of the
Loans under the Revolver Commitment, the Borrowers may request the issuance of a
letter of credit (each, a "Letter of Credit" and, collectively, the "Letters of
Credit") by delivering to the Issuing Bank a completed Application and agreement
for letters of credit in such form and with such other certificates, documents
and information as the Issuing Bank may specify from time to time by no later
than 10:00 a.m., Philadelphia time, at least five (5) Business Days, or such
shorter period as may be agreed to by the Issuing Bank, in advance of the
proposed date of issuance. Each Letter of Credit shall be denominated in
Dollars. Subject to the terms and conditions hereof and in reliance on the
agreements of the other applicable Banks set forth in this
27
Section 2.8, the Issuing Bank will issue one or more Letters of Credit,
provided, that each Letter of Credit shall (A) have a maximum maturity of twelve
(12) months from the date of issuance, and (B) in no event expire later than
five (5) Business Days prior to the Revolver Termination Date, and provided
further, that in no event shall (i) the amount of the Letter of Credit
Obligations at any one time exceed the lesser of (x) $4,000,000, or (y) the
Revolver Commitments minus the amount of the outstanding Revolving Loans or (ii)
the sum of the aggregate amount of all Revolving Loans made by a Bank plus such
Bank's Commitment Percentage of the amount of Letter of Credit Obligations then
outstanding exceed its Revolver Commitment. The Issuing Bank shall not at any
time be obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause the Issuing Bank or any Letter of Credit Participant to
exceed any limits imposed by any applicable Requirement of Law. Notwithstanding
the provisions of this subsection 2.8, the Banks and the Borrowers hereby agree
that the Issuing Bank may issue upon the Borrowers' request, one or more
Letter(s) of Credit which by its or their terms may be extended for additional
periods of up to one year each provided that (i) the initial expiration date (or
any subsequent expiration date) of each such Letter of Credit is not later than
five (5) Business Days prior to the Revolver Termination Date, and (ii) renewal
of such Letters of Credit, at the Issuing Bank's discretion, shall be available
upon written request from the Borrowers to the Issuing Bank at least thirty (30)
days (or such other time period as agreed by the Borrowers and the Agent) before
the date upon which notice of renewal is otherwise required.
(b) Letter of Credit Fees. The Borrowers shall pay in Dollars
(i) to the Agent for the ratable account of the Banks a fee (the "Letter of
Credit Fee") computed at the Letter of Credit Fee Rate in effect from time to
time and (ii) to the Agent for the account of the Issuing Bank a fronting fee
equal to 0.125% per annum, on the daily average undrawn face amount of
outstanding Letters of Credit (computed in each case on the basis of the actual
number of days such Letters of Credit are outstanding in a year of 360 days),
which amounts shall be payable quarterly in arrears commencing with the last
Business Day of each March, June, September and December following the issuance
of a Letter of Credit and on the Revolver Termination Date. The Borrowers shall
also pay to the Agent in Dollars for the sole account of the Issuing Bank, the
Issuing Bank's then in effect customary fees and administrative expenses payable
with respect to the Letters of Credit as the Issuing Bank may generally charge
or incur from time to time in connection with the issuance, maintenance,
modification (if any), assignment or transfer (if any), negotiation, and
administration of Letters of Credit. Once paid, all of the above fees shall be
nonrefundable under all circumstances. The Agent shall, promptly following its
receipt thereof, distribute to the Issuing Bank and the Banks all fees and
commissions received by the Agent for their respective accounts pursuant to this
subsection.
(c) Letter of Credit Participation By Banks
(i) The Issuing Bank irrevocably grants to each Letter of
Credit Participant, and, to induce the Issuing Bank to issue Letters of Credit
hereunder, each Letter of Credit Participant irrevocably accepts and purchases
from the Issuing Bank, on the terms and conditions hereinafter stated, for such
Letter of Credit Participant's own account and risk, an undivided interest equal
to such Letter of Credit Participant's Commitment Percentage in the Issuing
Bank's obligations and rights under each Letter of Credit issued by the Issuing
Bank hereunder and the amount of each draft
28
paid by the Issuing Bank thereunder. Each Letter of Credit Participant
unconditionally and irrevocably agrees with the Issuing Bank that, if a draft is
paid under any Letter of Credit issued by the Issuing Bank for which the Issuing
Bank is not reimbursed in full by the Borrowers in accordance with the terms of
this Agreement, such Letter of Credit Participant shall pay to the Issuing Bank
upon demand at the Issuing Bank's address for notices specified herein an amount
equal to such Letter of Credit Participant's Commitment Percentage of the amount
of such draft or any part thereof, which is not so reimbursed. Any action taken
or omitted by the Issuing Bank under or in connection with a Letter of Credit,
if taken or omitted in the absence of gross negligence or willful misconduct,
shall not create for the Issuing Bank any resulting liability to any Bank.
(ii) If any amount required to be paid by any Letter of Credit
Participant to the Issuing Bank pursuant to subsection 2.8(c)(i) in respect of
any unreimbursed portion of any payment made by the Issuing Bank under any
Letter of Credit is not paid to the Issuing Bank on the date such payment is due
from such Letter of Credit Participant, such Letter of Credit Participant shall
pay to the Issuing Bank on demand an amount equal to the product of (x) such
amount, times (y) the daily average Federal Funds Effective Rate, as quoted by
the Issuing Bank, during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Bank, times (z) a fraction the numerator of which is the number of days
that elapse during such period and the denominator of which is 360. A
certificate of the Issuing Bank submitted to any Letter of Credit Participant
with respect to any amounts owing under this subsection shall be conclusive in
the absence of manifest error.
(iii) Whenever, at any time after the Issuing Bank has made
payment under any Letter of Credit and has received from any Letter of Credit
Participant its pro rata share of such payment in accordance with subsection
2.8(c)(i), the Issuing Bank receives any payment related to such Letter of
Credit (whether directly from the Borrowers or otherwise, including by way of
set-off or proceeds of collateral applied thereto by the Issuing Bank), or any
payment of interest on account thereof, the Issuing Bank will distribute to such
Letter of Credit Participant its pro rata share thereof; provided, however, that
in the event that any such payment received by the Issuing Bank shall be
required to be returned by the Issuing Bank, such Letter of Credit Participant
shall return to the Issuing Bank the portion thereof previously distributed by
the Issuing Bank to it.
(d) Borrowers' Reimbursement Obligation
(i) Each Borrower jointly and severally agrees to reimburse
the Issuing Bank in respect of a Letter of Credit on each date on which a draft
presented under such Letter of Credit is paid by the Issuing Bank for the amount
of (i) such draft so paid and (ii) any taxes, fees, charges or other costs or
expenses incurred by the Issuing Bank in connection with such payment. Each such
payment shall be made to the Issuing Bank at its Principal Office in Dollars and
in immediately available funds.
29
(ii) Interest shall be payable on any and all amounts
remaining unpaid by the Borrowers under this subsection from the date such
amounts become payable until payment in full (A) for the first three days at the
per annum rate equal to the Base Rate and (B) thereafter, at the per annum rate
equal to the Base Rate plus 2.0%, and shall be payable on demand by the Issuing
Bank.
(iii) Obligations Absolute. The obligations of the Borrowers
under this subsection 2.8 shall be joint and several. The Borrowers (jointly and
severally) and the Banks agree with the Issuing Bank that the Issuing Bank shall
not be responsible for, and the Borrowers' Reimbursement Obligations under
subsection 2.8(d)(i) and the Banks' obligations under Section 2.8(c) shall be
absolute, unconditional and irrevocable under all circumstances, and shall not
be affected by, among other things (1) the form of, any lack of power or
authority of any signer of or the lack of, validity, enforceability,
sufficiency, accuracy or genuineness of any document submitted by any party in
connection with any Letter of Credit otherwise complying with the terms of the
Letter of Credit, or any fraud or alleged fraud in connection with any Letter of
Credit or any obligation underlying any Letter of Credit, in each case, even if
the Issuing Bank shall have been notified thereof except if and to the extent
the Issuing Bank is directed by a court order not to honor the draw in
connection with which any such document has been submitted, (2) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit (but only to the extent such Letter
of Credit is transferable) 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, (3 any claim of the Borrowers against any beneficiary of such Letter
of Credit, or any other party to which such Letter of Credit may be transferred
(but only to the extent such Letter of Credit is transferable) except where such
claim is the result of the failure to comply fully with any conditions required
in order to draw upon such Letter of Credit, (4) any dispute between or among
any Borrower and any beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred, (5) any claims whatsoever of any
Borrower against any beneficiary of such Letter of Credit or any such
transferee, (6) any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, (7) 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 except where such loss or delay is
the result of the failure to comply fully with the terms of the Letter of
Credit, (8) errors in interpretation of technical terms, (9) the misapplication
by the beneficiary of any such Letter of Credit of the proceeds of any drawing
under such Letter of Credit, (10) any act or omission (including the failure to
honor a presentation complying with the terms of such Letter of Credit as a
result of Governmental Acts or otherwise) by the Issuing Bank in connection with
a Letter of Credit, (11) any consequences arising from causes beyond the control
of the Issuing Bank, including any Governmental Acts, (12) any set-off,
counterclaim, recoupment, defense or other right which any Bank may have against
the Issuing Bank, the Borrowers or any other Person for any reason whatsoever,
(13) the existence of any claim, set-off, defense or other right which the
Borrowers or any Bank 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), the Issuing Bank or any Bank or any other Person or, whether in
connection with
30
this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between the Borrowers and the
beneficiary for which any Letter of Credit was procured), (14) any adverse
change in the business, operations, properties, assets, condition (financial or
otherwise) or prospects of the Borrowers, (15) any breach of this Agreement or
any other Loan Document by any of the Borrowers, (16) the occurrence or
continuance of an insolvency proceeding with respect to the Borrowers, (17) the
fact that an Event of Default or a Default shall have occurred and be continuing
and (18) the fact that the Revolver Termination Date shall have passed or this
Agreement or the Revolver Commitments hereunder shall have been terminated, and
none of the above shall affect or impair, or prevent the vesting of, any of the
Issuing Bank's rights or powers hereunder, provided, in each case, that a court
of competent jurisdiction has not finally determined that the reliance by the
Issuing Bank on any of such documents, instruments or acts, or any such action
by or omission of the Issuing Bank, constituted gross negligence or willful
misconduct of the Issuing Bank.
Without limiting the generality of the foregoing, the Issuing
Bank (i) may rely on any oral or other communication believed in good faith by
the Issuing Bank to have been authorized or given by or on behalf of the
Borrowers, (ii) may honor any presentation if the documents presented appear on
their face to comply with the terms and conditions of relevant Letter of Credit,
(iii) shall not be liable to the Borrowers for any consequential, punitive or
special damages, or for any damages resulting from any change in the value of
any property relating to a Letter of Credit, (iv) may honor a previously
dishonored presentation under a Letter of Credit, whether such dishonor was
pursuant to a court order, to settle or compromise any claim of wrongful
dishonor, or otherwise, and shall be entitled to reimbursement to the same
extent as if such presentation had initially been honored, together with any
interest paid by the Issuing Bank, (v) may honor any drawing that is payable
upon presentation of a statement from an advising bank advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being separately delivered), and shall not be liable
for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Letter of Credit, and (vi) may pay any paying or
negotiating bank claiming that it rightfully honored under the laws or practices
of the place where such bank is located.
(e) Law Governing Letters of Credit. (i) If any draft shall be
presented for payment to the Issuing Bank under any Letter of Credit, the
Issuing Bank shall promptly notify the Company of the date and amount thereof.
The responsibility of the Issuing Bank to the Borrowers in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit and any other
obligation expressly imposed by the provisions of the Uniform Customs and
Practice for Documentary Credits, 1993 Revision, International Chamber of
Commerce Publication No. 500 ("Publication 500") or such other law as the
Borrowers and the Issuing Bank agree shall apply, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
(ii) Each Borrower agrees jointly and severally to be bound by
the terms of each Application and the Issuing Bank's written regulations and
customary practices relating to letters of credit, though such interpretation
may be different from
31
such Borrower's own. It is understood and agreed that, except in the case of
gross negligence or willful misconduct, the Issuing Bank and the Agent shall not
be liable for any error, negligence and/or mistakes, whether of omission or
commission, in following the Borrowers' instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto. To
the extent not otherwise inconsistent with this Agreement, the provisions of
Publication 500 (or any other law as the Borrowers and the Issuing Bank agree
shall apply) are hereby made a part of this Agreement with respect to the
obligations in connection with each Letter of Credit.
(f) Indemnification of Issuing Bank and Banks. (i) In addition
to amounts payable as provided in Section 9.5, the Borrowers hereby agree to
protect, indemnify, pay and save harmless the Issuing Bank and the Banks and
each of their respective officers, directors, shareholders and employees
harmless from and against any and all claims, liabilities, losses, damages,
taxes, penalties, interest, judgments, costs and expenses (including reasonable
legal fees and costs, whether of internal or external counsel), which may be
incurred by or awarded against any of them, and which arise out of or in
connection with (a) any Letter of Credit, this Section 2.8, or the preparation
for a defense of any investigation, litigation, or proceeding arising out of or
in connection herewith or therewith (and irrespective of who may be the
prevailing party); (b) any payment or action taken in connection with any Letter
of Credit, including, without limitation, any action or proceeding seeking to
restrain any drawing under a Letter of Credit or to compel or restrain any
payment or any other action under a Letter of Credit or this Agreement (and
irrespective of who may be the prevailing party); (c) the enforcement of this
Section 2.8 or the collection or sale of any property or collateral; and (d) any
Governmental Act or other cause beyond the Issuing Bank's reasonable control;
except, in each case, to the extent such claim, liability, loss, damage, tax,
penalty, interest, judgment, cost or expense is found by a final judgment of a
court of competent jurisdiction to have resulted from the Issuing Bank's gross
negligence or willful misconduct.
(ii) Each Bank shall ratably in accordance with its Commitment
Percentage, indemnify the Issuing Bank, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrowers) against any cost, expense (including reasonable counsel fees and
expenses), claim, demand, action, loss or liability (except any of the foregoing
that results from the indemnitees' gross negligence or willful misconduct) that
such indemnities may suffer or incur in connection with this Section 2.8 or any
action taken or omitted by such indemnities hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the Issuing
Bank 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 create any liability of the Issuing Bank to the Borrowers or
any Bank.
2.9 Interest Rates and Payment Dates. The Borrowers shall pay
interest in respect of the outstanding unpaid principal amount (i) of the 364
Day Loans as selected by it from the Base Rate, the LIBOR Rate or the Daily
LIBOR Rate set forth below applicable thereto and (ii) of the Revolving Loans as
selected by it from the Base Rate or LIBOR Rate set forth
32
below applicable thereto, it being understood that, subject to the provisions of
this Agreement, the Borrowers may select different interest rates and different
Interest Periods to apply simultaneously to 364 Day Loans and Revolving Loans
comprising different Tranches and may convert to or renew one or more applicable
interest rates with respect to all or any portion of 364 Day Loans and Revolving
Loans comprising any Tranche, provided, that there shall not be at any one time
outstanding more than ten (10) Tranches in the aggregate outstanding at any time
under both Facilities (including one Base Rate Tranche and one Daily LIBOR Rate
Tranche, but excluding Swing Line Loans). If at any time the designated rate
applicable to any Loan made by any Bank exceeds such Bank's highest lawful rate,
the rate of interest on such Bank's Loan shall be limited to such Bank's highest
lawful rate.
(a) Subject to the provisions of Section 2.10, (i) each Base
Rate Loan shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be) at a rate per
annum equal to the Base Rate plus the Applicable Margin for Base Rate Loans, and
(ii) each Swing Line Loan shall be a Daily LIBOR Loan based on the Daily LIBOR
Rate.
(b) Subject to the provisions of Section 2.10, each LIBOR Loan
and each Daily LIBOR Loan shall bear interest, respectively, at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the LIBOR Rate for the Interest Period in effect for such LIBOR
Loan or the Daily LIBOR Rate in effect for such Daily LIBOR Loan plus the
Applicable Margin.
(c) Interest on each 364 Day Loan and Revolving Loan shall be
payable in arrears on each Interest Payment Date applicable to such Loan;
provided, that (i) interest accruing on overdue amounts pursuant to Section 2.10
shall be payable on demand as provided in such Section and (ii) accrued and
unpaid interest on such Loans shall be payable on the 364 Day Termination Date
or the Revolver Termination Date, as the case may be. Interest on each Swing
Line Loan shall be payable on the day such Swing Line Loan becomes due,
including the 364 Day Termination Date.
(d) As soon as practicable the Agent shall notify the
Borrowers and the Banks of (i) each determination of a LIBOR Rate or Daily LIBOR
Rate and (ii) the effective date and the amount of each change in the interest
rate on a LIBOR Loan or Base Rate Loan. Each determination of an interest rate
by the Agent, pursuant to any provision of this Agreement (including this
Section 2.9 and Section 2.10) shall be conclusive and binding on the Borrowers
and the Banks in the absence of clearly demonstrable error. At the request of
the Borrowers, the Agent shall deliver to the Borrowers a statement showing the
quotations used by it in determining any interest rate pursuant to subsections
2.9(a) and (b).
2.10 Default Interest. Upon the occurrence of and during the
continuance of an Event of Default under subsection 7.1(a) or (f), the
outstanding principal amount of the Loans and, to the extent permitted by law,
accrued and unpaid interest thereon and any other amount payable hereunder,
shall bear interest from the date of such occurrence at a rate per annum which
is equal to two percent (2%) in excess of the Base Rate (after as well as before
judgment). Upon the occurrence of and during the continuance of an Event of
Default other than under subsection 7.1(a) or (f), the outstanding principal
amount of the Loans and, to the extent permitted by law,
33
accrued and unpaid interest thereon and any other amounts payable hereunder,
shall bear interest from the date that the Agent (at its discretion if not
otherwise directed by the Required Banks or at the direction of the Required
Banks) shall send notice to the Company of the application of the default rate
at a rate per annum which is equal to two percent (2%) in excess of the Base
Rate (after as well as before judgment).
2.11 Pro Rata Treatment of Loans and Payments; Commitment
Fees.
(a) Except as required under Section 2.13 or as otherwise
provided for Swing Line Loans, each borrowing by the Borrowers hereunder, each
payment or prepayment of principal of the Loans, each payment of interest on
such Loans, each payment of Commitment Fees and Letter of Credit Fees, and each
reduction of the 364 Day Commitments and the Revolver Commitments, shall be made
pro rata among the Banks in accordance with their respective Commitment
Percentages.
(b) Except as provided in subsection 2.3, each borrowing of a
Swing Line Loan, each payment or prepayment of principal of a Swing Line Loan,
each payment of interest on the Swing Line Loans and each reduction of the Swing
Line Commitment shall be for the sole account of the Swing Line Bank.
(c) Each Bank agrees that in computing such Bank's portion of
any borrowing to be made hereunder, the Agent may, in its discretion, round each
Bank's percentage of such borrowing to the next higher or lower whole Dollar
amount.
2.12 Payments.
(a) The Borrowers shall make each payment (including principal
of or interest on any borrowing or any fees or other amounts) hereunder not
later than 11:00 a.m., Philadelphia time, on the date when due to the Agent at
its offices set forth in Section 9.2 for the ratable accounts of the Banks in
Dollars in immediately available funds. Such payments shall be made without
set-off or counterclaim of any kind. The Agent shall distribute to the Banks, as
applicable, any payments received by the Agent promptly upon receipt in
immediately available funds. The Agent's and each Bank's statement of account,
ledger or other relevant record shall, in the absence of manifest error, be
conclusive as the statement of the amount of principal of and interest on the
Loans and other amounts owing under this Agreement.
(b) Whenever any payment (including principal of or interest
on any borrowing or any fees or other amounts) hereunder (other than payments on
LIBOR Loans) shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, if applicable. Whenever any payment (including principal of or
interest on any borrowing or any fees or other amounts) hereunder on a LIBOR
Loan shall become due, or otherwise would occur, on a day that is not a Business
Day, such payment may be made on the next succeeding Business Day unless the
result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding
Business Day.
34
2.13 LIBOR Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available.
(a) The Agent shall have the rights specified in subsection
2.13(c) if on any date on which a LIBOR Rate would otherwise be determined, the
Agent shall have determined (which determination shall upon notice thereof to
the Borrowers be conclusive and binding on the Borrowers) that:
(i) adequate and reasonable means do not exist for
ascertaining such LIBOR Rate, or
(ii) a contingency has occurred which materially and
adversely affects the secondary market for negotiable
certificates of deposit maintained by dealers of
recognized standing relating to the London interbank
LIBOR market relating to the LIBOR Rate.
(b) The Agent shall have the rights specified in subsection
2.13(c) if at any time any Bank shall have determined (which determination shall
upon notice thereof to the Agent and the Borrowers be conclusive and binding on
the Borrowers) that:
(i) the making, maintenance or funding of any Loan to
which a LIBOR Rate applies has been made
impracticable or unlawful by compliance by such Bank
in good faith with any Law or any interpretation or
application thereof by any Governmental Authority or
with any request or directive of any such
Governmental Authority (whether or not having the
force of Law), or
(ii) such LIBOR Rate will not adequately and fairly
reflect the cost to such Bank of the establishment or
maintenance of any such Loan, or
(iii) after making all reasonable efforts, deposits of the
relevant amount for the relevant Interest Period for
a Loan to which a LIBOR Rate applies are not
available to such Bank in the London interbank
market.
(c) In the case of any event specified in subsection 2.13(a)
above, the Agent shall promptly so notify the Banks and the Borrowers thereof,
and in the case of an event specified in subsection 2.13(b) above, such Bank
shall promptly so notify the Agent and endorse a certificate to such notice as
to the specific circumstances of such notice, and the Agent shall promptly send
copies of such notice and certificate to the other Banks and the Borrowers. Upon
such date as shall be specified in such notice (which shall not be earlier than
the date such notice is given), the obligation of (A) the Banks, in the case of
such notice given by the Agent, or (B) such Bank, in the case of such notice
given by such Bank, to allow the Borrowers to select, convert to or renew a
LIBOR Rate shall be suspended until the Agent shall have later notified the
Borrowers, or such Bank shall have later notified the Agent, of the Agent's or
such Bank's, as the case may be, determination that the circumstances giving
rise to such previous determination no longer exist. If at any time the Agent
makes a determination under subsection 2.13(a) and the Borrowers have previously
notified the Agent of their selection of, conversion to or renewal of a LIBOR
Rate and such interest rate has not yet gone into effect, such notification
shall be deemed to provide for selection of, conversion to or renewal of a Base
Rate Loan to the extent permitted
35
hereunder. If any Bank notifies the Agent of a determination under subsection
2.13(b), the Borrowers shall, subject to the Borrowers' indemnification
obligations under subsection 2.18 as to any Loan of the Bank to which a LIBOR
Rate applies, on the date specified in such notice either (i) as applicable,
convert such Loan to the Base Rate, or (ii) prepay such Loan in accordance with
Section 2.15. Absent due notice from the Borrowers of conversion or prepayment,
such Loan shall automatically be converted to the Base Rate upon such specified
date.
2.14 Termination, Reduction and Extension of Commitments.
(a) The 364 Day Commitments and the Swing Line Commitment
shall be automatically terminated on the 364 Day Termination Date whereupon all
364 Day Loans and Swing Line Loans and accrued interest thereon shall become due
and payable in full. The Revolver Commitments shall be automatically terminated
on the Revolver Termination Date whereupon all Revolving Loans and accrued
interest thereon shall become due and payable in full.
(b) Upon at least five Business Days' prior irrevocable
written (including facsimile) notice to the Agent, the Borrowers may at any time
in whole permanently terminate, or from time to time in part permanently reduce,
the Commitments; provided, however, that (i) each partial reduction of the 364
Day Commitments shall be in a minimum principal amount of $1,000,000 or in a
whole multiple thereof, (ii) each partial reduction of the Revolver Commitments
shall be in a minimum principal amount $3,000,000 or in a whole multiple
thereof, and (iii) the Commitments may not be reduced or terminated if, after
giving effect thereto and to any prepayments of the Loans made on the effective
date thereof, the 364 Day Exposure and/or the Revolver Exposure at such time
would exceed the aggregate amount of the 364 Day Commitments and/or Revolver
Commitments, respectively, at such time.
(c) Each reduction in the 364 Day Commitments and/or Revolver
Commitments hereunder shall be made ratably among the Banks in accordance with
their respective Commitment Percentages. The Borrowers shall pay to the Agent
for the account of the Banks on the date of each termination or reduction of the
Commitments, the Commitment Fees on the amount of such Commitments so terminated
or reduced accrued to the date of such termination or reduction.
(d) (i) During the period beginning one hundred and twenty
(120) days and ending sixty (60) days prior to the initial and any subsequent
364 Day Termination Date, the Borrowers may deliver to the Agent (which shall
promptly transmit to each Bank) a notice (a "364 Day Extension Request")
requesting that the 364 Day Commitments be extended to the date three hundred
sixty-four (364) days after the 364 Day Termination Date then in effect (a
"Subsequent 364 Day Termination Date"). Within thirty (30) days after its
receipt of any such notice, each Bank shall notify the Agent of its willingness
or unwillingness so to extend its 364 Day Commitment. Any Bank that shall fail
so to notify the Agent within such period shall be deemed to have declined to
extend its 364 Day Commitment. In the event that all Banks shall approve a 364
Day Extension Request (a) the respective 364 Day Commitments of the Banks shall,
without further act by any party hereto, be extended to the Subsequent 364 Day
Termination Date, and (b) the term "364 Day Termination Date" shall thereafter
mean such
36
Subsequent 364 Day Termination Date. Any such extension shall be evidenced by a
written agreement among the Agent, the Banks and the Borrowers, such agreement
to be in form and substance acceptable to the Agent and the Banks.
(ii) During the period beginning subsequent to the first
anniversary of this Agreement and ending sixty (60)
days prior to the initial and any subsequent Revolver
Termination Date, the Borrowers may deliver to the
Agent (which shall promptly transmit to each Bank) a
notice (a "Revolver Extension Request") requesting
that the Revolver Commitments be extended to the date
one (1) year after the Revolver Termination Date then
in effect (a "Subsequent Revolver Termination Date").
Within thirty (30) days after its receipt of any such
notice, each Bank shall notify the Agent of its
willingness or unwillingness so to extend its
Revolver Commitment. Any Bank that shall fail so to
notify the agent within such period shall be deemed
to have declined to extend its Revolver Commitment.
In the event that all Banks shall approve a Revolver
Extension Request (a) the term "Revolver Termination
Date" shall thereafter mean such Subsequent Revolver
Termination Date. Any such extension shall be
evidenced by a written agreement among the Agent, the
Banks and the Borrowers, such agreement to be in form
and substance acceptable to the Agent and the Banks.
2.15 Prepayment of Loans.
(a) The Borrowers shall have the right at any time and from
time to time to prepay Loans, in whole or in part, without premium or penalty
(but in any event subject to subsection 2.18), upon prior written, telecopy or
telephonic notice to the Agent given, in the case of Base Rate Loans, no later
than 11:00 am., Philadelphia time, one Business Day before any proposed
prepayment, and in the case of LIBOR Loans, no later than 11:00 a.m.,
Philadelphia time, three Business Days before any such proposed prepayment. In
each case the notice shall specify the date, amount of each such prepayment,
whether the prepayment is of LIBOR Loans, Daily LIBOR Loans or Base Rate Loans,
or a combination thereof, and, if a combination thereof, the amount allocable to
each; provided, however, that each such partial prepayment shall be in the
principal amount of at least (i) with respect to prepayments of Base Rate Loans
or Daily LIBOR Loans, $1,000,000 or in whole multiples of $100,000 in excess
thereof, and (ii) with respect to prepayments of Loans that bear interest at the
LIBOR Rate, $1,000,000 or in whole multiples of $500,000 in excess thereof.
(b) On the date of any termination or reduction of either the
364 Day Commitments or the Revolver Commitments pursuant to Section 2.14, the
Borrowers shall pay or prepay so much of the Loans as shall be necessary in
order that the aggregate 364 Day Exposure and the Revolver Exposure at such time
would not exceed the aggregate amount of the 364 Day Commitments and/or the
Revolver Commitments, as the case may be, at such time.
(c) All prepayment notices shall be irrevocable. The principal
amount of the Loans for which a prepayment notice is given, together with
interest on such principal amount except with respect to Base Rate Loans and all
fees, costs and expenses payable in connection therewith, shall be due and
payable on the date specified in such prepayment notice as the date on which the
proposed prepayment is to be made. If the Borrowers prepay a 364 Day Loan, all
outstanding Swing Line Loans shall (unless the Swing Line Bank shall otherwise
37
agree) first be repaid from the proceeds thereof. If the Borrowers fail to
specify the applicable Tranche which the Borrowers are prepaying, the prepayment
shall, subject to the immediately prior sentence, be applied first to Base Rate
Loans, then to Daily LIBOR Loans and then to LIBOR Loans, with payments applied
to LIBOR Loans being applied in order of next maturing Interest Periods. Any
prepayment hereunder shall be subject to the Borrowers' obligation to indemnify
the Banks under Section 2.18.
(d) Upon receipt of any notice of prepayment, the Agent shall
promptly notify each Bank thereof.
(e) Amounts prepaid pursuant to this Section (other than
subsection (b) hereof) may be reborrowed, subject to the terms and conditions
hereof.
2.16 Requirements of Law.
(a) In the event that any change in any Requirement of Law or
in the interpretation, or application thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Bank to any tax of any kind
whatsoever with respect to this Agreement, any Note,
any Letter of Credit, any Application or any LIBOR
Loan made by it or payments by the Borrowers of
principal, interest, fees or other amounts due from
the Borrowers hereunder, or change the basis of
taxation of payments to such Bank in respect thereof
(except for taxes covered by Section 2.17 and changes
in the rate of tax on the net income of such Bank);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances,
loans, letters of credit or other extensions of
credit by, or any other acquisition of funds by, any
Bank or any Lending Office of any Bank which is not
otherwise included in the determination of the
interest rate on such LIBOR Loan hereunder; or
(iii) shall impose on any Bank or any Lending Office of any
Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank or
its Lending Office, by an amount which such Bank deems in its sole but
reasonable discretion to be material, of making, converting into, continuing or
maintaining LIBOR Loans, maintaining any commitment hereunder or issuing or
participating in Letters of Credit or to reduce any amount receivable hereunder
in respect thereof then, in any such case, the Borrowers shall as promptly as
practicable pay such Bank, upon its demand, any additional amounts necessary to
compensate such Bank for such increased cost or reduced amount receivable. If
any Bank becomes entitled to claim any additional amounts pursuant to this
subsection, it shall as promptly as practicable notify the Company, through the
Agent, of the event by reason of which it has become so entitled. A certificate
as to any additional amounts payable pursuant to this subsection submitted by
such Bank, through the Agent, to the Company shall be conclusive in the absence
of clearly
38
demonstrable error. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
(b) In the event that any Bank shall have determined that any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Bank or any
corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Bank's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Bank or such corporation could have achieved but for
such change or compliance (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, the Borrowers shall as
promptly as practicable pay such Bank, upon its demand, such additional amount
or amounts as will compensate such Bank for such reduction. If any Bank becomes
entitled to claim any additional amounts pursuant to this subsection, it shall
as promptly as practicable notify the Company, through the Agent, of the event
by reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this subsection submitted by such Bank, through the
Agent, to the Company shall be conclusive in the absence of clearly demonstrable
error. This covenant shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.
(c) Each Bank agrees that it will use reasonable efforts in
order to avoid or to minimize, as the case may be, the payment by the Borrowers
of any additional amount under subsections 2.16(a) or (b); provided, however,
that no Bank shall be obligated to incur any expense, cost or other amount in
connection with utilizing such reasonable efforts.
2.17 Taxes.
(i) All payments made by the Borrowers under this
Agreement and the Notes shall be made free and clear
of, and without deduction or withholding for or on
account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any
Governmental Authority (excluding, in the case of the
Agent and each Bank, net income taxes and franchise
or gross receipts taxes imposed on the Agent or such
Bank, as the case may be, as a result of a present or
former connection between the jurisdiction of the
government or taxing authority imposing such tax and
the Agent or such Bank (excluding a connection
arising solely from the Agent or such Bank having
executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement
or the Notes)) (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If
any Taxes are required to be withheld from any
amounts payable to the Agent or any Bank hereunder or
under the Notes, the amounts so payable to the Agent
or such Bank shall be increased to the extent
necessary to yield to the Agent or such Bank (after
payment of all Taxes) interest or any such other
amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Notes.
Whenever any Taxes are payable by the Borrowers, as
promptly as possible thereafter, the Borrowers shall
send to the Agent for its own account or for the
account of such Bank, as the case may be, a certified
copy of an original
39
official receipt received by the Borrowers showing
payment thereof. If the Borrowers fail to pay any
Taxes when due to the appropriate taxing authority or
fail to remit to the Agent the required receipts or
other required documentary evidence, the Borrowers
shall indemnify (subject to subsections 2.17(c)
below) the Agent and the Banks for any incremental
taxes, interest or penalties that may become payable
by the Agent or any Bank as a result of any such
failure. The agreements in this subsection shall
survive the termination of this Agreement and the
payment of the Notes and all other amounts payable
hereunder.
(ii) Each Bank that is not incorporated under the laws of
the United States of America or a state thereof
agrees that it will deliver to the Borrowers and the
Agent on or prior to the Closing Date in the case of
each initial Bank and on or prior to the effective
date of the Assignment and Acceptance pursuant to
which it becomes a Bank in the case of each other
Bank (i) two duly completed copies of United States
Internal Revenue Service Form W-8ECI or W-8BEN or
successor applicable form, as the case may be, and
(ii) an Internal Revenue Service Form W-8 or W-9 or
successor applicable form. Each such Bank also agrees
to deliver to the Borrowers and the Agent two further
copies of the said Form W-8ECI or W-BEN and Form W-8
or W-9, or successor applicable forms or other manner
of certification, as the case may be, on or before
the date that any such form expires or becomes
obsolete or after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrowers, and such extensions
or renewals thereof as may reasonably be requested by
the Borrowers or the Agent, unless in any such case
an event (including, without limitation, any change
in treaty, law or regulation) has occurred prior to
the date on which any such delivery would otherwise
be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing
and delivering any such form with respect to it and
such Bank so advises the Borrower and the Agent. Each
such Bank shall certify (i) in the case of a Form
W-8ECI or W-BEN, that it is entitled to receive
payments under this Agreement without deduction or
withholding of any United States federal income taxes
and (ii) in the case of a Form W-8 or W-9 or
successor applicable form, that it is entitled to an
exemption from United States backup withholding tax.
If any form provided by a Bank at the time such Bank
first becomes a party to this Agreement indicates a
United States interest withholding tax rate in excess
of zero, withholding tax at such rate shall be
considered excluded from "Taxes" as defined in
subsection 2.9(a). In the event that any Bank
receives a refund of any Taxes for which it has
received payment from the Borrowers under this
Section 2.17, such Bank shall promptly pay the amount
of such refund to the Borrowers without interest.
(iii) Notwithstanding the foregoing subsections of this
Section 2.17, the Borrowers shall not be required to
pay any additional amounts to any Bank in respect of
United States withholding tax pursuant to such
subsections if (i) the obligation to pay such
additional amounts would not have arisen but for a
failure by such Bank to comply with the requirements
of subsection 2.17(b) or (ii) such Bank shall not
have furnished the Borrowers with such forms listed
in subsection 2.17(b) and shall not have taken such
other steps as reasonably may be available to it
under applicable tax laws and any applicable tax
treaty or convention to obtain an exemption from, or
reduction (to the lowest applicable rate) of, such
United States withholding tax.
40
2.18 Indemnity.
(a) The Borrowers jointly and severally agree to indemnify
each Bank and to hold each Bank harmless from any loss or expense, including,
without limitation, reasonable attorneys' fees and expenses which such Bank may
sustain or incur as a consequence of (i) default by the Borrowers in payment
when due of the principal amount of or interest on any LIBOR Loan or Swing Line
Loan, (ii) default by the Borrowers in making a borrowing of, conversion into or
continuation of LIBOR Loans or Swing Line Loans after the Borrowers have given a
notice requesting the same in accordance with the provisions of this Agreement,
(iii) default by the Borrowers in making any prepayment after the Borrowers have
given a notice thereof in accordance with the provisions of this Agreement or
(iv) the making of a prepayment (whether voluntary, mandatory, as a result of
acceleration or otherwise) of LIBOR Loans or Swing Line Loans on a day which is
not the last day of an Interest Period with respect thereto (or, in the case of
a Swing Line Loan on the date such Swing Line Loan is due), including, without
limitation, in each case, any such loss or expense arising from the reemployment
of funds obtained by it or from fees payable to terminate the deposits from
which such funds were obtained. A certificate as to any amounts that a Bank is
entitled to receive under this Section 2.18 submitted by such Bank, through the
Agent, to the Company shall be conclusive in the absence of clearly demonstrable
error and all such amounts shall be paid by the Borrowers promptly upon demand
by such Bank. This covenant shall survive the termination of this Agreement and
the payment of the Notes and all other amounts payable hereunder.
(b) For the purpose of calculation of all amounts payable to a
Bank under this subsection, each Bank shall be deemed to have actually funded
its relevant LIBOR Loan or Swing Line Loan through the purchase of a deposit
bearing interest at the LIBOR Rate in an amount equal to the amount of that
LIBOR Loan or Swing Line Loan, as the case may be, and having a maturity
comparable to the relevant Interest Period or applicable period for such Swing
Line Loan; provided, however, that each Bank may fund each of its LIBOR Loans,
and the Swing Line Bank may fund its Swing Line Loans, in any manner it sees
fit, and the foregoing assumptions shall be utilized only for the calculation of
amounts payable under this subsection. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 Judgment Currency.
(a) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder or under a Note in any currency (the
"Original Currency") into another currency (the "Other Currency"), the parties
hereby agree, to the fullest extent permitted by Law, that the rate of exchange
used shall be that at which in accordance with normal banking procedures the
Agent could purchase the Original Currency with the Other Currency after any
premium and costs of exchange on the Business Day preceding that on which final
judgment is given.
(b) The obligation of the Borrowers in respect of any sum due
from the Borrowers to any Bank hereunder shall, notwithstanding any judgment in
an Other Currency, whether pursuant to a judgment or otherwise, be discharged
only to the extent that, on the Business Day following receipt by any Bank of
any sum adjudged to be so due in such Other
41
Currency, such Bank may in accordance with normal banking procedures purchase
the Original Currency with such Other Currency. If the amount of the Original
Currency so purchased is less than the sum originally due to such Bank in the
Original Currency, the Borrowers jointly and severally agree, as a separate
obligation and notwithstanding any such judgment or payment, to indemnify such
Bank against such loss.
2.20 Borrowers' Representative. Each of the Borrowers hereby
appoints the Company as its non-exclusive representative, and grants to the
Company an irrevocable power of attorney to act as its attorney-in-fact, with
regard to all matters relating to this Agreement and each of the other Loan
Documents, including, without limitation, execution and delivery of any Notice
of Borrowing, and amendments, supplements, waivers or other modifications hereto
or thereto, receipt of any notices hereunder or thereunder and receipt of
service of process in connection herewith or therewith and making all elections
as to interest rates and interest payment dates. (In such capacity, the Company
is herein referred to as the "Borrowers' Representative.") The Agent and the
Banks shall be entitled to rely exclusively on the Borrowers' Representative's
authority so to act in each instance without inquiry or investigation, and each
of the Borrowers hereby agrees to indemnify and hold harmless the Agent and the
Banks for any losses, costs, delays, errors, claims, penalties or charges
arising from or out of the Borrowers' Representative's actions pursuant to this
Section 2.20 and the Agent's and the Banks' reliance thereon and hereon. Notice
from the Borrowers' Representative shall be deemed to be notice from all of the
Borrowers and notice to the Borrowers' Representative shall be deemed to be
notice to all of the Borrowers. Nothing in this Section 2.20 shall vitiate or be
held contrary to the Borrowers' representations and covenants regarding the
Loans or the net worth or solvency of the Borrowers made herein or in any of the
Loan Documents.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Banks to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit, each of
the Borrowers hereby represents and warrants to the Agent and each Bank that:
3.1 Financial Condition.
(a) The consolidated balance sheet of the Company and its
consolidated Subsidiaries as at December 30, 2000 and the related consolidated
statements of income and of cash flows for the period ended on such date, copies
of which have heretofore been furnished to each Bank, present fairly the
consolidated financial condition of the Company and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the period then ended. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved. Neither the Company nor any of its consolidated Subsidiaries had, at
the date of the most recent balance sheet referred to above, any material
Guaranty Obligation, liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is required by GAAP
to be but is not reflected in the foregoing statements or in the notes thereto.
42
(b) The unaudited consolidated balance sheet of the Company
and its consolidated Subsidiaries as at September 29, 2001 and the related
unaudited consolidated statements of income and of cash flows for the nine-month
period ended on such date, certified by a Responsible Officer, copies of which
have heretofore been furnished to each Bank, are complete and correct and
present fairly the consolidated financial condition of the Company and its
consolidated Subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the nine-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved. Neither the Company nor any of its consolidated Subsidiaries had, at
the date of the balance sheet referred to above, any material Guaranty
Obligation, liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction, which is required by GAAP to be
but is not reflected in the foregoing statements or in the notes thereto.
3.2 No Change. Except as provided on Schedule 3.2, since December 30,
2000, there has been no development or event nor any prospective development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
3.3 Corporate Existence; Compliance with Law. Each of the Borrowers and
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate or
other power and authority, and the legal right, to own and operate its property,
to lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified to transact business and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, and (d) is in compliance with all Requirements of Law, in each
case, except to the extent that its failure to have such power, authority or
legal right, to qualify to do business, or to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. Each of
the Borrowers has the corporate or other power, authority, and legal right to
make, deliver and perform this Agreement, the Applications and each other Loan
Document to which it is a party and to borrow hereunder and has taken all
necessary corporate or other action to authorize the Extensions of Credit on the
terms and conditions of this Agreement and each other Loan Document to which it
is a party and to authorize the execution, delivery and performance of this
Agreement and each other Loan Document to which it is a party. No consent or
authorization of, filing with or other act by or in respect of, any Governmental
Authority or any other Person (including stockholders and creditors of the
Borrowers) is required in connection with the Extensions of Credit hereunder or
with the execution, delivery, performance, validity or enforceability of this
Agreement, the Notes, the Applications or any other Loan Document. This
Agreement has been and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of such Borrower. This Agreement
constitutes and each other Loan Document when executed and delivered will
constitute, a legal, valid and binding obligation of the Borrowers party thereto
enforceable against such Borrowers in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws affecting the
enforcement of
43
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.5 No Legal Bar. The execution, delivery and performance of this
Agreement, the Notes, the Applications and the other Loan Documents by the
Borrowers, the Extensions of Credit extended hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of any Borrower and will not result in, or require, the creation or
imposition of any Lien on any properties or revenues of any Borrower pursuant to
any such Requirement of Law or Contractual Obligation.
3.6 No Material Litigation. Except as provided on Schedule 3.2, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrowers,
threatened against any Borrower or against any of its or their respective
properties or revenues (a) with respect to this Agreement, the Notes, the other
Loan Documents or any of the transactions contemplated hereby, or (b) as to
which there is a reasonable likelihood of an adverse determination and which, if
adversely determined, would have a Material Adverse Effect.
3.7 No Default. Neither the Company nor any other Borrower is in
default under or with respect to any of its Contractual Obligations in any
respect which would have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
3.8 Taxes. Each of the Borrowers has filed or caused to be filed all
tax returns which, to its knowledge, are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves, if any, in
conformity with GAAP have been provided on the books of the Borrowers); no tax
Lien has been filed against any of the Borrowers, and, to the knowledge of each
of the Borrowers, no claim is being asserted, with respect to any such tax, fee
or other charges.
3.9 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U or for any purpose which
violates the provisions of Regulation U of the Board of Governors of the Federal
Reserve System. If requested by any Bank or the Agent, the Borrowers will
furnish to the Agent and each Bank a statement to the foregoing effect in
conformity with the requirements of FR Form U-l referred to in said Regulation
U. No part of the proceeds of the Loans hereunder will be used for any purpose
which violates, or which is inconsistent with, the provisions of Regulation X.
3.10 ERISA. Each Plan (such representations in respect of any
Multiemployer Plan being made to the best knowledge of each Borrower) has
complied in all material respects with the applicable provisions of ERISA and
the Code. No prohibited transaction (as defined in subsection 7.1(j)) or
Reportable Event has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Single
Employer Plan. The present value of all accrued benefits under each Single
Employer Plan of which any
44
Borrower or a Commonly Controlled Entity is a sponsor (based on those
assumptions used to fund the Plans), as calculated by such Borrower's actuaries,
did not, as of January 1, 2001 which is the last annual valuation date prior to
the date on which this representation is made, exceed the value of the assets of
the Plans allocable to such benefits. Neither any Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan and neither any Borrower nor any Commonly Controlled Entity
would become subject under ERISA to any liability if any Borrower or any such
Commonly Controlled Entity were to withdraw completely from any Multiemployer
Plan as of the valuation date most closely preceding the date this
representation is made or deemed made. Such Multiemployer Plans are neither in
Reorganization as defined in Section 4241 of ERISA nor Insolvent as defined in
Section 4245 of ERISA. Neither any Borrower nor any Commonly Controlled Entity
has any or has received notice of any liability under the Coal Industry Retiree
Health Benefit Act of 1992. Neither a Reportable Event nor an "accumulated
funding deficiency" within the meaning of Section 412 of the Code or Section 302
of ERISA has occurred during the five-year period prior to the date on which
this representation is made or deemed made with respect to any Single Employer
Plan or Multiemployer Plan. No termination of a Single Employer Plan has
occurred, and no Lien on assets of any of the Borrowers or any Commonly
Controlled Entity in favor of the PBGC or a Plan has arisen during such
five-year period.
3.11 Investment Company Act. None of the Borrowers is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
3.12 Public Utility Holding Company Act. No Borrower is subject to
regulation as a "holding company", subject to regulation as an "affiliate" of a
"holding company", or subject to regulation as a "subsidiary company" of a
"holding company", in each case under the Public Utility Holding Company Act of
1935, as amended.
3.13 Environmental Matters. Except to the extent that all of the
following would not reasonably be expected to have a Material Adverse Effect:
(a) The Properties do not contain, and have not previously
contained, in, on, or under, including, without limitation, the soil and
groundwater thereunder, any Materials of Environmental Concern in amounts or
concentrations that constitute or constituted a violation of, and reasonably
could give rise to liability to the Borrowers under Environmental Laws.
(b) The Properties and all operations and facilities at the
Properties are in substantial compliance, and have in the last five years been
in substantial compliance with all Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by any
Borrower thereof which could interfere with the continued operation of any of
the Properties or impair the fair saleable value of any thereof. None of the
Borrowers has assumed any liability of any Person under Environmental Laws.
(c) Neither the Company nor any other Borrower nor any of
their Subsidiaries has received or is aware of any claim, notice of violation,
alleged violation,
45
non-compliance, investigation or advisory action or potential liability
regarding environmental matters or compliance of Environmental Law with regard
to the Properties which has not been satisfactorily resolved by the Company or
such other Borrower, nor is the Company nor any other Borrower aware or have
reason to believe that any such action is being contemplated, considered or
threatened.
(d) Materials of Environmental Concern have not been
generated, treated, stored, transported, disposed of, at, on, from or under any
of the Properties by any of the Borrowers, nor have any Materials of
Environmental Concern been transferred by any of the Borrowers from the
Properties to any other location except in either case in the ordinary course of
business of the Borrowers in substantial compliance with all Environmental Laws
and such that it would not reasonably be expected to give rise to liability to
the Borrowers under any applicable Environmental Law.
(e) There are no governmental, administrative actions or
judicial proceedings pending or, to the best knowledge of each Borrower after
reasonable inquiry, contemplated or threatened under any Environmental Laws to
which the Company is or will be named as a party with respect to the Properties,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to any of the
Properties to the best knowledge of each Borrower after reasonable inquiry.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operation of the Borrowers in connection with the Properties or
otherwise in connection with the business operated by the Borrowers in violation
of or in amounts or in a manner that could reasonably be expected to give rise
to liability to the Borrowers under any Environmental Law.
(g) To the best knowledge of the Borrowers after reasonable
inquiry, each of the representations and warranties set forth in paragraphs
3.13(a) through 3.13(f) is true and correct with respect to each Property.
3.14 No Material Misstatements. No financial statement, exhibit or
schedule furnished by or on behalf of any Borrower to the Agent or any Bank in
connection with the negotiation of this Agreement, any Note or any other Loan
Document contains any misstatement of fact, or omitted or omits to state any
fact necessary to make the statements therein not misleading under the
circumstances under which they were made or given, where such misstatement or
omission would be material to the interests of the Banks with respect to the
performance of one or more Borrowers of its or their obligations hereunder or
thereunder. Prior to the date hereof, the Borrowers have disclosed to the Banks
in writing any and all facts which materially and adversely affect (to the
extent the Borrowers can as of the date hereof reasonably foresee), the
business, operations or financial condition of the Company and its Subsidiaries
taken as a whole, and the ability of the Borrowers to perform their obligations
under this Agreement, the Notes and the other Loan Documents.
3.15 Title to Properties. The Borrowers have good and marketable title
to or valid leasehold interest in all material properties, assets and other
rights which they purport to
46
own or lease, respectively, or which are reflected as owned or leased on their
respective books and records, free and clear of all Liens and encumbrances
except Permitted Liens, and subject to the terms and conditions of the
applicable leases, except for minor defects in title that do not interfere in
any material respect with their ability to conduct their businesses as presently
conducted. All leases of property are in full force and effect without the
necessity for any consent (which has not previously been obtained) upon
consummation of the transactions contemplated hereby unless the failure to
obtain or maintain such consent would not have a Material Adverse Effect.
3.16 Intellectual Property. Each of the Borrowers owns, or is licensed
to use, all trademarks, tradenames, copyrights, technology, know-how and
processes necessary for the conduct of its business as currently conducted (the
"Intellectual Property"), except for those as to which the failure to own or
license would not reasonably be expected to have a Material Adverse Effect. No
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property, nor does such Borrower know of any
valid basis for any such claim. The use of such Intellectual Property by the
Borrowers does not infringe the rights of any Person, except for such claims and
infringements that, in the aggregate, could not have a Material Adverse Effect.
3.17 No Burdensome Restrictions; List of Subsidiaries. No Requirement
of Law or Contractual Obligation of any of the Borrowers could reasonably be
expected to have a Material Adverse Effect. All of the direct or indirect
Subsidiaries of the Company are Borrowers under this Agreement.
3.18 Solvency. Each of the Borrowers is, and after receipt and
application of the initial Loans hereunder will be, solvent such that: (a) the
fair value of its assets (including without limitation the fair salable value of
the goodwill and other intangible property of such Borrower) is greater than the
total amount of its liabilities, including without limitation, Guaranty
Obligations, (b) the present fair salable value of its assets (including without
limitation the fair salable value of the goodwill and other intangible property
of such Borrower) is not less than the amount that will be required to pay the
probable liability on its debts as they become absolute and matured, and (c) it
is able to realize upon its assets and pay its debts and other liabilities and
commitments (including Guaranty Obligations) as they mature in the normal course
of business; provided, that with respect to the obligations outstanding under
this Agreement and any payments made with respect thereto, the common law right
of and to contribution and subrogation among the Borrowers and any other rights
to payment between and among any one or more of the Borrowers shall be taken
into account in determining whether each Borrower is solvent. Each Borrower (a)
does not intend to, and does not believe that it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature, and
(b) is not engaged in a business or transaction, or about to engage in a
business or transaction, for which its property would constitute unreasonably
small capital after giving due consideration to the prevailing practice and
industry in which it is engaged; provided, that with respect to the obligations
outstanding under this Agreement and any payments made with respect thereto, the
common law right of and to contribution and subrogation among the Borrowers and
any other rights to payment between and among any one or more of the Borrowers
shall be taken into account in determining whether each Borrower is able to pay
such debts and liabilities as they mature or whether such Borrower's property
would constitute sufficient capital.
47
3.19 Insurance. The Borrowers currently maintain insurance which meets
or exceeds the requirements of Section 5.5 No notice has been given or claim
made and no grounds exist to cancel or avoid any insurance policies or other
bonds to which the Borrowers are a party or to reduce the coverage provided
thereby or any replacements thereof. Such policies and bonds or any replacements
thereof provide adequate coverage from reputable and financially sound insurers
in amounts sufficient to insure the assets and risks of the Borrowers in
accordance with prudent business practice in the industry of the Borrowers.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Closing. This Agreement shall become effective upon,
and the agreement of the Banks to make the initial Extension of Credit shall be
subject to, the satisfaction of each of the following conditions precedent:
(a) Credit Agreement and Notes. The Agent shall have received
(i) this Agreement, (A) executed and delivered by a duly authorized officer of
each Borrower, with a counterpart for each Bank, and (B) executed and delivered
by a duly authorized officer of each Bank, (ii) for the account of each Bank, a
364 Day Note, (iii) for the account of each Bank, a Revolver Note, and (iv) a
Swing Line Note for the account of the Swing Line Bank.
(b) Corporate Proceedings; No Default. The Agent shall have
received, with a counterpart for each Bank, a certificate of the Secretary or an
Assistant Secretary of each Borrower dated as of the Closing Date certifying (A)
that attached thereto is a true and complete copy of the resolutions, in form
and substance satisfactory to the Agent, of the Board of Directors or other
governing body of such Borrower authorizing (i) the execution, delivery and
performance of this Agreement, the Notes and the other Loan Documents to which
it is a party, and (ii) the Extensions of Credit contemplated hereunder and that
such resolutions attached thereto have not been amended, modified, revoked or
rescinded and (B) as to the incumbency and specimen signature of each officer
executing any Loan Document on behalf of a Borrower and (C) that the
representations contained in Section 3 are true and correct, that the Borrowers
are in compliance with all covenants contained herein and there exists no
Default or Event of Default after giving effect to the initial Extension of
Credit hereunder.
(c) Corporate Documents. The Agent shall have received, with a
counterpart for each Bank, true and complete copies of the articles or
certificate of incorporation or other organizational documents certified by the
Secretary of State or similar official of the state of organization of each
Borrower, and the by-laws of each Borrower, in each case, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of such Borrower. The documents and certifications of the
Secretary or an Assistant Secretary contemplated in this subsection may be
included within the certificate contemplated by subsection 4.1(b) above.
(d) Fees and Expenses. The Agent shall have received (i) the
closing fee and the fees required to be paid on the Closing Date pursuant to
this Agreement and the Commitment Letter and (ii) all other fees and expenses
due and payable hereunder on or before the Closing Date (if then invoiced),
including, without limitation, the reasonable fees and
48
expenses accrued through the Closing Date of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx,
LLP, counsel to the Agent in connection with the transactions contemplated by
the Loan Documents.
(e) Legal Opinion. The Agent shall have received the executed
legal opinion of Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP, counsel to the Borrowers
covering such matters as the Agent may reasonably require.
(f) Insurance. The Agent shall have received Certificates of
Insurance with respect to each Borrower's fire, casualty, liability and other
insurance covering its respective property and business.
(g) Good Standing. The Agent shall have received certificates
of good standing, subsistence and/or status dated a recent date from the
Secretary of State or appropriate taxing or other authorities in the
jurisdiction of incorporation or organization of each Borrower and any other
locations requested by the Agent.
4.2 Conditions to Each Extension of Credit. The agreement of each Bank
to make any Extension of Credit requested to be made by it on any date
(including, without limitation, its initial Extension of Credit) is subject to
the satisfaction of the following conditions precedent:
(a) Existing Credit Arrangements. On or before the initial
Extension of Credit, the Existing Credit Agreement shall have been terminated
and all Indebtedness thereunder shall have been repaid in full, all collateral
(if any) pledged to secure such Indebtedness shall be released and executed
Uniform Commercial Code termination statements shall either have been filed or
be provided to the Agent.
(b) Representations and Warranties. Each of the
representations and warranties made by each Borrower herein or which are
contained in any certificate, document or financial or other statement furnished
at any time under or in connection herewith or therewith, shall be true and
correct in all material respects on and as of such date as if made on and as of
such date.
(c) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Extensions
of Credit requested to be made on such date.
(d) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Agent, and the Agent shall have
received such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
Each request by the Borrowers for an Extension of Credit hereunder shall
constitute a representation and warranty by the Borrowers as of the date of such
Extension of Credit that the conditions contained in this Section 4.2 have been
satisfied.
49
SECTION 5. AFFIRMATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as any of
the Commitments remain in effect, any Note or Letter of Credit remains
outstanding and unpaid, or any other amount is owing to any Bank or the Agent
hereunder, such Borrower shall:
5.1 Financial Statements. Furnish to each Bank:
(a) as soon as available, but in any event not later than 90
days after the close of each fiscal year of the Company, an audited consolidated
balance sheet of the Company and its consolidated Subsidiaries as at the end of
such fiscal year, and related consolidated statements of income and retained
earnings and changes in cash flows of the Company and its consolidated
Subsidiaries for such fiscal year, all in reasonable detail, prepared in
accordance with GAAP applied on a basis consistently maintained throughout the
period involved and with the prior year with such changes thereon as shall be
approved by the Company's independent certified public accountants, such
financial statements to be certified by PricewaterhouseCoopers L.L.P. or other
nationally recognized independent certified public accountants selected by the
Company and reasonably acceptable to the Agent, without a "going concern" or
like qualification or exception arising out of the scope of the audit; such
financial statements shall be accompanied by a certificate of a Responsible
Officer of the Company stating that the financial statements fairly present the
financial condition of the Company and its consolidated Subsidiaries as of the
date and for the periods covered thereby; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of the Company, unaudited consolidated financial statements of the Company
and its consolidated Subsidiaries, including therein (i) a consolidated balance
sheet of the Company and its consolidated Subsidiaries as at the end of such
fiscal quarter, (ii) the related consolidated statements of income and retained
earnings of the Company and its consolidated Subsidiaries, and (iii) the related
consolidated statement of changes in cash flows of the Company and its
consolidated Subsidiaries all for the period from the beginning of such fiscal
quarter to the end of such fiscal quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in comparative form
the corresponding figures for the like period of the preceding fiscal year; all
in reasonable detail, prepared in accordance with GAAP applied on a basis
consistently maintained throughout the period involved and with prior periods
and accompanied by a certificate of a Responsible Officer of the Company stating
that the financial statements fairly present the financial condition of the
Company and its consolidated Subsidiaries as of the date and for the periods
covered thereby (subject to normal year-end audit adjustments).
5.2 Certificates; Other Information. Furnish to each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a), a certificate of the Company's independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary for certifying such financial statements no
knowledge was obtained of any Default or Event of Default, except as
specifically indicated;
50
(b) concurrently with the delivery of the financial statements
referred to in subsections 5.1(a) and 5.1(b), a certificate of a Responsible
Officer of the Company (each a "Compliance Certificate") showing in detail the
calculations demonstrating compliance with the financial covenants set forth in
Section 6.1, together with a certificate of a Responsible Officer of the Company
stating that, to the best of his or her knowledge, each of the Borrowers during
such period has kept, observed, performed and fulfilled each and every covenant
and condition contained in this Agreement and in the Notes and the other Loan
Documents to which it is a party and that such officer has obtained no knowledge
of any Default or Event of Default except as specifically indicated; if the
Compliance Certificate shall indicate that such officer has obtained knowledge
of a Default or Event of Default, such Compliance Certificate shall state what
efforts the Borrowers are making to cure such Default or Event of Default; and
(c) promptly, such forecasts and additional financial
information as the Agent or any Bank may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature (including but not limited to all taxes,
assessments and governmental charges and levies upon them or upon any of their
respective income, profits or property prior to the date on which penalties
attach thereto), except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the Company or
its Subsidiaries, as the case may be.
5.4 Maintenance of Existence. Preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business; comply with all Contractual Obligations and
Requirements of Law, except to the extent that failure to comply therewith would
not individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5.5 Maintenance of Insurance; Property.
(a) Insure its properties and assets against loss or damage by
fire and such other insurable hazards as such assets are commonly insured
(including fire, extended coverage, property damage, worker's compensation,
public liability and business interruption insurance) and against other risks in
such amounts as similar properties and assets are insured by prudent companies
in similar circumstances carrying on similar businesses, and with reputable and
financially sound insurers, including self insurance to the extent customary.
The Borrowers shall deliver, at the request of the Agent or any Bank, from time
to time a summary schedule indicating all insurance then in force with respect
to the Borrowers.
(b) Maintain in good repair, working order and condition
(ordinary wear and tear and casualty excepted) in accordance with the general
practice of other businesses of similar character and size, all of those
properties useful or necessary to its business, and, from time to time, each of
the Company and its Subsidiaries will make or cause to be made all appropriate
repairs, renewals or replacements thereof.
51
5.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and upon reasonable
notice permit representatives of any Bank to visit and inspect any of its
properties and examine and make abstracts from any of its books and records
during normal business hours and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Company and its Subsidiaries with officers and employees of the Company
and its Subsidiaries.
5.7 Notices. Promptly give notice to the Agent and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of any Borrower or (ii) litigation, investigation or proceeding which
may exist at any time between any Borrower and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case may be,
would have a Material Adverse Effect;
(c) any litigation, investigation or proceeding affecting any Borrower
which, if adversely determined, would have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after any Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, any Lien in favor
of PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or any Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any Plan or (iii) an
assessment of liability under the Coal Industry Retiree Health Benefit Act of
1992; and
(e) any other event which has had or would reasonably be expected to
have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrowers and their Subsidiaries propose to take
with respect thereto.
5.8 Environmental Laws.
(a) Comply with, and require compliance by all tenants and all
subtenants, if any, in all material respects with all Environmental Laws and
obtain and comply with and maintain, and require that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, registrations or permits required by Environmental Laws,
except in each case to the extent that failure to so comply or obtain or
maintain such documents could not reasonably be expected to have a Material
Adverse Effect;
52
(b) Comply in all material respects with all lawful and binding orders
and directives of all Governmental Authorities respecting Environmental Laws;
and
(c) Defend, indemnify and hold harmless the Agent and the Banks, and
their respective employees, agents, officers, directors, successors and assigns
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to any
violation of or noncompliance with or liability under any Environmental Laws, or
any orders, requirements or demands of Governmental Authorities related thereto
which in each case relate to or arise in connection with any Borrower, any
Property or any activities relating to any other property or business of a
Borrower or the enforcement of any rights provided herein or in the other Loan
Documents, including, without limitation, attorneys' and consultants' fees,
response costs, investigation and laboratory fees, court costs and litigation
expenses, except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of any of the foregoing enumerated parties.
This indemnity shall continue in full force and effect regardless of the
termination of this Agreement and the payment of the Notes.
5.9 Notice and Joinder of New Subsidiaries. Notify the Agent as soon as
practicable of its ownership of any Subsidiary that is not a Borrower and cause
such Subsidiary to execute and deliver to the Agent a Joinder and Assumption
Agreement pursuant to which it shall, among other things, become a Borrower
hereunder.
5.10 Use of Proceeds. Use the proceeds of the Loans (i) for working
capital and general corporate purposes in the ordinary course of business
including to pay all or a portion of the purchase price for Permitted
Acquisitions and (ii) to repay Indebtedness under the Existing Credit Agreement.
SECTION 6. NEGATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as any
Commitments remain in effect, any Note or Letter of Credit remains outstanding
and unpaid, or any other amount is owing to any Bank or Agent hereunder, such
Borrower shall not, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Minimum Tangible Net Worth. Permit the Tangible Net Worth of the
Company and its consolidated Subsidiaries at any time to be less than (i)
$44,973,671, plus (ii) fifty percent (50%) of net income (or, in the case of a
deficit, zero percent (0%)) for the Company and its consolidated Subsidiaries on
a cumulative basis in respect of each fiscal year commencing with the Borrowers'
fiscal year ending December 29, 2001, with each increase to be effective as of
the last day of each such fiscal year.
(b) Fixed Charge Coverage Ratio. As of the last day of any fiscal
quarter of the Company commencing with the fiscal quarter ending December 31,
2001, permit the Fixed Charge Coverage Ratio for the period of four consecutive
fiscal quarters ending on such date to be less than 1.50 to 1.0.
53
(c) Debt to Capitalization Ratio. As of the last day of any fiscal
quarter of the Company commencing with the fiscal quarter ending December 31,
2001, permit the Debt to Capitalization Ratio to exceed 0.50 to 1.0.
6.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for Permitted Liens.
6.3 Limitations on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except that:
(a) any Subsidiary of the Company may be merged or consolidated with or
into the Company (provided that the Company shall be the continuing or surviving
corporation) or with or into any Borrower (provided that such Borrower shall be
the continuing or surviving corporation or such surviving or continuing
corporation becomes a Borrower hereunder pursuant to Section 5.9); and
(b) any Subsidiary of the Company may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to a Borrower;
provided, that immediately after any such transaction referred to in paragraphs
(a) and (b) above and after giving effect thereto, each of the Borrowers is in
compliance with this Agreement and no Default or Event of Default shall have
occurred and be continuing or result from such transaction.
6.4 Limitation on Indebtedness. Create, incur, assume or suffer to
exist, directly or indirectly any Indebtedness except the following ("Permitted
Indebtedness"): (a) the obligations of the Borrowers to the Banks hereunder; (b)
Indebtedness secured by Permitted Liens to the extent that any such Indebtedness
secured by (i) Purchase Money Security Interests does not exceed $5,000,000 in
the aggregate, and (ii) Liens created pursuant to Capital Leases (other than
Liens existing or created pursuant to the Capital Lease for the Hunting Park
Avenue manufacturing facility located at 0000 Xxxxxxx Xxxx Xxxxxx, Xxxxxxxxxxxx,
XX) does not exceed $5,000,000 in the aggregate; (c) Indebtedness existing on
the date hereof and shown on Schedule 6.4; (d) current trade accounts payable
incurred in the ordinary course of business; (e) intercompany indebtedness to
the extent permitted by Section 6.6; and (f) Indebtedness of Tasty Baking
Oxford, Inc. in an aggregate amount not to exceed $12,000,000 and secured by a
first mortgage lien on its real estate and fixed assets and by such other Liens
as are permitted by Section 6.9 and any guaranty by the other Borrowers of such
Indebtedness.
6.5 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer
or otherwise dispose of any of its property, business or assets (including,
without limitation, receivables and leasehold interests and Capital Stock or
equity interests in any Subsidiary that is or is required to be a Borrower
hereunder), whether now owned or hereafter acquired, except:
54
(a) any sale, transfer or lease of assets which are no longer necessary
or required in the conduct of the Borrowers' business;
(b) transactions involving the sale or lease of inventory in the
ordinary course of business;
(c) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection in the ordinary course of business of such accounts receivable; and
(d) as permitted by Section 6.3.
6.6 Transactions with Affiliates. Except as expressly permitted in this
Agreement, directly or indirectly enter into any transaction or arrangement
whatsoever (including without limitations any purchase, sale, lease or exchange
of property or the rendering of any service) or make any payment to or otherwise
deal with any Affiliate, except, as to all of the foregoing (i) in the ordinary
course of and pursuant to the reasonable requirements of such Borrower's
business and upon fair and reasonable terms no less favorable to such Borrower
than would be obtained in a comparable arm's length transaction with a Person
not an Affiliate and (ii) intercompany loans among the Borrowers in the ordinary
course of and pursuant to the reasonable requirements of such Borrowers'
business.
6.7 Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by such Borrower of real or personal property which
has been or is to be sold or transferred by such Borrower to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations thereof.
6.8 Limitation on Acquisitions, Investments, Loans and Advances.
Purchase, hold or acquire beneficially any stock, other securities or evidences
of indebtedness of, or all or a substantial amount of the assets of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or acquire any interest whatsoever in, any other Person, except:
(a) extensions of trade credit to customers in the ordinary course of
business;
(b) Permitted Investments;
(c) Capital Stock of any Borrower;
(d) loans and advances to or other investments in any Borrower;
(e) loans and advances to employees of the Borrowers and their
Subsidiaries for travel and entertainment expenses in the ordinary course of
business; and
(f) Permitted Acquisitions.
55
6.9 No Negative Pledge. Enter into any agreement after the date hereof
with any Person other than the Agent on behalf of the Banks pursuant to which
any Borrower covenants or agrees to a prohibition upon creating, incurring, or
suffering any Lien upon any of its properties, assets or revenues, whether now
owned or hereafter acquired, except (i) in connection with a Capital Lease or
Purchase Money Security Interest, in which case such agreement shall be
permitted but only with respect to the specific asset or assets subject to such
Capital Lease or Purchase Money Security Interest or (ii) for an agreement from
Tasty Baking Oxford, Inc., with any Person whereby Tasty Baking Oxford, Inc.
covenants or agrees to a prohibition upon creating, incurring or suffering any
Lien upon its fixed assets , whether now owned or hereafter acquired.
6.10 Fiscal Year. Permit the fiscal year of a Borrower to end on a day
other than the last Saturday of December.
6.11 Limitation on Conduct of Business. Discontinue any substantial
part of their existing businesses or enter into any business except for
businesses in which the Borrowers are engaged on the date of this Agreement and
businesses related to the manufacture or distribution of food products.
SECTION 7. EVENTS OF DEFAULT
7.1 Events of Default. If any of the following events shall occur and
be continuing:
(a) A Borrower (i) shall fail to pay when due any principal on any Note
or any Reimbursement Obligation when due, or (ii) shall fail to pay any other
amount payable hereunder or thereunder (including without limitation any
interest or fees) within three (3) Business Days after the date due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by a Borrower
herein or in any other Loan Document or which is contained in any certificate or
financial statement furnished at any time under or in connection with this
Agreement shall prove to have been incorrect or misleading in any material
respect on or as of the date made or deemed made; or
(c) A Borrower shall default in the observance or performance of any
agreement contained in Section 5.9 and Section 6 of this Agreement; or
(d) A Borrower shall default in the observance or performance of any
other agreement contained in this Agreement (other than as provided in
subsections (a) through (c) above) or any other Loan Document, and such default
shall continue unremedied (if it is capable of being remedied in such period)
for a period of thirty (30) days after notice thereof; or
(e) A Borrower shall (i) default in the payment of any principal of or
interest on or any other amount payable on any Indebtedness (other than the
Notes) or in the payment of any Guaranty Obligation, beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness or
Guaranty Obligation was created and
56
the aggregate amount of such Indebtedness and/or Guaranty Obligations in respect
of which such default or defaults shall have occurred is at least $2,000,000; or
(ii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or Guaranty Obligation or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guaranty Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due and payable prior to its stated maturity or such
Guaranty Obligation to become payable, in each case, beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness or
Guaranty Obligation was created and the aggregate amount of such Indebtedness
and/or Guaranty Obligations in respect of which such default or defaults shall
have occurred is at least $2,000,000; or
(f) (i) A Borrower shall commence any case, proceeding or other action
(A) 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 it or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or a Borrower shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against a Borrower any case,
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against a Borrower any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, satisfied, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) a Borrower shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) a Borrower shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they generally become due; or
(g) One or more judgments or decrees shall be entered against a
Borrower involving in the aggregate a liability of $5,000,000 or more and all
such judgments or decrees shall not have been vacated, discharged, settled,
satisfied or paid, or stayed or bonded pending appeal, within 30 days from the
entry thereof; or
(h) Any Change of Control shall occur; or
(i) Without limiting the covenants and representations made herein
relating to environmental matters, any Borrower shall fail to (i) comply in all
material respects with all Environmental Laws or obtain and comply with and
maintain any and all licenses, approvals, registrations or permits required by
Environmental Laws except to the extent that failure to so comply or obtain or
maintain such documents would not reasonably be expected to have a Material
Adverse Effect; or (ii) comply in all material respects with all lawful and
binding
57
orders and directives of all Governmental Authorities respecting Environmental
Laws except, in each case, (x) if and to the extent such Borrower is contesting
the application of any such Environmental Laws in good faith in appropriate
proceedings for which adequate reserves have been established on its books or
(y) if such Borrower is in the process of curing any such non-compliance as
permitted by the provisions of such Environmental Laws or Governmental
Authorities enforcing such Environmental Laws; or
(j) Without limiting the covenants and representations made herein
relating ERISA matters (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Company or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or institution of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Banks, likely to result in
the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company
or any Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Banks is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist in regard to a Plan; and in each
case in clauses (i) through (vi) above, such event or condition, together with
all other such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect; or
(k) the Company shall cease to own, directly or indirectly, one hundred
percent (100%) of the legal and beneficial ownership of each other Borrower
except pursuant to a transaction permitted under Section 6.3 or Section 6.5;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to a Borrower,
automatically the Commitments (including without limitation the obligations of
the Issuing Bank to issue Letters of Credit and the Banks to participate
therein) shall immediately terminate, and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement, the Notes
and the other Loan Documents shall automatically and immediately become due and
payable (including, without limitation, all Letter of Credit Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder), and (B) if such event is any
other Event of Default, with the consent of the Required Banks, the Agent may,
or upon the written request of the Required Banks, the Agent shall, (i) by
notice to the Company declare the Commitments to be terminated forthwith,
whereupon the Commitments and the obligations of the Banks to make Loans, and
the obligation of the Issuing Bank to issue Letters of Credit and of the Swing
Line Bank to make Swing Line Loans and the Banks to participate in any Letters
of Credit or Swing Line Loans thereafter issued shall immediately terminate;
(ii) by notice of default to the Company, declare the Loans hereunder (with
accrued interest thereon) and all other amounts owing under this Agreement, the
Notes and the other Loan Documents to be due and payable forthwith, whereupon
the same shall immediately become due and payable (including, without
limitation, all Letter of Credit Obligations, whether or not the beneficiaries
of
58
the then outstanding Letters of Credit shall have presented the documents
required thereunder); and/or (iii) by notice to the Company require the
Borrowers to, and the Borrowers shall thereupon, deposit in a non-interest
bearing account with the Agent, as cash collateral for their obligations under
this Agreement, the Notes and the Applications, an amount equal to the Letter of
Credit Coverage Requirement, and the Borrowers hereby pledge to the Agent and
the Banks, and grant to the Agent and the Banks a security interest in, all such
cash as security for such obligations. Amounts held in such cash collateral
account shall be applied by the Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrowers hereunder and under the Notes. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrowers hereunder and under the Notes shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Company. The Borrowers shall execute and deliver to the Agent, for the account
of the Issuing Bank and the Letter of Credit Participants, such further
documents and instruments as the Agent may request to evidence the creation and
perfection of the within security interest in such cash collateral account.
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and
appoints PNC Bank, National Association as the Agent of such Bank under this
Agreement and the other Loan Documents, and each such Bank irrevocably
authorizes PNC Bank, National Association, as the Agent for such Bank, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement and the other Loan Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or therein, or any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement and the other Loan Documents or otherwise exist against the Agent. PNC
Bank, National Association agrees to act as the Agent on behalf of the Banks to
the extent provided in this Agreement and the other Loan Documents.
8.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to engage and pay for the advice and
services of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible to the Banks for the negligence or misconduct of any
agents or attorneys in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(a) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or the other Loan Documents
(except for its or such Person's own gross negligence
59
or willful misconduct) or (b) responsible in any manner to any of the Banks for
any recitals, statements, representations or warranties made by a Borrower or
any officer thereof contained in this Agreement, the other Loan Documents or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement, the Notes or the other Loan Documents or for any failure of
the Borrowers (or any of them) to perform their obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Bank to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or the other Loan Documents, or
to inspect the properties, books or records of the Borrowers (or any of them).
8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile,
facsimile, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to one or more of the
Borrowers), independent accountants and other experts selected by such Agent.
The Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or the other Loan
Documents unless it shall first receive such advice or concurrence of the
Required Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement, the Notes or the other Loan Documents in
accordance with a request of the Required Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Banks and
all future holders of the Notes.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
it has received notice from a Bank or a Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives such a notice, the
Agent shall promptly give notice thereof to the Banks. The Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Banks; provided, that unless and until the Agent shall
have received such directions, it may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Banks.
8.6 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrowers, shall be deemed to
constitute any representation or warranty by the Agent to any
60
Bank. Each Bank represents to the Agent that it has, independently and without
reliance upon the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and made its own decision to
make its Loans hereunder and enter into this Agreement and each other Loan
Document to which it is a party. Each Bank also represents that it will,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrowers which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Banks agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrowers and without
limiting the obligation, if any, of the Borrowers to do so), ratably according
to their respective Commitment Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement, the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided, that no Bank shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this Section 8.7 shall survive the payment of the Notes and all
other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrowers (or any of them) as though the Agent were not the Agent
hereunder. With respect to its Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued or participated in by it,
the Agent shall have the same rights and powers under this Agreement and the
other Loan Documents as any Bank and may exercise the same as though it were not
the Agent, and the terms "Bank" and "Banks" shall include the Agent in its
individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 30 days' notice
to the Banks and the Borrowers. If the Agent shall resign as Agent under this
Agreement, then the Required Banks shall appoint from among the Banks a
successor agent for the Banks, which appointment shall be subject to the
approval of the Borrowers (which approval shall not be unreasonably withheld and
shall not be required if there shall then exist a Default or Event of Default)
and such successor agent. If no successor agent shall have been so appointed by
the Required Banks and shall have accepted such appointment within 60 days after
the retiring Agent's giving of notice of resignation then the retiring Agent
may, on behalf of the Banks,
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appoint an interim successor agent. Any interim successor agent appointed under
the preceding sentence may be replaced at any time by a successor agent
designated by the Required Banks and subject to the approval of the Borrowers
(which approval shall not be unreasonably withheld and shall not be required if
there shall then exist a Default or Event of Default). Any such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Agent's resignation as Agent, the provisions of this Section 8.9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
8.10 Beneficiaries. Except as expressly provided herein, the provisions
of this Section 8 are solely for the benefit of the Agent and the Banks, and the
Borrowers shall not have any rights to rely on or enforce any of the provisions
hereof. In performing its functions and duties under this Agreement and the
other Loan Documents, the Agent shall act solely as agent of the Banks and does
not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Borrowers.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any Note, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section. With the
written consent of the Required Banks, the Agent and the Borrowers may, from
time to time, enter into written amendments (including letter amendments),
supplements or modifications hereto and to the Notes and the other Loan
Documents for the purpose of adding any provisions to this Agreement, the Notes
or any other Loan Document or changing in any manner the rights of the Banks or
of the Borrowers hereunder or thereunder or waiving, on such terms and
conditions as the Agent may specify in such instrument, any of the requirements
of this Agreement, the Notes or any other Loan Document or any Default or Event
of Default and its consequences; provided, however, that no such waiver and no
such amendment, supplement or modification shall directly or indirectly (a)
reduce the amount or extend the maturity of any Note or any installment thereof,
or reduce the rate of interest or extend the time of payment of interest
thereon, or reduce any fee payable to any Bank hereunder or extend the period
for payment thereof, or change the duration or the amount of any Bank's
Commitment Percentage in each case without the consent of the Bank affected
thereby or (b) or amend, modify or waive any provision of this Section or reduce
the percentage specified in the definition of Required Banks, or consent to the
assignment or transfer by the Borrowers of any of their rights and obligations
under this Agreement, the Notes and the other Loan Documents, in each case
without the written consent of all the Banks, or (c) amend, modify or waive any
provision of Section 2.3 or any other provision affecting Swing Line Loans
without the written consent of the then Swing Line Bank, or (d) amend, modify or
waive any provision of Section 2.8 or any other provisions affecting Letters of
Credit without the written consent of the Issuing Bank, or (e) amend, modify or
waive any provision of Section 8 without the written consent of the then Agent.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Banks and shall be binding upon the Borrowers, the Banks,
the Agent and all future holders of the Notes. In the case of any
62
waiver, the Borrowers, the Banks and the Agent shall be restored to their former
position and rights hereunder and under the outstanding Notes, and any Default
or Event of Default waived shall be deemed to be cured and not continuing; but
no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
9.2 Notices; Lending Offices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including electronic transmission, facsimile transmission or posting on a
secured Web site), and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or three days
after being deposited in the mail, postage prepaid, or, in the case of facsimile
transmission notice, when sent during normal business hours with electronic
confirmation or otherwise when received, or in the case of electronic
transmission, when received and in the case of posting on a secured Web site,
upon receipt of (i) notice of such posting and (ii) rights to access such Web
site, addressed as follows in the case of the Borrowers, and the Agent, the
Swing Line Bank or the Issuing Bank, and as set forth in Schedule I in the case
of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
If to the Borrowers, to the
Borrowers' Representative: Tasty Baking Company
0000 Xxxxxxx Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx,
Vice President, Finance
Facsimile: (000) 000-0000
with copies to: Tastykake Investment Company
Xxxxx 000
000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
and
Tasty Baking Company
0000 Xxxxxxx Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
The Agent, the Swing Line Bank or
the Issuing Bank: PNC Bank, National Association
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Xx.
Facsimile: (000) 000-0000
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with a copy to: PNC Bank, National Association
Agency Services
Xxx XXX Xxxxx , 00xx Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Facsimile: (000) 000-0000
provided that (a) any notice, request or demand to or upon the Agent, the
Issuing Bank or the Banks pursuant to Sections 2.2, 2.3, 2.4, 2.8, 2.14 and 2.15
or to or upon the Swing Line Bank, shall not be effective until received and (b)
any notice of a Default or Event of Default hereunder shall be sent by facsimile
or nationally recognized overnight courier. Schedule I lists the Lending Offices
of each Bank. Each Bank may change its Lending Office by written notice to the
other parties hereto.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Notes and the other Loan Documents.
9.5 Payment of Expenses and Taxes. Each of the Borrowers jointly and
severally agrees (a) to pay or reimburse the Agent and each of the Banks for all
its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and the syndication of, this
Agreement, the Notes, the other Loan Documents and any other documents executed
and delivered in connection herewith, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Agent, (b) to pay or reimburse the
Agent and each of the Banks for all its out-of-pocket costs and expenses
incurred in connection with any amendment, supplement or modification to this
Agreement, the Notes and the other Loan Documents and any other documents
executed and delivered in connection therewith, and the administration of the
Facilities, including without limitation, the reasonable fees and disbursements
of counsel, (c) pay or reimburse the Bank and each Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes, the other Loan Documents and any such
other documents, including, without limitation, reasonable fees and
disbursements of counsel to the Agent and to the several Banks, (d) to pay,
indemnify, and hold each Bank and the Agent harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any amendment,
64
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the Notes, the other Loan Documents and any such other
documents, and (e) to pay, indemnify, and hold each Bank and the Agent harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions (whether sounding in contract, in tort or on any other
ground), judgments, suits, costs, expenses including, without limitation,
reasonable attorneys' fees or disbursements of any kind or nature whatsoever
with respect to the execution, delivery, enforcement, performance and
administration of or in any other way arising out of or relating to, this
Agreement, the Notes, the other Loan Documents or any such other documents
contemplated by or referred to herein or therein or any action taken by any Bank
or the Agent with respect to the foregoing including, without limitation, any of
the foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Laws applicable to the
operations of the Borrowers or their Subsidiaries (all the foregoing,
collectively, the "indemnified liabilities"), provided, that the Borrowers shall
have no obligation hereunder to the Agent or any Bank with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of such person. The agreements in this Section shall survive repayment of the
Notes and all other amounts payable hereunder.
9.6 Successors and Assigns.
(a) Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and permitted
assigns of such party; and all covenants, promises and agreements by or on
behalf of a Borrower, the Agent or the Banks that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns. The Borrowers may not assign or transfer any of their rights or
obligations under this Agreement or the other Loan Documents without the prior
written consent of each Bank.
(b) Each Bank may, in accordance with applicable law, sell to any Bank
or Affiliate thereof and, with the consent of the Company (which consent will
not be required if an Event of Default has occurred or is continuing) and the
Agent (which consents shall not be unreasonably withheld), to one or more banks
or other financial institutions (each, a "Purchasing Bank") all or any part of
its interests, rights and obligations under this Agreement, the Notes and the
other Loan Documents (including all or a portion of its 364 Day Commitment,
Revolver Commitment and Swing Line Commitment and the Loans at the time owing to
it and the Notes held by it); provided, however, that (i) so long as the
Commitments are in effect, such assignment shall be in an amount not less than
the lesser of all such Bank's interests, rights and obligations under this
Agreement or $5,000,000 (or such lesser amount as the Company and the Agent
shall agree in their reasonable discretion), (ii) the parties to each such
assignment shall execute and deliver to the Agent and the Company for its
acceptance an Assignment and Acceptance, together with the Notes subject to such
assignment and a processing and recordation fee of $3,000, (iii) unless
otherwise agreed by the Agent and the Company in their reasonable discretion and
provided no Event of Default has occurred and is continuing such assignment
shall be of all or the same pro rata portion of all of such assigning Bank's 364
Day Commitment and Revolver Commitment hereunder and (iv) the Swing Line
Commitment and all outstanding Swing Line Loans may only be assigned in their
entirety to a Bank then having a 364 Day Commitment. Upon acceptance and
recording pursuant to paragraph (e) of this Section 9.6, from and after the
effective date specified in each Assignment and Acceptance, which effective date
65
shall be at least five Business Days after the execution thereof, (A) such
Purchasing Bank shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Bank under this Agreement and (B) the assigning Bank thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under this Agreement and the other Loan Documents, such Bank
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.13, 2.16, 2.17, 2.18, 5.8(c) and 9.5 (to the extent that
such Bank's entitlement to such benefits arose out of such Bank's position as a
Bank prior to the applicable assignment). Such Assignment and Acceptance shall
be deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Bank and the resulting
amounts and percentages held by the Banks arising from the purchase by such
Purchasing Bank of all or a portion of the rights and obligations of such
assigning Bank under this Agreement, the Notes and the other Loan Documents.
Notwithstanding any provision of this Section 9.6, the consent of the Company
shall not be required for any assignment which occurs at any time when an Event
of Default shall have occurred and be continuing.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the Purchasing Bank thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial owner of
the interest being assigned thereby, free and clear of any adverse claim and
that its 364 Day Commitment, Revolver Commitment and Swing Line Commitment, and
the outstanding balances of its Loans, without giving effect to assignments
thereof which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto, or the financial condition of the Borrowers or the performance or
observance by the Borrowers of any of its or their obligations under this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (iii) such Purchasing Bank represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such Purchasing Bank confirms that it has received a copy of
this Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.1 and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such Purchasing Bank will independently
and without reliance upon the Agent, such assigning Bank or any other Bank and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents; (vi) such Purchasing Bank
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; and (vii) such Purchasing Bank agrees that
it will perform in accordance with their terms all the obligations which by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a
66
Bank including, if it is organized under the laws of a jurisdiction outside the
United States, its obligation pursuant to Section 2.17 to deliver the forms
prescribed by the Internal Revenue Service of the United States certifying as to
the Purchasing Bank's exemption from United States withholding taxes with
respect to all payments to be made to the Purchasing Bank under this Agreement.
(d) The Agent shall maintain at one of its offices in Pennsylvania a
copy of each Assignment and Acceptance and the names and addresses of the Banks,
and the 364 Day Commitments, Revolver Commitments and Swing Line Commitments of,
and principal amount of the Loans owing to, each Bank pursuant to the terms
hereof from time to time. Such information maintained by the Agent shall be
conclusive in the absence of manifest error and the Borrowers, the Agent and the
Banks may treat each Person whose name is recorded pursuant to the terms hereof
as a Bank hereunder for all purposes of this Agreement.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Bank and a Purchasing Bank (and in the case of a
Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Company
and the Agent) together with the Note or Notes subject to such assignment and
the processing and recordation fee referred to in paragraph (b) above, the Agent
shall promptly (i) accept such Assignment and Acceptance, (ii) record the
information contained therein and (iii) give notice thereof to the Banks. Within
five Business Days after receipt of notice, the Borrowers shall execute and
deliver to the Agent, in exchange for the surrender of the original Note(s) (A)
with respect to the assignment of Loans of any Bank, a new Note to the order of
such Purchasing Bank in an amount equal to the amount of each applicable
commitment assumed and (B) if the assigning Bank has retained a 364 Day
Commitment and/or Revolver Commitment, a new Note or Notes to the order of such
assignor in the amount equal to each applicable 364 Day Commitment and Revolver
Commitment retained by it. Such new Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note(s); such
new Notes shall be dated the date of the surrendered Notes which they replace
and shall otherwise be in substantially the form of Exhibit A-1, or, in the case
of the Swing Line Bank only, Exhibit A-2 hereto, as applicable. Canceled Notes
shall be returned to the Company.
(f) Each Bank may without the consent of the Company or the Agent sell
participations to one or more banks or other entities (each a "Participant") in
any Loan owing to such Bank, any Note held by such Bank, any 364 Day Commitment,
Revolver Commitment and Swing Line Commitment of such Bank or any other interest
of such Bank hereunder and under the other Loan Documents, provided, however,
that (i) such Bank's obligations under this Agreement to the other parties to
this Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Bank shall remain the holder of any such Note for all purposes under
this Agreement and the other Loan Documents, (iv) the Borrowers, the Banks and
the Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement and the
other Loan Documents, (v) in any proceeding under the Bankruptcy Code such Bank
shall be, to the extent permitted by law, the sole representative with respect
to the obligations held in the name of such Bank, whether for its own account or
for the account of any Participant and , (vi) such Bank shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of this Agreement or
67
the Note or Notes held by such Bank or any other Loan Document, other than any
such amendment, modification or waiver with respect to any Loan or 364 Day
Commitment or Revolver Commitment or Swing Line Commitment in which such
Participant has an interest that changes the principal amount of any Loans or
364 Day Commitment or Revolver Commitment or Swing Line Commitment, forgives
principal, interest or fees or reduces the interest rate or fees payable with
respect to any such Loan or Commitment, postpones any date fixed for any
regularly scheduled payment of principal of, or interest or fees on, any such
Loan or releases any guarantor of such Loan.
(g) If amounts outstanding under this Agreement and the Notes are due
or unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in amounts owing
under this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this Agreement
or any Note, provided that in purchasing such participation such Participant
shall be deemed to have agreed to share with the Banks the proceeds thereof as
provided in Section 9.8. The Borrowers also agree that each Participant shall be
entitled to the benefits of Sections 2.13, 2.16, 2.17, 2.18, 5.8(c) and 9.5 with
respect to its participation in the 364 Day Commitments, Revolver Commitments
and Swing Line Commitments and the Loans outstanding from time to time;
provided, that no Participant shall be entitled to receive any greater amount
pursuant to such Sections than the assigning Bank would have been entitled to
receive in respect of the amount of the participation transferred by such
assigning Bank to such Participant had no such transfer occurred.
(h) If any Participant of a Bank is organized under the laws of any
jurisdiction other than the United States or any state thereof, the assigning
Bank, concurrently with the sale of a participating interest to such
Participant, shall cause such Participant (i) to represent to the assigning Bank
(for the benefit of the assigning Bank, the other Banks, the Agent and the
Borrowers) that under applicable law and treaties no taxes will be required to
be withheld by the Agent, the Borrowers or the assigning Bank with respect to
any payments to be made to such Participant in respect of its participation in
the Loans and (ii) to agree (for the benefit of the assigning Bank, the other
Banks, the Agent and the Borrowers) that it will deliver the tax forms and other
documents required to be delivered pursuant to subsection 2.17 and comply from
time to time with all applicable U.S. laws and regulations with respect to
withholding tax exemptions.
(i) Any Bank may at any time assign all or any portion of its rights
under this Agreement and the Notes issued to it to a Federal Reserve Bank;
provided that no such assignment shall release a Bank from any of its
obligations hereunder.
9.7 Disclosure of Information. Unless otherwise consented to by the
Company in writing, each of the Banks and the Agent agrees to use reasonable
precautions to keep confidential, in accordance with its customary procedures
for handling confidential information of the same nature and in accordance with
safe and sound banking practices, any non-public information supplied to it by
the Borrowers pursuant to this Agreement; provided that nothing herein shall
limit the disclosure of any such information (a) to the extent required by
statute, rule, regulation or judicial process, (b) to counsel for any Bank or
the Agent, (c) to bank examiners, auditors or accountants, (d) to the Agent or
any other Bank, (e) in connection with
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any litigation to which any one or more of the Banks or the Agent is a party and
(f) to any Participant or Purchasing Bank (or prospective Participant or
Purchasing Bank) so long as such Participant or Purchasing Bank (or prospective
Participant or Purchasing Bank) agrees to comply with the requirements of this
section. If the Agent or any of the Banks believes it is obligated to disclose
with respect to the Borrowers any non-public information and is not precluded by
law or judicial order from doing so, it shall give notice thereof to the
Borrowers as far in advance of the anticipated disclosure as is reasonably
practicable under the circumstances in order to allow the Borrowers the
opportunity to seek an appropriate protective order, should they so desire.
9.8 Adjustments; Set-off.
(a) If any Bank (a "benefited Bank") shall at any time receive any
payment of all or part of its Loans or the Reimbursement Obligations owing to
it, or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in subsection 7.1(f), or otherwise), in a greater
proportion than its Commitment Percentage of any such payment to or collateral
received by any other Bank, if any, in respect of such other Bank's Loans or the
Reimbursement Obligations owing to it, or interest thereon, such benefited Bank
shall purchase for cash from the other Banks such portion of each such other
Bank's Loans owing to it, or shall provide such other Banks with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefited Bank to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Banks; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
benefited Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest unless
the benefited Bank is required to pay interest thereon, in which case each Bank
returning funds to the benefited Bank shall pay its pro rata share of such
interest. Each of the Borrowers, jointly and severally agrees that each Bank so
purchasing a portion of another Bank's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Bank were the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks provided by
law, upon the occurrence and during the continuance of an Event of Default, each
Bank shall have the right, without prior notice to the Borrowers (or any of
them), any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrowers hereunder or under the Notes (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Bank to or for the
credit or the account of one or more Borrowers. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made by
such Bank, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
9.9 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts
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taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Company, on behalf of the Borrowers, and each of the Banks.
9.10 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.11 Integration. This Agreement and the other Loan Documents represent
the agreement of the parties hereto with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Agent or any Bank relative to the subject matter hereof not expressly set forth
or referred to herein or in the other Loan Documents.
9.12 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
9.13 Submission To Jurisdiction; Waivers. Each of the Borrowers hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement or the Notes, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the Commonwealth of Pennsylvania, the courts of
the United States of America for the Eastern District of Pennsylvania, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Company at its
address set forth in Section 9.2 or at such other address of which the Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to xxx
in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
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9.14 Acknowledgments. Each of Borrowers hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, the Notes and the other Loan Documents;
(b) neither the Agent nor any Bank has any fiduciary relationship to
the Borrowers (or any of them) and the relationship hereunder between the Agent
and Banks, on the one hand, and the Borrowers, on the other hand, is solely that
of debtor and creditor; and
(c) no joint venture exists among the Banks or among the Borrowers (or
any of them) and the Banks.
9.15 No Right of Contribution. On and after the occurrence of an Event
of Default hereunder, no Borrower shall seek or be entitled to any reimbursement
from any other Borrower, or be subrogated to any rights of the Banks against the
Borrowers, in respect of any payments made pursuant to the Loan Documents, until
all amounts owing to the Banks hereunder and under the Notes are paid in full.
9.16 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENT AND FOR ANY MANDATORY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the day and year
first above written.
TASTY BAKING COMPANY
By:
---------------------------------
Xxxxxx X. Xxxxxx
Vice President, Finance
TASTYKAKE INVESTMENT COMPANY
By:
---------------------------------
Xxxxxx X. Xxxxxxxxxx
Vice President
TBC FINANCIAL SERVICES, INC.
By:
---------------------------------
Xxxxxx X. Xxxxxx
Treasurer
TASTY BAKING OXFORD, INC.
By:
---------------------------------
Xxxxxx X. Xxxxxx
Treasurer
PNC BANK, NATIONAL ASSOCIATION,
as a Bank, as Swing Line Bank,
as Issuing Bank and as Agent
By:
---------------------------------
Xxxxxxx X. Xxxxxxxxx, Xx.
Vice President
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CITIZENS BANK OF PENNSYLVANIA,
as a Bank
By:
---------------------------------
Xxxxxx X. Xxxxx
Vice President
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